Debates of June 1st, 1995

Supply

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Madam Speaker, I listened carefully to the speech of the hon. member for Trois-Rivières and I would like to ask him a question. Are liberals not trying to find solutions to the problems of Ontario regarding the financing of small business and to generalize the Ontario model by amending the Federal Business Development Bank Act?

I remember that, in the months following the election, Ontario Liberal members on the industry committee were somewhat angry and said that banks were not sensitive enough to the needs of small business, that the last recession had caused many bankruptcies and that ways had to be found to deal with the situation.

Quebec committee members were less concerned by the situation because Quebec had already developed its own tools like the Fonds de solidarité des travailleurs de la FTQ-the CSN will soon have a similar fund-and the Mouvement des Caisses Desjardins. There is also the use made of business support centre funds and regional development funds. We already had all those resources.

I feel that the amendments to the Federal Business Development Bank were proposed to please Ontario but they will not make funds more easily available to Quebec. We already have regional funds available. There are many coordination problems between the various funds. Is the change of vocation of the Federal Business Development Bank not going to make things more complicated and increase delays without necessarily having a positive effect on the access of Quebec small business to financing?

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Madam Speaker, I would like to thank my colleague, the hon. member for Kamouraska-Rivière-du-Loup, for his question. I commend his intuition. Indeed, when the Standing Committee on Industry started looking into the matter, the problem was centered on the issue of funding of small and medium size enterprises. Members of Parliament from Ontario made legitimate representations, considering the slump caused by the lack of credit, although this was never proven.

But things went differently afterwards, when the purpose of the Federal Business Development Bank was radically changed. Previously, the bank's primary purpose and almost only concern was assisting small and medium size enterprises, but that is now becoming somewhat secondary.

I will read the first lines of clause 4 which deals with that purpose:

"The purpose of the Bank is to support Canadian entrepreneurship-"

That is what subclause 4(1) says. Subclause 4(2) says:

"In carrying out its activities, the Bank must give particular consideration to the needs of small and medium sized-enterprises."

So, we see that what was previously a fundamental concern for small and medium size enterprises is becoming somewhat secondary. The bank will deal as it can with small and medium size enterprises having primarily established entrepreneurship development programs, as I was saying earlier, which do not qualify or have not been defined. Anything is possible with the private funds that the bank will have in the future.

I would like to give more information on the two distinguished Liberals that I was telling you about. They are the hon. senator Rivest and Mr. Forget. They said on an open line show on the CBC, which is as credible as these two gentlemen: "Mr. Rivest having revealed that the Minister of Intergovernmental Affairs and President of the Privy Council is preparing a major administrative and tax reform for Canada". This is Mr. Rivest speaking, a very good Liberal.

"Mr. Forget went on to say that he feared a no vote on the referendum-this is very important for Quebecers-would lead to a loss of control by the government of Quebec on subsequent events". That is, after the referendum. "This situation would create opportunities for initiatives, whether under the constitution or not, but which could, at any rate, considerably change the rules. It seems to me that, for now, the threat to Quebec lies

much more in this restructuring of the government-a vital issue-than in some constitutional matter".

I conclude with these comments, which confirm our apprehensions. Here, in this Parliament, as well as in the Langevin building, very important events are occurring, but they are not being publicized. A country is being built and changed without any debate. I think it is outrageous.

[Denis Paradis, Liberal, Brome—Missisquoi, QC]

Madam Speaker, I just heard the hon. member for Trois-Rivières speak about the Federal Office of Regional Development in Quebec. I would like to remind him that the Office's presence in Quebec was requested by the social and economic stakeholders in the regions.

In my riding, as in most ridings, people have asked for a regional economic development policy. A few days ago, we heard the Minister of Finance say in the House that he had written several times to his provincial counterparts inviting them to co-operate on matters related to regional economic development. He has received no answer to date. This is an important point that we must not forget during our debate.

A few weeks ago, a seminar was held in Chicoutimi on the future of Quebec and its regions. At the seminar, the Quebec government was asked to do something along the same lines as the federal government in the area of economic development. I think this is important. The federal government is a leader in the field of economic development in Quebec, and, through the Federal Office, it is responding to people's needs, as Quebec should do. It is very important that the federal government continue its efforts, but with the provinces' co-operation.

Finally, I have a question for the member for Trois-Rivières. In his riding, some forty economic development projects have been approved by FORD-Q. Would he deprive his constituents of the federal government's economic presence in his own riding?

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Madam Speaker, I thank the hon. member for Brome-Missisquoi for his very thoughtful question. Sure, we do not want to deprive our constituents of the moneys they have already paid to the government and that are redistributed in the normal way. When one claims to want to develop the economy, as the federal government is doing, it is perfectly normal that from time to time it takes tax moneys paid by Quebec taxpayers to redistribute them in Quebec.

There is nothing new here, there is no gift in there, contrary to what is hinted at in such a question, as if that money was paid out of generosity. However, I am not sure, and there lies the danger, that these 40 projects are being developed in harmony with the efforts being made at the same time by the Quebec government. That is not obvious at all. On the contrary, one is left with the impression that there is competition, duplication and overlapping of energies.

I would like to take the opportunity provided by my colleague's question to talk about the Federal Business Development Bank and the change in policy it is setting for itself or that is being imposed on it by the minister. We seriously wonder how, despite all its claims, the new Business Development Bank of Canada will be able to meet the need it met successfully up till now for very small businesses, because 52 per cent of the loans made by the FBDB were loans of $100,000 or less, which suited the needs of very small businesses. Given the new aspirations of the Business Development Bank of Canada, it is not that obvious that the needs that were met up till now will be met in the future. This is not very reassuring, and therefore leads us to question the validity of this new mandate.

[David Walker, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, I am pleased to participate in this debate. I will take this opportunity to set the record straight concerning the Canada health and social transfer.

Contrary to the propaganda spread by the Bloc Quebecois and reflected in the motion before the House, the Canada health and social transfer does not take powers away from Quebec and transfer them to the federal government. Instead, it gives more flexibility to provinces.

Thus, the new Canadian social transfer is a big step toward more mature federal-provincial fiscal relations.

In the last federal budget, the government acted on the request made by Canadians that deficits be reduced through structural changes.

That kind of change is essential if we are to secure Canada's economic well-being and protect our social programs. But the structural changes we need could not be made without a reform of the provincial transfer system.

Cash transfers amount today to more than 20 per cent of all federal program spending.

The government responded to the need for change with a new transfer system that is both more sustainable and more effective, the Canada health and social transfer. Currently the federal government transfers funds to the provinces for health and post-secondary education under established programs financing or EPF.

Funding for social assistance and social services is provided under the Canada assistance plan. Beginning in 1996-97, these transfers will be replaced by a single transfer as described in Bill C-76 which is before the House. The Canada health and social transfer is part of that bill.

Unlike the current system, which is based partly on cost sharing arrangements, the Canada health and social transfer will

be a block fund like EPF. This means that amounts transferred will no longer be determined by provincial spending decisions as under cost sharing.

The new system will be more fiscally sustainable. When the Canada health and social transfer is fully implemented in 1997-98, the total of all major transfers to provinces will be down by about $4.5 billion from what would have been transferred under the existing system.

This is significant action but to put it into perspective, the reduction will equal about 3 per cent aggregate provincial revenues. Furthermore, the Canada health and social transfer is not merely more sustainable but also more efficient. It will bring real benefits for both levels of government.

The Canada health and social transfer continues the evolution away from the requirement to obtain federal government approval in areas of provincial responsibility, which has been a source of entanglement and irritation in federal-provincial relations.

From the provinces' point of view, the new system will include fewer conditions on the use of transferred money.

From now on, there will be no more rules on the kinds of expenditures that can be cost-shared and those that cannot. Provinces will be completely free to use innovative means in the context of social security reform, and they will have more flexibility to set their own priorities.

Let me offer some concrete examples of what this greater flexibility could entail in practice. There would be no need for provinces to submit claims for federal approval and no need to draw up lists of provincial laws, welfare agencies and the like. This will bring significant administrative savings.

The move from CAP cost sharing to block funding will also mean that policies and programs could be designed to better integrate social, health, education and labour market programming.

Further, provinces can use simpler, less intrusive methods of establishing eligibility for income support and services such as an income test. In this way federal funds will assist a wider range of people with disabilities to live independently, based on a variety of personal and employment criteria.

A less stringent implementation of needs tests could also help provinces make income support and non monetary benefits more widely available to low wage earners or people who try to stop depending on welfare and to enter the labour market.

That way, federal money could be used to support the APPORT program in Quebec and other income supplement projects geared to low income families and workers.

By moving from the needs test, provinces could also provide integrated prevention programming to a broader cross section of children and families. For instance, federal funds could support community or school nutrition programs which are not currently eligible for CAP because they are not needs tested.

The flexibility I have just described-the flexibility to spend as effectively as possible-paves the way for better design and more affordable social programs for Canadians. Each province will be able to emphasize the programs and services that work best for its own unique circumstances.

It is important to emphasize this enhanced flexibility does not mean a free for all. The Canadian health and social transfer maintains an important federal role in social programs.

First, the federal government will continue to provide substantial funding to provinces in support of health and other social programs. Individual provinces will receive amounts ranging from about 20 per cent to about 40 per cent of their total revenues.

Further, the principles of the Canada Health Act will continue to be enforced. Canadians have made it very clear this is extremely important to them. Seventy-seven per cent of Quebecers believe these new principles are important to them also.

Also, there will be no change in the principle that provinces must provide social assistance without minimum residency requirements.

Furthermore, the Minister of Human Resources Development will be inviting all provincial governments to work together on developing, through mutuel consent, a set of shared principles and objectives that could underlie the new Canada health and social transfer.

The official opposition would like us to believe that this whole process is nothing but a plot to underhandedly impose new conditions, methods or penalties on the province of Quebec.

Frankly, that is absurd. Let me emphasize again the only standards contained in the legislation introduced in the Canada health and social transfer are the Canada Health Act provisions and the social assistance mobility condition. These are not new and they have not been changed. Compared to the status quo there are fewer legislative social assistance conditions in this

legislation, not more. The legislation provides no legal authority to introduce any new conditions, standards or penalties. Claims to the contrary are simply wrong.

The legislation does contain a statement of the federal government's intention to launch the consultative process I have described, a process seeking mutual consent on principles and objectives.

Nothing new was included in this statement of intention. On budget night, on February 27, 1995, the government stated clearly that it would be "inviting all provincial governments to work together on developing, through mutual consent, a set of shared principles and objectives that could underlie the new Canada social transfer".

This is the exact same commitment we included in Bill C-76, word for word. What does "mutual consent" mean? It means no government whatsoever in Canada can be forced to adhere to new principles and objectives against its will.

In other words, only the governments who subscribe freely to new objectives and common principles will have to abide by them. Nothing is clearer than that and those who claim that we are dispensing with mutual consent are being ridiculous.

There is another piece of nonsense from the Bloc members that I would like to challenge during this debate. Contrary to the devious spin being given by the opposition, the bill does not allow the federal government to introduce new standards through the back door. Quite the contrary. There is absolutely no clause in the bill that allows the federal government to introduce new criteria or new financial penalties with the Canada social transfer. Bill C-76 does not allow us to tack new conditions on the Canada social transfer arising from the consultative process carried out by the Minister of Human Resources Development.

Those who say otherwise have misunderstood the bill. They do not make a distinction between statutory conditions and statements of intent. The principles and objectives eventually reached through mutual agreement between governments would not necessarily lend themselves to inclusion in a legislative text. If, some day in the future, the consenting governments want to entrench an agreement in a federal statute, it would be necessary to submit a bill to this effect to the Canadian Parliament.

In conclusion, I would say that one of the main characteristics of the Canada Social Transfer for health care and social programs is that it is proof that Canadian federalism is capable of evolving. It opens the door to further progress toward a kind a federalism that is more mature, more responsive to the concerns of Canadians, who want more viable programs, and to the concerns of the provinces, who want more flexibility.

It proves our commitment to get the government back on the right track and to reduce duplication and overlap, which will result in administrative savings. And it clearly shows the federal government's firm commitment to co-operate with the provinces. That commitment involves a consultation process on the establishment of a permanent distribution formula for the Canada health and social transfer, as well as on a series of issues concerning fiscal federalism.

I am not at all surprised that the official opposition expresses its dissatisfaction about the characteristics of the new program. The Canada health and social transfer delivers a fatal blow to the separatists' arguments because it proves the vitality and the flexibility of the federal system.

But the great majority of Canadian men and women strongly support this evolution of Canadian fiscal arrangements, as do most members in this House. Therefore, I urge all members to support this motion.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Madam Speaker, I found my Liberal colleague opposite quite eloquent, in his own way. He has aptly illustrated the ambiguity and the depth of the government's strategy, which is to hide its real motives.

This is non-transparency incarnate, since it is saying one thing and doing another. It claims that this beautiful and supposedly united country is in the process of decentralizing, while in reality, what is really happening, to use the term used by the opposition and several columnists, is that the federal government is offloading under the pretext of decentralizing. It is decentralizing the fight against the deficit by foisting unprecedented cuts on the provinces.

This is obvious in Quebec. There is nothing surprising about the unfortunate closure of a certain number of hospitals when one considers that the government of Quebec has had to deal with over one billion in cuts per year, cuts made almost on the quiet, without any opportunity for discussion. Fourteen billion dollars in cuts over 12 years and now the federal government wants to sell us a form of decentralization! And these cuts are paired with the introduction of national standards. Next, it will boast that it is helping to fund such and such programs. This is downright indecent. It should at least have the guts to call a spade a spade.

I would like to ask the hon. member to once again explain how his government can justify this way of operating. It would be so simple to just respect section 93 of this country's constitution, which says that social matters, including education, fall under provincial jurisdiction, and to just divvy up the appropriate tax

points to the provinces and stay out of other people's business, which would be the constitutional way of operating.

[David Walker, Liberal, Winnipeg North Centre, MB]

Madam Speaker, the opposition member confused about three or four very important issues in the same speech. Let us take them one at a time.

First, the federal government has given the provinces every opportunity to design their social programs as they wish. The only condition the federal government is putting in Bill C-76 is the condition that there is no residency requirement attached to social assistance.

We think that the provinces will respond very positively and will develop some very innovative programming. As I explained in my speech on some of the barriers under the Canada assistance plan, which has been sort of the cornerstone of the Canadian social assistance program and social policy for the last 30 years, the time has come to change it. We feel very confident that the provinces will do the right thing and develop some very innovative programming. One of the things I mentioned was the school lunch and breakfast programs, which are not facilitated under the present arrangements under the Canada assistance plan. There will be other opportunities.

One expression in the text is crucial to this debate, and that is "mutual consent".

We use those words very carefully and very purposely to indicate to the provinces that we are not about to impose new conditions on their social programs and that if a future government wishes to do so this would require entirely new legislation.

The Minister of Human Resources Development will be approaching the provinces, as is stated in the act. I want to say to the House that in my short history as a parliamentarian and my longer history as a student of Canadian politics, I cannot remember an act that mandates a minister to go out and consult. This was not just said in a speech in the House of Commons but is in fact part of the legislation.

I suspect this is being taken very seriously by the minister himself, as he has indicated in the House, and that by mutual consent there may be programs emerging and conditions or statements. However, this is up to the minister to discuss with the provinces. We have simply said that at this time the conditions that are stated are those that are in the act.

In terms of the responsibility the federal government has for closing hospitals, we cannot have it both ways. We cannot ask the federal government to sponsor and finance but to leave people alone and then second guess whether provinces are closing hospitals or cutting back on doctors or cutting back on nurses. These are very serious decisions, but they are the decisions of the provincial government.

I will use the example of Alberta, where everybody is up in arms about the government closing rural hospitals. They often forget that it was the same government that opened those hospitals in the first place. The province has the responsibility for its construction programs and for the infrastructure it puts into health care. If mistakes were made in the past, I do not think federal politicians should second guess them. Those things are in the provincial domain, the construction of hospitals and the delivery of health care.

I say this in the context that the cutbacks that will come into effect in two years represent 3 per cent of the total provincial revenues of Canada.

We in the finance committee listened to many groups intervening on the question of federal funding for social and health policy. We have been most conscious that the amount of funds will not be devastating to the poor of the country. We are confident that with the two years of warning, one year of no cuts and another year of half the cuts, most provinces will have the revenue capacity and the tax points and the space needed to generate the money to make sure the programs continue, particularly those west of Ontario that have a balanced budget. I believe seven out of ten are getting close to a balanced budget. However, they have to decide on their own which are the best ways to finance these programs and what the priorities are.

There is no province I can think of that would think of abandoning the poor as a priority. I am confident these issues will be taken care of.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Madam Speaker, I would like to ask my colleague, who is undoubtedly an honourable man, as a Canadian citizen elected by his constituents, whether, when he considers the demands of the people of Quebec as embodied by their government, he feels that these are the demands of a distinct society within the Canadian federation or that these are merely the vengeful demands of a province that refuses to conform, and above all, to be treated like the other provinces?

I would be interested to hear what the hon. member has to say about Quebec's historic claims as opposed to the other concept that includes all that, where our aim, at least within the framework of Canadian Confederation, is to be a distinct society in Canada.

[David Walker, Liberal, Winnipeg North Centre, MB]

Madam Speaker, in the Canada social health transfers and in the debate we are having, the words distinct society do not appear. I will put that case aside for another debate.

In the history of federal-provincial relations in the country there have been many arguments by many provinces against the federal government. Some of those have been conceptual fights over the federal-provincial authority and some have been fights over money. Depending on the nature of the Quebec government at various times it has pursued aggressively some of these objectives. In the same fashion, British Columbia took the federal government to court over cutbacks in the Canada assistance program.

The constitutional debate is always on the horizon in Canada, but it is not here today and is not central to the debate today. What is before the House is an opposition motion debunking the cornerstone of the government's approach to resolving the problems of the country.

We feel we have a very pragmatic and effective way of permitting provinces to develop their own social programs. There will be programming responses from Quebec, which I am sure will be entirely different from programming responses elsewhere in the country. This facilitates the development of programs that are very responsive to the Quebecois. People in other provinces may choose to do things differently. I see this in the context of a very wide ranging series of problems we are dealing with.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Madam Speaker, I welcome this opportunity to speak to the opposition motion before the House today, and I may recall the wording: That this House condemn the government's legislative agenda, which makes clear its intention to usurp provincial jurisdictions and construct an entirely centralized state, as can be seen from Bills C-76 on the Canada Social Transfer, C-88 on the Agreement on Internal Trade, C-91 on changing the name and mandate of the Federal Business Development Bank and C-46, which confirms that the Department of Industry is responsible for regional development in Quebec and Ontario.

These are legal terms we use in the House, but basically, the real question being asked today, and it has already been asked this morning by the federalist parties, which demonstrates their failure to understand the issues at stake for Quebec, is as follows: Why is Quebec again disturbed by this attack by the federal government which is intruding in a variety of areas? Why is Quebec again being a spoil sport? Since today is the first day of June, 1995, I think we should make this show-and-tell month.

In fact, after the offensive fought during the Trudeau years to put in place a system the Liberals now want to resuscitate, we had a strategic retreat by the Conservatives when, because of nationalist members within the Conservative caucus and because it was impossible to get through the bureaucracy at Industry Canada, for instance, the government decided in favour of what I would call a by-pass operation. It created the Federal Office of Regional Development and other regional agencies to get around the centralizt bureaucracy and find parallel channels for spending federal money in the regions. However, that was still at a time when there seemed to be enough money or in any case the government was still willing to borrow money, all of which helped to run up our current debt.

Today, the "arteries" are being closed down. There is no more blood for the system to pump. Whether we try to preserve the Conservative-built bypasses or whether we return to the centralizing approach, the system needs oxygen and does not meet the objectives. This is what has led us to the present situation of 1.2 million welfare cases in Ontario and 800,000 in Quebec and a debt that will soon reach $600 billion. I think these are the symptoms of the system's failure.

We are seeing a repeat of the events of the 1970s. The federal government decided it had the solutions to all the problems in areas of jurisdiction other than its own. Let us take Bill C-76 dealing with the Canada social transfer as an example. The federal government has decided to intervene in the areas of health, social assistance and post-secondary education-all areas of provincial jurisdiction. It has decided to establish national standards, which take no account of the economic and social realities of Canada's regions.

Let us look at a few examples. Bursaries and loans, for one. The bursary and loan system was changed on the sly so the provinces are now forced to comply with the wishes of the federal minister in this area. In Quebec, we developed a different model, and here Quebec will have to choose between complying with federal standards and making the rest of the population pay for the constraints established by the federal government.

One thing I learned as a member of the human resources committee on its cross-Canada tour is that there is not one Canada and that there is no single solution to the problems raised. The approach of setting up national standards, as we have seen in health care and other sectors, at a time when the federal government is cutting back, leads nowhere, except to frustration. This is the reason for today's motion by the opposition, which is to make people aware, in June 1995, a few months away from the referendum in which Quebecers will decide whether they want to leave this madhouse, as René Lévesque described this dysfunctional and dead-end system.

Therefore, Quebecers must do some thinking. At first we had thought they would have to decide between the status quo and sovereignty. Now, however, it appears that the choice is between a degenerating status quo with the federal government wanting to intervene even more and sovereignty. It is very clear.

I understand why people who consider the federal government to be the main government in Canada, the one that must apply all the rules, have difficulty understanding where the official opposition stands on this issue. When one looks at it from Quebecers' perspective, it is clear that for Quebecers in general, the main government has for a long time been and still is Quebec. The government in Ottawa is to a large extent the result of a compromise made in 1867.

Quebecers cannot accept that this federal government systematically interfere in areas such as social programs, internal trade and potential loans by the Federal Business Development Bank, and give the Department of Industry the responsibility for regional development in Quebec and in Ontario when one knows very well that this system never worked.

The Tories had been forced to create parallel agencies to put an end to this bureaucracy. Now the Liberals come back to the old system which suited Ontario but does not suit Quebec. I have nothing against the fact that members of Parliament from Ontario protect their interests, but I am against the consequences of restoring an old structure which adversely affects Quebec and does not offer good prospects.

Let us take, for example, the bill to implement the Agreement on Internal Trade, Bill C-88. We should keep in mind that this bill implements an agreement based on co-operation. Everyone in Quebec, Canada and North America realizes how important free trade is. It is so important that Quebecers rallied to the defence of the FTA, which would never have passed without Quebec's massive support. The FTA goes well beyond interprovincial trade opportunities.

Adjustments were made to reach an acceptable compromise. This agreement is based on interprovincial co-operation. Suddenly, with Bill C-84, the federal government is surreptitiously putting its big paws in this agreement by introducing a judicial process into an agreement based on an administrative consensus that disputes should be settled between the parties.

However, the federal government has now come up with a wonderful idea. In one case, whether or not the federal government is a party to the dispute, it may impose sanctions on the provinces which, in its opinion, do not comply with the agreement. This amounts to being both judge and party. This is a concrete example of the paternalistic approach used by this government and developed by the Canadian federal system, since, under the federal decision making process, senior officials always feel that they are right about what to impose on Canadians.

I now come back to the example of the Standing Committee on Human Resources Development. A year ago, officials, deputy ministers told the committee that UI reform would introduce two levels of coverage. They said that people in the outlying regions and seasonal workers go on UI because they are not prepared to work hard. Our committee travelled across Canada and unanimously rejected the proposed system. The minister set up a committee on seasonal work, which also rejected the whole approach proposed by the federal bureaucrats. This week, senior officials smugly outlined for our committee the same vision they had a year ago.

Although he may have acted in good faith in this matter, the minister did not succeed in convincing them to change their proposal one iota. The bureaucracy's control over Canada's development is unhealthy. Bureaucrats are responsible for the current results. It is because of them that regional disparities are so wide, because they never wanted, because this government in particular does not want, to give each region control over important sectors. Instead, perhaps because the constitutional provisions on the division of powers are so vague, it always feels like interfering in areas of provincial jurisdiction, simply because it has the right to collect and redistribute taxes.

Following the Canadian social transfer and the agreement on internal trade, the federal government is stepping up its attacks by proposing a new Business Development Bank of Canada.

Clauses 20 and 21 of the new legislation to change the name of the Federal Business Development Bank to Business Development Bank of Canada, which is a minor change as far the name is concerned, make it possible for the federal government to systematically interfere in regional development. This goes to show, once again, that the federal government does not regard regional development as a provincial area of responsibility. In fact, it is unclear whether the provinces exist at all in the eyes of the federal government.

Under clause 20 of this bill, it may deal directly with any organization, which means that the same pattern will be used as in the past. The federal government will walk in with its money, tell community consultation organizations, municipalities or development funds: "The thing is, we can give you money for regional development, but we want to have a say about how it will be used, since our contribution will be substantial". And the pattern of fighting will be repeated, with provincial and federal organizations each defending their turf. In the end, who will be the losers? The people. In this case, with the development bank, the businessman is the one who will be in a worse

position than before with the various departments he will have to deal with.

This is the third bill which, under the guise of simple name change, is used to discreetly introduce provisions that would have gone unnoticed if it were not for the watchful eye of the opposition. But this is serious business and it speaks volumes about how this government operates, always trying to go over the heads of the provinces.

If we were certain that this approach was effective, we would have to recognize that, as unconstitutional as it may be, it is efficient, but experience shows that it is not effective and never has been. A region like Eastern Quebec is a perfect example, having been a proving ground for every federal-provincial action for the past 25 years. And the end result was a significant drop in population. All the young people have moved away, and we are struggling in our communities to get out of this situation, but were it not for the goodwill and sweat of local stakeholders, we would get nowhere. But we also get tired of trying to work with that system and finding ways to implement programs locally.

There is another clause in the Business Development Bank of Canada bill which is indicative of duplication, as it set out two different goals for a development policy. I am referring to the fact that the bank is to support Canadian entrepreneurship. This is a very general statement. It means that, if some provinces implement projects on their territory to make up for the seasonality of their economy, for example in the Maritimes or in certain regions of Quebec, a federal intervention aimed at providing programs which support Canadian entrepreneurship could easily trigger a centralization of businesses in the large centres, and thus result in an even greater population decrease in the outlying regions.

The provinces, and particularly Quebec, will have to spend energy and money to fight that approach. The federal government will do just the same, with the result that public servants will be very busy and will work really hard, but not toward the stated goal, which is to develop the economy.

If only one bill or another was involved, we could talk about a blip on the screen, or say that the federal government wants to interfere in social programs because it feels that some provinces are not adequately assuming their responsibilities. However, this is a planned approach. It is a systematic approach designed to make Canada a unitary state.

The predominantly English-speaking provinces probably have no problem with that approach, since they are pretty comfortable with a system where the federal government assumes all the responsibilities. A university chancellor in the Maritimes told me that we were now at a stage where we need a federal department of education and that it will have to come to that. I told him that I appreciated his being so clear about the issue. Such will be the choice for Quebecers. They will have to decide whether to keep the steamroller which, in 1982, unilaterally erased the reference to two founding nations in Canada's constitution.

Now we are left with the Canadian people. Since 1982, all the federal structures have favoured this approach, which is at odds with how Quebec wishes to develop.

Take health, as an example. The official opposition is said to continually criticize the federal government's interference in areas of provincial jurisdiction, but, of course, they are sovereignists. The members opposite will even say we are separatists. But if we take an event like the health forum, there could have been two different approaches.

The federal government could have made sure that the provinces were represented. The discussions might have taken a little longer, but it would have been possible to reach a consensus and find a logical solution. Instead, it was decided to hold the health forum without the provinces. Not to worry, we will bring in experts to define Canada's needs. The result was inevitable.

We find ourselves in the situation where the recommendations resulting from this forum will have no credibility with the provinces, who already have jurisdiction in this area and are aware of the problems created by the reduced federal budgets. And more problems are expected in the future. The provinces must take on increasing responsibilities, with no consultation by the federal government, accepting the news and making short term adjustments.

Here we are at the beginning of June 1995. Quebecers are three weeks away from their national holiday and a few months away from a referendum in which they must decide if they want the future of the people of Quebec to be governed entirely by Quebecers or whether they can risk seeing the people of Quebec become just a minority among Canadians within the Canadian constitutional context.

We have the choice of accepting the model proposed by the federal government or fighting it within the existing Canadian system. But that has been the nightmare of the last 30 years. There is no longer anyone in Quebec who dares to say that we should keep trying to change the federal system. No one in a position of political responsibility would say it because it no longer has any credibility, there is no longer any likelihood that it can be done.

The third choice available to Quebecers is to leave the existing federal system, eliminate duplications and overlap, all the reasons to do with how it operates. But why, when it comes right down to it, should we leave? Why must we make sure that these unsuccessful efforts are not repeated? Why cease these futile struggles? Because, fundamentally, we are a nation. We have long sought to work out an agreement with Canada's other founding nation. Now is the time to make a choice. As Maurice Duplessis said: "Donnez-nous notre butin". Faced with a choice between what this government is offering us and taking

control of our own destiny, I think that Quebecers will choose Quebec and that, in the fall, they will decide that it is time they had their own country.

[Jane Stewart, Liberal, Brant, ON]

Madam Speaker, in my hon. colleague's earlier remarks he referred to Bill C-76, particularly the Canada health and social transfer, somehow implying that our change to a block funding format is reducing the flexibility or changing the control the province has in the areas of health, education and social assistance.

I sat on the finance committee and listened to witness after witness say that they were concerned the strategy was quite the opposite, that perhaps the block transfer gave too much flexibility to the provinces.

The hon. member must be able to defend that. The people of Canada are seeing just the opposite. Under Bill C-76 we are not infringing upon or tying the hands of the provinces but doing quite the opposite. We are giving them far more latitude, far more opportunity to spend the moneys transferred to the provinces in the way they see as best.

There were questions earlier of my hon. colleague, the Parliamentary Secretary to the Minister of Finance, that said we were somehow creating new guidelines and controls on the provinces. However, as the parliamentary secretary indicated very clearly, the words mutual consent are just that. The provinces would have to agree to any new standards and guidelines and if they did not, fair game.

How can the hon. member convolute Bill C-76, particularly the Canada health and social transfer, into any kind of representation that the federal government is trying to put more controls and more strings on the provincial responsibilities and ability to use their funding in those areas?

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Madam Speaker, I think that the question is quite pertinent, because it gets to the heart of the debate. In effect, the organizations from English Canada which testified before committee had the gall to say that, if the provinces were given too much latitude, they might do things that hinder their objectives as organizations.

Let us look at what led to this situation. Twenty-five or thirty years ago, the federal government opened up its floodgates and began funding all kinds of programs. This contributed to our current debt. These organizations, which have all along been fed by the federal government, fear that when the government runs out of money, instead of simply saying so, it will decide to reduce transfers to the provinces, which will in turn reduce the capacity of these organizations to act.

Their reaction is understandable, absolutely normal and healthy. They want to survive and are looking for funding. Each group is doing it the best way it knows how. But did you see any Quebec organizations behave in such a fashion in front of the finance and human resources development committees? Did any of Quebec's organizations appearing before the finance committee say "we could not live with the decision to give Quebec jurisdiction over social programs?" No, not a one.

The main government for Quebecers is the government of Quebec. The government of Quebec is responsible for providing the fundamentals to promote at the very least the survival of Quebecers as a people. Many years ago, Quebec realized that that was not enough. We cannot live on unemployment insurance benefits alone. We do not want people telling us that they are our cash cow, that they hold the key to our development. What we want is control over our own development and the ability to implement measures that will get us out of difficult situations.

We, not just Paul Crête the separatist but all Quebec labour stakeholders, have been systematically petitioning for jurisdiction over the labour portfolio for 10 years now. The Liberal Party of Quebec, the Conseil du patronat du Québec, the unions, and everybody in between all agree.

It is obvious that Quebecers took part in the Canadian confederation in the hope of harvesting good economic benefits. Today, they are realizing that they do not have enough power to develop to their potential in this system. Worse yet, they are realizing that the federal government would force them to use the model that the other provinces want.

Take for example the changes made to the loan and bursary program this year. The main section says that all provinces with a loan and bursary program must meet all of the requirements of the federal minister. The anglophone provinces have no problem with that, but Quebec developed a unique loan and bursary program 25 years ago. When this program becomes compulsory, which is why in Quebec particularly, students were opposed to this bill, Quebec will have to revamp its program completely to make it conform to national standards, without the social adjustments we want to include.

In Quebec we are willing to have government pay a larger share of tuition fees. We are willing to let students have a better balance of bursaries and loans. The Canadian model does not want to develop that. Let them go ahead and develop a different model, but let Quebec have the option of doing as it sees fit.

Briefly, to answer the question, I think we have reached a decisive stage. We must get out of this artificial financing, because Canada no longer has the artificial means to spend as if there were no tomorrow. The debt is no longer the government's business, when people from outside the country come to tell the government to find ways to control the debt.

So they closed the tap part of the way. The federal government decided it would offload budget cuts on the provinces, and now we are going to have to pick up the pieces. You can live beyond your means some of time, but not all of the time. In any case, there will have to be some major structural changes, but the most positive change would be to give these two communities, Quebec and Canada, a chance to develop side by side without putting obstacles in each other's way, and to let them each control their own future.

[Jane Stewart, Liberal, Brant, ON]

Madam Speaker, I think the hon. member has just made my case. He says that the people of Quebec want to have the responsibility to spend the moneys on health, education and social assistance in the way they see fit.

That is what the block transfer allows them to do. We put the money together in a fund and give it to the provinces that constitutionally have the responsibility to provide programs and services for health, education and social assistance. We are telling them they know best. They can take the money and allocate it in the way they see best fitting for the people of Quebec. The block transfer gives that flexibility. It gives the provinces the responsibility to respond to its own constituency in those areas.

In the course of the debate I cannot see that the opposition has any real clarity or substance to its point.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Madam Speaker, I think the clearest answer to this question, the best example, to be objective, is not to be found in Quebec, but in Alberta. The provincial government there has an approach which is very different from what the federal government might wish. It is almost forced to cheat with federal standards in the area of health. It is forced to beat about the bush, because it wants different rules. But the federal government, despite its reduced funding, feels free to establish very clear national standards regarding the five principal conditions. And so the provincial government becomes the bad guy. Provincial governments are certainly not going to accept responsibility for the years of bad management of funds by the federal government.

[Denis Paradis, Liberal, Brome—Missisquoi, QC]

Madam Speaker, I would like to make a couple of comments on what we have just heard.

First, a reminder regarding the Canada social transfer. Could it be that what the Bloc members do not like in this is the word "Canada"? They might like it better if it were called the Bloc social transfer. Indeed, it is the word "Canada" that irritates them the most in the expression Canada social transfer.

It must be pointed out that the Canada social transfer includes education, health care, and social assistance. From now on, under the Canada social transfer, Quebec will receive block funding, as will all the other provinces, each one of them; the Quebec government will be able to allocate this block funding as it sees fit. It will decide how much will go to education, how much to health care, and how much to social assistance. This is important.

The federal government is only setting the following two conditions; this is extraordinary decentralization and flexible federalism. First, the health care system will have to remain Canadian, and accessible to all Canadians. As our Prime Minister has said on several occasions, the health care system must allow people to be admitted to the hospital when they are sick, not because they have money.

Therefore, a universal health care system is the first condition, The second one is that there be no minimal residence requirements. This is simple, this is not complicated, this is what the Canada social transfer is all about, whether you like it or not. Furthermore, the member for Kamouraska-Rivière-du-Loup mentioned earlier that this system was centralizing.

I would like to go back to something I said earlier using FORD-Q as an example. This is something I discussed with several of my constituents-I am fresh out of an election campaign and have been in this House for close to three months-and people in Brome-Missisquoi want to keep FORD-Q. Not only do they want to keep it but, as I mentioned earlier, at a forum recently held in Trois-Rivières on the future of the regions in Quebec, people demanded that Quebec do its share with regard to regional development. To this day, Quebec has done nothing. The federal example is convincing and I believe that we must continue along the same line.

To conclude, I would like to ask a question to the member.

[The Acting Speaker (Mrs. Maheu)]

I am sorry, but the member has risen on debate. He has 10 minutes. I understand that you are sharing your time.

[Denis Paradis, Liberal, Brome—Missisquoi, QC]

Madam Speaker, I thought I had risen on questions and comments. For the debate, I intend to share my time with the member for Durham.

The motion of the opposition suggests, among other things, that the legislation implementing the Agreement on Internal Trade is aimed at reducing Quebec's powers to the benefit of the federal government. First of all, I would like the member for

Shefford, the mover of the motion, to become familiar with the bill.

The preamble reads as follows:

WHEREAS the Government of Canada together with the Governments of Newfoundland, Nova Scotia, Prince Edward Island, New Brunswick, Quebec, Ontario, Manitoba, Saskatchewan, Alberta, British Columbia, the Northwest Territories and the Yukon Territory have entered into an Agreement on Internal Trade;

AND WHEREAS the reduction or elimination of barriers to the free movement of persons, goods, services and investments is essential for the promotion of an open, efficient and stable domestic market to enhance the competitiveness of Canadian business and sustainable development-

This is the preamble to the bill.

Clause 5 is not too complicated. Clause 7 says: "The Agreement is hereby approved".

This is an agreement between the provinces and the federal government. This agreement between the federal government and the provinces shows once again how efficiently Canadian federalism can accommodate differences and produce concrete, practical results.

For example, in Brome-Missisquoi and particularly in the Estrie region, there is an very high degree of co-operation in labour matters between the Monteregian and Estrie manpower associations and Human Resources Development Canada. We sat down together and signed an agreement, a document looking at job opportunities in the next five years.

This is another example of the co-operation between the federal government and Quebec.

Canadian federalism requires a high degree of consultation and co-operation between the federal government and the provinces on a wide range of issues. Federal-provincial relations are doing very well in Brome-Missisquoi. I must say that the relations are quite friendly.

Our federalism is based on a series of intergovernmental mechanisms that allows us to overcome difficulties. That is why, over the years, we were able to work out various arrangements between the two levels of government.

This approach is successful in our federation because the Prime Minister, the premiers, ministers and public officials all work in close co-operation to achieve concrete, practical results.

These arrangements are an essential component of the Canadian federation and provide flexibility.

These various mechanisms and this great flexibility associated with our kind of federalism enabled us to achieve the following in co-operation with our partners: the signature of infrastructure program agreements with all the provinces.

This program was implemented quickly with the co-operation of the federal government and all the provinces, is working very well and has created jobs from coast to coast, which is what Canadians want.

We also signed action plans to reduce overlap and duplication with eight provinces and two territories. We set up Team Canada. As you may recall, the Prime Minister travelled to Asia and South America for the purpose of making inroads on new, promising markets. Again, for the purpose of strengthening the economic union, we signed an agreement to reduce interprovincial barriers to the free movement of goods and people.

Consultations on interprovincial barrier elimination in Canada is a fine example of co-operation that lead to a practical agreement, which reflects the flexibility and vitality of this federation. The Government of Canada engaged in consultations with the provinces and territories, and together they agreed on a process that resulted, once again, in an agreement which is fair and just for all concerned.

Specifically, the agreement lays the basis for preventing the creation of new barriers and eliminating existing ones in nine areas of economic activity. It increases transparency and puts in place a dispute settlement mechanism available to individuals as well as businesses to ensure government compliance with the agreement.

It provides for the development of action plans in a number of areas, so that standards are harmonized. It covers major areas like transportation and consumer protection. In addition, great emphasis is put on the environment in this agreement, thereby setting it up as a modern-day concern.

Finally, the agreement takes Canadian diversity into account by ensuring a fair balance between trade objectives and government objectives.

This is the first agreement of its kind in Canada. It represents a major victory for all Canadians. It proves conclusively that the federal, provincial and territorial governments can work together, provided there is good faith.

This agreement is a key part of this government's strategy for promoting strong economic growth in Canada and getting Canadians back to work. The Internal Trade Agreement, complete with concrete changes, implementation schedules and thorough process, will reinforce the Canadian economic union and promote freer movement of people, capital, goods and services within it. It is the exact opposite of the separatist option, characterized mainly by self-centredness and a fascination with one's navel.

Contrary to what the hon. member opposite suggests, the act to implement the Internal Trade Agreement is not designed to take powers away from Quebec or any other province, but to ensure that we all grow stronger.

[Pierre Brien, Bloc, Témiscamingue, QC]

Madam Speaker, I will make a few comments before putting my question. First, I want to point out the contradiction in the hon. member's last comment. He claims that sovereignists are self-centered, but it is the federalists who say that, if we do achieve sovereignty, they will not enter into an economic union with Quebec.

So, which side is self-centered? It is the Canadian side, and I do not mean the people, but those who are mandated to represent them and do not do so properly in this case. They are the ones who say that they will refuse to participate in an economic union with Quebec. They are the ones who are self-centered, not us.

As for us, we are saying just the opposite: we welcome the idea of a partnership. After all, it would be consistent with today's trend. It is possible to want to control things and have as much power as possible as a nation and still be open to the idea of economic partnerships with others.

It is the hon. member who is inward-looking and self-centered. He is new here but, over time, he will come to recognize all the examples of duplication which exist.

The member referred to the Canada social transfer. I participated in a talk show at a Montreal radio station, CJAD, with the Minister of Human Resources Development, who addressed people who were panicking at the idea that the federal government would no longer have control. Interest groups in Canada are indeed concerned when they realize that the federal government will have less control over social programs. They are worried when they see the rise of the right wing in western Canada, and I can certainly understand their concern. They are worried about this whole issue.

The Minister of Human Resources Development told these people, and you can listen to the tapes: "Quite the contrary! We will now have more control than before". I would appreciate it if the two of them could get together and try to reconcile their views, given that the member just referred to an extraordinary flexibility.

He also mentioned the Federal Office of Regional Development, now a federal structure with no money and no means to act, but which gets involved in many issues. The member says: "Now, this is a good illustration of the future in regional development". I say that there is still a lot of room for improvement.

Let us now look at the issue of manpower, to which the member briefly alluded, and also the co-operation agreements in his region. In his speech, the hon. member said that we would discuss, examine and consider the issue, and that is exactly what is being done. But while governments are discussing, the unemployed and welfare recipients are not working. While he says: "It is all right, federal and provincial officers are working together, trying to harmonize things and reduce overlap", nothing is being done, because of all the tension between the two levels of government which are always eager to pass the buck back and forth.

When only one level of government will be dealing with this issue, things will be clearer for the citizens who will have a more direct influence. The time will have come to stop talking about it and to take action, and I can hardly wait. My question is related to all of this. At first, the Minister of Human Resources Development said that he would reduce transfer payments for post-secondary education. Given the reaction of students, the government decided to hide its agenda first by lumping up the programs and then by making its cuts so that no one would know which program was hit the hardest.

Having said that, let me add that the Quebec National Assembly unanimously passed a motion put forward by the Action démocratique, with the support of the Liberal Party of Quebec, the close federalist friends of the members opposite, which said that Quebec should get more tax points instead. They all agreed on that.

Since the hon. member believes that the system is flexible, I would like him to tell us why his government does not want to give this area of jurisdiction to the province of Quebec and if he supports the resolution passed by the National Assembly of Quebec, which is asking for more tax points instead of cuts to cash transfers. I would like to find out the position of the hon. member on this issue.

[Denis Paradis, Liberal, Brome—Missisquoi, QC]

Madam Speaker, my first comment would be to say that Canada is a country that works. Maybe that is why our colleagues in the Bloc Quebecois do not know which way to turn. Canada is a working proposition. A moment ago, they were talking about dismantling something that works just fine in order to set up a new partnership. That is exactly the word used by colleague from the Bloc.

If we are to have a partnership, mutual respect is a prerequisite. Hurling insults at people or at a system will lead us nowhere. Canada already has a structure to accommodate co-operation and partnership between the provinces and the federal government. Scores of agreements have been signed by both levels of government. That structure has been designed to let Canada as a whole and the provinces, reach for a better future.

My second point concerns the Canada social transfer, which demonstrates the flexibility of federalism.

[Alex Shepherd, Liberal, Durham, ON]

Madam Speaker, it gives me great pleasure to enter into this debate on the motion by my hon. colleague in the Bloc Quebecois.

What we are discussing today is flexible federalism. Indeed, I think sometimes that my hon. colleagues in the Bloc do not understand the word flexible. What has kept Canada together for many years has been the fact that people have been able to understand and respect each other's differences and diversities.

I can remember reading an article about an American study which was commissioned during the second world war. It said that of all the allied countries which were fighting in the war, Canada was the most likely to break up.

As we stand here today we can reflect on the erroneousness of that report which talked about Canada's being so decentralized it would be an easy matter for it to dissolve. The reality is the decentralization of Canada is its strength.

We govern a huge geographical country. This part of the northern hemisphere has not only great cultural diversity but also climactic diversity due to our geography. Lester Pearson once said we have too much geography in this country. There is some truth to that.

My fellow colleagues in the Bloc often discuss and point to what they believe is duplication and overlap. They like to point out this is some kind of failure of our federal system. Let us look at some of these programs. I am amazed at some of the areas Quebec does control. It has control over immigration and controls for a large part its own income tax system. For most countries their individual states do not have these kinds of powers. Clearly we have already decentralized significantly in Canada.

The Bloc often says our having shared jurisdictions creates inefficiency. Duplication and overlap is the theory. I have been interested to discover one area of purely provincial jurisdiction in Quebec, education, does not perform particularly well. Next to Alberta, Quebec has the highest drop out rate for secondary education institutions, over 30 per cent.

Quebec spends the highest per capita on education with $7,132 per student. With this exclusive control it would appear it has been unable to solve its problems. All provinces have problems, but it is not clear that by not having shared jurisdictions somehow there are great efficiencies to be earned. With shared jurisdictions there is more of a consultative framework, more of an opportunity to get good advice form across the country.

I will deal with two components of the motion. It talks about Bill C-88, an agreement on internal trade. All provinces have basically consented to this and signed this agreement. In an era when we are discussing things like the GATT agreement and NAFTA it seems almost a tarnish and a shame on Canada that we have to argue and discuss trade agreements within our country.

The Bloc Quebecois has often talked about a European Union type of government. In reality the European Union probably has freer trade within its union than does Canada. The agreement on internal trade does not solve all of these problems. There is continued inhibition of trade within our country. It seems odd to me when this act is used as part of an argument that somehow we are trying to concentrate power in Ottawa when in reality we are trying to create a free market within our nation.

The motion deals with Bill C-91, an act not to create something new but merely to rename something. I can only assume my colleague's concern is the Federal Business Development Bank may well become the business development bank of Canada. I do not know if the use of the word Canada bothers him so much. I do not like those words. When I see the words of Canada I think of American corporations operating in Canada, such as General Motors of Canada. Be that as it may this is the proposed new name.

It seems to me some of the things proposed in the legislation are to create more dynamism in arranging capitalization of small and medium sized businesses. This is something very close to my heart. I believe through creating new capital markets in Canada we will encourage and create new jobs. The business formation is inhibited by its inability to seek capital.

I have listened to some of my colleagues in the Reform Party who speak against this bill because they feel it is a competition with existing banking structures. The Federal Business Development Bank and in some ways its sister company, the Farm Credit Corporation came into existence for a very significant and real reason: there is a significant lack of long term business financing. Our banking sector has basically become a short term lender. The popular loan within the banks is a demand loan. Imagine borrowing some money today and tomorrow the banks can call it back. That is how the banks want to lend. There are a number of reasons. It has to do with their deposits and so on. That is what banks are.

In a sense there is a disequilibrium in the market which is long term financing. Banks do not get involved in it mainly because of the way they are capitalized. The Federal Business Development Bank, which is now called the business development bank of Canada, will raise funds in Europe and other equity markets throughout the world and attempt to match them on a long term approach.

It does not matter whether we are in Quebec, Ontario or Saskatchewan, small business needs some kind of access to this capitalization and it is not being provided in Canada.

In the United States it is common to have mortgages that run 30 years and payable in 30 years. This gives people a great deal of security in their arrangements. We do not have this in Canada. Our capital markets are deficient because we have only short term lenders. Because of that uncertainty in our marketplace

small businesses find it very difficult to become capitalized. What they want is equipment. Farmers are probably the most capital intensive of any business with farmland, equipment and buildings that cannot be paid off tomorrow.

I am surprised that my colleagues in the Bloc, who I am sure must be interested in creating jobs in Quebec which has one of the highest unemployment rates in Canada, would see this bill as somehow a centralizing factor. This bank has branches throughout Quebec. If we had only one branch in Ottawa and we made all the people come here, I would call that centralization. When in reality facilities are available not only in Quebec but throughout Canada that is a decentralized approach and we are not treating any one province differently than another.

These are not gifts. These are not grants. These are not sources of regional development. People simply borrow money on a long term basis and pay it back over an agreed period of time. It is fulfilling a need.

I understand some people wish the private sector would do this. Why Canada is typified by short term capital markets I do not know. However, this is the way it is being addressed. Hopefully some day we can privatize this bank, but it has not occurred. Most of the major banks still do not get involved in long term lending.

From my experience the Federal Business Development Bank has been a major asset in lending to small businesses.

The important thing is both of these pieces of legislation have nothing to do with centralizing the power of the state but they have everything to do with creating jobs in neighbourhoods and communities in Quebec and in Ontario.

The problem we have with a lot of people is we have too much government. I do not think we need to centralize it. We need to get government closer to the people.

[Ed Harper, Reform, Simcoe Centre, ON]

Mr. Speaker, it is a pleasure for me to rise this afternoon and speak in opposition to the Bloc motion.

In some ways and in some areas of the bill highlighted on this motion we agree with the Bloc that the system is broken and these bills are not addressing the real problem.

Where we differ with our colleagues from the Bloc is the problem is repairable. It can be fixed. There is absolutely no reason for quitting or separating. Canada is worth fighting for and that is what we have to do.

What I read in this motion, the me, we mentality, is the real problem. It is what is in it for me and not what is in it for Canada.

I recall an article about the me, we generation. It identified the 1980s as the me generation. It talked about the Milkens in the United States and the Campeaus in Canada who were out for personal gain and glory at the expense of jobs to thousands of Canadians.

The article suggested that changed in the 1990s, that the 1990s changed to what we call the we generation. It talked about people becoming more concerned about what is really important in life. It talked about the number of people who have started contributing to charities and working for the betterment of their communities.

In the article a minister had interviewed many people in their last moments. He never had heard anyone say in those last moments they wished they had spent more time at the office. The message there was we all have to remember that what is good for the family is really what is important.

There was also a story of a very successful stockbroker who had made millions in the stock exchange, more money than he could ever hope to spend in his lifetime. He quit all that when he realized what was really meaningful in life and what was really important to him was missing. He walked away from it. He went home to look after a young family even to the point of making sandwiches and participating in life. He found a great deal more satisfaction from that. This mentality of we, me is at the bottom of many of the problems we have in Canada today.

The status quo has been rejected overwhelmingly. There is no question about that with 205 new members elected to Parliament. There was a very strong message from the Canadian people they were not happy with what had been happening here and they wanted change.

Change does not mean walking away or quitting. The change they are asking for is a change to the system to make it work, to make for a better and united Canada. Canada is worth fighting for. We have the greatest country in the world.

We have a great opportunity with 205 new members. We have some fresh thinking, some new ideas and new visions for a new Canada, a Canada where all citizens in all provinces will be treated equally.

I am sure the people in the province of Quebec are no different from the people in every province across this great country. They are looking for a government that will live within its means. They are looking for a government that will do what it has to do in their lives and in their businesses.

There is no way any family or any business can continue to go deeper and deeper in debt year after year and survive. The people in Quebec are looking for politicians with integrity who will say what they mean and mean what they say. The tragedy of broken promises has created a level of cynicism which has to be overcome all across Canada.

They are looking for a change in the process. They are looking for changes with the government being more responsive to the needs and demands of the people. They want to have a say in what is going on in Ottawa, not just hear the voice of Ottawa in the ridings. They want a change in the process. Freer votes, referenda and recall are all issues which the people of Quebec would support as well as the rest of Canadians. As I said in another speech, if you want trust you have to give trust. We have to do that to return to the level of trust that has been lost. I am sure the people of Quebec are no different from other Canadians in wanting safer streets, safer homes and safer communities.

This motion highlights several bills and I would like to deal with two of them, the budget bill, Bill C-76, and Bill C-88, that deals with interprovincial trade barriers. In those two bills the government missed an opportunity and failed to unite Canada and to address the barriers which exist. I would like to highlight where the government went wrong and what should be done to restore Canada as a united nation.

The budget was wrong. It failed dismally in addressing the deficit and the debt, which are the most serious problems Canada has today. I was very disturbed and disappointed by the Bloc response to the budget. Apparently Bloc members still do not understand and appreciate the fact that the deficit and the debt are the major problems in Canada. What I heard was: "It is not really a problem. It is not too serious. All we have to do is trim a bit of government fat. Whatever we do, we should not touch the social programs because they are sacred".

I would suggest that with a $600 billion debt, overspending of $25 billion a year and interest payments approaching $52 billion, all programs have to be looked at thoroughly. It cannot be done simply by trimming government fat or by going after the social programs. All areas of government spending must be addressed. The spending which has been taking place in social programs, because they represent such a huge portion of the total spending envelope, absolutely has to be addressed.

The message is that Canada has a spending problem, not a revenue problem. Canadians from coast to coast understand that. They were ready for the budget. When I say coast to coast I am including the people of the province of Quebec. They understand the magnitude of the problem. They understand that living beyond our means has to come to an end. There will be some pain associated with it, but that is facing reality. To suggest that the deficit might be tackled by getting delinquent taxpayers to pay the tax dollars they owe is a flight in fantasy. It nowhere nearly approaches our enormous debt.

It is interesting that Moody's, the bond rating agency which fired a warning shot across the bow of the finance minister before the budget came out is not Conservative, Liberal, Reform or Bloc. Moody's is non-political and was, as a bond rating agency, in my estimation, doing us a favour. It was sending a warning to the government about the seriousness of the overspending problem.

What did we do? We shot the messenger. The messenger was not telling us what we wanted to hear. In reality the messenger was giving us good fiscal advice to get our house in order and to get it in order quickly. It did that in advance of the budget because there were two messages which it wanted the government to get.

The first message was that 3 per cent of GDP is too low a target. It is easy and it will not fly with the investors that have been buying our bonds. The second part of the message was that it wanted a date set when Canada was going to achieve a balanced budget. Rolling two-year targets that the government hopes to meet will not fly with the people who have been buying our bonds. They want to know how and when Canada will balance its budget. No reasonable banker and no reasonable Canadian would expect less.

The downgrade which Moody's threatened before the budget was introduced, as we know now, happened. The budget which could have united us did not. In fact, it is doing more damage to the country as we are going deeper and deeper into debt. The downgrade has not really taken effect yet but it will down the road. It will have a very dramatic effect on the rate of interest paid to finance our bonds. Every 1 per cent increase in those interest rates costs Canadian taxpayers in the first year of borrowing an extra $1.7 billion. The impact of that downgrade is very significant and does not look well for the future.

The budget has been passed on the assumption that interest rates will remain fairly stable. That is a very dangerous assumption. It does not take into account the possibility of a downturn in the economy which we know is coming. It is not a matter of if it is going to come. Economies go up and down and Canada could very well be into a downturn in the economy now and is very poorly positioned to deal with it.

Canadians know there are three ways to balance the books in Ottawa. One is to raise taxes. The second is to hope for growth in the economy and the third is to cut spending.

Canadians from coast to coast are not prepared to pay any more taxes. Again, the people in Quebec are no different from the people in every other province who are taxed to the limit.

That is not an avenue that the government should explore to raise funds in order to balance the books.

Growth in the economy is an area the Liberals look at through rose coloured glasses, hoping that there would be greater growth in the economy than actually happens. The downside of that is when the economy does not grow. In fact our deficit and debt has increased, it has not been reduced.

Going back to taxes for a moment, taxes right across Canada are counterproductive. The more taxes are increased, the more the underground economy is fuelled. As huge as it is now, it will only grow by any attempt at an additional tax grab.

The area that we have complete control over is spending. That is where the government missed with this budget. It did not go after the reductions in spending to get the books in balance so that there would be no new and increased taxes.

The government likes to say that it inherited the problem. I suggest that it initiated the problem. I go back to the years 1963 to 1984 when the debt rose from $20 billion to just about $200 billion when it left office.

Unfortunately, the Conservatives took office and in their years from 1984 to 1993 the debt increased from $200 billion to some $490 billion. It is interesting that some of the Bloc members today were actually sitting with the Conservative government and were allowing that debt hole to continue to go as deep as it did.

It is also interesting to recall that very little was done by government members when they were in opposition to support any of the attempts that were made to get spending under control. For them to say that they inherited the debt is not quite factual. They initiated the problem several years ago that put us in the mess we are in today.

In 1993 when the Liberals presented their first budget, they still had no idea of the magnitude of the problem. The message we got then was: "Be happy, don't worry. This deficit and debt are not serious. We are not going to do anything". In fact they did nothing.

I should not say that nothing was done but what was done was unbelievable in the short time after the budget. The Bloc was part of this. They gave in to the smugglers. They gave away $350 million in taxes that Canadians could ill afford then and certainly could not afford today. That is aside from the additional health costs that are down the road because of that very foolish move on the part of the government.

What has been learned since is that the forecast of $350 million, which should not have surprised us because they are not good with numbers, turned out to be something like $800 or $850 million. It cost nearly a billion dollars to give in to the bad guys, the smugglers. It is unbelievable given the fiscal position we are in.

What happened in 1994? We had an admission that the problem was serious. Now the finance minister is saying that this is a serious problem. It may even be life threatening. Unfortunately he does not have a solution.

They have some plans for these rolling targets. At the end of this first rolling target the government will still be overspending by $25 billion a year and will be $600 billion in debt. When it addresses the next budget it will be trying to shoehorn in $52 billion in interest payments.

If members think this budget was difficult, try the next one, where the government will be trying to find a way to accommodate $52 billion in interest payments without any significant cuts. I would suggest it cannot be done.

Canadians in every province want fiscal sanity in this place and that is not what Bill C-76 gave us. They are not looking for pie in the sky. They know what has to be done. They are looking for reality and they are prepared to support a government that will give it to them.

Let me speak for a moment on Bill C-88 concerning interprovincial trade barriers. It is a bill that could have meant a great deal to uniting the country but it missed the mark completely. It was a great opportunity to bring down the walls that are dividing us east to west.

In spite of the barriers there is about $146 billion in trade between the provinces. It was the Canadian Manufacturers' Association that said those barriers are costing taxpayers $6 billion and hundreds of thousands of jobs.

Canada can trade north-south with free trade but it still cannot trade east-west. Bill C-88 did nothing to really address that. It just touched lightly on some areas but did not get into the real meat of the barriers that are there.

Free trade is talked about as the salvation of Canada. If it was not for free trade, our exports would be in a much sadder condition than they are presently. Free trade was violently opposed by the current government when it was in opposition. Today it is proving to be its salvation.

The federal government has a responsibility for breaking down the barriers to interprovincial trade but it has abdicated the responsibility. Those walls must be broken down because those barriers are interfering with the interaction of governments and deterring the development of culture between the different provinces.

The provinces have always been able to negotiate bilateral trade agreements. As a matter of fact one was negotiated between Quebec and Ontario regarding the construction trades. Both provinces worked that out and it was a model which showed those things could be worked out across Canada.

Bill C-88 as it is now discourages international investors from coming into all the provinces and creating employment. Years were spent negotiating GATT. The Department of Finance estimated it represents about a .04 per cent increase in Canada's gross domestic product. Yet the Fraser Institute said that if interprovincial trade barriers could be broken down the GDP could be increased anywhere from 2 per cent to 6 per cent. All this time has been spent negotiating GATT for .04 per cent when if something was done about internal barriers a much more significant improvement could be made in the GDP. This would translate into jobs that are sorely needed in the economy. As I said, it would strengthen our economic, political and cultural ties.

These barriers cause lost jobs in every province resulting in higher taxes and making us less competitive in the global economy. If we really want to benefit from north-south free trade, we can only do it by maximizing trade east-west as well. Again, it is the me mentality that exists which must be broken down. It has to give way to the we mentality.

In closing, I would like to say that with 205 new members in the House we have a great opportunity to resolve the problems in the country. We do have problems. There is no denying that. We are a family and all families must give and take. In every successful marriage it is give and take. It is never all one way if it is to be a successful and happy marriage. Working together we can fix it. We can make Canada a better place for all Canadians.

Indeed, Canada is worth fighting for. I intend to fight for it as hard as I can, as hard as I know how. I want to do that because my grandchildren are counting on me to do that.

[Mac Harb, Liberal, Parliamentary Secretary to Minister for International Trade]

Madam Speaker, I would like to begin by making a comment and then asking my colleague to answer a question.

First, I very much enjoyed the beginning of his speech where he spoke about the me and we mentality. Then for whatever reason, I do not know why, he derailed himself and took a different type of train. I counted in excess of 52 different negative connotations throughout his speech. He spoke at the beginning about public cynicism and public confidence, yet his speech dealt only with the negative but not really the positive things this government and this country have to offer its people.

My colleague surely knows it is not government that creates jobs; it is the private sector. Surely my colleague and the public would know that all the government can and should do is create a proper environment so the private sector can create jobs. Historically, it has always been the private sector that has created jobs.

I would like to bring to the attention of my colleagues that interest rates since we took office have been stable; we have stability in interest rates. Our trade has hit an all-time high. Our economic growth is leading the G-7 countries. My colleague could testify to the fact that our growth is greater than any other country in the western hemisphere.

The government has taken a number of steps in order to streamline and reorganize the way we deliver services. In fact some of those bills deal specifically with reorganizing, with giving different levels of government different responsibilities so we can better do the job we are supposed to be doing.

I also wanted to bring to my colleague's attention that there is a myth that government should not be looking at taxes for generating revenue. The only way for government to get revenue is through taxes. How else can we support programs unless we are generating tax revenues? Economic growth means businesses are doing well, which means government is generating more taxes.

Telling the public we are no longer going to collect taxes gives the wrong signal; it is the wrong thing to say. We should be saying that we need economic growth so government revenue could increase through taxes. If businesses do well we will bring in more taxes.

I do not understand why my colleague would say we can no longer collect tax from the private domain. That is the only way governments here and anywhere in the world can do business unless they were to go into business themselves. We were in business in the past. This government is trying to get out of doing business itself by streamlining, by privatizing part of the crown corporations we have so they can do the kind of work done by them in the past through the government. They will be able to do it on their own.

On the issue of spending, this government has done a tremendous amount of work in the area of spending. I do not know what my colleague expects. In one year the government came down with a budget that slashed over 45,000 jobs from the public service itself, from the public domain.

If we were to look at the balance sheet, this government is now generating more revenues than we are spending. In a way we are already in a surplus position. The problem here is there are no more cuts to be done but we have to increase revenues.

I will submit to my colleague that we should turn the me and we mentality into a mentality of we collectively.

Finally, I wanted to ask him what specifically he would suggest the government do that it has not done, and give it to us in point form without any negatives.

[Ed Harper, Reform, Simcoe Centre, ON]

Madam Speaker, there was a lot said by the member for Ottawa Centre.

I would like to begin by saying it is very difficult to find anything but negatives when we are responding to this government's agenda. I could not believe it when I heard the member say that it is not governments that create jobs but the private sector. That is not the message that has been coming across the

floor. They have spent $6 billion on an infrastructure program because governments were going to create jobs, arenas, boccie courts.

That is government creating false jobs, not real jobs. It still fails to get the connection between high taxes and job creation. High taxes kill job creation. If we want to create jobs we have to lower taxes. One of the provinces is doing that right now. It is lowering taxes and cutting spending. What is happening? It is increasing employment. It is getting more jobs for its people.

This budget is not a job creator, it is a job killer. The government does not create jobs, the private sector does, and the private sector is looking for tax reductions. Anybody in the private sector will say: "Get out of our lives. Get off our backs. Get out of our pockets. We will create the jobs, but we do not need you on our backs. Get off our backs and we will do it".

The hon. member spoke about the myth of taxes. I am sure that Canadians who were listening to "we do it with more taxes" are responding to that, because they are eagerly waiting to give the government more tax dollars. They have been giving the government all of these tax dollars and they have been receiving fewer services. Does the government not think they are getting the message?

The reason for the tax increases over the years has been supposedly to do something about our deficit and debt, but they have been getting deeper and deeper. It has not happened. There is no proof that the answer is to go after more taxes. In fact, the opposite has been happening for 25 years.

Where is the justification for standing up and talking about the myth of taxes? The myth is that we are taxing too much. We have to cut our spending. When we have been overspending for the number of years we have been, to suggest that we can continue to overspend and that the Canadian people will be prepared to support us with more tax dollars is to dream in the extreme.

The government has not yet received the message. It will get it in the next election. When the government addresses the next budget let it find how it will accommodate $52 billion in interest payments that are going out the window without increasing taxes and again hurting the creation of jobs.

It is nice to hear hon. members opposite talking about free trade. When they were in opposition they were vehemently opposed to free trade. Yet in fact free trade today is the salvation of this government. If it were not for free trade it would be in far worse shape than it is right now.

[Jean-Paul Marchand, Bloc, Québec-Est, QC]

Madam Speaker, as my colleague for Simcoe-Centre was saying, it is true that the Liberal government does not understand anything. But, unfortunately, the Reform Party has not yet understood that Canada's fundamental problem is not about to be solved.

Despite their good intentions, Reform members have not understood that, when powers are centralized in Ottawa, it just perpetuates a long-standing problem in Canada. When powers are centralized, taxes go up, costs go up and we do not get the services we need. So when a Reform member rises in this House to tell us that what we need is more services for the people, I have to tell him that it is certainly not by centralizing powers in Ottawa that we will be able to provide more services to the people. Anybody with good common sense would recognize that, if we want to provide more services at a lower cost, we have to get closer to the people. Therefore, powers have to be decentralized.

We can see through all the bills I have talked about that the Liberal government is trying once again to centralize even more. And, once again, it will be expensive, it may even lead to tax increases, it will certainly cause more waste, more irresponsibility, more lobbying and all the other evils that come with excessive centralization of powers in Ottawa.

If members from the Reform Party, from the west, really want to offer a solution for Canada, they have to try to return powers to their provinces. They really have to do that. If they do, government will become more efficient.

We, in Quebec, understand that bureaucracy has to be reduced. We have known that for a long time. That is exactly why we are sovereignist. We have understood that it is the only solution for us if we want to provide more services to the people, to reduce costs, to reduce duplication and to get the federal government out of the picture.

And if Reform members and western Canadians really understood the situation, they would agree with us because the option for Canada-

[The Acting Speaker (Mrs. Maheu)]

I am sorry to interrupt the hon. member.