Debates of June 6th, 1995

Budget Implementation Act, 1995

[An hon. member]

They are good at shovelling.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

They certainly are. Cuts in federal transfer payments to the Government of Quebec will cost Quebec $650 million next year. This offloading of the federal deficit will mean that next year, the Government of Quebec will have a shortfall of $650 million. Ultimately, we will lose $2.4 billion because of federal decisions over which the Government of Quebec has no control.

But there is more than that in this bill. The bill contains another instance of strong arming by the federal government. This is the kind of tactic we have come to expect from the present Prime Minister who was the right-hand man of Pierre Elliott Trudeau in 1980 and in 1981, when the Canadian constitution was patriated against an almost unanimous decision of the National Assembly to veto patriation unless Quebec's historic demands were met.

The present Prime Minister was also the chief instigator of the demise of the Meech Lake accord in 1990. No one will forget that. We all remember how he walked up and down the hallway with his cellular phone while inside, the Leader of the Official Opposition in Manitoba, Mrs. Carstairs, was taking her cues from him and doing his dirty work.

He is the one responsible for the collapse of the Meech Lake accord. Quebecers remember that too.

Now, another blow is being struck by the federal government with Bill C-76. The blow comes from our national expert, who is making his right hand man, the Minister of Finance, do his dirty work.

Bill C-76 provides for the continuance of national standards for health care and the introduction of new ones for welfare and post-secondary education. And if the provinces-for these people, Quebec is just another province-fail to comply with these standards, they will be cut off just like the unemployed and the people on welfare were cut off and like seniors soon will be.

Permit me to contradict the parliamentary secretary. No, the provinces are not being given greater autonomy. It gives me a pain in my stomach to hear talk of provincial autonomy, when welfare, post-secondary education and health are already provincial matters, within Quebec's jurisdiction. Giving greater autonomy in areas of provincial jurisdiction-now I have heard it all.

The parliamentary secretary talks of greater autonomy and greater flexibility. On the contrary. Not only will federal intrusion into areas already established by the constitution continue, but the provinces will be bound and gagged and told that, if they fail to meet the Canada-wide standards established, the government will find one way or another to cut them off, to not give them any transfer funding.

This is the sort of flexible and co-operative federalism the government is offering us with a simple bill on public finances.

When Bill C-76 was initially tabled, there was a great outcry in Quebec. Imagine setting national standards in post-secondary education for Quebecers, in particular. You can bet there was a reaction in Quebec when that came out. Quebecers were outraged. They understood that, if this bill were implemented, 75 per cent of people of Canada would be deciding about education in Quebec. Imagine the effect on the backbone of our culture, of what makes us distinct and of what makes us a people if our education were determined by the other founding people.

No people in the world would accept such conditions. It makes no sense. So here we have the Prime Minister and the Minister of Finance, our worthy representatives of Quebec,-and I see the member for Brome-Missisquoi with a smile on his lips-closing their eyes and concerns to the development of Canadian standards for post-secondary education and making Quebec toe the line on pain of being cut off. This is their idea of federalism.

Given the general outcry provoked by his initial project, the Minister of Finance, at one point-I think it was during the debate at second reading-proposed, in a move which is very unusual on the floor of the House, to table amendments following speeches by the Leader of the Opposition who opposed this measure, by the critic from Mercier and myself. He threw them out just like that, saying that they could meet Quebec's demands. We did well not to react right away because, when we received in writing the amendments which were passed yesterday by the government side, we realized that not only did the minister not solve anything but that he made things even worse. The second version was worse than the first one. They were laughing at us.

[Some hon. members]

They get everything wrong.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Absolutely. No wonder this country is in such a mess.

Madam Speaker, the amendments passed yesterday by the liberal majority say the following: "The Minister of Human Resources Development shall invite representatives of all the provinces to consult and work together to develop, through mutual consent, a set of shared principles and objectives for the other social programs referred to in paragraph (1)( d ) that could underlie the Canada Health and Social Transfer''. Other social programs include not only health but also post-secondary education and welfare.

First of all, what is meant by "mutual consent"?

We have heard it over the past 15 or 20 years; "mutual agreement" has meant that as soon as seven provinces with 50 per cent of the population agree, there is mutual agreement. Not only is the agreement mutual, but it becomes a Canadian consensus, no matter what Quebec believes.

This is the route we are going with Bill C-76, and the provisions regarding the Canada social transfer if they are adopted under their present form. Mutual agreement could mean the agreement of seven provinces with 50 per cent of the population. The federalists opposite with their blinders on will see it as a Canadian consensus. They used to be called the 74 fools. I do not know how many of them there are now, I did not count them, but I do not think anything has changed. Even they will accept that Quebec is made to toe the line if there is mutual agreement with seven provinces accounting for 50 per cent of the population.

This is what is meant by mutual agreement, it becomes a Canadian consensus and must be abided by, and it says right here that if it is not, they will cut funding. "Canada health and social transfer may be provided for a fiscal year for the purpose of-" Among the listed purposes are the following: "promoting any

shared principles and objectives that are developed, pursuant to subsection (3), with respect to the operation of social programs, other than a program for the purpose referred to in paragraph (b)."

What this means is that because these types of consensus have been arrived at through mutual agreement, as I explained earlier, if one province does not abide by these mutual agreements, these sorts of Canadian consensus, its funding will be cut in a drastic manner and without warning.

Picture this. A Canadian consensus is arrived at regarding post-secondary education, with seven provinces accounting for 50 per cent of the population, excluding Quebec, and they say: "From now on, this is the way education is going to be, and this is the route all provincial governments are going to follow". If Quebec refuses to toe the line, because of its distinct culture and because it is a distinct nation, it will lose billions of dollars in transfer payments. This is what is called co-operative federalism according to Bill C-76.

We have a suggestion to make to the government: it should immediately abolish all provisions concerning the Canada health and social transfer and, before anything else, meet with the Quebec government to discuss its withdrawal. It should withdraw from any area of provincial jurisdiction like health care, post-secondary education and welfare. It must leave those areas to Quebec. It must transfer tax points to the Quebec government as a compensation and stop annoying Quebec with those darned national standards, those Canada-wide standards.

That is what Quebec wants and that is the essence of Quebec's message.

[Some hon. members]

Hear, hear.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

There is also another message that we could send to the federal government, given what we heard at the finance committee. We could certainly add another message. Some Canadian provinces want national standards; they want standards for everything. The federal government should meet with these provinces and determine the standards with them and with all the Canadian groups outside Quebec who want such standards. Let them choose and implement the standards, but they should leave Quebec alone. That is the second message we want to convey to the government about Bill C-76 and the Canada health and social transfer.

There is another point we must make in the context of this bill and it concerns the Crow's benefit. That benefit raised passions in Quebec in the past. Do you know why? Because, in 1982, another Liberal government was in office at the time and they understood strictly nothing about that issue. I remember that, in 1982, the actual minister of International Affairs was responsible for the Crow's Nest rate issue in Quebec. He was the only french speaking member of the group who could understand what a crow, a nest and a train were. At least, it was a beginning.

There was a terrible fight in 1982. Do you know why? Because the Crow rate, a grant for western grain transportation, a preferential rate structure for the shipping of grain products from the prairies to the various export points, was established in 1897.

Since 1897, we have built a balance between east and west, between grain production in the west and livestock production in the east, especially in Quebec. We also grow grain in Quebec, but mostly for animal feed, while in the west wheat is grown for export. This balance evolved over the years: grain in the west, livestock in the east.

When you eliminate the preferential rate known as Crow's Nest, when you eliminate the subsidies paid year after year by the federal government to railway companies, to allow them to charge below cost, you are breaking the balance. The disappearance of the preferential rates will mean a local price for grain in the west that is $8 to $15 a metric tonne below the international price.

Do you know what that means? It means that by breaking the balance you are giving a competitive advantage to western producers who, with a price for grain of $8 to $15 a metric tonne lower than the international price, will be able to produce more meat animals. This situation is accepted by eastern producers and in particular those in Quebec. They reason that things have changed since 1897, and they accept that the subsidized rates known as the Crow's Nest rates must disappear.

However, we should not go too far. That is the way it was in 1982 and that is the way it is today, but we should not go any further. In other words, when you eliminate this advantage, you must simply do away with it and bring transportation rates to the level at which they should normally be, that is to say the real transportation cost for the hopper cars which carry grain to the various export points.

If you go beyond that, if you give a federal compensation-24 per cent of which is being paid by Quebec taxes-to increase livestock production in the west so that they can compete with Quebec hog producers, for example, we no longer agree. We cannot accept that federal money be used to help western producers compete against their Quebec colleagues. It would be totally unfair. Not only do they subsidize, but they subsidize in a big way.

They ask everybody to tighten their belts while giving $1.6 billion in compensation to western producers. And contrary to what the parliamentary secretary said earlier, this $1.6 billion is tax free, which means that, in fact, we are giving $2.2 billion to western producers in compensation for the fact that the preferential tariff is going to be eliminated within the next five years.

Nobody warned the Quebec milk producers when milk subsidies were cut, $35 million in one shot. There were no transition measures, they did not offer any when our markets were opened up under NAFTA and, afterwards, the GATT agreement which is now the World Trade Organization agreement. They did not compensate them at all. Nor did they compensate the unemployed when they cut UI funds by $2.5 billion annually.

In a period of fiscal austerity, a time when it is said that the federal system is bankrupt with a debt of $548 billion, they are ready to give what amounts to $2.2 billion to western producers. It is totally unfair because, as I said earlier, Quebec's money will be used to increase the competitiveness of western cattlemen who are going to compete with Quebec hog and beef producers. This is why we are against this part of Bill C-76.

If we must amend the Crow rate, let us eliminate it and the subsidy that goes with it; we must let the free market set the tariff and leave it at that. This is what we must do when we are bled white because of the state of public finances and when everybody is asked to make sacrifices. Moreover, they do not even recognize that the elimination of the Crow's Nest rate will have considerable impacts on Quebec. According to an analysis done by Professor Garth Coffin of McGill University, Quebec will have to absorb between $24 and $46 million per year in losses because of the government's policy.

I think that the current Minister of Intergovernmental Affairs and the current Prime Minister forgot what the Crow rate did for Quebec in 1982.

It would be in their interest to remember that, because Quebec producers remind them, either here or in their riding office, of what the Crow rate means for them, of what it means for them to have their dairy subsidies cut again and again. They were asked to make greater sacrifices than other classes of population in the last budget; their dairy subsidies and various income stabilization plans were cut and they were especially concerned when our borders were opened, as we did here a bit over zealously-if you will allow me the expression-by opening our borders wider than anywhere else in the world. Americans, who are in favour of free trade in the milk industry, are the second most protectionist in the world after Japan. That is something.

Madam Speaker, I have only a few minutes left, but I would like to add a last point. Veterans affairs is another issue that I consider important. Bill C-76 contains clauses that are hitting veterans very hard, but even more so their families. Speaking of veterans, we can go back to World War I or II, but we must not forget those who fought recently. Soldiers were sent by the federal government to represent Canada in peacekeeping forces and some of them died while in the performance of their duty. Their families however must go on with their lives.

Concerned with justice, my colleague and friend, the member for Châteauguay, presented amendments to Bill C-76 to prevent the federal government from acting unjustly towards them. His colleague for Chicoutimi made a brilliant plea in favour of the amendments yesterday. I thank him for that, since the member for Châteauguay had pressing obligations elsewhere. Yesterday, the member for Chicoutimi presented the analysis made by the member for Châteauguay and I will comment on it, since the Bloc Quebecois considers that in no case must a budget lead to social injustices, as this measure would do for veterans.

Briefly, in Bill C-76 the government gives up its obligations and commitments towards veterans despite historical promises made on their honour by this government and its predecessors. The government knows very well that these cuts will add to the plight of the families of these veterans and force them to turn to other public services, provincial in this case, for the help they need. Someone said earlier that the federal government had become an expert at shovelling. Well, this is another case of shovelling.

This government not only shows disrespect for veterans, their memory, their families and all they had to go through, but it passes on to Quebec responsibilities which were initially that of the federal government. For example, clause 42 of Bill C-76 amends the Children of Deceased Veterans Education Assistance Act. This amendment is the first step in the gradual elimination of a benefit giving children of deceased veterans a chance to pursue their studies. The 85 orphans who presently receive this benefit are all, except one or two, children of deceased soldiers who participated in Canadian peacekeeping missions. We are not talking here about the two world wars but about recent peacekeeping missions in which Canadian soldiers died.

Not only did those children lose their fathers who died while defending peace, democracy and freedom, but they are now being deprived of a chance to further their knowledge. According to Bill C-76, students who were receiving the benefit up to the day the budget was tabled will continue to be entitled to it, but the department will accept no further applications. In 1993-94, that assistance program cost $315,803. It is not so much, but that is the Minister of Finance's great initiative, his masterpiece.

Not only are the poorest in our society being attacked, but now the children of those who lost their lives fighting for peace are being attacked also. We oppose this. Clauses 68 to 72 amend the War Veterans Allowance Act by putting an end to the payment of allowances to veterans who were involved in the resistance. We are talking about allied resistance fighters who made the same contribution as official soldiers, as official armies, to bringing

about peace and freedom during the First and Second World Wars.

These clauses are aimed at gradually eliminating the allowances payable to these veterans who were military allies, who immigrated to Canada at the end of their service and who lived here for at least ten years before asking the government for assistance. The government is cutting off their allowances simply and brutally.

Clause 69 repeals sub-section 6.1 of the Allowance Act. This sub-section 6.1 provides that allied veterans who took part in the resistance will continue to receive the allowances established according to their financial circumstances, as long as these allowances were awarded on March 2, 1992 or before.

With this provision, by repealing this sub-section, the government is cutting off allowances to more than 3,000 people in Canada. This provision will also have the effect of taking away the allowances of more than 1,000 resistance veterans whose Old Age Security and Canada Pension Plan benefits put them just above the income level that would normally qualify them for health care benefits.

And speaking about health care, a few weeks ago, I received a letter from people in my riding of Saint-Hyacinthe that was quite meaningful and may illustrate the awful and disrespectful treatment we give to veterans and their families.

Mr. Hervé Bélanger, the secretary of branch 102 of the Royal Canadian Legion in Saint-Hyacinthe wrote the following: "The executive committee of branch 102 learned recently that veterans living in the Sainte-Anne-de-Bellevue Hotel"-veterans injured in active duty-"will have to pay more for their rooms, as rates will go from $547 to $703.80 per month this year, or a 28 per cent increase", all because of a decision taken by this government.

Do you know how much rates have gone up for these veterans since 1990? They pay 198 per cent more. But because there are very few of them, and they do not have the energy and strength to get organized, after having served their country, and in some cases lost a limb-some families were left fatherless-, they cannot get organized, their numbers are dwindling, and they are not a force to be reckoned with, so the Liberals have no use for them. The Liberals do not see them as an organized lobby, so they think nothing of slashing their assistance. This shameful slashing is taking place because they do not have names like Bronfman or Desmarais, and because Liberal ministers never visit them as they visit the Desmarais and the Bronfmans, even if it means going as far as California. So, they are not accorded fair and just treatment.

For all these reasons, not only during the vote, but also after, and during the referendum campaign in Quebec, the official opposition will strongly and firmly reject Bill C-76 as well as this government which is more centralizing than any other government-

[The Acting Speaker (Mrs. Maheu)]

I am sorry to interrupt the hon. member for Saint-Hyacinthe-Bagot, but his time has expired.

Debate resumes with the hon. member for Kootenay East.

[Jim Abbott, Reform, Kootenay East, BC]

Madam Speaker, I appreciate the round of applause from my Bloc friends very much.

Coming to the House, I have come to the conclusion that one does not have to be crazy, but it helps. It makes me think of the situation where the inmates are in charge of the asylum.

The government came here on a promise of openness. The government came here on a promise that we were going to be able to get into debate, get into a situation where the people of Canada were going to be represented in the Chamber. As opposed to openness, what have we had? Closure.

I refer to a very profound one-minute statement made by my colleague from Calgary Centre yesterday, and I know that Liberals would want to hear it again:

In opposition the Liberals howled at Brian Mulroney with righteous indignation over his government's use of time allocation to ram through legislation. With such sincere compassion for democracy, one would expect this Liberal government's record in the use of time allocation to be squeaky clean compared to Mulroney. Let us compare.

Mulroney used time allocation 35 times to pass 200 bills. That is 17 per cent of his bills. Shame on him. Counting today's time allocation motion, the little guy from Shawinigan has used time allocation an unprecedented 11 times in only 59 bills. That is 19 per cent of his bills passed using time allocation, 2 per cent more than Mulroney.

Congratulations, Liberals. A parliamentary record. Does this mean that this Prime Minister is less democratic and even more arrogant than Brian Mulroney? Is that possible?

It is a very good question. Time allocation is absolutely inexcusable in that the Liberals have on Bill C-76 turned 180 degrees from their red book. There is no mandate on the part of the government to be able to bring forward Bill C-76.

Why would we be into a situation of time allocation? The House might be interested. The list is moderately exhaustive but it is important to get on record how the government has either exhibited poor management and planning or, in the alternative, legislation by stealth.

Poor management and planning would say it is impossible to understand that the following bills in the Commons are awaiting start or completion of second reading, all of which are supposed to be completed by June 23: Bill C-62, an act respecting the achievement of regulatory goals; Bill C-71, an act to amend the Explosives Act; Bill C-78, an act to provide for the establishment of a program to enable certain persons to receive protection in relation to certain inquiries, investigations or prosecutions; Bill C-81, an act respecting the Buffalo and Fort Erie Public Bridge Company; Bill C-82, an act to amend the Royal Canadian Mint; Bill C-83, an act to amend the Auditor General Act; Bill C-84, an act to provide for the review, registration, publication and parliamentary scrutiny of regulations and other documents; Bill C-88, an act to implement the agreement on internal trade; Bill C-90, an act to amend the Excise Tax Act and the Excise Act; Bill C-91, an act to continue the Federal Business Development Bank under the name Business Development Bank of Canada; and Bill C-92, an act to amend the Canadian Wheat Board.

That is not all. The next list is of bills in committee: Bill C-7, an act respecting the control of certain drugs, their precursors and other substances and to amend certain other acts and repeal the Narcotic Control Act; Bill C-58, an act to amend the Public Service Staff Relations Act and the Royal Canadian Mounted Police Act; Bill C-61, an act to establish a system of administrative monetary penalties for the enforcement of the Canada Agricultural Products Act; Bill C-64, an act respecting employment equity; Bill C-66, an act to amend the Western Grain Transportation Act; Bill C-68, an act respecting firearms and other weapons; Bill C-72, an act to amend the Criminal Code on self-induced intoxication; and Bill C-85, an act to amend the Members of Parliament Retiring Allowances Act.

I might have something to say about that act in a couple of minutes.

The list continues: Bill C-86, an act to amend the Canadian Dairy Commission Act; Bill C-87, an act to implement the convention on the prohibition of the development, production stockpiling and use of chemical weapons and on their destruction; and Bill C-89, an act to provide for the continuance of the Canadian National Railway Company under the Canada Business Corporations Act.

Then we have bills awaiting or in report stage: Bill C-41, an act to amend the Criminal Code on sentencing; Bill C-45, an act to amend the Corrections and Conditional Release Act, the Criminal Code, the Criminal Records Act, the Prisons and Reformatories Act and the Transfer of Offenders Act; Bill C-52, an act to establish the Department of Public Works and Government Services; Bill C-65, an act to recognize and dissolve certain federal agencies; Bill C-70, an act to amend the income tax application rules; Bill C-75, an act to amend the Farm Improvement and Marketing Co-Operatives Loans Act; and Bill C-76, an act to amend certain statutes to implement certain provisions of the budget tabled in Parliament on February 27.

Just to top it off, bills awaiting start or completion of third reading: Bill C-54, an act to amend the Old Age Security Act, the Canada Pension Act, the Children's Special Allowances Act and the Unemployment Insurance Act.

It begs the question of why the backlog is sitting there. Is the government actually in a situation of such poor management and planning that it would be expecting the House to be working exhaustive hours and that it would be expecting to be able to shove this kind of legislative package through in such a short period of time because of poor management and planning? Is that the reason, or is it legislation by stealth?

Legislation by stealth happens when a government decides it will regularly and frequently use time allocation, as pointed out by my colleague from Calgary Centre. One interesting things happens when we get into legislation by stealth. We end up with legislation by exhaustion.

The standing committee that considered Bill C-68 finally rose at 1 a.m. I sat in on a few sessions which were very detailed and thoughtful. I commend the chairman of the committee for listening to all sides of the question, treating the motions by the opposition as serious motions, and allowing time for discussion.

To show the House how we end up with legislation by exhaustion, the parliamentary secretary to the justice minister brought in no less than 79 amendments to the legislation on behalf of the justice minister. Why in the world would a bill be so flawed, so full of holes, so badly drafted that the government would actually have to bring in 79 amendments to its own legislation? That is unheard of.

It is really hilarious that in committees there are a few rogues but as a general rule we find members vote the party line. The parliamentary secretary who sits in the meeting will say: "I really don't think this is good". Guess what? We end up with party members voting the party line. That is the way it happens in the House too.

In this instance I am happy to report that under legislation by exhaustion, as is being practised by the government, 2 of the 79 amendments brought forward by the parliamentary secretary were rejected by members of his own caucus. That is how disorganized the Liberals are. That is what happens when we end up with legislation by stealth and hence legislation by exhaustion.

It permits rushing bills through the House such as Bill C-76. The government has no mandate to bring it to the House. It allows the government to push it through under time allocation. It will also be able to push through Bill C-68 and Bill C-41, two of the more contentious bills, under the whole ruse of time allocation and pressure because there is so much legislation. It could have and should have been properly planned so the people of Canada and their points of view would be properly represented.

In a couple of minutes I will talk about the relationship of high taxation to Bill C-76 and the lack of understanding on the part of the Liberals with respect to high taxation. Before doing so, I quote the from an article in the Calgary Sun on the weekend entitled ``Tax cheats grow'' about the frustrations of Canadians:

COMPAS' survey of 820 adult Canadians last month showed respondents frustrated by corrupt politicians, government waste, overpaid officials and high taxes, in that order.

It's a common sense moral view that says if our leaders cheat I'm going to cheat.

I want to make it very clear that I am not suggesting for one minute anyone in the House is cheating.

However I am talking about the perception of many Canadians in casual situations around the kitchen table or in a coffee shop. Common sense says that they do not understand what politicians are doing and think they are out of control. That is why I find legislation by subterfuge, legislation by pressure, to be completely unacceptable particularly when it comes to the issue of MPs pensions.

MPs pensions are a focal point or a pressure point the government chooses to completely misunderstand. Just because a few high paid people are at the front end who are in for the millions of dollars, the majority of backbenchers are prepared to go along with it. It is absolutely outstanding. In this case we have pressure on parliamentarians to bring the matter forward. I predict the MPs pension plan will be slid into the House and out of the House just as quickly as possible. Therein lies the frustration of people with coffee shop common sense.

I will deal with the bill specifically. Clause 38 of Bill C-76 gives cabinet far too much arbitrary power and discretion to decide how much to withhold and when and why transfers to provinces should be withheld. More significant, it allows cabinet to withhold any federal transfers, not just transfers under the CHST.

Clause 48 is probably the single most troubling clause. In the departmental briefing our researchers attended, officials told them their legal interpretation of section 13(3) was that it would be possible for the federal government to unilaterally impose national standards. If the government cannot provide us with a guarantee that any national standard must be arrived at with unanimous provincial consent, we could not possibly support the clause.

We have a tremendous amount of difficulty with clause 50 and clause 51. They deal with the whole Liberal mindset of giving the government executive power, giving the government power that actually puts it in a position where it no longer has to refer to the House.

I think back to last June when we were in the pressure cooker. The government jammed through legislation on the Yukon Indian land claim settlements and Yukon self-government. It was jammed through the House. The difficulty is that although there were 14 land claims settled, only 4 were covered by the legislation. It means that kind of thing can come back to Ottawa and never see the House. There can be further settlements on behalf of the people of Canada by a closed group of people in the executive of government. It will never have the transparency that it must have in a democracy. It is just absolutely unacceptable.

We really have a lot of difficulty with clauses 50 and 51 in Bill C-76. Basically they give cabinet too much authority with respect to determining what is or what is not a violation of the CHST. They allow the government to withhold any federal transfer, not just the CHST transfer, if it concludes there has been a violation.

This raises the question of why they would do it. Why would they have this executive power? Why would they put this clout in the hands of the federal government? One of the main reasons is that it is a confused attempt to control social expenditures.

The government is famous for saying that it will be preserving health care. What an empty threat. As it keeps on diminishing the amount of money that is transferred to the provinces to administer the program, how in the world will they have any clout to preserve health care? The difficulty I have is the basic question that if the government is talking about preserving health care and if the government is doing away the ability to transfer funds to the people, how will it do it? It will do it by having the legislation and being able to point to the legislation. It is basically like saying we know we will not be transferring any money but if we could, we would not. It is an absolute joke.

It also gives rise to concern about what is happening in Ontario where Lyn McLeod with her Liberal red book has absolutely laid an egg. The provincial red book being brother of big red book is seen for what it is, basically empty promises.

I and every person in Canada with the exception of members on the other side have seen from the time that Lyn McLeod introduced the red book her popularity started to slide. It is because people said they will not be taken in again.

With the will of the people of Ontario talking about workfare and with these clauses that give the ability to the federal government to withhold funds, is the will of the people of Ontario to be thwarted by the people in Ottawa who will say they will not be transferring sufficient funds for a workfare program? It has to be considered.

I talked earlier about tax increase. One of the wildest ones was the roll back of the Public Utilities Income Tax Transfer Act. Capital is capital, money is money; whether public or private, money is money and should be treated exactly the same way.

This was a direct slap to the people of Alberta. I am absolutely astounded the Minister of Natural Resources of all people did not have the fortitude to stand up to this onslaught on people and industries in Alberta. It is really shameful she backed off and was not there to be counted.

Perhaps I should explain my understanding of what the Public Utilities Income Tax Transfer Act is. Crown corporations such as B.C. Hydro and Ontario Hydro are not subject to certain tax provisions from the federal government, whereas private corporations that might be in the same utility business such as Trans Alta and other corporations like that are.

The purpose of the PUITTA was to give a credit. In other words, the public utility privately owned would then end up paying the taxes and receive a credit back from the federal government. By rolling it back the government under a different guise and under a different name basically gave a tax increase to the people who rely on the utilities in Alberta. It was not only Alberta, it was Nova Scotia and Labrador, two areas that can least afford that kind of subterfuge in terms of a tax increase.

In the case of Nova Scotia, one of the most interesting things is that there was an attempt on the part of the provincial government to turn around and get out of the hydro business. I suggest it is something that might be considered by Ontario Hydro, B.C. Hydro and the rest of the public utilities. There is a place for government and there is a place for private enterprise and the efficiencies that come with private enterprise.

Now if it does we can count on the fact that the federal government will have its hands in the wallets of the people of any other jurisdiction who choose to make what could be a very sound judgment otherwise.

I see two fundamental problems. I combine the issues of integrity and leadership. From the Financial Post : High taxes turn Canadians into cheats''. I will quickly address the question of integrity and leadership. From a June 3 article concerning a poll done recently for the <em>Financial Post</em> :They cheated because they were disgusted with governments, politicians, regulations, the welfare system, bureaucrats and excessive taxation. Excessive pay to officials and politicians, government waste and especially political corruption are the main drivers of citizens' desires to tax cheat. The message for politicians is they should focus on their own personal conduct if they do not want citizens to destroy the welfare state through the silent rebellion of tax cheating.

"Besides documenting the degree of outrage and dissatisfaction with the government in this country this poll reveals that Canada's current levels of taxation are simply not collectable from a large segment of the population. Put another way, it means that most Canadians are unwilling to support the current level of government spending".

That is instructive because in the Reform Party's taxpayers budget we recognize that. We balance the budget. We stop the overspending within three years without one dime of a tax increase. This survey absolutely underscores that. I repeat: "Put another way, it means that most Canadians are unwilling to support the current level of government spending". There is absolutely nothing to give me any cause for comfort that the government has that message yet.

What happens when the government does not listen? What happens to taxes and tax cheats? Here are a few of the points discovered by this survey. Two out of five or 42 per cent admitted paying cash for goods or services in order to avoid taxes, GST or provincial sales taxes. One out of five or 20 per cent admitted they have hidden income in order to evade income tax.

Another 14 per cent said they have either smuggled or bought smuggled cigarettes or alcohol to avoid paying taxes on these commodities; 72 per cent said they would pay cash to avoid taxes if given the opportunity; 56 per cent said they would hide income if they could; 34 per cent said they would buy smuggled cigarettes or alcohol or smuggle them into Canada if they had the opportunity; 13 per cent admit they cheated whenever possible by paying cash; 5 per cent hid income whenever possible; 3 per cent bought contraband goods or smuggled goods whenever possible.

Further on in the survey it was pointed out that 15 per cent of Canadians said they will definitely tax cheat in the future by paying cash under the table; 8 per cent said they would hide income; 5 per cent would buy contraband or smuggle goods. Of all surveyed, 53 per cent said they personally know people who pay cash under the table; 37 per cent said they know cigarette or alcohol smugglers or buyers of contraband; 36 per cent said they had knowledge of people cheating by hiding their income.

A staggering 77 per cent of those polled said they have become more determined to avoid taxes than before. Of this percentage, 42 per cent said they are much more determined to avoid taxes; 35 per cent said somewhat more determined. Only 16 per cent are less or somewhat less determined to avoid paying taxes in the future.

This comes about in my judgment through the lack of a clear exhibition of integrity and leadership on the part of politicians. We have a core problem, integrity.

I have come to know some of the government members and I appreciate them, their friendship and their integrity. In the last election under the red book and under the promises and under the whole political process, were they ignorant that they could not fulfil the promises or did they get into government by stealth?

There is one person in my mind in the House who stands out as being a person of quite exceptional integrity. This person was joined by the member for Halifax and the member for Beaches-Woodbine in a press conference clearly setting out his objections to Bill C-76. All three of them were absolutely decrying Bill C-76, how it could not work, how it should not work, how it was turning its back on the principles under which the government was elected. All three did it and only one of them still stands to this day, the hon. member for Notre-Dame-de-Grâce.

Let me make my position really clear. There are very few things which the member and I would find in common. I totally disagree with his position on gun control. I completely disagree with his position on criminal sentencing and the rest of those provisions, and I absolutely reject his position on Bill C-76. He came to the House, elected by the people of Notre-Dame-de-Grâce to represent them as their member of Parliament. He said he would stand up for what he knows to be right.

In a quote from the Ottawa Citizen today, under the member's name who will vote against the budget:

Accusing the Liberals of betraying their principles and reneging on campaign promises to protect social programs, the veteran member is planning to vote against his government's budget today.

"I cannot contribute to tearing down a system which I for 29 years in the House helped build up with the Liberal Party", (he) told the Commons during final debate Monday on a bill to implement last February's budget.

The bill contains provisions to cut $7 billion from federal transfers to the provinces for welfare, post-secondary education and health care and role those transfers into one block fund.

(He) predicted the social program cuts will hit those in need the hardest, "widen the gap between the rich and poor" and lead to "social unrest and increased crime". And he said they could "quick start or aggravate a recession that might be coming on".

I want to reiterate I do not agree with the member's point of view. I would find it impossible to stand with him when he votes against this bill on the same matter of principle. I think he is completely wrong. It even borders on being immoral when the government of the day turns around and says to members on the gun control bill: "You did not vote our way, you are out".

This member has been an outstanding chair of the justice committee. What will happen? Is the Prime Minister to oust him as well? What happens when he does? What he does then is undermine the whole issue of integrity and leadership on the part of politicians.

In 1994 the government had a unique opportunity. It is true that its members came to Ottawa either in ignorance or stealth, misunderstanding the reality of what was involved with the economics of the day, totally missing the mark, decrying the fact that the Reform Party had the audacity to tell people the biggest single problem was the debt and the way it was eroding social programs.

In 1994 they missed the opportunity. They arrived here with unrealistic expectations, and clearly the budget of 1994 showed that. In Bill C-76 and under the budget of the finance minister for the first time in 25 years we saw a real cut in spending of a net reduction of approximately $10 billion. Unfortunately because the government arrived here with unrealistic expectations, in the intervening period from October 1993 until February 1995 guess what? Interest charges had increased $10 billion. Here we have this government taking $7 billion out of social spending, a total reduction in expenses of $10 billion, which will impact everyone in Canada, only to pay the extra interest on the money that they have had to borrow in the same period of time. It is called treading water.

At the moment under the government we are giving away our sovereignty. He who pays the piper calls the tune. Right now we are turning that tune over to foreign investors who are coming in and in their own wisdom are continuing to fund the expenditure binge of the government.

The government is taking Canadians $110 million further into debt every single day. That is $1,800 per second. We are further and further into debt. We are destroying our ability to sustain health care and pensions.

I decry the government's lack of leadership and its offloading on to provinces. It fails to realize that there really is only one taxpayer.

I also draw to the attention of the House and to Canadians the fact that it is bringing pressure and through that pressure are bringing interesting ways to be able to push legislation through the House.

I call on Canadians to make the government accountable. Do not give it the free ride it is getting at the moment. Make it accountable in its constituencies by phone.

Finally, in bringing forward Bill C-76 the government shows a lack of integrity, because there is no mandate for it to bring forward Bill C-76. As a consequence, I will be voting against Bill C-76.

[Marlene Catterall, Liberal, Ottawa West, ON]

Madam Speaker, I am pleased to participate in this debate.

This is not an easy budget and it certainly has been the subject of a great deal of discussion. It does signal some fairly significant changes in the way government in this country carries out its business and its service to Canadians. Nonetheless, notwithstanding what the member who just spoke had to say, I think we realized very well when we ran for election in 1993 and when we made certain commitments to Canadians as part of that election that this country was facing a difficult economic situation.

Certainly a good part of the commitment we made to Canadians was a commitment to deal with that very difficult economic and fiscal situation. This budget is stage two of doing that and of continuing our two prime commitments to the country: one, jobs and economic growth to provide a more prosperous future for all of us and for those who come after us; and as part of that, deficit reduction to a target of 3 per cent of GDP by 1997, half of what it was when we took office.

It is really important to remember that without achieving that target many of the other things that we want to do as a government and that I believe Canadians want to do as a nation will not be achievable.

Let me speak of a couple of things in particular on which I have been receiving a great deal of feedback from constituents and from others. One thing is the Canadian health and social transfer, which is certainly a cause for significant concern. It is one of those major changes I talked about in how we carry out our responsibilities as a government in this country. I do not think it helps to pretend that it is not a significant change when it is. However, it was a necessary change in order for the federal government to maintain some influence and some impact over health and social programs and post-secondary education.

By combining the transfers to the provinces to cover those three fields of post-secondary education, health, and social services, what we are doing is maintaining the ability with smaller amounts of money to have some influence on all three areas of expenditure.

I think we are also getting rid of some rigidity in the system. As one who has worked closely with a number of agencies in my community, I am well aware of the frustration that has been there with the stringent requirements of existing social programs and the existing Canada Assistance Plan Act, which prevents really innovative and often preventive programs from being funded under the current act and under the current transfer programs. As a former municipal councillor, I well remember the frustration of some very good programs not being eligible for federal funding.

The combined transfer allows the provinces to be more innovative. I expect and hope to address prevention in the delivery of all three of those programs. It also signals very clearly that those three programs are very much linked. Education is very much a part of solving some of the social problems this country has. Health is very much a part of solving both educational and social problems that we have.

I would like to provide some information that will make that point very clear. Let us look at the poor children in our country. It is a shame for a country with the wealth that Canada has to have well over a million children living in poverty. A poor child is four times as likely to become seriously ill, die, or even commit suicide. Poverty has a direct impact on our health services and of course on the quality of life for those families living in poverty. A poor child is only one-quarter as likely to go to university as the average Canadian child.

I learned a long time ago that these issues are not separate from each other. There is not much point in treating an elderly woman for bronchitis and then sending her back to a damp basement apartment because she cannot afford adequate housing and does not have enough money in her purse to feed herself properly. She will soon be back, if not with bronchitis then with something more serious, unless the whole problem of her social environment and the amount of money she has to live on is dealt with.

With the combining of these payments I certainly hope that the provinces will start recognizing the link between these three fields of public policy and public spending and start to set the priorities so that we are dealing in preventive ways. We are concerned about the extra cost of our health care system. Yet I believe that unless we deal with the social problems, in particular the issue of poverty, which tends to contribute to ill health, then we are never going to solve the problems of an ever growing cost of health care.

People are concerned about national standards and so am I. Very clearly we are setting the residency principle that no matter where you live in Canada, people cannot be required to be a resident of a province to be eligible for social assistance.

There are two other principles, which are not incorporated in the legislation and which I am concerned about and have heard concerns about. It is all the more important to recognize that the combining of payments to the provinces is a way of keeping some clout in all three fields as our share of those expenses diminishes. That has been happening under the existing agreement and will continue.

I hope we will endeavour to negotiate as national principles with the provinces that need be the basis of establishment-anybody in need would be eligible for assistance-and that there be an appeal process to the social welfare system.

Another issue of great concern to my constituents is the significant and dramatic changes we are making in the public service.

We have taken a thorough look at what government does, and in virtually every area of government activity we are looking for better and more efficient ways to serve Canadians at less cost. The result of that over the next three years is going to be a substantial reduction in the number of people working for the public service.

There are measures in the bill that will make it easier for those affected by the downsizing to get on with their lives in a number of ways. We expect a vast majority of people will take advantage of the early retirement incentive, which has already been passed in regulations. It will enable them to leave the public service on full pension and remain in their communities as contributing members.

The second measure in the legislation is the early departure incentive, which will allow people to voluntarily leave the public service and get on with other opportunities or another job.

I compliment the President of the Treasury Board for showing some flexibility on how the downsizing is being managed and for doing what appears to have been resisted a few months ago: allowing people who are interested in leaving the public service to vacate their jobs and make room for somebody else who does not want to leave at this time.

As long as we are spending one third of the taxes we collect from Canadians just to pay interest on the debt, there will continue to be pressure on our social programs, pressure on the services government can deliver. It is extremely important therefore that the primary direction of the budget is to reduce the deficit, reduce the amount we are wasting on interest. I regard it as a waste because it accomplishes nothing for us. Yet the amount continues to spiral every year and will continue to eat away at everything we want to accomplish as a government and as a nation.

I encourage the finance minister to continue with greater tax fairness, as he has done in the budget. I encourage him to look at every way possible of reducing the foreign debt, because it is money going out of our economy and not being taxed in Canada

There are things that many of us do not want to see in the budget, but I believe that fundamentally it is heading in the right direction.

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

Madam Speaker, I appreciate the opportunity to ask some questions today and to make a comment or two.

I listened thoughtfully to the member's comments regarding Bill C-76, the matter before us today for third reading. I found her remarks quite interesting.

I do have a couple of questions I would like to ask. The first question relates to the farm subsidies that are important to the people in my constituency. The second question relates to the health transfer. These are matters I addressed yesterday at report stage.

I am quite concerned about the long term implications on the prairie economy, particularly on those communities that are affected by the elimination of the Crow benefit as a result of this legislation. It has been estimated that each delivery point on the prairies served by the Western Grain Transportation Act will lose approximately $1 million annually as a result of this legislation.

Within my constituency are some 40 to 45 elevator points that could be classified in this category. This means that the farm communities in my constituency will lose $40 million to $45 million a year in funds that are currently in those communities. For example, $1 million every year out of the town of Glaslyn is quite significant.

This is the first question I want to put to the hon. member opposite. In any of her discussions with her colleagues, whether they be members of the cabinet or just members of her caucus about support for this bill or in any of the research she has done, has she seen or investigated any reviews that look at the implication of the removal of the subsidy on the farm communities of western Canada?

This money is supposed to be replaced by investments for value added production. I wonder if she knows of any study that has been done of where the investment capital is coming from to support the value added production on the prairies?

[The Acting Speaker (Mrs. Maheu)]

The time for questions and comments should you wish an answer is nearing an end. Would you please give the member time to respond if you wish her response.

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

Madam Speaker, I appreciate your intervention. Although I have other questions for the member, perhaps if I could have an answer for those two, it will satisfy me for the time being.

[Marlene Catterall, Liberal, Ottawa West, ON]

Madam Speaker, I do not represent an agricultural community although the preservation of the agri-food industry and the preservation of strong agricultural production in this community is of great concern to me and to my constituents.

I am not an expert, as the member well knows, although I understand his need to make these statements and ask these questions in the House. He knows this is not an area of expertise for me and it would be unfair of me to even try to provide an answer to the kinds of questions he has asked.

I am sure the minister would be more than happy to share with him any reviews that have been done to provide whatever level of briefing he would like to have provided to him and to answer any questions he has.

I am quite surprised he is asking these questions in the House of somebody he knows does not have expertise in that field instead of already having sought those answers from the minister. After all he has had over two months to follow up. I would encourage him to do that since I know the minister would be most happy to co-operate in providing him with any documentation and any explanations he needs for his constituents.

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

Madam Speaker, on a point of order, could you clarify for me how much time was used on questions and comments?

[The Acting Speaker (Mrs. Maheu)]

A little over five minutes.

[Jane Stewart, Liberal, Brant, ON]

Madam Speaker, with pleasure I rise to debate third reading of Bill C-76. As you know, I am a member of the finance committee and have been inextricably intertwined with the development of this bill for the last nine months.

Nine months ago the Minister of Finance came to the committee and directed its members to begin the first ever prebudget consultations. This was the first time the finance committee went out in advance of the preparation of the budget to talk with Canadians about their will, their concerns, their interests in the preparation of what is possibly the most important aspect of the legislative year.

During the debate committee members talked with over 600 members of the Canadian public about the budget. Despite what the member for Kootenay East said in his reference to time allocation, I can say unequivocally that this budget has probably had more discussion, more debate, more consultation than any budget to date in the history of the Parliament of Canada.

When we talked with our fellow citizens it was clear and interesting the level of consensus that we were able to build. The message from the Canadian public, from region to region, was very similar. In effect, they agreed that the government must take responsibility, that the deficit must be reduced and the debt managed. There was agreement to that. There was agreement by and large that the method of reduction should focus on expenditures as opposed to revenue or tax measures.

The people of Canada said to the committee, as members of government and members of Parliament, to take a message back to the minister that said start with government and then move to program reduction, but please start with government, get your own House in order. That made sense to us.

It was in December when the committee reported to the Minister of Finance. Then as an individual member of Parliament I went to my riding of Brant and had lengthy discussions with the constituents there. I had public forums and individual groups of Canadians actually took it upon themselves to think about the issue of budgetary management and fiscal responsibility. I congratulate them for the time they spent in preparing briefs that were subsequently presented to the finance minister.

After that we waited. The budget was presented in February and in the interim we know what the international community was like. Things were upset financially. The international community challenged us to make sure that a tough budget was brought in. We watched with trepidation, with worry but knowing all the time that the minister would respond directly to the information he received from the committee and from those of us who as members of Parliament provided him with our points of view and the points of view of our constituents.

In February the minister did proffer a budget that responded to the needs of Canadians. He clearly indicated a direction so that we will move to a deficit of GDP ratio of 3 per cent as we promised in our election platform and in the red book. He has listened to Canadians because the deficit is being reduced primarily through expenditure reductions versus revenue measures in a ratio of seven to one.

Finally he responded to the issue of getting government right, saying that cuts will be made in government first and then move to programs. When this is looked at we find a new structure has been created for the federal government. We are embarking on a change in the role of the federal government.

As the system of legislative review progressed the finance committee took the budget bill into committee and continued its deliberations and its open consultations with the people of Canada and talked further about the details as they had been laid out in Bill C-76. It was interesting that the focus of the debate in committee shifted. People feel that the government has taken fiscally responsible initiatives.

The nervousness in the public marketplace has quieted and we are now looking at the thing which we call new government structure. We spent a lot of time talking about the structural changes, because they are different.

I have to make the analogy that we have given birth to something which is quite new. It is significantly different from what the people of Canada have seen in the past. Government has been restructured. Many departments have been downsized. There will be a physical downsizing of staff to the tune of 45,000 individuals. Longstanding Canadian assets, CN for one, will be privatized. Finally, but not exclusively, the way that some transfers to the provincial governments are made will be changed.

We have something which is distinctly new and something which is very different. Our job now as a government is to recognize that we have created a fiscal framework which is fiscally responsible and under which we as a Liberal government must continue. We must develop our baby in a very Liberal way.

We looked at the strategies which the government has planned. The Minister of Human Resources Development will be presenting a new strategy for unemployment insurance in September. The government is undertaking and will over the next year begin discussions on pension review, looking at the CPP and all the bits and pieces that go into providing a safe and secure retirement for Canadian citizens.

The new block transfer to the provinces has to be looked at very carefully. It is quite a different transfer than in the past. It is a block transfer. It contains the same standards of requirement for health care, but it addresses education and social assistance as well. We have to be very careful with that transfer because it does talk to our future as a country.

I was fascinated by the witnesses as they came before the committee and encouraged us to maintain national standards, a federal presence in the continuing development of those programs, while recognizing the need for flexibility and control in the provinces. With that transfer we have provided an opportunity to do just that.

The Minister of Human Resources Development will be working very closely with the provinces to build a mutual consent on the development of new principles and guidelines. That speaks volumes about a new structure, a new role for the federal government, and its responsibility to facilitate discussions among the provinces to find the best possible strategies to provide health care, solid post-secondary education and social assistance. It gives the government a new opportunity at the federal level to use different strategies and not just the control of cash, which continues to be very important.

In the report to Parliament at report stage the finance committee indicated that it would prefer that the Canada health and social transfer continue as part of the federal responsibility over the next number of years. However the government must facilitate discussion. It must consider using new technologies and new techniques, perhaps like a social audit, comparing provincial successes in these different areas. That is the job which we as parliamentarians take.

One of the critical situations which will occur is the loss of 45,000 public servants. I recognize that our public service is the best public service in the world. As did my hon. friend from Ottawa West, I would like to mention that the President of the Treasury Board did respond to the very good submissions made by the public service unions and has put together a labour and management committees to ensure that the downsizing is done in a humane, fair and equitable manner.

These kinds of activities speak volumes to the kind of government we are. It will be important for us as a government to now work within a new fiscal framework, to continue the Liberal tradition of providing fairness, equity, compassion and understanding so that we continue to be the best country in the world in which to live.

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

Mr. Speaker, my comment relates to my earlier intervention. I did ask the member who spoke just prior to this member some questions about the farm economy. The bill in fact addresses the farm economy quite significantly. Whether or not members of this House are from farm constituencies, they have an obligation to understand the implications of legislation on all Canadians regardless of where they live.

I would have thought that a bill that has such substantial impact on rural Canada would be something that all members of the Chamber would be able to address. It seems to me that we as MPs have an obligation to Canadians as well as our own constituents.

The member indicates she is a member of the finance committee. Is she aware of any studies relating to the long term implications of this legislation on rural communities? Specifically where will the investment to replace the lost income come from to ensure that these communities are able to continue to exist?

Keeping in mind what I said earlier, in my constituency alone income that presently exists, up to some $40 million a year will be lost as a result of this bill, all from rural communities. A considerable investment will have to be made in order to make that up.

My other question deals with the health care part of the bill. The member will recall that earlier this week the Canadian Hospital Association expressed what it said amounts to a call to arms against the plans in this bill for health care. Essentially the Canadian Hospital Association president said that the reluctance of the federal government to match its moral commitment with a financial commitment is inexplicable.

Can the member of the finance committee explain what has happened to the federal government's fiscal commitment to health care?

[Jane Stewart, Liberal, Brant, ON]

Madam Speaker, the member spoke directly to the comments I made earlier. The point I was making is that this budget creates a whole different structure for the federal government in terms of what it looks like and the role it plays.

When we look at the implications for agriculture particularly, I represent a combined rural and urban community. I am very sensitive to the needs of rural Canada. I can tell the hon. member without a doubt that the rural members in our caucus have talked long and hard about the implications here as we have done with health care, with education, with downsizing, with all the structural changes that are occurring as a result of this budget.

The minister who is responsible for agriculture and agri-food is from Saskatchewan. Rest assured that the issues facing rural people are front and foremost in our caucus, in our cabinet. We do recognize that we have to watch the implications of this budget in the long term and plan to ensure a strong and healthy future for rural Canada.

When we talk about the health issues, the government is fully and totally committed to the five pillars that currently exist under the Canada Health Act. That has not changed and will not change. It is a hallmark of our government to maintain full and solid health care for Canadian citizens.

[Francine Lalonde, Bloc, Mercier, QC]

Madam Speaker, to speak on this bill to implement the budget is a challenging task, as it forces us to put in plain words the sweeping changes proposed in this budget, changes which will affect provinces with the largest percentage of underprivileged people more than the others, and Quebec in particular.

The federal government announced its intention to bring about deep structural changes in Canada and that is what it is doing with this budget, without any debate except for this budget debate. This budget is choking the provinces which are the worst off by reducing transfers dramatically. At the same time, the central government keeps making surpluses on the UI fund. Now, the government wants to retain the ability to impose on all the provinces common direction and principles.

I will start with this latter aspect. First of all, let me remind you that, as soon as this bill was introduced, the Bloc Quebecois denounced the excessive powers the federal government is giving itself with this bill, presumably to implement as required national standards to other social programs.

Since social programs are later described, in clause 53, as including programs in respect of health, post-secondary education, social assistance and social services, it is obvious that the government intends to use transfer payments to impose standards regarding other social programs as required.

Our interpretation was endorsed by many. But when the Official Opposition held an opposition day on the budget and Bill C-76, the Minister of Finance furiously criticized this interpretation. Strangely enough, to be able to criticize us for our misinterpretation, the Minister of Finance himself had to put forward amendments to his own bill. That is right, Madam Speaker.

[An hon. member]

Himself?

[Francine Lalonde, Bloc, Mercier, QC]

Himself. We, in the Official Opposition, have not been sitting in this place for very long, but from what we are told, it is quite unusual for a finance minister to put forward, just to prove his point, amendments to his own legislation, amendments which in this case were submitted in writing only weeks later.

When the Minister of Finance takes the trouble to prepare amendments well in advance, you figure that this time, he is going to try and fine-tune the bill and incorporate what he says into the act. So, what did he say?

"We want to give flexibility to the provinces." Great! Now, what does his own amendment to his bill say? Basically, it says the following. Perhaps it comes as a surprise to the finance minister that the Official Opposition can read bills.

Clause 13 essentially says this: Subject to this Part, a Canada Health and Social Transfer may be provided to a province [-]for the purposes of: ( a ) establishing interim arrangements to finance social programs [-].It has been said that the provinces should enjoy greater flexibility. ( b ) maintaining the criteria and conditions in the Canada Health Act [-]; ( c ) maintaining the national standard, set out in section 19 [-]; ( d ) promoting any shared principles and objectives that are developed, pursuant to subsection (3), with respect to the operation of social programs [-].

Again, what are these social programs? They are those we identified earlier: post-secondary education, social services and welfare. This clause can only be read as follows: "A Canada Health and Social Transfer may be provided for the purposes of", among other things, "promoting any shared principles and objectives that are developed, pursuant to subsection (3)".

The government will use the transfers to promote these principles. Ah! Whenever the central government uses its transfers to promote something, there is cause for concern. As the old saying goes, "Old habits die hard".

What does subsection (3) say? It says this: "The Minister of Human Resources Development shall invite representatives of all the provinces to consult and work together to develop, through mutual consent,"-not unanimous consent but mutual consent-"a set of shared principles and objectives"-for the social programs being referred to, namely post-secondary education, social services and welfare-"that could underlie the Canada Health and Social Transfer".

The only good news is that the Minister of Human Resources Development would invite representatives of the provinces. Yet, since the minister was elected, he has not seen fit to invite the provincial employment and human resources ministers. It says that he would invite them, but it does not say when.

That clause, with its various paragraphs and sub-paragraphs, can only be interpreted as reflecting the federal government's intention to use transfers to promote principles which are not unanimously approved-thus leaving the possibility that Quebec, and perhaps other provinces, might not agree-, but which are common principles. The idea is to use transfers to promote common principles.

Considering how careful the Minister of Finance was before submitting his amendments, it is clear that the government intends to meddle even more in provincial matters. The goal is crystal clear: to ask the provinces to follow common principles and objectives regarding post-secondary education, social services and social assistance.

However, the provinces are fed up with the cuts announced. What are these cuts? I will repeat them, but I will use a different perspective. We were told on numerous occasions that these cuts would total $7 billion but, in fact, it is more than that and those who are listening to us realize that.

When someone's salary is reduced-for example, if a person earning $450 a week is told by the employer that he or she must accept a $150 cut per week so that the company will survive-that person knows that the cut is either temporary, which means that he or she will lose $150 multiplied by the number of applicable weeks, or permanent, which means that he or she will lose $150 every week.

However, when the provinces are faced with a $4.5 billion cut one year, followed by a $2.5 billion the next, the total is not just $7 billion. From 1994-95 to the end of 1997-98, the provinces will have been deprived of $12.3 billion. This means that the cuts which they, in turn, have to make are not temporary ones. They have to be structural cuts, since they do not even know what to expect next.

Quebec is particularly affected. It will lose at least 27 per cent of those $12.3 billion. This is an enormous amount, given that, from what we hear, the reform announced in Montreal, which raises so many concerns, will result in savings of only $180 million. I say only, because that is the sad truth. So when we hear members singing the praises of renewed federalism, I think they have a lot of nerve-and I hope "culot" is not unparliamentary-because the truth of the matter is that these changes will bring about major disruptions in the services that people receive. And thanks to federalism, these disruptions will be blamed on the provinces.

The provinces will have to cut spending, and the public will suffer the consequences this will have for health care, education, social services and welfare. National standards for health care will be maintained but the provinces will have to cut back drastically, perhaps not so much on health care but on education, welfare and social services.

The government announces reforms but makes these cuts without considering the consequences, because it wants to cultivate this image of a responsible government, and so it transfers the problems to the provinces and the private citizens. Meanwhile, and this is not in Bill C-76, it is in the budget but is not mentioned because it has separate legislation and the government is not going to meddle with unemployment insurance just now, the government is letting the Unemployment Insurance Fund run a surplus. Five billion dollars this year alone. Five billion dollars next year.

Soon there will be another recession, and people are predicting one, although we are right in the middle of a so-called upturn, but it is not a good time for everyone. It is not a good time for a lot of people, and now they are predicting another recession. When? Who knows? In a few months, in a year or two years, but the fact remains that the provinces, which have seen their welfare rolls increase even now, during this economic upturn, and it was like that this month in Quebec, the provinces will be stuck with dealing with an increasing number of people on welfare and the accompanying increase in social needs, while the federal government has this fund, so that it will not only be able to maintain unemployment insurance benefits but will also be in a position to lend a helping hand to the provinces while intruding on their jurisdictions. It will no longer have to set certain criteria for programs. It will make the decisions itself. The government itself will intrude into fields that are not its own.

Yes, Mr. Speaker, we are changing Canada. Much more surely than if we amended the Constitution, but not in terms of flexibility. No. The only flexibility in this is the flexibility to cut. Some flexibility. All the rest gives the central authority-as in Bill C-76 and other legislation-the central government powerful means to change the structure of Canada by making Ottawa even more the brains and operational centre of Canada,

to the point where the provinces will soon hardly even be regional structures, they will be branches of Ottawa.

Quebecers are a distinct people and form a distinct society. They have repeatedly tried to make a place for themselves in this country. Their demands were modest. Inadequate would be a better word than modest in terms of what Robert Bourassa asked for at Meech Lake. Quebec kept getting "no" for an answer. Now, reforms are being made, but not the reforms Quebec wanted. These reforms are in completely the opposite direction and they are leaving Quebec much worse off.

Quebecers now know that their only hope lies in solidarity, in combining their tax dollars so they can plan, be prepared and invest where they want rather than have the course of the province's development imposed by a central government, which cuts where it feels like it and collects money where it feels like it.

Those of us on the Standing Committee on Human Resources Development heard repeated calls for strong national standards across Canada, except in Quebec. We have nothing against generous social services for everyone, quite the opposite, but we want to establish our own standards, because peoples and nations organize themselves, run their economy and do business according to their own priorities and objectives.

Under existing conditions, Quebecers have no choice, if they want a future, but to gather up their money and their means and make their own laws and treaties.

[Andy Mitchell, Liberal, Parry Sound—Muskoka, ON]

Mr. Speaker, I am very pleased to have an opportunity at third reading to discuss the federal budget and specifically the implementation legislation that we have before the House today.

There is no question in my mind that I fully support this budget. I fully support Bill C-76, the implementation bill that will bring it about. I believe that the actions the Minister of Finance has taken and the actions this government has taken are appropriate and necessary.

I understand that not everybody in Canada is happy with everything in the budget. However, the important thing is that most Canadians, although there are things in the budget they might not like, realize that the action that was taken was necessary, given the fiscal situation the country found itself in.

The average Canadian out there understands what members of the opposition do not understand. That is, if we are to have the government act responsibly and if the government is to cut back expenditures, then there will be an impact on individuals. Canadians understand that and know that is to happen. Because they realize the necessity of it, this budget has widespread support in the country.

This is a good budget because in it government recognizes that it has two basic responsibilities and that both responsibilities have to be fulfilled if the country is to operate efficiently and with a social conscience. Those two responsibilities, quite simply put, are fiscal responsibility and social responsibility.

We have a fiscal responsibility. We have a responsibility as a government to operate in a prudent manner. We need to be businesslike but remember that we are not a business. We must ensure that each Canadian taxpayer receives full value for each dollar that is spent.

However, in addition to this fiscal responsibility, the government understands and Canadians understand that government also has a social responsibility. We do things not to earn a profit from doing them but because they are the right things to do. We fund medicare as a federal government not because we can make money at it but because it is appropriate to provide Canadians with medical care. We have an old age security system not to make a profit on it but because we believe, as Canadians, that it is appropriate that we collectively provide for the security of those in our society who have reached 65.

It is important for us to understand that government has this social responsibility in addition to this fiscal responsibility. It is also important for Canadians to understand, which I believe they do, although I do not think the opposition understands, that we cannot have one of these responsibilities without the other.

Before I came to the House I had a job in the private sector. I had the opportunity to work with people who were in financial difficulties. In a large sense what we face as individuals in our family budget is not a whole lot different from what the country faces today. The options on how to deal with it are frankly not a whole lot different. I have had individuals who have come to me in financial difficulty. Perhaps they bought a house that was larger than they should have and their mortgage was bigger than it should be. Perhaps they bought a larger car or a second car and went into debt more than would have been prudent. Perhaps they ran up their credit cards on things that maybe they should not have bought. At the end of the day they find themselves overcommitted financially, much like Canada today finds itself overcommitted financially.

There are a number of options you can take as a financier, just as there are a number of options the government can take. You can be, as some members in the Bloc have suggested, like the bank and

say: "Oh, you are in difficulty. You are having difficulty with your finances. I will tell you what I will do, I will just increase your credit card limit by another $5,000 so that you can go out there and maintain the level of expenditures you have always had." This might work for a month or two, but it is not going to work in the long term and it is not the fiscally responsible and for that matter the socially responsible thing to do, either as a government or as the individual banker who might be dealing with that client.

Or you can take a different approach, the approach the Reform Party has often talked about in the House in terms of how to handle an overcommitted debt situation. We can say to a person: "You are going to absolutely stop spending now. We will go down your budget and hack out. It does not matter whether you are going to have enough money to feed your family or to keep at least one car on the road so you can get to work, or whether you will be able to buy clothes or pay for your kids' education. No. The only thing we are going to think about is that you are overcommitted financially. We will cut that all out right now and at least balance your budget. You might starve and you might not have any shelter, but by Jiminy Cricket, we will have your financial situation in order".

That is what the Reform Party suggested in its counterbudget. It said we should slash everything and get it all down into a nice neat package in three years. It just does not work that way, just as it would not work for the bank client to simply cut everything at once.

There is an appropriate middle course to take. It is one we would take as individuals and one we have taken as a government. It is simple. We would come to an understanding that we have spent too much, that we are overcommitted financially and that we do need to put our house in order, but we must do it in a responsible way. In the case of an individual the debt would probably be consolidated and the payments spread over a number of years so the payments could be made according to the level of income. In time the problem would be resolved.

A fiscal regime is not imposed that is impossible to live with. The federal government has taken this approach. It is understood that our expenditures were too high. It is understood that we were spending too much money. It is making the adjustments in a gradual, prudent, responsible way that Canadians can afford.

This is the essence of the budget. It is what makes the budget work. It is why the budget is accepted across the country. Canadians instinctively understand that we have taken an approach they would have taken in dealing with their own family budgets.

I want to compliment the minister and the government for having seen clear to take this approach. We will move ahead in the next fiscal year and the following fiscal years. We will improve our financial situation and improve Canada's fiscal situation year after year. We will do it in a manner that understands our social responsibility and which maintains the social safety net for Canadians. It will maintain the Canada we have built over the last 50 years, a Canada we are proud of and a Canada which the Liberal government is committed to protect.

[Bill Gilmour, Reform, Comox—Alberni, BC]

Madam Speaker, I would like to compliment the member opposite on his speech, particularly since during his speech he referred to the Reform Party as the official opposition, which is what really has been happening in the House.

The member went into detail on his private life, particularly in terms of private individuals who are overly committed financially and how he would fix their situation. I find it rather ironic that if the federal government were in the same position as any business or individual, it would have been bankrupt a long, long time ago.

At a time when the provinces are balancing their budgets, one after the other all the way down the road, the member seems to think that the federal government is somehow different, that it does not have to balance its budget. It is off somewhere after a future election, off into the sunset somewhere, which is very much the old style promises of the old style politics.

Why does the member think that the federal government is different from the provinces which are balancing their budgets one after the other all the way down the line?

[Andy Mitchell, Liberal, Parry Sound—Muskoka, ON]

Madam Speaker, if I referred to the Reform Party as the official opposition, I certainly apologize for that. I certainly did not mean to provide that party with a status it does not have and never will.

No one is suggesting that the federal government does not need to balance its books. It needs to eliminate its deficit and in time bring its debt down. Similarly, as individuals if we were overcommitted at some point in time we would want to bring our individual debt down and to spend only what we were bringing in in a given year. The Reform Party is suggesting that we do this at a pace and in a manner which totally ignores the needs of individual Canadians.

I can go to any budget for a business, an individual, a government or a province and I can look at certain lines, rip them out and come to a balanced budget. That is easy. It is simple. However, we have to remember that behind each line on the budget, behind each stroke of the pen, there will be an impact on people. We have to remember the impact it will have on people and not simply do a number punching exercise.

The same thing holds true for the government as holds true in our personal lives. We have to be responsible, we have to be prudent and we have to remember the consequences of our actions. The government will balance its budget. It will bring its financial house in order, but it will do it in a responsible manner which will recognize the needs of individual Canadians.

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

Madam Speaker, the hon. member began his comments today by saying that the budget measures were necessary. I wonder if he could clarify that.

This move today takes approximately $1 million per elevator point away from communities in western Canada. The budget bill essentially withdraws about $400 million worth of federal commitment from the province of Saskatchewan alone with no plans in place to manage what is left behind. Can the member tell us today how it is possible that he thinks it is necessary?