Mr. Speaker, I wish to thank the Reform Party member who allowed me to take the floor now, since I have to leave in a few minutes.
I am happy to address the House today on Bill C-76 at report stage. Since our arrival here in Parliament, we have seen this bill take shape. It reflects the whole approach of the government to transfer payments to provinces.
The government introduced over time a series of measures which affected and reshaped its approach. It started with a cap on equalization last year, which affects mainly Quebec. The amount has been estimated at $1.5 billion over the next five years.
Last year's budget contained cuts to unemployment insurance and also to what we call shared costs programs, that is post-secondary education and health. Cuts estimated at $2 billion had already been announced in last years's budget, and this years's budget brings further reductions totalling $7 billion, which will come into effect in the next two years, that is $2.5 billion next year and $4.5 billion the following year.
This year's reductions come on top of last year's cuts. The whole area of transfer or transfer payments to provinces has therefore been hit with massive cuts.
The government also tried to conceal the whole thing in the budget by presenting transfers to provinces, tax points and equalization payments all together. It mixed them all up in such a way as to give only global amounts and summarized data. From now on, the federal government will administer a new Canada social transfer that will combine all the amounts it contributed to CAP and the Established Programs Financing for post-secondary education and health. By these cuts, or the merging of these three fields in order to make one global cut, the government is hiding its true intentions.
The Minister of Human Resources Development had given some hints with his consultations and the rainbow series of papers he distributed. At that time, it was supposed to affect post-secondary education, among others. There was also mention of other sectors such as health, but that was still to come, since there were also consultations on that issue.
Now, in order to avoid debates such as this and not wanting to be seen as the culprit for having made all these cuts, the federal government says: "Let us add everything up and cut the envelope". This way, we can shift the blame to the provinces". We have a fine example of this in Quebec with the whole debate we are having about health care reform, which is aimed of course at improving delivery but is also motivated by cuts imposed by the federal government.
Because of these cuts, the provinces are forced to choose. The federal government did leave them some leeway. That is what they call decentralized federalism: "You must cut, but you get to choose where these cuts will be made". This is easier said than done, because at the same time the government is telling us: "You will required to comply with a number of principles arising from the Canada Health Act and, regarding social assistance, residency requirements will be excluded as grounds for denying assistance to an applicant". Basically, we are told that these are the only two conditions that will be maintained, the only two national standards that will apply to the Canada social transfer.
At the same time, the provinces are expected to develop other standards together. Upon further analysis, one realizes what the government means, and reads in the committee's report that it
recognizes the responsibility of the Minister of Human Resources Development to develop standards "through mutual consent". Also stated in the same report is the need to maintain an element of cash payment in transfer payments as part of the Canada social transfer because, in time, these could be reduced to nil. It says that a portion of the federal transfer payments must remain in the form of cash payments, so that it remains possible to tell the provinces how to apply these standards.
So, they have just confirmed what we suspected all along: there is indeed a strong desire to maintain national standards through this new Canada social transfer. The bottom line is that the federal government will reduce transfer payments and that there may be more federal standards than before, since the federal government may now impose post-secondary education standards.
We know very well what happens during these discussions, when 10 or 11 people sit around a table to try to define national criteria. There is often a lot of energy spent with few results and, at the end of the day, the federal government prevails through financial blackmail. Other decisions will have to be made by the federal government in coming years.
We are still waiting for the reform of the goods and services tax, the notorious GST. The federal government still leaves itself a way out and room to manoeuvre so that it can impose its vision in future talks with the provinces. I remember being a guest on a radio show the day after the budget. Since the Minister of Human Resources Development was interviewed just before me, I was able to hear what he said. He candidly told the host-who was asking him if he was sorry that the federal government would no longer exercise control and impose standards in sectors affected by transfer payments-that, on the contrary, they would have more control than ever. This shows that what Liberals say here in this House and what they tell other people are two different things. I tend to believe what the minister said on the radio, that he did want more control and that the federal government would have more control in the long run.
I want to link this to a number of things, to a speech by the Prime Minister that has been somewhat forgotten. I remember when the Liberal Party held its convention in Trois-Rivières, in eastern Quebec. At that time, the Prime Minister accused the Quebec government of not caring about poverty, once again using his old theme about how that government was only concerned about separation. The fact is that we care a great deal about poverty and we ask: Who will be affected by these cuts? Think about it for a moment. Who will be affected by these cuts to social assistance, to post-secondary education and to health care, which come on top of cuts affecting the UI program? We have to take a close look at this issue.
The government waxes eloquently about job creation, but it takes measures which will adversely affect people.
These measures will hit Quebecers even harder, because of a series of decisions made over the years by the federal government regarding spending in a number of sectors, including research and development. As we often said in this House, we feel that, because Quebec did not get its fair share in these sectors, it was forced to become more dependent on welfare assistance and unemployment insurance.
I am not proud to say that Quebec has the largest number of welfare recipients or unemployed. We are not proud of that, and this is not the kind of financial assistance which we seek from the federal government. If another approach had been used in the past, the situation might be different now.
But this is not the case, since we were adversely affected by a series of decisions on structuring expenditures. In the past, at least the federal government would say: "We know what we did to you, but we will compensate you for that". Now, this government says: "In addition to that, we will cut the compensation which you used to receive". This is not the kind of money which we want, without increasing the rest and without giving us the means to do something about it. Just think of manpower training and the fact, as was mentioned earlier today, that the federal government will simply not let Quebec assume control of that sector.
This is a strange approach. There are also other financial cuts which will have an impact. For example, in the first year, that is next year, transfers through the Canada social transfer will be reduced by $2.5 billion, which means that Quebec will be deprived of some $650 million. In the House, ministers and the Prime Minister himself said it would probably be $300 million or $325 million. Officials who came before the committee said it would be $625 million, which is much closer to the $650 million that has been mentioned since the beginning.
If that is another illustration of this government's mathematics, it is easy to understand why people are often suspicious of its management and decision-making processes. They have their own way of calculatiing things, as ministers and the Prime Minister showed when they talked about $325 million for Quebec, while everybody knew that it was really $625 million for the first year.
As regards the $4.5 billion in the following year, the criteria for the breakdown of these cuts are still to be negotiated. Otherwise, Quebec would have to contribute $1.2 billion. But we will renegotiate, and one approach that is strongly favoured is a breakdown according to population. Under this approach, Quebec's share would be $1.9 billion.
So, the criteria change will most probably penalize Quebec. It will certainly not favour it, given that the provinces requesting this change are complaining that Quebec is overcompensated in comparison to them, Ontario in particular, which will come to the
table, according to what is reported these days, with a Conservative government, whether liberal members like it or not, which could seriously complicate the picture. So, that is how things stand right now.
In short, I will resume my speech by saying that we will end up with less money, provinces will get less money, standards will be forced on them, some pretty high standards that they will have to observe under difficult economic conditions. No doubt about it, this is shifting the financial burden to the provinces.
When the taxpayer takes a look at the federal government's books, he will find at first sight that there is a slight improvement, but he will feel a deterioration elsewhere. Either he will have to pay more for some services, or he will be hit by the cuts made by provincial governments. The situation will be a real headache for the provinces because they will always be caught with this whole intractable approach imposed on them, the compliance with national standards.
That being said, I understand there is some concern in Canada because of the rise of the right in the area of social policy. We see it in Alberta, and even here in Ontario now. In Quebec, we do not have that problem, so people there are not afraid, and are not asking the federal government for national standards.
It this system were flexible enough, we would have an asymmetrical solution that would be different for Quebec than for the rest of Canada, but here we have a Canadian vision which does not give much recognition to the specificity of Quebec on that issue.
The time to decide will soon be here. Quebecers will be able to choose other models and other approaches in a public debate, even though our mind is already made up in that regard. The Prime Minister says he is concerned with the neediest, but if he wants to keep some credibility when his government tables its record, he will have to explain why he attacked mostly the unemployed, the welfare recipients and the students since he took office.
I can hardly believe he really feels any compassion. We have his words, and then we have the facts. Here, we are faced with facts; that is what we are looking at, and we are very disappointed.