Debates of June 6th, 1995

Budget Implementation Act, 1995

[The Deputy Speaker]

I understand that the hon. member for Yorkton-Melville had the floor when we interrupted the debate for question period.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Mr. Speaker, I will briefly conclude my answer.

The hon. member opposite continues to perpetuate the myth, the fairy tale, that there would be fewer poor people if we continued having more and more big government programs and big government bureaucracy.

If we borrow money year after year we will be driving our children into the poor house. Who does he think pays for big government? It is the poor people of Canada who right now are being driven into the poor house to pay for it. The government keeps saying that Canadians need to have fairer taxes. All that does is raise the taxes of everyone. The government has raised the taxes for the poor, for the hard working, for the labourers of Canada.

The people of Canada are not being fooled by all of this. This is simply a fairy tale, a myth, which the government is perpetuating, that it is kinder, gentler and more compassionate. In fact, the most cruel thing it can do is to continue to borrow more money so that Canadians have to pay more interest and continue to impoverish the people. We are borrowing from the poor to give to the rich. That is the point I want to make.

[Len Taylor, NDP, The Battlefords—Meadow Lake, SK]

Mr. Speaker, I appreciate the opportunity to raise a question with my colleague and friend from Yorkton-Melville.

His earlier comments to the House were quite well received. However, I want to bring to his attention some comments which were recently made in a committee of the House by the Saskatchewan Association of Rural Municipalities concerning the future of agriculture and rural communities on the prairies.

One of the comments made by the Saskatchewan Association of Rural Municipalities was with respect to the government's claims that crop diversification and value added production will be a direct result of the elimination of the Crow benefit. The Saskatchewan Association of Rural Municipalities said this in its opening remarks:

It is difficult to predict with any degree of accuracy whether the elimination of the Crow benefit will expedite the move toward diversification and value-added opportunities.

It goes on to say:

It must be mentioned-that lack of capital is a significant obstacle to the realization of many successful value-added businesses.

It concluded the section by saying:

Our association has made consistent statements to federal and provincial governments that the establishment of equity and/or capital venture funds is necessary for Saskatchewan to fully realize growth in value-added processing.

I believe very strongly that the position brought forward by the Saskatchewan Association of Rural Municipalities represents the view of many communities in rural Saskatchewan. They realize that with the withdrawal of the Crow benefit their communities will lose income and will need to find alternative sources of income to maintain not only their tax base but their quality of life.

The development of equity funds is one way to ensure that investment capital will exist. However we all know that the number of communities that will lose significant amounts of money will never be in a position to attract all of the investment necessary.

Will the member for Yorkton-Melville inform the House whether he supports the Saskatchewan Association of Rural Municipalities' position in this matter and what sort of investment opportunities he thinks will result because of the loss of the Crow?

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Very briefly, Mr. Speaker, I have a hard time making the connection between what I had to say previously on this question but I will offer some comments anyway.

We have clearly stated that a transition period should have taken place before the Crow rate was pulled out. This transition would have allowed much of what this member talked about to take place. If it is suddenly pulled out it is going to be much more difficult for people to adjust to the changes that will take place.

We had a plan to do this. We would have taken the Crow subsidy and rolled it into a farm program that would have helped farmers make the transition. That should have taken place. As it stands now farmers will probably have a very difficult time.

The changes that have been made probably eventually would have had to come but because of the way it was done by the government it is going to put farmers in a very difficult situation. I hope that is an appropriate answer to the member's question.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I will be splitting my time with the hon. member for Vancouver East.

I am pleased today to speak on third reading of Bill C-76. I begin by reading from page 16 of the Liberal red book which was the book we campaigned on during the election. It establishes in many ways the mandate of the government. It states:

A Liberal government will adopt a two-track fiscal policy, matching a drive for jobs and growth with a comprehensive approach to controlling debt and deficits. The two tracks run parallel: fiscal discipline will support economic growth, while growth and jobs will enhance government revenues.

That is the basis of our platform and of our budgets.

The 1995 budget pursues both the goals outlined in that statement. Infrastructure projects are creating jobs across the country. I am certainly pleased to have them creating jobs in Halifax West. This program is an excellent example of job creation activities as one side of the two track approach.

The other side is also very important. We are attacking the debt and deficit. This attack is an important step toward a healthy economy, toward job creation. It creates the best possible climate for job creation.

For instance, since the budget interest rates have come down a bit. We would like to see them come down a lot more. Everyone who has a Visa account, a mortgage or a loan would like to see interest rates come down. We hope they will. However it has to be remembered that if the cuts in the budget had not been as large as they were interest rates would probably have risen.

Last year over 430,000 new jobs were created. That is largely due to the fact that interest rates were lower than they had been at times in the past.

If interest rates had been raised right after the last budget a lot of jobs would have been lost. In my area of Halifax West there is some concern because of the large civil service presence in the Halifax area. People who are being affected by the reduction in the civil service are very concerned.

The number of civil servants being cut is 45,000 across the country. When we recognize how many jobs that were created last year, over 430,000 jobs, you can see how much you can lose by having interest rates rise. What we lose in civil service jobs we hope to make up for by keeping interest rates low. That is a very important point.

Keeping interest rates low is very important in terms of the disposable income that people have to spend on things. If they are paying more for their mortgage, paying more for their Visa account, paying more for all their loans they have less to spend on consumer items, less to keep the economy going.

As we all know, expenditure reduction is a key to reducing our deficit. We cannot reduce our deficit without reducing our expenditures. That is why the government will reduce cumulatively over the next three years $25.3 billion. We are doing this without increasing personal income taxes.

We are maintaining our assault on the deficit with fundamental changes to the structure of government. Government must still be active but we have to find ways to reduce duplication. We have to realize the things that are the most important, find the priorities for government and reduce activity in other areas. We cannot afford to be in all areas all the time.

We are making tough choices in the budget. There is no question about it. It was not an easy budget to work out. There have been difficult decisions made. Program review involves some of those decisions; it involves going through the whole government department by department and analysing which activities and programs of government we should maintain and which we should reduce or remove. We have to maintain the most important ones. It is all about sustaining the most important activities of government. Those are the reasons we have to do this in terms of government reduction.

For those in my area and for those people who are affected by the cuts to government programs and the civil service, it is very difficult to accept and to receive those cuts. That is why it is so important we achieve our reduction in the civil service in a humane way. I spoke to the President of the Treasury Board when he was in Halifax some weeks ago about this matter, trying to maximize the flexibility so civil servants could move between the departments where there were possibilities of openings.

We are also merging and commercializing many programs of government in order to reduce our costs. We are also doing some other things I think are very positive. Most people recognize it as part of the balancing act that happened in this and the very important balance provided in the budget. We have cut business subsidies by I believe $60 million; that is important in terms of balance.

We are trying to achieve better management of government. We have also made changes in the new Canada health and social transfer. The Reform Party is telling us we have not made enough cuts. I do not think it has a real understanding of what the

effect of those cuts are on regions like mine. There will definitely be a real challenge in places like Halifax and throughout the Atlantic because of some of these reductions, especially in the metro area of Halifax-Dartmouth. We will rise to meet that challenge. We can do it and we know we have to. At the same time, to say we should go much further right now makes no sense to me at all. It fails to realize the impact these reductions will have in regions like Atlantic Canada.

The people in my riding of Halifax West have told me in their view the budget struck a good balance between the two tracks of our approach. There are enough cuts to get us on track regarding the deficit, to get it down where it should be quickly. At the same time we are maintaining the important principles of our government, the important Liberal principles of maintaining social programs.

I mentioned there is no hike in the budget in personal income taxes. There are new measures to ensure that taxes owed are collected. That is very important in terms of improving fairness in our tax system. There are also tighter rules for tax deferrals and for foreign and family trusts. It is certainly time the tax holiday for family trusts came to an end.

The red book platform focused in many ways on small and medium size businesses. The 1995 budget contains many continued efforts to support small business which we all know is the engine of our economy and which provides so many jobs. So many of the new jobs in our economy are being created by small business and so it is very important to continue to support small business activities.

The government looked to members of Parliament for input in terms of what we should be doing to help small business, which is why last October the industry committee came out with its report "Taking Care of Small Business". In November, 1994 the small business working committee came out with its report "Breaking Through Barriers". Many of the recommendations in those reports were adopted by the Minister of Industry when he gave response entitled "Building a More Innovative Economy" which contained among others key initiatives measures to reduce the paper burden for business. We all hear about the red tape and the number of forms people have to file and deal with when they are in small business. It is overwhelming for them.

I was talking recently to a friend who operates a small engineering business in my riding. He was talking about how he is always filling out an endless array of forms. It is important to reduce some of these forms. Also in those initiatives I mentioned there was a strategic procurement initiative which is very important to see that some of our government procurement comes more and more from small business across the country.

We are seeing the expansion of the Canada business service centres across the country to provide more services to help small businesses getting started or that need help with advice in terms of expansion. We are seeing the reform of the regulatory systems which will help to reduce red tape. We are also seeing new export financing initiatives targeted toward small business. The Export Development Corporation has been instructed very strongly to not only help the big companies but to focus its attention toward helping small business.

That is very important. Small business told us the most important obstacles to growth and jobs and to its growth, which means growth and jobs, is the debt and deficit. That is why we attack those obstacles. The budget reaffirms our commitment to small business as the engine of growth and job creation.

I am pleased that the Atlantic Canada Opportunities Agency is assisting in those efforts and doing important work. It is one of the most important financing tools in Atlantic Canada.

The OECD has advised countries that if they want to provide for a strong future they should support the development of self-employment skills in our populations. I am pleased to recommend support of this bill.

[Len Taylor, NDP, The Battlefords—Meadow Lake, SK]

Mr. Speaker, I appreciate the opportunity to again put a question to a member on the government side.

Members have had an opportunity to review the bill, to study it in caucus, to talk to cabinet members about it, review it in the finance committee and examine it in their own ways.

The hon. member comes from a part of eastern Canada with some agricultural base. Therefore he should have some understanding of rural life in Saskatchewan. As a member of government he has an obligation to review the effect this legislation will have on rural Canadians right across Canada.

The hon. member talked about small business. When we in Saskatchewan think about small business we think not only about those who are entrepreneurs selling or manufacturing products but also those who are producing products on the farm.

In all fairness to the government to have claimed otherwise, this bill and the budget in general will have a more devastating effect on rural Saskatchewan than on any other part of the country.

With regard to the bill, the legislation and its effect on the farmers through the reduction of the Crow benefit, I ask the member if he can identify any studies that will back up his government's claim that this legislation will lead to increased crop diversification and enhanced value added production.

At the same time, given his commitment to small business, can he tell us and the farmers of western Canada what transition measures he believes are necessary to secure the future of rural communities given the immediate withdrawal of federal support for grain transportation?

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, the hon. member is not familiar with my riding and its nature. There is very little agricultural activity in my riding.

The member mentions rural Saskatchewan and that I should have some understanding of these issues. My grandfather would agree because he, my mother's father, was the member of Parliament for Meadow Lake, Saskatchewan and spoke often of the concerns of agriculture in the House in the 1950s.

The budget is balanced. Perhaps the hon. member is not aware that in last year's budget Atlantic Canada took quite a strong hit. We lost a lot of military bases. Close to my riding, the base in Shearwater was cut by 40 per cent. We lost the base in Cornwallis and have had other cuts across Atlantic Canada in the 1994 budget. It was gratifying and satisfying to see a greater balance in this budget.

The hon. member talks about the problem of diversification in agriculture. Canola, invented in western Canada, is one of the products being grown more and more in western Canada and is providing a real good cash crop for western farmers. The area is also seeing more development and work in terms of bio-fuels. Both of these commodities are the kinds of things that can provide for western diversification and allow farmers to keep operating in western Canada, which I think is very important.

[Anna Terrana, Liberal, Vancouver East, BC]

Mr. Speaker, I rise to speak to Bill C-76 for the second time. While previously I spoke on the total content of the act, today I wish to speak to part V of the act and particularly on social transfer and social programs.

While I understand the concept behind the change of payment of social services to the provinces and the need for taking some drastic steps, I am concerned about the application of the funds.

We all know the importance of social programs and the high rate of acceptance by Canadians for such programs, amounting to over 70 per cent of our population.

The legislation for the Canada assistance plan was passed in 1996, but since then over 14 million people either were born in Canada or came as immigrants. Provinces in the meantime have become more progressive and have asked for more autonomy. The new legislation will offer greater flexibility to the provinces to deal with the distribution of social programs.

All this would be fine if the government did not have to cut payments to the provinces. These cuts are necessary to deal with the debt and the deficit. If payments were to continue on the same basis as in the past, they would soon have to be phased out altogether.

Although these are sensible decisions, we cannot forget those who will suffer most as a result of these cuts. When Canadian taxpayers asked us not to raise taxes, I often explained this would mean cutting services and programs, which would not help the poor and those who need social assistance.

Being on welfare has become a stigma. Society has a tendency to label people without taking into consideration that life is not treating everybody in the same manner. We know that as long as there are rich there will be poor, but it is up to the rest of society to make sure the needy are treated fairly. People on welfare are very vulnerable and have to struggle to keep afloat.

Too many people are poor in Canada. One child out of five lives under the poverty line and where there are poor children there are poor parents. Statistics do not mean much. They are just numbers and behind them there are real people. Every percentage point means several human beings, each one of them with rights and privileges like everybody else.

In my riding many of the children in the inner schools eat only one meal a day provided by the school board. They wear clothes donated to them and never want to go home because they do not have a home, they have a house, often empty, where there is no warmth or affection. Often children look for affection elsewhere with the consequences we all know.

Last week the Minister of Health was in an inner school of my riding to announce the head start program for aboriginal families. The children in the school, many aboriginal, gave the minister a great welcome. She spoke to the children. She spent time with them and this, for the children who spoke to the minister, was probably the highlight of their school year and was a great shot in the arm for the parents who were present and for the teachers and the principal who live with all the difficulties day in and day out.

Some say God made mothers because he could not be everywhere. Long ago I added to the word mother, intended for parent, the word teacher because of the hard work many of them do with many of our children, especially with those who need it the most.

These children are not mere numbers. They are individuals, our men and women of tomorrow. What an opportunity we miss. They could be the professionals and the tradesmen of tomorrow and a lot of potential is going to waste because of the lack of resources they are faced with. These children represent one-fifth of the population of tomorrow.

The other day I visited skid row in Vancouver. In one of the hotels I met a young aboriginal man, and we had a conversation. This young man, who is very intelligent, had finished high school, went to college for two years and to university for three, and had lived a decent life until he started using drugs. What a shame and what a waste.

There was also a very young woman who was coming out of the hotel. She was too young and too vulnerable to be going to a hotel on skid row. What a shame and what a waste.

This misery can be found all over the world, but in Canada we should not allow it to happen. CAP exists to try to give some dignity to people who would otherwise live in sheer poverty.

My concern about the new system is the loss of the five rights which up to now have been imposed on CAP: the right to income when in need; the right to an amount of income that takes into account budgetary requirements; the right to appeal; the right not to have to work or train for welfare; and the right to income assistance regardless of the province you are from.

Part V of Bill C-76 only maintains the fifth right requiring that "no period of minimum residency be required or allowed with respect to social assistance". Maintaining only this right is not enough. Each province could go in a different direction and deny welfare for other reasons. This would increase poverty and crime and would put even more people on the street. If a province denies individuals welfare, it is possible to move to another province, but if all the provinces do the same, where would people go for help? South of the border?

Poverty is everywhere. Last week, my opposition colleague said that in a separate Quebec, there would be no more poverty, but I think we will have to think very seriously about all of us working together, if we want to reduce poverty and improve the circumstances of so many Canadians. I believe that united we stand and that together we can get the best results.

I know that the bill provides for consultations with the provinces to reach mutual agreement on social programs. But I also believe that if we maintain the five principles of the welfare program at the federal level, we can at least have a discussion based on these principles.

The House finance committee in its recent report has backed the right of appeal. This is a very sound decision and an important recommendation. I would like, as would many other people, to see this recommendation implemented and the remaining rights maintained.

Let me go back to my riding where there is the only emergency day care in the city of Vancouver. The greatest majority of children in day care have drug related and alcohol related syndrome. The reason: poverty. In my riding, there is the food bank where tons and tons of food are distributed on a regular basis to hundreds of people. The food bank is not alone in offering this service; other good hearted people do the same. This is found all over Canada. If we abandon the rights of CAP, we also abandon these people creating a new category of poor. Because of this action we will have many more program disparities than we have now.

I have met several people since budget day. These people have the poor at heart. They are those who work on skid row, those who teach in the inner schools, those who deal with people with disabilities. I thank these people for their assistance to me over this month. They really hope that when the minister of human resources meets with his provincial counterparts they will find a consensus and will keep the five rights.

[Roger Pomerleau, Bloc, Anjou—Rivière-Des-Prairies, QC]

Mr. Speaker, I was not sure I could take part in this questions and comments period. Thank you for recognizing me. I would just like to ask my hon. colleague a question.

She talked about poverty in general, mentioning Canadian unity and Quebec sovereignty of course, and finally, quoted the principle of strength through unity. That is a principle often quoted even in my riding. However, based on fact rather than principles, in 1980, the Canadian debt was approximately $90 billion and unemployment was much lower than it is today. In Quebec alone, there were half as many people on welfare in 1980 as there are now.

So it was decided in 1980 that Canadian unity should be maintained. Fifteen years later, the debt has skyrocketed to nearly $550 billion and will reach $700 billion in just a few years, we are told; it is growing very fast. Unemployment is not double what it was, but almost. We now have 808,000 people on welfare. During these 15 years, we have come to realize that the gap between rich and poor is widening. The middle class is disappearing before our very eyes. Could the hon. member please explain how the strength through unity principle applies in that context?

[Anna Terrana, Liberal, Vancouver East, BC]

Mr. Speaker, I think that what my hon. colleague just said is incorrect because, as you know, this matter has implications not only in Canada but also throughout the world. I also think that in 1980, when Quebec decided against separating from the rest of Canada, the battle for separation was not over and this has been a source of major instability across the country. I think that while it may not be the only cause of poverty, it certainly is a contributing factor.

[Len Taylor, NDP, The Battlefords—Meadow Lake, SK]

Mr. Speaker, the hon. member for Vancouver East, like the hon. member from Halifax before her, has an obligation to all Canadians to review and ensure that their support for legislation is fair.

I am wondering if the hon. member for Vancouver East understands that if the bill before us cuts $1 million from various rural communities that it will result in the loss of elevators, increased input costs for farmers and decreased prices for farmers. I have newspaper clippings galore here that indicate all sorts of problems will result in agriculture trade as a result of this legislation.

How can the hon. member in all good conscience support this legislation when these immediate and long term impacts will be so devastating on prairie people?

[Anna Terrana, Liberal, Vancouver East, BC]

Mr. Speaker, not only the prairies and the farmers have been hit in this budget but many other people have as well. This budget is not good at all for the people in my riding. They will suffer.

We have subsidies and subsidies were cut which of course is not a pleasant thing to do. However they had to come to an end. There is a transition period and $1.6 billion is being offered to the farmers to adjust to the new situation. In my duties as a member of the transportation committee I also asked a question about the effect of Crow for instance on transportation. It seems they are not very concerned about it. I would like to see the situation adjust. It is tough we have had to do that, but we have taken great care to be equitable in our cuts.

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

Mr. Speaker, I wish to inform you right away that I will share my time with my colleague from Terrebonne.

I am very happy to speak again today to Bill C-76, which is a major bill allowing this government to implement various provisions of the hon. finance minister's budget.

As everyone will agree, one of the key elements of Bill C-76 is the planned cuts to the federal government's transfers to the provinces. With some $7 billion in cuts to be spread over the next three years, $2.5 billion will be cut in Quebec alone. For the Quebec government, this is in keeping with its relations with the federal government, which, in the last 12 years, has deprived Quebec of $14 billion. This represents over $1 billion a year, which easily explains why the Quebec government is in a difficult financial situation. This can be seen throughout the health care sector. In the Montreal region alone, there is talk of closing between seven and nine hospitals, if I remember correctly.

We must be aware that the cuts imposed on Quebec by the federal government are at the heart of the problem, particularly as far as hospitals are concerned. It is too easy to blame the messenger for the bad news. Real courage means taking responsibility and facing the situation, as the Quebec government is doing, unlike the people here who prefer to hide their decisions.

All the cuts made in recent years have led, as my Vancouver colleague pointed out, to the proliferation of food banks, which unfortunately have become increasingly important in the daily lives of too many Canadians and Quebecers. Cuts are therefore the first element of the Canada social transfer.

The second element is implementation. To add insult to injury, the federal government is not only cutting transfers to the provinces but also imposing its own standards. The provinces will not be free to use the amounts still available as they see fit. We know that in a few years cuts will not even be an issue, since there will be no more federal transfers. Yet, the federal government dares to impose standards.

As the provinces already have to comply with federal health and welfare standards, they will now be required to conform to federal standards in social services and post-secondary education. Federal involvement in these areas violates the constitution.

The rules for running the country are set out in the Canadian constitution. Section 93, in particular, provides for this kind of thing. For a great many years, we have been aware that the federal government contravenes the Canadian constitution, in particular section 93, by disregarding provincial jurisdictional claims in the areas of health, post-secondary education, social services and welfare. Despite its cuts, the federal government dares to impose and expand standards in areas that are none of its concern.

The third and last element, which is related to the Canada social transfer, is the fact that the UI fund is currently growing. Need I remind members that contributions to this fund are made by those workers lucky enough to have a job and by their employers?

Thanks to the insight of the hon. member for Mercier, who is the Bloc critic on social issues, we feel, and rightly so, that the federal government is preparing its strategy against the provinces by letting the UI fund grow, while at the same time going after the provinces by imposing cuts in the transfers made to them.

Soon, the government will be offering to the financially strapped provinces money-that is money which does not belong to it but, rather, to the workers and companies contributing to the UI fund-to help meet new needs, or to implement readjusted manpower training programs from coast to coast.

The government will tell the provinces: We have money. You do not have any, but we do. However, that money will not be the federal government's money. It will be money contributed to the UI fund by ordinary workers and by the companies which employ them. There is something immoral in all this, something which we will denounce as long as we are here.

Our position regarding the Canada social transfer is very simple: It should not exist. The federal government should mind its own business; it should comply with section 93 of the Constitution and withdraw from provincial fields of jurisdiction. The savings thus made could be used to reduce taxes, and the federal government could give the tax points to the provinces, including Quebec. The situation would then be much clearer and certainly more normal.

Bill C-76 was the subject of debate on the last opposition day, last Thursday. The official opposition denounced the operation that it saw taking shape, the scheming, and that is perhaps just the tip of the iceberg, with Bill C-76 that we are looking at today, Bill C-88 on internal trade, Bill C-46 on the new Department of Industry, and Bill C-91, an act to continue the Federal Business Development Bank under the name Business Development Bank of Canada.

We see in this bill, and that is our right, a scheme first to stop Quebec in its tracks and surround it and then to quietly lay the groundwork for a post-referendum scenario in which Quebecers will have decided to stay in Canada. And, in that scenario, the other provinces will find themselves in the same boat as Quebec, whose decision not to leave will be disastrous.

We denounced this scheme last Thursday. At that time the member for Edmonton Southwest applied some, I would think, rather unparliamentary terms to us, and I quote: "The Bloc Quebecois is suffering from tribalism, with its constant harangue that certain federal policies are centralist and target Quebec".

I would simply like to remind our colleague for Edmonton Southwest that we are doing our job, that we are perhaps showing some vision of the Canada of tomorrow, and that it is also the responsibility of the members of the Reform Party to help preserve the integrity of this Canada, because we are witnessing an insidious move by the federal government to centralize Canada to the detriment of the provincial governments that they are supposed to be representing, which will soon become regional governments. That is what the future holds. They perhaps have the right to see it this way, but this view is certainly not unanimous throughout Canada. It is disastrous for Quebec. If this scheme succeeds, a nation that has the right and the desire to exist may disappear.

To be accused of tribalism is rather insulting. I wonder whether it was ignorance or bad faith that made the hon. member for Edmonton Southwest and his colleagues use such language and show so little understanding and respect for the position of the Bloc Quebecois on the future of the people of Quebec.

Finally, I would like to draw your attention to a recent initiative that hardly reflects the intent of Bill C-76. I am referring to a flyer distributed recently in Quebec under the auspices of Power Corporation-friends, and we know who they are-and to all Canadian homes. This flyer, and we do not know how much it cost, describes the attractions of Canada Day.

To spend that kind of money now is rather obscene. I may recall that the Department of Canadian Heritage, which is responsible for publishing the flyer, had a budget of $1,066,000 for community groups which lost one million to cutbacks. This leaves $66,000. Imagine how much this flyer costs, compared with the remaining $66,000?

This seems rather unethical. Furthermore, after the flyer was sent to all Canadian homes, a poll was taken, and my wife had the privilege of being called by the Comquest firm, always at the expense of the public purse. While vaunting the merits of the National Capital, some leading questions were asked with the emphasis on Canadian unity, while pretending there was no connection at all with the referendum, certainly not.

You get people like the ineffable President of the Queen's Privy Council for Canada, Minister of Intergovernmental Affairs and Minister responsible for Public Service Renewal, who make fun of the Government of Quebec and its public consultations on the future of Quebec, a government that wants to provide information and find out what people think and still has a 1-800 line to give this information to the people of Quebec.

Instead of sending these flyers, perhaps the federal government should write to the citizens of Canada and explain its vision of and its plans for the Canada of the future. That would be a lot more democratic than this miserable little flyer.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I would like to make a brief comment and put a question to the hon. member with regard to the social transfer.

As the member well knows, under the Canada Health Act the federal government is empowered to enforce the provisions of that. Those provisions are that our medicare is universal, portable, accessible, publicly administered, and comprehensive.

The transfer presently to the provinces with regard to health care is in the form of both tax points and cash. The member will well know from the current example with regard to the clinics in Alberta that the Minister of Health has indicated that in the event that the Alberta government does not respect and uphold those principles of the Canada Health Act there will be a withholding of the cash amounts relative to the extra billing in Alberta.

Under the Canada health and social transfer, the government has combined the transfer mechanisms primarily because of the cash component. In the event that there was no cash component with individual programs, the government would have absolutely no leverage whatsoever to help to protect those standards and those principles of the Canada Health Act and of the other programs.

The member will well know that the provinces do not necessarily spend the moneys transferred to them. Whether it be post-secondary education, health, or social programs, they do not necessarily direct those funds received for the purpose for which they were given. In fact the provinces have the latitude.

Since the provinces are already spending the money in a form they believe is appropriate for their province, how would combining the transfers for all the programs under one impact, if at all, the present operations of the provincial governments?

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

Mr. Speaker, what struck me in my colleague's question is that, in the spirit of the Constitution, a jurisdiction like health falls strictly under the purview of the provinces. It is unconstitutional for the federal government to intervene in the way it does, exchanging assistance for adherence to standards. From an historical perspective, this is an abuse of its power to spend. And historically, it has also always granted itself the corresponding powers to tax, and this has been going on since the end of the second world war.

This allows it to intervene today, some might argue in a responsible way, but I must say that we in Quebec have no need for this. We are stuck with the federal government, stuck with paying it $30 billion each year and stuck with its standards in areas for which Quebecers already have institutions. We have no pretensions, but we also have nothing to learn from it regarding social democracy and sound social organization principles.

This order of things may well suit the rest of Canada. We see that the Canadian government holds a larger place in the hearts of Canadians than Quebecers: our first allegiance is to the government of Quebec. Therefore, the internal logic of Canada may make a central government in Ottawa work well. That will be your decision to make in the post-referendum context. But, now, the logic of Canada contrasts with the logic of Quebec, and we ask Canada to withdraw from this kind of thing and to let the government of Quebec keep its tax points in order to administer health, all social issues and education.

[Benoît Sauvageau, Bloc, Terrebonne, QC]

Mr. Speaker, I am pleased to rise today in this House to speak on a bill that, according to the government opposite, gives the provinces more decision making room, while taking $7 billion away from them, in the space of two years.

With absolute seriousness, the Liberals are proclaiming for all to hear that this is new flexible federalism. The provinces are not being given the right to withdraw; the federal government is clearly opting out financially with the aim of reducing its debt and balancing its budget, if possible. In reality, the federal government is cutting off the provinces and giving itself more right to supervise and to intervene.

During the course of this debate you have heard words like demagoguery and bilge. I am going to quote documents of the present government, not documents of the Conservatives and not documents of the wicked separatists, but documents of the Liberals, who lacked the courage to note in their red book that they would drop the most disadvantaged after cutting them off.

They also failed to note that they would make students in Quebec and Canada meet national standards after they cut off their financial support. I am going to quote documents from members and documents from ministers, who are present today in this House. The $7 billion cuts are contained in the latest budget. It provides for $2.5 billion in 1996-97 and $4.5 billion in 1997-98; 2.5 and 4.5 add up in my books to $7 billion in cuts, as set out in the budget.

As regards the national standards, which cause the Minister of Finance to say, and I quote: "[I] will 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 a quote from the minister, the member for LaSalle-Émard.

What happens if there is no agreement, no mutual consent? It seems to me that, in 1981, there was agreement and mutual consent in the case of nine provinces out of ten. Since that agreement, Quebec has suffered the shame and affront of unilateral patriation. Our motto is: "Je me souviens", and we remember.

We must also bear in mind that the current Prime Minister was a major player in this coup against Quebec, and that he is now promising to be reasonable, as he told this House. But if the future is anything like the past, in Quebec, we are in for more unilateral encroachments.

They talk about agreement, respect and mutual consent, while at the same time federal officials are producing documents that I would describe politely as somewhat centralizing. The report of the national education standards committee, a 130 page report submitted to the Prime Minister recommends among other things-this is recommendation No. 1-that standards of excel-

lence be defined at every level and in every field of education and training. These standards should reflect the highest national and international levels of performance and should be regarded as the primary objective to be achieved by students.

This recommendation, made in a report dated May 1994, under the Liberals, clearly shows the direction taken by this government even before any consultations were conducted: cuts and growing interference in an area which, I remind you, has been under exclusive provincial jurisdiction since 1867. That gives us an idea of what to expect from Bill C-76 and mutual consent.

That is not all; there is more. Recommendation No. 2 states that a higher percentage of education spending should be directed to research and development. What spending? Who will control that spending? Every one in Quebec, including Ghislain Dufour and the Liberal MPPs, wants control over manpower training to be returned to the province.

Further in the report, it is recommended that the federal government provide assistance for the development and administration of tests on every basic subject. It should be pointed out that we are talking about a provincial jurisdiction here.

Another recommendation: That every level of government make it a priority to earmark sufficient funds to analyze and make maximum use of the results and implement recommended changes.

It so happens that, in Quebec, we have a Ministry of Education with 5,000 employees. Other provinces also have ministries of education. In addition, in Quebec, we are currently holding a summit conference on education. That shows how little respect the federal government has for local and provincial authorities. Why is it so bent on increasing costly duplication and overlap?

Through Bill C-76, the federal government makes $7 billion in cuts here and there. As was mentioned with regard to the report on national education standards, its presence is being intensified in exclusive local or provincial jurisdictions.

This report refers to an annual conference on national education problems, to a national review organization, and so on. From the outset, I have been trying to demonstrate that Bill C-76 provides for national standards, that the federal government's centralizing approach has led us to expect the worst as far as the definition of these standards is concerned. The only report on national education standards reflects the education policy contemplated by this government.

Unfortunately, I have been unable to address the issue of social services or that of health care, which, as my colleague from Trois-Rivières said earlier, has also been under exclusive provincial jurisdiction since 1867. Other reports by the Bloc Quebecois have demonstrated the federal government's irresponsibility in these areas in connection with Bill C-76.

In conclusion, I would like to quote two excerpts from an editorial by Michel Vastel. The first excerpt relating to Bill C-76 reads as follows: "Any province that does not mention the federal government's contribution will be fined. The financial penalty, to be recommended by the federal minister, can go as far as withdrawing the total contribution under the Canada social transfer. Such a penalty could amount to roughly $7 billion".

A Liberal member asked earlier why we objected to putting social programs, health and education in the same bag. Failure to comply with a given agreement may lead to the loss of the whole package. For Quebec, this would translate into a $7 billion penalty simply on the recommendation of the federal minister.

The second excerpt from the same editorial is this: "Notices saying something like "This service is provided thanks to a contribution from the Government of Canada" will now be displayed in hospital lobbies and on Quebec health insurance forms". The size of letters, the colour of the maple leaf will be determined by memorandums of understanding, mutual agreements and umpteen meetings of federal and provincial officials.

Thank you, Mr. Speaker, for giving us the opportunity to speak to Bill C-76.

[The Deputy Speaker]

The hon. member for Mississauga South, for a question or a comment.

As the hon. member may know, I always try to give the floor to a member from a party other than the one represented by the previous speaker.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I expect that another hon. member would also like to comment.

With regard to the social transfers, the question has been raised as to whether they should be going into one pool. If the Bloc has a problem with grouping them together, knowing full well that the provinces spend the funds wherever they want anyway, would the member agree to mandating that all dollars transferred for health care be spent on health care, that all dollars transferred for education be spent on education, that all dollars transferred for social programs be spent on social programs, and that the provinces would have absolutely no discretion in that spending?

[Benoît Sauvageau, Bloc, Terrebonne, QC]

Mr. Speaker, I thank the hon. member for his question. I find that, when it comes to streamlining this whole transfer process, Quebec probably has the ideal solution: we pay our taxes to the province and we make our laws in the province. This is what we call sovereignty. This is what we want to do, so as to avoid all these problems.

The reason why we oppose these national standards and these costs is very simple. As I said earlier, the number one recommendation of the committee on national standards for education provides for basic national standards on all subjects taught and on all training programs. The federal government also says in the report that it wants to see more science and technology courses. Sure, but if, for example, Newfoundland would rather offer more courses related to fisheries or social issues, what will happen if national standards are in place? That is my first example.

Let me give you another. Do we really want to allocate the money earmarked for education to education, and the budgets for health care to health care?

I am personally convinced that the Canadian provinces as a whole are responsible and that they will allocate the funds where it is necessary.

[René Canuel, Bloc, Matapédia—Matane, QC]

Mr. Speaker, I want to thank the hon. member for Terrebonne, who wants certain powers. It is said that all the English provinces are getting together to demand more autonomy, that they are also in favour of decentralized government. Mr. Johnson says he keeps hearing the same message when he travels across Canada. And Mr. Bourassa said the same thing.

Everyone wants more power. No one is satisfied, and especially not Quebec. Why do we go on making these demands year after year? Why do we keep saying we must do something that is very worthwhile and make Quebec sovereign?

My colleague talked about education, and we realize that Quebec is lagging behind, because they wanted to create a lag in research and development. In the Gaspé alone, 10,000 students have left the region. I want to ask the hon. member: Why is Quebec not, and never will be-in my estimation-satisfied with the situation in post-secondary education?

[Benoît Sauvageau, Bloc, Terrebonne, QC]

Mr. Speaker, I want to thank the hon. member for Matapédia-Matane for asking me this question. Education is my specialty, and although I do not think I have the answer, I may have part of the answer.

First of all, as he said earlier, at the post-secondary level students, like workers who have trouble finding a job, have to cope with overlapping programs and duplication, whether we are talking about federal or provincial programs.

I believe that as members of the Bloc Quebecois, we are more interested in education, which is a provincial jurisdiction, than members on the other side of the House, and I know why. They have other things on their minds, so let the government render unto the provinces what belongs to the provinces, like education, so they can get on with other business.

Now I would like to explain why young people are against national standards for education. As my colleague said, in Matapédia-Matane, for instance, they might need special emphasis on a particular sector, and that is what the états généraux de l'éducation au Québec are bound to conclude.

But how can we have national standards in an area that, when the Fathers of Confederation signed their agreement, was a provincial responsibility? Or so we are told. But how can we have similar standards for health care in Quebec, Ontario and Newfoundland? The federal government has imposed national standards for health care. What Bill C-76 wants to impose is the same medicine-no pun intended-this time for education. They want to set national standards for education.

When? Just when the government is going to cut funding. In other words, it gives less money to a province, gives more orders, and the province has to fall in line, otherwise funding for all programs will be cut: social assistance, education and health care. That is why we object.

[Jim Peterson, Liberal, Willowdale, ON]

Mr. Speaker, approximately a year ago Canada began an incredible transformation, a change that has had a profound impact on all of us in this Chamber and on Canadians everywhere.

I am talking about finally coming to grips with our national debt, which over the years has now reached the unconscionable level of $550 billion and which demands so much of our interest that one-third of all of the tax revenue paid by Canadians to the federal government goes just to pay the interest. One-quarter of all federal government expenditures today are simply to pay the interest on our debt, let alone not paying it down at all. We have had to come to grips with that, and ever increasing annual debt adding to it. It has not been easy.

In the past governments have always been in the mode of giving things to people, of increasing programs, of increasing expenditures. Maybe it does not come easily to a lot of us to start to look at the reality and come to grips with our debt and deficit crisis. We have done it. One of the amazing things that we on the finance committee learned as we travelled across the country is that Canadians, from the richest to the poorest, all said we must get the deficit and debt under control. There was a lot of legitimate debate on how to go about it, but as we opened up the

public hearings Canadians were committed to the reality that we had to find a new way of doing things.

In the budget bill before us, Bill C-76, we have really attacked what in the past have been three sacred cows in Canadian government. The first is the western grain transportation subsidy, which for all of this century has given an incredible subsidy to grain farmers in the west to help them get their grain to market and to help them be competitive in what is really a dirty international market wracked and plagued by subsidies of enormous quantities in many countries.

It will not be easy for our prairie farmers. There are transitional provisions to help ease the burden and help them find ways to bear some of the brunt of the burden. It is not easy for us to have to say that this can no longer be the way we do business.

The second sacred cow we have had to gore is our public service. We have had to cut 14 per cent of our public service, or 45,000 public service jobs over the next three years. This is not easy for us. Those of us who have been in government for a long time realize that we are fortunate have a highly competent public service, with people who could be earning much more in the private sector but who feel they have a pride in actually serving their government.

This tradition was built up in Canada over this century, a position of great pride in our public service. Names that come to mind are the Robertsons, the John Holmes, and people who gave Canada a name internationally because of their intelligence and their commitment. They were the ones who got us into international peacekeeping. We can find individuals like this in every department.

For us to say we have to cut them, let us say to our public servants that we recognize that maybe they do not deserve it. They do not. We recognize they have made a great contribution to our country, and it is with heavy hearts that we have to put 45,000 people on the street.

There are a couple of ways you can do it. We went through a program review. Every program was looked at to see if it could be eliminated or whether it could be done better elsewhere or whether it was really necessary in order to eliminate expenditures and bring down the deficit.

The normal way to go about making the cuts is that all those people in a program that is axed would be asked to leave the public service. There are severance packages. We are contributing a large amount of money to ease the burden of transition from public to private life. However, we would be losing many very competent public servants if that were the way we were to proceed. From a management point of view it is quick and certain. After we on the finance committee listened at length to many of the public service unions we thought there might be a better way. We learned from them that there are people in many departments who might want to take the early retirement package and leave the public service, even if their program or department was not going to be axed.

The concept of substitution came out. The government tried to negotiate with the public sector unions and they almost had an agreement on how all the cuts could be made on a voluntary basis. At the last minute the agreement did not come about.

In listening to the witnesses we determined it would be very important to approximate some type of voluntary substitution program. Those who wanted to avail themselves of the early retirement package could, and people could switch from one department to another.

We were told all of these 45,000 jobs could be replaced on a voluntary basis and we therefore have encouraged the ministers and the finance committee to do that recognizing that in many cases this might not be practical. We have also asked the public sector unions to work with the minister in not only the promulgation of the guidelines for alternates but also in their carrying out.

The minister has been very responsible in responding to these entreaties on our behalf and the unions. From what I understand we are to have a much more humane and practical way of downsizing the public service than if we took the easy way out. It may take longer but we will have public servants who want to stay in the public service.

The third sacred cow we have had to take on is transfer payments to the provinces. By way of brief background, under the current regime that has existed up until now we have four types of transfer payments from the federal government to the provinces. One is for equalization to the poorer provinces to give them a certain level of public service. In the budget we have not cut any of these equalization payments.

The second type of equalization payment is under the Canada assistance plan from the federal government to match the funds put forward by provinces to deal with Canadians who are in need or who suffer from disabilities, the most disadvantaged and the poor. The province establishes the program and we match its funding. There are very few controls or strings over this money right now.

The third area is established programs financing which has two components. One is for post-secondary education where there are no federal strings attached whatsoever. The second is for health. We have a number of strings on this. The Canada Health Act says a province has to meet the five criteria of the Canada Health Act or else we can cut back the funding.

We are cutting back the $7 billion of transfer payments over a two-year period. We do not do this with alacrity because we know how important expenditures in these areas are. If anybody thinks we can cut the deficit without cutting in this area, they are wrong.

Under this new regime there will be a combination of the three programs, the CAP, the EPF for post-secondary education, and the EPF transfers for health, into one transfer payment instead of the two; combining the two into one, called the Canada health and social transfer.

We have not touched equalization. In the bill we have mandated the Minister of Human Resources Development through mutual consent with the provinces to develop principles and objectives for social assistance and post-secondary education.

Members of the opposition and many Canadians who appeared before us said that if we continue on the trend established in the budget for the next two years we will run out of cash payments. There will be no more cash payments to the provinces. In some cases it will be after 4 years; in some cases maybe after 11 or 12 years.

How can the federal government have any voice? How can we have any voice if we do not have cash? This is why our committee recommended in the future there must be a cash component. What will this do?

For the first time where we have very few standards today the provinces will have a major voice in determining the standards applied.

Because the amount of the cash transfer under the Canada health and social transfer is to diminish by $7 million over two years, people say we will have less clout with the provinces to force them into national standards, objectives, shared principles or whatever.

The object is not to force the provinces into anything. We have said we want the minister to sit down with them and develop through mutual consent. That means talking with them about the principles they want. This does not mean we are imposing them.

In the future, supposing we agree on shared principles or objectives, we will still need some money as part of the cash transfer to the provinces to enforce standards such as with the Canada Health Act which we are not touching. This is why we went beyond the budget and did something which a finance committee has not done in the past to my knowledge. We not only reported Bill C-76 back to the House but we did so with an additional report, report 16 of the finance committee wherein we said that in future years future Ministers of Finance-we know it will be this one for a long time, many decades perhaps-must have a cash component in order to ensure the standards under the Canada Health Act or new standards developed with the consent of the provinces are enforced.

Another concern related to the most disadvantaged economically, those at the bottom of the heap, those who do not have jobs, single parents whose children are living in poverty, those who are not working and the working poor, those referred to as the ones who get welfare or social assistance which were part of the Canada assistance plan in the past.

In the Canada assistance plan we matched transfers but we are no longer doing it. It is all combined in one payment. We heard a tremendous amount of testimony from the National Anti-Poverty Organization, from community groups such as the one here in Ottawa working with the poor, giving them health care and other assistance through a number of volunteers, many right across the country.

The federal government is cutting its transfers to provinces that are not the neediest, those with the least political clout, the provinces that will stop giving them the money. We have no control now over whether the provinces give support to the needy. If they do, we will match it.

When the finance committee set out last fall to prepare for the budget, we reported we would have to make massive cuts. We said we did not want these cuts to be made on the backs of the poorest because they are already down and out. They are the ones who in many cases cannot stand more cuts.

This is why in our report to the House of Commons we urged the finance minister and particularly the Minister for Human Resources Development when he talks to the provinces to make sure the most in need are not the ones who are cut out of the programs, children in poverty, the working poor and the others who are not there.

We heard testimony from the National Anti-Poverty Organization that according to its best estimates only about 3 per cent of those who are on welfare today are abusing the system. Even if its figures were twice what it us they were, are the abuses of a few people sufficient to bring down our wrath on all of the people?

We have to be very careful when we are making these cuts that we have our priorities straight and that we do not prejudice those who are already the most vulnerable, those who are most deserving of our support in what we consider and always want to consider to be a compassionate and caring society.

Because we are combining the two or three transfers into one, even though it is smaller there will be greater economic clout in the short term to enforce standards that might be agreed to and to protect the five principles of the Canada Health Act.

Over the longer term and in the more distant future we are urging that future budgets retain a cash component so these principles can be observed.

I started off by saying our national debt is a crisis we could not ignore. Past governments have overspent. It is not for us, I believe, a fruitful course to say-

"It was the Liberals, it was the Conservatives, or because of the NDP's support". It is up to us, to all Canadians, all Members of Parliament from all parties to deal with crises and to do better to build a better future.

We have begun our all out battle against the deficit. We must do it fairly, humbly and with the knowledge that by doing something about it today, we can build a stronger and more prosperous Canada for our children and our children's children. Such is our duty, and we will do our duty.

[Jim Abbott, Reform, Kootenay East, BC]

Madam Speaker, I was very appreciative of the comments the member made referring to the Canada Health Act and other social programs like that. He said, and I agree with him, if anybody thinks we can cut the deficit without cutting in this area they are wrong. I am being quite serious, not sarcastic. I hope he and other people who are responsible in the Liberal caucus get that message through to certain backbenchers like the member for Halifax or Beeches-Woodbine.

I wonder if the member would agree that in the case of the Public Utilities Income Tax Transfer Act and the doing away with the PUITTA grant, that very specifically was a tax increase.

The second question is with respect to the downsizing of the civil service. The member will recall that in committee I was trying to draw the minister out about the reverse of the hiring quotas or numerical targets. Does the member understand there will be absolutely no attempt on the part of the Liberal government to achieve its numerical targets under employment equity when it is laying people off by using that process selectively to simply do a reverse hiring procedure on the way it is planning on doing the hiring procedure to gain its balances?

[Jim Peterson, Liberal, Willowdale, ON]

Madam Speaker, with respect to the public service, we will not do away with the public service act or the protection which any public servant has through the Public Service Commission and the rules regarding employment equity. If the hon. member thinks we are, he is wrong.

The beauty of the way we are going about the layoff is that it is being undertaken in consultation and in co-operation with the public sector unions as well as with management in Treasury Board and the various departments. That is why we have something which can work and which will achieve the level of substitution on a voluntary basis that we were hoping for.

In terms of PUITTA, members will understand that in the last budget year we spent $249 million reimbursing public utilities which had been privatized and which were in the provinces. We were reimbursing them for the income tax we collected.

How did they get into the private sector in the provinces anyway? They were privatized originally by the provincial governments in order to make them more efficient and in order to create capital funds for deficit reduction for the provinces. Now they are working in the private sector. They were a function and a creation of the provincial governments.

These utilities and the provincial governments were insisting that we continue to give them $249 million a year. Were the provinces prepared to rebate the corporate taxes collected by the provinces to these utilities? Not one was, even though they were creations of the provincial governments. If the provincial governments are not prepared to rebate the corporate taxes to them, why should the federal government? It is a real anomaly.

[Benoît Sauvageau, Bloc, Terrebonne, QC]

Madam Speaker, I would like to take the floor to briefly thank my Liberal colleague for so respectfully listening to all of our speeches. I would like to make a few comments before asking him my question.

As he said at the beginning of his speech, he shed some crocodile tears because of the abolition of 45,000 public service positions in Ottawa and across Canada. I have half a mind to ask him where the Liberals boasted about cutting 45,000 positions in the red book they talked so much about during the election campaign. Since everybody already knows the answer to that question, I will not ask it.

However, I would like to say that public servants probably have more reason to fear a Liberal federalist government in Ottawa than to fear the sovereignists who promise that they will be integrated into the Quebec public service-a promise that will be kept-in their draft bill. These public servants have much more to fear, and we now hold the proof-45,000 jobs cut-from the other side of the House, because that is where the cuts are coming from, and not from our side.

I would also like to mention something that my colleague did not deem worth repeating in his speech. The cuts for the next two years will be in the order of $7 billion, I repeat $7 billion. If we, on this side of the House, are mistaken, if this is not truly what is written in the Martin budget, perhaps they could give us proof and give us other figures than those that the Minister of Finance already gave us.

Now to my question. Earlier in your speech, hon. member, through you, Madam Speaker, you said to us: "There are no strings attached whatsoever to post-secondary education. Of course, we have a number of strings attached on health". So, why does a committee on national education standards exist and why has this committee already issued a 130 page report on national education standards?