Mr. Speaker, I appreciate the accommodation in switching the speaking order.
The motions I am addressing today relate to the Canadian health and social transfer. This transfer was one of the more controversial aspects of the latest budget as it transformed the whole system of federal transfers to the provinces.
The transfers were represented by the finance minister as being more flexible in approach. In his budget speech the finance minister stated: "Provinces will now be able to design more innovative social programs, programs that respond to the needs of the people today rather than inflexible rules".
When that statement is considered on its own, it almost seems as if anyone can identify that as being something positive, constructive, et cetera. The provinces will be allowed to be more innovative and will indeed have fewer rules, therefore becoming more flexible.
I wonder what definitions are meant by innovation and flexible and how they are actually applied. Does it suggest it will allow the provinces to have more control over management of the programs and be able to adapt programs to meet the specific needs of residents in their area? Of course, innovative would be to create the programs.
The minister goes on to state: "However, flexibility does not mean a free for all. There are national goals and principles we believe must still apply and which the vast majority of Canadians support. Our goal must be to combine greater flexibility with continued fidelity to those principles".
This suggests that the government will still be making and interpreting the rules and that the provinces will abide by the decisions and interpretations. Therefore, they will have to be flexible to adapt to less money because this is very suggestive that there will still be federal control over it. Yes, they will become flexible in that they will have to adapt to providing innovative programs on less money.
We cannot have it both ways, especially based on this approach. On the one hand the federal government says it will allow greater flexibility, but on the other hand it is going to enforce the national standards.
The finance minister continued his speech with a commitment to maintain the five conditions of the Canada Health Act: universality, comprehensiveness, accessibility, portability and public administration. Then the minister proceeded to outline the cuts in the transfers to the provinces under the new Canada health and social transfer. This is an excellent illustration of how the federal government is failing to address the fundamental problem now facing health care in Canada: declining federal financing combined with a lack of provincial manoeuvrability.
Also in the red book there is the statement: "The Liberal government will not withdraw from or abandon the health care field". We are talking about semantics or the meanings of words. We talk about flexibility. Flexibility how? We talk about being innovative. How? Here we talk about withdrawal as well. Withdrawing or reducing finances can be interpreted as withdrawing
from the program as we knew it in 1993. Therefore, we have another broken promise if we interpret the word withdraw that way.
At this time I would like to provide a little background on the subject. Under the Canada health and social transfer, the funding to the provinces will be reduced from what it otherwise would have been in 1996-97 by $2.5 billion. It will go down to $26.9 billion. That tends to suggest to me a withdrawal of funds from health care. Of course, it is going to make the provinces innovative and flexible in trying to find programs which will meet the needs of the provinces based on less money. It is going to be further reduced from what it otherwise would have been in 1997-98 by $4.5 billion, bringing it down to $25.1 billion.
That is not a complete representation of the total effects of the cuts in the last budget. When discussing the value of the transfers to the provinces under CAP and EPF, the government decided to include the value of the tax points which were transferred in 1977. This component of the transfer is not and never has been a budgetary item. The value of the tax point transfer is not included in the budgetary expenditures, nor is the forgone tax revenue deducted from the budgetary revenues. We begin to wonder whether the tax point transfer was included in this whole process just to mask the depth and the significance the reductions which are proposed in this transfer to the provinces will actually be.
The cash transfers to the provinces are scheduled to fall from their 1994-95 level of $25.2 billion to a 1997-98 level of $19.9 billion. Included in the cash transfers are two components: the equalization component and the CHST component. Over three years the equalization payment will continue to grow. It will actually grow from approximately $8.3 billion in 1994-95 to $9.6 billion in 1997-98. On the other hand, funding for Canada health and social transfers will be reduced by $6.6 billion, from $16.9 billion in 1994-95 to $10.3 billion in 1997-98.
When we get through all the jargon and the process of what is actually happening and try to figure out what the bottom line is, and when we consider the components of cash transfers, tax points, the CHST component, the equalization component, the CAP component and the EPF component, what is actually going to happen? I sat down and tried to pull this all together. It looks like this will represent a 39 per cent cut over this period of time to 1998 in federal cash transfers for health, advanced education and social assistance as they are now being lumped into a block program.
When we start to think of the diminishing cash contributions, the key question which comes to mind is: How does the federal government hope to enforce the national standards in health care if the cash contributions are diminishing every year and what will happen when they get down to zero? That is where clause 51 comes into play. It allows the government to withhold any transfers, such as those going to advanced education or social services, based on its interpretation of the province's behaviour in relation to health care, or whatever it is. That is a threat to the provinces.
In any given year, based on a judgment of the government, transfers can be withheld from the provinces. Again, it must be flexible because now it will affect the other two components as well. Of course, there will be more people upset, which will also apply pressure.
The whole process is totally unacceptable because the control is being kept by the federal government instead of being decentralized to the provinces and closer to the people who are actually receiving the care. That is why my hon. colleague from Lethbridge has introduced the amendments which would prevent these kinds of contradictions and I fully support them.