Debates of March 7th, 1996

The Budget

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, I have a comment for the hon. member for Outremont and Secretary of State. I heard him congratulate his great party, the Liberal Party, a great party that has existed for a very long time and has done wonders, and an extraordinary party that has set up many social institutions in Canada.

I would like to point out to him that he is partly right, but he neglected to mention one thing. When the Liberal government decided to put in place great social programs in areas such as health care-and it interfered in education and many other areas-it neglected to tell Canadians that all these programs would cost money. If that great party had been honest, it would have told the population at the same time that it would cost $2 billion, $3 billion, $20 billion a year to provide those services. But the Liberal government did not say so.

Between 1970 and 1984, Canada's debt increased by $175 billion. Sure, the Liberals gave all these wonderful services to the population, but the member for Outremont neglected to say how they gave them: by borrowing on the backs of Canadians. The great Liberal Party neglected to tell them that the government was providing those services with borrowed money. This is the source of problems.

I would like to remind him also that, in 1983, the finance minister, Mr. Lalonde, who was then the member for Outremont, his predecessor, ran a $45 billion deficit in his budget with revenues that were, at the time, less than $70 billion. This was unprecedented in the history of the world. No other political party in the world had created such a great disaster. Thus the member should remember that the current debt, a great disaster, was created entirely by his great Liberal Party. I know it, for I have been here for twelve years and I am very aware of what went on. Why are we still adding to that debt now?

The hon. member forgot to mention another element in the comparison between Canada and other industrialized countries. I checked the tables in the budget, and I found them misleading. As the hon. member mentioned in his speech, annual deficits are compared as a percentage of the gross domestic product. Our target is 3 per cent.

The hon. member neglected to mention that, in all the G-7 countries, when the debt or the deficit is considered as a percentage of the GDP, the provincial and municipal deficits are taken into account. To be a member of the European Economic Community, a country should not have a debt that represents more than 60 per cent of its GDP. Canada's total debt is 105 per cent of its GDP. This country is bankrupt, nobody is saying it, and we go on spending huge sums of money.

We are talking here about the Canadian debt, the federal debt, but we neglect to mention the accumulated debt of the provinces. In the other countries, the debts of states or provinces are included in the total debt. At this time, our real accumulated debt stands at 105 per cent of the GDP, and the deficit at 5.7 per cent. That is much too high.

If only the federal government decided some day to stop being stubborn and reorganized the way we run this country by decentralizing more powers to the provinces, it could be much more efficient, save billions of dollars and wipe out the deficit. But we are heading for a disaster because of this stubborn Liberal government, which wants to keep controlling everything from Ottawa. The hon. member for Outremont and secretary of state should be aware of that. He should openly tell the whole truth to Canadians, instead of half truths.

[Martin Cauchon, Liberal, Secretary of State (Federal Office of Regional Development-Quebec)]

Mr. Speaker, I listened to the comments made by my hon. colleague. Either the hon. member is not taking a very responsible attitude in this House or he has been out of this great democratic forum, which is the House of Commons, for the last two years.

We talk about making major changes in the best interest of Canada and of the whole population, and that is basically what we have been doing since 1993. About the huge deficits we have, I would like to remind the hon. member that it was under the Conservative government, of which he was a member at the time, that Canada had its most outrageous deficits and went through the worst political situation ever in our country.

When the hon. member talks about how much our social programs are costing the Canadian population, his comments seem anachronistic, to say the least. You know, we are talking about social programs which were implemented decades ago. Today, basically, we are acting as the responsible government that we are. We want to review the social safety net we have developed as a

society, and which we are very proud of, to ensure that it is more responsive to the needs of Canadian society.

That is what we are doing and we are going even further by taking action on the economic front and working with the small businesses. We have to increase the competitiveness of our small businesses and use a modern approach to do so. In saying that, I am reminded of course of the Federal Office of Regional Development, which has created a partnership and is working with all of the communities throughout the province of Quebec and providing what is called the SMB access centre, so that our small businesses can have access to world markets, which they did not have before, and can use the federal government's expertise in international development to gain access to a network open to the whole wide world.

The Liberal Party has always had the courage to make the appropriate changes, always keeping Canada's best interests in mind. We avoid partisanship, unlike the opposition parties, and we also avoid a doctrinaire approach, unlike the opposition parties. We always act in the best interests of all Canadians.

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

Mr. Speaker, I listened very carefully to the speech of the hon. member and the answer to the question to which he responded.

I could not help but notice that he, like the Minister of Finance, put a lot of stock in the financial deficit of the country, the plans the government has put in place, the targets and the forecasting it has done with respect to the deficit.

I cannot help thinking the hon. member has forgotten about the second deficit we have, the second problem we have to fight, the human deficit caused by the number of job losses that have occurred in Canada, the number of people unemployed from coast to coast, the number of people willing, ready and able to take up work to support the country, to pay taxes and to help reduce the financial debt of the country. However, those people have been denied jobs by the private sector and by the policies of the government and they will continue to be denied jobs.

There are no plans in the budget to deal with unemployment. There are no targets set to bring down unemployment. There are no forecasts for what the rate of unemployment will be at the end of this budgetary period. There is a complete lack of understanding on the part of the government with respect to jobs.

The government talks about its partnership with the private sector in creating jobs. I read a piece in the New York Times which talked about how the private sector in the United States has dealt with jobs over the last few years, a time of prosperity. AT&T has cut 123,000 jobs since 1990. Delta Airlines has cut 18,000 jobs. Eastman Kodak has cut 16,000 jobs. IBM has cut 35,000 jobs. Sears has cut 50,000 jobs. DEC has cut 20,000 jobs. Lockheed Martin has cut 15,000 jobs.

[The Acting Speaker (Mr. Kilger)]

I regret to interrupt the hon. member. I am extending ever so slightly the question and comment period. If there is a question or if it is simply a comment, I ask the hon. member to please bring it to a conclusion.

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

Mr. Speaker, while the hon. member has dealt with the question of the deficit, I wonder if he is concerned about the human deficit which unemployment is causing the people of Canada. Is he prepared to talk to the Minister of Finance to deal with it?

[Martin Cauchon, Liberal, Outremont, QC]

Mr. Speaker, it is amazing. The budget of the Minister of Finance is so good that opposition members are starting to switch from the question of the deficit per se to the human deficit.

Members of the Reform Party are very displeased with the result. They are displeased because we said in 1993 we would meet the target of deficit reduction and we did so. We did so in making sure we reached 3 per cent of GDP.

With respect to taking care of people, three years ago we launched the reform of the social safety net to ensure that once people have access to the benefits of the social safety net they will be able to access a very active program in order to ensure Canadians will return to the workplace as soon as possible.

Since 1993 we have created more than 500,000 new jobs. I must tell the Reform members that we will keep on working with the private sector and people in the communities at the local level to create more jobs. We will make sure that our small enterprises have the same access to the international market all over the world. We will then be able to create jobs with a responsible government.

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

Mr. Speaker, thank you for recognizing me; some people could go on and on and on.

Needless to say, my colleagues will speak on the budget in the days to come, analyzing it thoroughly for Canadians because there is a lot to analyze in this budget. They will examine its impact on the Canadian health and social transfer, on government downsizing, on dairy producers, on regional development and on several other points.

I think that all my colleagues will come to the conclusion that this really is a cosmetic budget which totally ignores the employ-

ment growth. And although the finance minister called it a "job budget" earlier, there is nothing in there to create jobs.

As for me, I would like to focus my comments on a sentence on page 6 of the budget, which says simply this:

-whatever the numbers might say, many do not see evidence of improvement in their own lives.

I would like to direct my remarks specifically to those, and there are many of them, who will see no improvement in their day-to-day life in the next six to eight months, but who will instead notice a deterioration in their situation when they become unemployed-because I believe more and more people will lose their job-, who will notice that the funds on which they relied during their period of unemployment have been considerably cut-because of the coming unemployment insurance scheme reform-, and who will notice that social assistance payments, to which some of them will have to resort-because the reform of the unemployment insurance scheme will send them there faster than they thought-, have also been cut, because the transfers to provinces will be reduced. As we know, the cut amounts to $650 million for Quebec alone in 1995; it will amount to $1.2 billion in 1996, and will keep on increasing during the next three years.

What the government has to say to them today can be found on page 8 of the budget speech, and this is the last time I will quote the budget speech, Mr. Speaker. It is a very short sentence which states:

Chronic deficits put the disadvantaged at risk, because it is they who suffer when the financial strength of government is so weak it can no longer reach out to those in need.

This short sentence simply sends people the message that there are no more resources and that we have to cut, which is extremely debatable.

First, what it says is that there are no resources in Canada, that is primarily what is said. What people really need-the Prime Minister himself admitted it on many occasions-is to have a job. There must be job creation. However, we are told that there are no resources in Canada. This is what the government wants people to believe.

I want to say that there is no strong will to create jobs-and I will get back to that-because, fiscally, large corporations in Canada do not pay their fair share of tax. If there is a shortage of resources, it is precisely because the will is not there et because the tax system is inadequate.

As far as Quebec's resources are concerned, it is even worse, because the second point I want to make is that the federal government is depriving Quebec of its whole economic infrastructure.

So there is no strong will to create jobs. The central government, the federal government itself, tells us this: "It is not my responsibility to create jobs. We will rely on the private sector for that". However, companies are indicating that they are not responsible for job creation either, not in so many words, but in the way they behave.

Companies are doing massive layoffs at a time when they are reporting record profits. I will quote a few figures, some of which were already mentioned by the hon. member for Roberval, the Leader of the Opposition, as well as by members of the NDP.

General Motors of Canada reported record profits of $1.39 billion, but still laid off 2,500 employees. The five big Canadian banks made profits totalling $4.9 billion but reduced their workforce by 2,800 employees. In 1995, Bell Canada's profits reached $502 million and the company cut 3,200 positions-and they are talking of creating a few summer jobs for students?-on top of the 8,000 that were cut since 1990. Petro-Canada recorded profits of $196 million in 1995 and cut 564 positions. Shell made $523 million in profits and cut 471 positions. Imperial Oil, with profits of $514 million, lais off 452 employees. And the government is talking about job creation.

If the government does not create jobs because, as it says, it is not its business to do so and if big companies, the major players in the economic field-we know that jobs are created by small companies in Canada-lay off workers, who will create jobs?

Yet, the government says on page 3 of its speech:

It will require the concerted efforts of individual citizens, their governments, business and others for our country to tackle these challenges effectively.

What we see is that businesses do not want to be part of that effort and that government considers that it is none of its business. These are nice words, but where exactly does that leave us?

The truth is citizens and only citizens are asked to make an effort. That is what that means. Those words, on page 3, are a statement of principle:

It will require the concerted efforts of individual citizens, their governments, business-

Businesses do not want to make these efforts, the government says it is not its job, and Canadians will have to suffer the cuts.

In December 1993, the Department of Finance, in a document on tax expenditures, identified 288 tax exemptions available to businesses. The department said it was aware of the cost of 176 of these exemptions, which amounted to more than $17 billion a year, and admitted that it did not know the cost of the other 112. The lack of precise information on tax expenditures leads us to call for a review of our tax system. That is what the Bloc has been asking for since we came to this House.

Here is what the International Monetary Fund said, as reported in La Presse on December 8 of last year: ``Corporate taxes represent a smaller percentage of the GDP in Canada. This indicates that it may be possible to reduce some of their tax benefits.'' There is the

International Monetary Fund adopting the same position as the Bloc. That is where we should look first.

What is the greatest tax benefit used by large Canadian corporations? It is, of course, the use of tax havens.

It is difficult to obtain precise information on the extent of the tax avoidance phenomenon through the use of tax havens because of the lack of available data and the confidentiality rule which often applies in this area. Companies that do business abroad are not required to declare here the profits they declare in another country. Therefore, since they do not have to declare those profits in Canada, they do not pay taxes in this country.

There are several tax benefits related to tax havens. In 1987, the Minister of Finance made a commitment to study this issue; these studies have yet to be undertaken despite the insistence of the auditor general and the revenue department. However, it must be said that, in the 1994 budget, the Minister of Finance amended the Income Tax Act provisions related to foreign affiliates. These amendments were in accordance with the recommendations of the auditor general of the day and the Public Accounts Committee. But they will not prevent companies from using these tax havens.

It is difficult if not impossible to calculate the amount of tax revenues lost by Canada in these tax havens. However, several indicators can give us an idea of the extent of these losses.

For example, in his 1992 report on tax havens, the auditor general, although it was not necessarily in his mandate to do so, said that it could reasonably be assumed that hundreds of millions of dollars in tax revenues had already been lost et would continue to be at stake in the years to come. This was in 1992. We are now in 1996 and it is still going on. The amounts lost have even increased considerably since then.

Tax exemptions for businesses operating in foreign countries can have two major effects. Some countries considered as tax havens have very low tax rates, hypothetically, in the 2 to 3 per cent range compared to 40 per cent in Canada. This difference leads to an unfair tax treatment which can cost the Canadian government millions of dollars.

The foreign affiliate can transfer its dividends tax free to the Canadian corporation, despite the fact that the income corresponding to those dividends was not taxed at a rate comparable to that in Canada.

I have at least another five or six pages on tax havens I could read. The important thing is to realize that tax havens do exist and that more and more companies are using them. Some companies even specializing in helping other companies use tax havens to avoid paying the Canadian government the taxes they normally should.

To deal with that issue and because the Bloc Quebecois has been asking for a review of taxation for two and a half years, the government has finally decided to set up a technical committee on business taxation, which will examine business taxation. As the hon. member for Saint-Hyacinthe-Bagot, who is finance critic for the Bloc, has already mentioned, those who will examine the taxation of businesses are all Canadian tax experts and some of them-not all, but a good number of them, the best among Canadian tax experts, as it has already been said during question period-are themselves using these tax havens.

The Bloc asked that a special parliamentary committee be set up to review taxation, but here we are with a technical committee. They have waited two and a half years before doing something. We asked for a public and open process and here we are with small groups working behind closed doors. We wanted a precise calendar. What we are told is that later this year, a report will be made which will be scrutinized by the public. This just puts it off indefinitely, just like the GST.

We wanted MPs to look at this issue so as to be able, on behalf of citizens, to review taxation. This is a bit like putting the fox in charge of the henhouse. It is well known that those who are going to examine the tax rules are the same persons who are going to advise the government on the taxation system and the same persons who are going to tell companies how to apply these rules in order to avoid paying any taxes.

This is the worst conflict of interest in Canada today. None is more serious. Those who make the tax rules are the same ones that help businesses take advantage of tax loopholes. By stretching the process out-if it takes one or two years as in the case of the family trusts-they give businesses time to review their tax strategy.

I would like to send an urgent message to Canadians who are anxious to understand what is going on in this area, because the government is really up to no good.

A few years ago Linda McQuaig wrote the book Behind Closed Doors: How the Rich Won Control of Canada's Tax System . This book explains fully how in 30 years the rich people in this country have taken control of the Canadian fiscality and do not pay any more taxes.

Linda McQuaig's book was also published in French under the title La part du lion . In it, she shows how rich Canadian families have used all tax loopholes available in order not to pay any Canadian income taxes.

What I just said concerns all Canadians. Every time there is excessive use of tax evasion, it means a loss of revenue for Canada and, as we now know, it is the little people, the future unemployed,

who end up footing the bill. They will start paying in the middle of the summer with UI reform.

Things are even worse in Quebec. The employment situation in Quebec is worse than anywhere else in Canada, except Newfoundland. They are telling us-and they will continue to do so throughout the coming year-that all this is due to the political uncertainty in Quebec. Nothing could be further from the truth.

There are all kinds of sovereignist movements around the world; some are even in power. There is a sovereignist party in Scotland, the Scottish National Party, which has long had elected members to Parliament. They advocate Scottish sovereignty; one of their most famous propagandists is Sean Connery, the actor who first played James Bond, whom we all remember very well. Yet no one calls the Scots racist or xenophobic.

There is a sovereignist party in Taiwan, as I have said before in this House, the Democratic Progressive Party. In 1992, with 31 per cent of the vote, this party won 51 out of 161 seats in Parliament. No one in the world claims that political uncertainty in that country has led to economic uncertainty. On the contrary, everyone wants to do business with Taiwan, including Bombardier. Strangely enough, the President of Bombardier, who was complaining about insecurity in Quebec, has decided to invest in Taiwan, where the situation is exactly the same as in Quebec.

There is even a new sovereignist party in British Columbia, which is being built around Roger Rocan and is apparently supported by 12 per cent of the population according to the polls. We will never hear the Prime Minister talk about the big, bad separatists in B.C. That is reserved for Quebec. They would never say this to the people of British Columbia. On the contrary, in its analyses, the Fraser Institute goes as far as saying that B.C. would benefit from sovereignty. So they conduct studies over there but when we do the same here, we are big, bad separatists.

Since 1980, close to 40 new countries have joined the UN because it is the normal destiny of peoples to become nations and of nations to become countries. That is what the UN is for. There are even countries that have achieved sovereignty twice: Singapore, among others. In 1963, Singapore left the British empire to join Malaysia and, two years later, it seceded from Malaysia to become an independent republic.

The population of Singapore is half that of Quebec and is very cosmopolitan-in no way can it be considered homogeneous-with 80 per cent Chinese, 15 per cent Malaysians, 4 per cent Indians and 1 per cent people from other parts of the world, including a fair number of Canadians. All this in an area 2,500 times smaller than Quebec, that does not have any natural resources or energy resources. Anyone who travels to Singapore cannot help but notice that the leading foreign commodity is dirt on which to build by reclaiming land from the ocean. Singapore is a tiny country. No one denies that Singapore's economy is booming; economic success has nothing to do with the size or population of a country.

Responding to a question yesterday, my hon. friend from Saint-Denis, who is of Greek origin, stated that the idea of Quebec becoming sovereign bothered her. I would like to remind her, not without some pride, that we all are more or less Greek. Greece was the birthplace of science and democracy and, as you know, Mr. Speaker-you studied the Classics-we were brought up on that. All this to say that, were we to ask the Greeks tomorrow morning if they would be ready to give up their sovereignty and become a minority in some other nation, the answer would be no. I think therefore that the Greek community should understand Quebecers for wanting to do just like them.

Things are not going well in Quebec because our economic infrastructure is being drained away. A long time ago, it was decided to centralize all the economic activity in Ontario. Canadians did this for very good reasons. What were they? Geographically, Ontario is at the heart of the country. If you are going to centralize, you might as well do it in the centre, in the province with the largest population and which provides direct access to the heart of the U.S. market, cities such as Detroit, Chicago and Milwaukee, across the Great Lakes. The decision to empty Quebec of its economic infrastructure was made a long time ago.

Let me just tell you when this decentralization process started, because I had prepared a longer speech, which I probably will not have the time to finish.

Somewhat surprisingly, our dear friend, Mr. Mordecai Richler, tells us in his book O Canada! O Québec when that decentralization started. He mentions it in a short sentence, on page 107, which I will read in

"Once the St. Lawrence Seaway was in place, diminishing the importance of our port-il parlait bien sûr de Montréal-and the Toronto stock market was doing more business than St. James Street, Montreal's slippage was inevitable".

Once the St. Lawrence Seaway was in place, Montreal's slippage was inevitable. We are now witnessing the decline of Montreal. It started with the building of the St. Lawrence Seaway. We could go on about all the other decisions that were made concerning airports, the petrochemical industry, the Borden line, the money spent in Quebec by the government which is less than the standard 25 per cent, and also the new areas in which the federal government is about to interfere, including the securities business, as mentioned

in the speech from the throne. Once again, the government will centralize all that.

Given that Ontario's economic appeal was built from scratch, it is no wonder that foreign investors all want to move to that province.

This is the current situation. We have a budget which does not do anything about employment. It merely maintains the measures that were decided last year, such as taking money from the UI fund, reducing assistance to individuals and cutting transfers to the provinces. There is basically nothing about employment. Within that structure, all Canadians lose, Quebecers in particular.

[The Acting Speaker (Mr. Kilger)]

First, I want to thank the hon. member for Anjou-Rivière-des-Prairies for reminding me of my studies at Cornwall's classical college. We now move to questions and comments.

[Mac Harb, Liberal, Ottawa Centre, ON]

Mr. Speaker, my colleague has touched on several topics. He has spoken about the budget, and I will answer him on that, but first of all, let me reply to another point he has made. He made a comparison between Quebec and Greece, which did not want to be part of another country, whereas Quebec wants to be an independent country. This is too simplistic a comparison, because Greece has always been a country on its own, whereas Quebec has always been part of Canada.

He also drew a parallel with Taiwan, which is the same thing. Here we have an entity called Canada, in which the provinces have the right to govern themselves as they wish.

In 1867 there was the Canadian Constitution. There was an agreement delegating some responsibilities to the provincial level and others to the federal. In my opinion, our confederation is one of the world' finest. I am sure there are many countries that would gladly trade problems with Canada. We need only look at what is going on in Bosnia, Haiti, or other places where there are major problems to realize ours are relatively simple ones, readily solved if we make a concerted effort.

My colleague has indicated that the separatist groups in B.C., Quebec or other countries will one day see the light and realize they live in the best country in the world.

Now, for the budget. My colleague states that the government has not created any jobs. I would like to point out that, in 1995 alone, this government created 263,000 jobs. I would also like him to know that governments in general set an atmosphere that is favourable for private sector job creation. Finally, it is the private sector that creates jobs, not the government. Often, the government works in a partnership with the private sector in job creation, and that is precisely what this government has done. It has assigned a great deal of importance to the private sector so that it might create jobs. Among the examples of job creation I could offer my colleague, there is government investment in technology.

There are, in fact, a lot of companies involved in research and development in the area of technology, which will receive direct benefits from the government. They will become direct and indirect partners of the federal government and will create even more jobs again in Quebec and across the country.

Inflation here in Canada is fairly low. Interest rates are three points lower than they are in countries comparable to Canada. As with deficit control, all these initiatives by the federal government will help the private sector create jobs.

I do not think my colleague was being fair in saying that the government is not helping create jobs. It is indeed distressing that Petro-Canada, Bell Canada and other companies have cut their staffs. However, we must not end up setting a quota for the private sector, requiring it to create a specific number of jobs. All we can do is ask and do what we have to to enable the private sector to create jobs.

The performance of this government over the past two years has been extraordinary. It is time my colleague in the Bloc rose and congratulated the Minister of Finance, the Prime Minister and the President of Treasury Board, because their efforts have been extraordinary.

Now I would like to say a few words about provincial jurisdictions and transfers to the provinces. Once and for all the federal Liberal government has set up a program to ensure the provinces fair, balanced and long-term transfers in the areas of health, post-secondary education and social services. The provinces can finally enjoy some peace in these three areas.

I must say my colleague in the Bloc Quebecois is perfectly right in saying that a lot more has to be done in job creation, but he still must rise and congratulate the government.

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

Mr. Speaker, I hope that my colleague does not expect me to congratulate the government.

To start with, I would like to set the record straight regarding some of his comments. He said that Greeks have always been Greeks. If they celebrate Independence Day in Greece, it is precisely because they had to gain their independence. He said that we have always been part of Canada, and yet we were here well before Canada became a country. Lastly, he tried to tell us that we do not have that many problems in Canada.

I have been a sovereignist for a long time, but in Quebec, many became sovereignists in 1982. Why in 1982? Because that was when the basic agreement holding this country together was torn up; Quebec was excluded. And today we are told that it is not a problem. It is just as if two individuals had signed a lease and the owner had gone down into his basement to redraft every single clause of the lease, and the revised version became the real lease to

be used by all parties. The tenant would have every right to consider this a breach of contract.

In 1982, the Canadian Constitution was patriated, the terms were changed and no government in Quebec, even a federalist government, has agreed to sign it. Quebecers had some of their rights taken away. And today we are told that we should stop talking about it, that it is not important.

I am sorry, but the basic agreement in this country has been torn up. Quebec did not refuse to go along with the Constitution, rather, it was excluded from the Constitution. What we are confronted with today is the result, the consequence of this Prime Minister's actions. We must not forget that the current Prime Minister is the one who brought the Constitution back from England, the same one who is now saying: "Stop talking talk about the Constitution; let us talk about real issues. I changed your lease, but never mind that, we love you very much; let us talk about real issues".

I am very sorry, but that is exactly what we are planning to do: talk about real issues.

To my hon. friend, who says that 263,000 jobs were created, I will reply as the people of my riding would. Quite simply put: Where? That is what they would say: Where?

People who go out for a stroll in downtown Montreal notice all the stores that are closed. I was a carpenter in a previous life. Today, there is nothing left for carpenters in Montreal, neither construction work nor retail stores. Half the stores are closing their doors. Where are these 263,000 jobs he is talking about? In light of the long list of businesses that have to lay off workers, I wonder: where are these 263,000 new jobs? I realize that this is what statistics say, but what the people want to know, however, is: Where?

Finally, there is this nice initiative to stimulate job creation. We had one in place in Quebec: the RRSP of the FTQ investment fund. This was the only tax measure that promoted any real job creation, and they just chopped it to create, maybe, a few student summer jobs. I do not know how many exactly. Student summer jobs are being created, while at the same time, measures truly capable of creating employment in the long run are being chopped.

On the one hand, they will be giving students a few jobs for the summer, but on the other hand, by cutting transfers to the provinces, they are making their school fees go up. Where is the logic in that? Personally, I can see none. If the government deserves praise for anything, it is for helping us show the public that we no longer have our place in there. With 25 per cent of the voting shares, you have no power over the company. When this company is going bankrupt, it is time to pull out.

[The Acting Speaker (Mr. Kilger)]

I understand there had been a change in terms of the rotation of speakers. Therefore the House will now be apprised of the rotation following consultation with our table officers. I will look to the government for speakers. I will then look to the government to bring the rotation back up to speed, return to the official opposition, then look to the government and, last but not least, to the Reform Party.

Should there be any questions please raise them with our table officers so that you can organize your schedules accordingly. You get on my list only once you are on your feet and you are recognized. Ultimately the list is blank and we will start now with the hon. member for St. John's West. I ask her co-operation in indicating to the Chair who she might be splitting her time with.

[Jean Payne, Liberal, St. John's West, NL]

Mr. Speaker, I will be sharing my time with the hon. member for Vaudreuil.

It is with great pleasure that I rise to speak on the debate on the budget. The Minister of Finance last night presented to Canadians a budget that is fair, compassionate and visionary.

Last night, as part of my budget night activities, I held a teleconference with representatives from industry, municipal governments, business, social services, education and health in my riding of St. John's West, all of whom wanted to convey their reaction to the budget.

While these individuals had some concerns, the reaction to the budget was largely positive. While my colleagues on the other side of the House earlier mentioned that the Chambers of Commerce were not in favour of the budget, last night I had representatives from the Chamber of Commerce who were very positive about the budget and had nothing but good things to say about it.

I will now touch on some of the key points raised during the teleconference and discuss the impact on my riding of St. John's West. As a government not only are we meeting our deficit reduction targets, we are surpassing them. The budget ensures that we will meet our red book commitment of reducing the deficit to 3 per cent of GDP within our first three years in office.

In addition, by 1997-98 we will be meeting our new interim target of 2 per cent. By 1997-98, due to the consistent efforts of the Liberal government, the economy will finally be growing faster than the debt, the first time since 1974-75.

Program spending will be reduced by 12 per cent of GDP by 1998-99, which translates in the lowest level in 50 years. Also, Canada's fiscal requirements will be cut by $6 billion in 1997-98, the lowest of all the G-7 countries.

Earlier my colleague from the third party spoke about fishery violations and offences occurring and he went through a great litany of these violations taking place on the west coast.

For his information, the department of fisheries raised its enforcement budget to provide greater enforcement. The government cannot possibly have enforcement offices at every location to control all the people who want to violate our fishery agreement.

The residents of St. John's West are particularly pleased that there are no tax increases in the budget, no increases in personal income tax, no increases in corporate tax and no increases in excise tax. The government has not increased personal income tax since we took office three years ago.

Canadians have told us they want the deficit and the debt reduced, but they also want to protect the most vulnerable, and the people of St. John's West are no exception.

Again the finance minister has listened to Canadians and has safeguarded our social programs for the next century. Over the next five years the CHST, federal transfers to the provinces for health, post secondary education and social assistance, will be maintained. Funding will remain constant at $25.1 billion for the first two years and will actually increase over the three remaining years.

Although the initial cash component in Newfoundland's CHST will decline initially, transfers will resume growth some time over the five-year arrangement. The federal government is guaranteeing that the cash component of the transfer will never be lower than $11 billion during this five-year period. Newfoundland will benefit from the tax component as well as from the cash guarantee.

Also, by putting a floor of $11 billion under the cash part of the CHST, the federal government is ensuring the principles of the Canada Health Act can and will be enforced throughout Canada.

A new seniors benefit will replace the existing old age security and guaranteed income supplement. This new system is designed to help those who need it most. In my riding of St. John's West there are many single seniors and many senior couples who live on incomes well below $40,000 a year. To these seniors I want to say they will be as well off, indeed better off, than they are under the current system.

The new benefit will be tax free and fully indexed to inflation. The new system targets those who need it most and ensures the system is sustainable in the future.

In keeping with our red book commitment, the federal government is introducing a new child support system. These changes were a long time coming and are long overdue. The child support paid under the orders or agreements made on or after May 1, 1997 will no longer be taxed as income to the recipient, nor will it be tax deductible for the payer.

The federal government will introduced guidelines to assist parents, lawyers and judges to see that fair and consistent child support is awarded in divorce cases. The federal government will introduce comprehensive measures to help provincial enforcement agencies ensure that support is paid in full and on time.

The maximum level of working income supplement of the child tax benefit will double; it will increase from $500 to $750 in July 1997 and will increase again to $1,000 in July 1998.

Jobs and economic growth continue to be the government's top priority.

Since we took office in 1993 the Liberal government has and will continue to provide the private sector with an environment for growth. The economic climate in Canada is improving. Interest rates have declined three percentage points in the last year. Inflation is at its lowest level in 30 years and Canada's economy is more competitive now than ever.

More than 500,000 private sector jobs have been created. With this in mind the Liberal government is investing in the future. No longer do we have the resources to do everything. We must make some strategic choices. We must invest in areas where we can get the biggest bang for our buck.

The federal government therefore is reallocating existing funds into three areas, youth, technology and trade. We are providing an additional $165 million over three years to help students and their families deal with the increased costs of education. The government has increased education tax credits, raised the limits on the transfer of tuition fees and education credits, and increased the limits to contributions to RESPs. Also, the eligibility for the child care expense allowance will be broadened.

The government will also provide $315 million over three years to create new youth employment opportunities. We will double funding for summer student jobs. We remain committed to Team Canada style partnerships between business and government in order to create entry level jobs for youth.

I understand the Minister of Industry will soon announce technology partnership Canada, which will encourage develop-

ment of the environmental technologies, advanced manufacturing of material as well as biotechnology. In addition, funding to the Federal Business Development Bank will increase so that the bank will be able to provide more loans to knowledge based exporting and growth businesses.

The government is assisting small business by bringing it all of the advantages of access to the information highway. We are introducing a program in which 2,000 computer students will connect to some 50,000 small businesses on the Internet.

Canada's trade performance in the last few years has been nothing less than remarkable. Team Canada's approach has proven a major success with $20 billion in new business deals resulting from three major trade missions led by the Prime Minister.

Exports are vital to the creation of jobs. Every billion dollars in exports translates into 11,000 to 12,000 new jobs. Because export financing is so critical, the government will provide $50 million to the Export Development Corporation for further innovative types of export financing.

I will briefly mention the measures taken in relation to RRSP and RPP limits to increase flexibility for individuals saving for their retirement. A seven-year carry forward for RRSPs is being removed to permit individuals to continue to save for their retirement. The age limit for maturing RPPs and RRSPs will be reduced from 71 to 69. RRSP limits will be frozen at $13,500 through to the year 2003 and then increased to $14,500 in 2004, and $15,500 in 2005. These measures will limit the cost of the tax deferrals associated with retirement savings, while ensuring tax assistance is targeted at modest and middle income Canadians.

This is a fair budget, a realistic budget and a compassionate budget. While the economy is finally improving, the government must continue to stay the course on debt and deficit reduction. We have made some tough choices to ensure the programs we cherish as Canadians will continue into the next century. This budget will ensure that.

[Jay Hill, Reform, Prince George—Peace River, BC]

Mr. Speaker, I listened attentively to the honourable member. Quite frankly, I am getting sick and tired of the government's trying to brag about bringing the deficit down to 3 per cent or 2 per cent of GDP. I find that totally misleading for the general population. The government likes to quote that number because it is a small number, when in reality it should be talking about the debt and its percentage of GDP. That number is considerably higher. The debt to GDP ratio is more like 73 per cent.

The hon. member quoted statistics. She seemed to enjoy quoting statistics to tell us how wonderful Canada is doing and how great the government is doing. She mentioned that Canadians want the deficit and debt reduced but they also want those who are the most vulnerable in society protected. It is interesting that she mentioned not only the deficit but the debt in that statement. Canadians want the deficit and the debt reduced.

Let us talk about the debt for a minute. The debt under this Liberal administration has grown since 1993-94, when it was about $508 billion, to a projected figure for next year of $602 billion. That is an increase of almost $100 billion.

The hon. member talked about revenue in her speech. She mentioned that there have been no increases in personal income tax. She might be right about that, but revenues have increased dramatically. Revenues have increased from 1993-94 when they were $116 billion to a projected figure in 1996-97 of $136 billion, an increase of about $20 billion of increased income from the taxpayers.

Those are the real numbers that count, not the deficit but the debt. The fact is that the interest charges on the public debt have increased from $38 billion in 1993-94 when the hon. member's government took office to a projected $49 billion of interest charges for next year, an increase of $11 billion. Those are the numbers that Canadians should be concerned about. Those are the numbers that present the most serious threat to Canada's social programs.

I would like the hon. member to address those numbers when she is talking. I think it is totally irresponsible of the government to be talking about reducing the deficit when the debt continues to grow at an alarming rate.

[Jean Payne, Liberal, St. John's West, NL]

Mr. Speaker, I want to thank the hon. member for his comments and for the statistics that he quoted.

If we were to listen to what the members across the way would do, they would reduce the debt to zero before the end of this year. I cannot help wondering what would happen to those people in my riding in particular who are dependent on the social programs, the elderly who are dependent on old age pensions, the young people who need to be able to get assistance to continue their education.

This party earlier this year said that it should reduce social housing by $11 million. What would that do to the social programs in ridings like mine? These people talk a good talk, but they do not walk a good walk. I am afraid that their program is not acceptable.

The program that we have under this budget is an acceptable one. It is fair, as I said before. It is a compassionate budget and it is one that will work for Canadians.

[John Williams, Reform, St. Albert, AB]

Mr. Speaker, I had several points that I wanted to make but I will restrict myself to one comment in respect to the speech of the member for St. John's West who is trying to tell us about this compassionate budget, this feel good budget and this budget that basically does nothing. I call it an economic statement.

The hon. member says the government is trying to protect the seniors, the helpless and those in need, yet transfers to bankers, to foreign lenders and to rich people are going up by $12 billion. That is reality number one.

With three million seniors that works out to $4,000 a senior that the government is going to transfer to lenders rather than transferring it to the seniors. My question is short. How can this government and this member say that this is a compassionate budget when the money is going abroad? It is going into the pockets of rich people and the government is ignoring the old, the poor and the helpless and the needy.

[Jean Payne, Liberal, St. John's West, NL]

Mr. Speaker, the hon. member opposite did not hear what I said. The budget does address the needs of seniors. It addresses the needs of young people. It addresses the needs of the people who need it most. It addresses the needs of women who have been living well below the poverty line and who, for the first time, are seeing their incomes increase.

This budget does take care of those who need it most.

[Nick Discepola, Liberal, Parliamentary Secretary to Solicitor General of Canada]

Mr. Speaker, I am proud to take part in this debate on our third budget, and especially to point out that, in the last two and a half years, Canadians have relied on the government not to create jobs but to generate a social and economic climate conducive to economic growth and job creation.

We are also proud of our achievements thus far. In fact, since we came to office, the unemployment rate has fallen by 2 per cent and some 500,000 jobs have been created, most of them in the private sector and almost all of them by small and medium size businesses, of which I am proud. That said, there is still much to be done. Unemployment is still too high and Canadians, especially young people, are concerned about future jobs.

We intend to take lasting and meaningful measures. Rather than relying on short term direct spending programs, we will take a more productive approach by focusing on co-operation with our partners and strategic investments to give the forces of economic change an incentive to create jobs.

But let us start at the beginning. To secure the sustained economic growth we need to create new jobs, we must first guarantee the basic elements of the Canadian economy by reducing and eventually eliminating the deficit. Chronic, large deficits go hand in hand with high interest rates. High interest rates, in turn, discourage investment, borrowing and consumer spending. Ultimately, they have a detrimental effect on employment.

We must also keep inflation low, since it reduces pressure on interest rates and results in lower overhead for companies. It goes without saying that keeping the operating costs of a Canadian company at a minimum level promotes investment. This, in turn, helps create jobs.

Today, we are reaping the benefits of our efforts to tackle the deficit and control inflation, which is at its lowest level in 30 years. Short term interest rates have already gone down three percentage points since the last budget, and we have made major progress in terms of our competitiveness, as indicated by the unprecedented level of our exports. However, there is an obvious need to maintain and even increase our efforts in order to ensure the future of Canadians.

In addition to providing a solid economic framework, we took a hard look at what more we can and must do. Some issues are so vital for Canada's future that they warrant a significantly greater effort on the part of the federal government. Our youth, in my opinion, is one such area.

The unemployment rate for young people is around 16 per cent, which is one and one half times higher than the national average. The transition from school to the labour market must be looked at. Our young people are our greatest asset. They are the key to the future. They need higher education, since this is vital for any job. They also need more assistance in finding that all-important first job.

We have a plan. The programs announced include Youth service Canada, Youth internship Canada, as well as the summer employment program for students. In addition to these initiatives, the student loans program, whose budget provides for an additional $556 million, will include the negotiation of loans totalling over one billion dollars and will help more than 360,000 students.

The 1996 budget also calls for new measures to enable young people to meet the challenge of the labour market, so that future generations will be able to keep pace with the remarkable changes in the world economy. To that end, we have inaugurated an apprenticeship program. As the result of rearrangements within the taxation structure, these new measures will make it possible to free up an additional $165 million in the form of tax assistance to students and their families.

This program has three main components. First, there is additional tax assistance to students, through a 25 per cent increase in the education credit, that is to say from $80 to $100 per month. The budget also proposes a 25 per cent increase in the ceiling for

transfer of tuition and education credits to family members who are supporting students.

Second, savings to finance education over the long term are eligible for assistance, because the annual limit for contributions to registered education savings plans has been increased.

Assistance is also available to single, low income parents, by authorizing the child care expense deduction from any kind of income when the single parent is also a full time student. This applies to secondary students. Two parent families are also eligible for this deduction if both adults are studying at the same time. The age limit for this deduction will also be raised to help parents of older students.

Implementation of tax rules in favour of education is a first step. However, young Canadians need much more than educational opportunities in order to get a job on the labour market. They need professional experience.

We first provided for on-the-job training by re-allocating $315 million over three years to help create job opportunities for young people. These funds will combine with the $700 million we set aside for this year for youth internship Canada, youth service Canada and summer employment programs.

As an initial intermediary stage, the budget will double our commitment to the summer employment program from $60 million to $120 million.

We are concerned not only about young people, but about the burgeoning technologies that are changing our universe. In short, innovation feeds productivity and growth, which underlie the jobs of tomorrow. We have a job to do to stimulate Canada's creative abilities.

The initiatives currently in effect include changes in the type of work done by the National Research Council in areas such as biotechnology, telecommunications and the latest in manufacturing and infrastructure technology.

We are working closely with the private sector in projects such as CANARIE, which is aimed at speeding up the establishment of high speed electronic networks. Furthermore, we are encouraging the expansion of new technologies in small businesses under the industrial research assistance program.

Here again, we want to do more. We are re-allocating $270 million worth of savings over three years to promote innovation and technology. This measure provides for the creation of technology partnerships Canada, a fund to stimulate the development of environmental technologies, high tech manufacturing processes and biotechnologies. It will also help maintain jobs in the aerospace industry, which is facing fierce highly subsidized foreign competition.

We will give an additional $50 million to the Business Development Bank. This money will enable the institution to loan an additional $350 million to knowledge-based, and growth businesses.

Moreover, we are creating a program under which 2,000 computer students will help connect 50,000 small businesses to the Internet.

Last but not least, trade, which is at the heart of the Canadian economy. We export a third of what we produce, providing work for millions of people.

In this budget, we are allocating a further $50 million to the Export Development Corporation. We are reallocating resources from concessional loans to foreign borrowers to finance higher volumes of non-concessional financing under an improved system of risk management. This measure will permit an increase of up to $500 million of year in the financing available to Canadians exporters.

To conclude, I will say that the private sector is our most important and most astute innovation mechanism. Young Canadians are our most solid hope for the future. And trade is one of the most powerful means to create wealth. We are investing in these three areas.

The framework is in place. The economic situation is improving. The fundamentals to create partnership are in place. We are being true to our commitment to provide opportunities in the areas of education and modernization, as well as job opportunities for young people in the next century.

[Harold Culbert, Liberal, Carleton—Charlotte, NB]

Mr. Speaker, I listened with great interest to my colleague's comments on the budget that was tabled by our Minister of Finance late yesterday afternoon. Like many in this House, one of the things I have heard on many occasions is that the best social program in this country is an opportunity for a job. As the member across the way so capably mentioned, one of the things presented in this budget is that opportunity.

I wonder if the parliamentary secretary has had an opportunity to speak to his business constituents in his riding. I had the opportunity this morning to speak to a number of key businesses in my riding and I will be speaking to others over the next few days to get their input and feelings on it. The business representatives I spoke with this morning indicated that it was a very positive budget and that it did set the tone. They were pleased to see that the government is getting our financial house in order, that the lower interest rates would certainly be beneficial and that they would be increasing their employee base. They agreed that with their additional exports there would be further employees coming.

I wonder if the parliamentary secretary has had an opportunity to speak to some businesses in his constituency and what type of reaction have they provided.

[Nick Discepola, Liberal, Vaudreuil, QC]

Mr. Speaker, in response to my colleague's question, I have the opportunity to point out that our job as a government is not to create jobs. I remember during the election campaign that when any politician stood up and said that he or she was going to create so many thousands of jobs, he or she was ridiculed by everybody because it is not our job to create employment. However, it is our duty as a government to create the appropriate climate to stimulate job creation measures, et cetera.

If members look at what we have done over the past two or three years through the initiatives of our Minister of Finance and the support he has received from the Prime Minister and colleagues, we have put in place a firm foundation for companies through measures such as reduced interest rates for example.

Last year alone I remember interest rates dropped by almost 3 per cent. Inflation is quasi non-existent. If we analyse those companies that are making profits today, it is those companies in the new technologies and exporting that have been successful over the past three or four years. Therefore, when we can encourage and create the climate that is appropriate for job creation measures then I am confident that jobs will be created.

We have been criticized by members of the Reform Party who say that we have not done anything. However, I would like to raise a point for the information of members. The measures we put in place in 1994, because of the compounding effect from year to year to year, by fiscal year 1998-99 will have a net effect of close to $45 billion in savings. Compounded with the measures we have put in place in the second budget, there will be another $43 billion in savings.

This is phase three of a fantastic, sound footing which I am convinced will put us into the 21st century hopefully with the elimination of the deficit. The strong footing will encourage investment in the country. If we could get the political stability, I am convinced investments would come and job creation would follow.

[Maurizio Bevilacqua, Liberal, York North, ON]

Mr. Speaker, Canadians will not be left behind. There is no question the world around is changing. Fifty years ago fax machines, cellular phones, the Canada space arm and fibre optic surgery were only seen in science fiction movies. Today they are part of our everyday life.

Fact: the world is changing. Fact: our lives are changing. Fact: some countries will be left behind. Fact: Canada will not be one of them.

Certainly our labour market is changing. Machines are doing some of the jobs people used to do. However, people are doing some jobs we never thought would be possible. We are building the robots that now do the heavy lifting and exploration of mines. We are designing the fibre optic cables that allow people on different continents to conduct meetings and exchange ideas. We are developing the vaccines to combat disease that had previously wiped out entire populations. Certainly, the world is changing but we are leading the revolution.

The 1996 budget tabled yesterday by the Minister of Finance will allow us to continue to set the pace for other countries to follow. This Liberal government recognizes that Canada is a rich country, a country rich in resources: natural resources, its people, its youth. We also recognize it is our responsibility to create opportunities for present and future generations of Canadians, and that is what we have done.

The challenges that face our youth are clear. The youth unemployment rate is roughly double the national average. Roughly 45 per cent of new jobs created between the year 1990 and the year 2000 will require more than 16 years of training and education.

What is the federal government doing to offer young Canadians a brighter future? More than any other government in Canadian history, we have been devoted to achieving positive change in the lives of young people. To quote the Minister of Finance: "The economy of the future will belong to our young people. The success of our economy will depend on them, just as their success will depend on their ability to fully participate in all that the economy has to offer".

Post-secondary education is an important step toward achieving meaningful full time employment. Our government recognizes that. That is why the 1996 budget announced measures to increase Canada's investment in our youth. After all, if our future is to be brighter, we must invest in it. To that end we have introduced a learning package. These measures will provide an additional $165 million in tax assistance to students and their families. However, getting the tax system to work in favour of education is just the beginning.

In addition to these measures we have further improved access to post-secondary education by providing more flexible repayment terms for Canada student loans. That, plus our previous $2.5 billion increase in the amount of federal assistance available through our Canada student loans program clearly demonstrates our government's commitment to providing Canadians with the opportunity to pursue lifelong learning.

As chair of the Liberal Party's task force on youth, as Parliamentary Secretary to the Minister of Human Resources Development, as a member of the human resources committee and as the member of Parliament for the riding of York North I have spoken to tens of thousands of young people across the country.

I spoke with high school dropouts who still have dreams to one day have good paying jobs. I spoke with a 19-year old single mother who wants to be an accountant. I spoke with a young man from Newfoundland who wants a job he can go to year round. The desire to work, to grow and to succeed is there. It just needs some help to flourish.

How many times have we heard a young person say that he or she cannot find a job because he or she does not have experience: "How can I gain that experience if I do not have a job?" That is the paradox in the lives of so many young people in our country. These are indeed tough questions. Our government has attempted to find some answers.

In April 1994 our government announced the youth employment and learning strategy involving, among other initiatives, the youth internship program and Youth Service Canada. Our government is maintaining its $700 million in funding over the next three years for these programs. While past governments have run make work projects for young people, Youth Service Canada and the youth internship program focus on providing participants with tangible, hands on experience.

Youth Service Canada provides employment skills built on community needs. Students gain valuable work experience that will help them make that very important transition from school to work. The community gains the energy and enthusiasm which only the young can bring to their work. The youth internship program works because it builds partnerships between employers and educators, teaching hands on skills to young people. The focus is on jobs and careers with a future. The theme is innovation.

For example, last year I announced a special program for the automotive industry. When we look under the hood of a new car we see how technology has changed the industry. I read recently that the computers in new cars are worth more than the steel. This requires people with up to date skills. It requires a new generation of highly skilled workers. In turn, that requires a new partnership with the private sector.

The youth internship program is an excellent example of partnership and co-operation. Chrysler Canada and other major car manufacturers donated engines and guaranteed on the job training spots to participants. We brought on board a major corporation to do its share to help tomorrow's workers.

In addition to maintaining funding for Youth Service Canada and the youth internship program, this year's budget announced the government's plans to reallocate $315 million in budget savings for additional on the job training which includes doubling the funding for student summer employment placements. It is a wise investment. In 1995 alone more than 52,000 jobs were created thanks to the student summer job action. Our Canada employment centres for students placed over 175,000 students in jobs during that summer.

How does this Team Canada approach apply locally in my riding? I will tell the House about another effective partnership between government and the private sector which I announced last week.

The government teamed up with Tetra Pac Inc., a forward thinking company in my riding. We each contributed $100,000 to an initiative called "Completing the Circle". The Career Foundation, an active training establishment in York North, is using these funds to match unemployed residents with available jobs in the riding. One hundred participants will receive pre-employment and on the job training, followed by a placement in a job with a future. This, my friends, is co-operation. This is team work, this is Team Canada in action.

Speaking of jobs with a future, there is no greater growth area than high tech. Look in the career section of any paper. Where are the jobs? Computers. Look at page 76 of the budget plan and what do you see? Computers.

The 1996 budget outlines a plan to enlist the help of 2,000 students to help connect 50,000 small businesses to the Internet. What a great idea, students and small business owners helping one another.

Another successful program I helped develop in my riding, one that I am extremely proud of, is VaughanTec. It is truly an employment strategy with a future. VaughanTec recruits young entrepreneurial residents of York North with an interest in technology and provides them with the skills and knowledge required to become successful high tech entrepreneurs.

Through classroom training, skills development and concrete work experience, these young entrepreneurs develop the tools they will need to seek employment or create new businesses in this rapidly developing sector.

As these local examples demonstrate, the private sector is our greatest and most appropriate medium for innovation. Canada's youth are our strongest foundation for our future. The framework is in place. The economic environment is improving. The partnerships are proving successful. We are following through with our commitment to providing opportunities. Canada will not be left behind.

[Daphne Jennings, Reform, Mission—Coquitlam, BC]

Mr. Speaker, I agree that jobs are necessary. I agree with the parliamentary secretary who spoke previously. He sounded like a Reformer. It is not the government's job to create jobs but rather to create an economy that is healthy.

I am concerned, though, that the budget offers no tax relief. The hon. member for York North spoke very inspiringly about students, the desire for jobs, the desire of the government to create jobs, the desire of the government to make sure jobs are there, technology and everything like this.

There is no tax relief and yet the government is trying to create a climate that will encourage businesses. I heard the Prime Minister say to businesses: "Now it is your job. You go ahead and create the jobs, we have done what we can do". I am a bit confused because it is very difficult for the market, for a health economy to exist if there is no tax relief.

How will businesses have the finances, the will, the profits? How will they create these jobs? Where will the consumer confidence come from? I would like a realistic answer from the hon. member for York North.

The budget did not create that confidence. It did not build the economy. It did not give us any indication that now there will be a lot of jobs for students. I feel it is the economy that has to have some kind of encouragement. I did not see that in the budget.

I wonder if the member could please explain to me how, with no tax relief, businesses will suddenly get all this inspiration and turn things around in the economy and offer the jobs the government feels they should.

[Maurizio Bevilacqua, Liberal, York North, ON]

Mr. Speaker, I thank the hon. member for finding my speech inspirational. One of the reasons I delivered it was to make sure people across Canada understand that when people come together and pool the resources available we can bring about positive change to people's lives.

One of the things I do not agree with is that somehow Canadians are lacking confidence. I know that when I speak to Canadians from coast to coast what they are telling me about the government is that for the first time in a long time they believe our budgets.

We are telling them we will reach 3 per cent of GDP on the deficit. We will be going down to 2 per cent. They also gain a lot of confidence from the more than 560,000 jobs that have been created since the election on October 25, 1993. That is good news for Canadians. They understand that we have low interest rates and that the fundamentals are there for small business to create those jobs.

I agree with the Prime Minister, the Minister of Finance and members of my caucus who are saying to the small business sector and to the business community that they have to join with the rest of the Canadian family to generate the jobs required, in particular for our young people.

I cited a couple of examples of the type of work I have been doing in partnership with local stakeholders in my riding which is are actually creating jobs for people. We live in an era of constant change. The old rules simply do not apply. We need to be creative and innovative to generate the type of job creation Canadians are calling for.

I do not view this in a very self-defeatist way. The people in my riding of York North are quite excited about the change that is occurring. That is why initiatives like the Vaughan Technology Enterprise Centre, the York Region Strategic Alliance and the recent activities with one of our major corporations, TetraPak, are bearing fruits and bringing about change.

It is the responsibility of all members of the House to join forces with local stakeholders to create those much needed jobs for the Canadian economy.

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, this week's budget is nothing new. There is hardly anything to talk about, since this budget contains no measures that are really new. We realized that, for the next few years, the government has decided to ride the wave that brought it to power in 1993 and to stick with the measures that had been decided at that time-some of which, it must be said, were unpopular. The government has decided that, since these measures were announced two years ago, they did not have to be modified or supplemented by other measures.

In other words, the government is thinking that the blows it dealt to Canadians-some of whom it even clobbered-have caused enough pain, since some of the measures will come into effect this year. Some of the decisions made in the 1994 and 1995 budgets will take effect this year and others next year.

So, of course, the government is looking good, saying: "We will not impose any drastic, unpopular measures this year". No wonder, since those measures have already been announced in previous budgets.

At the same time, the government has decided that, by adopting this new budget, it will still impose measures, although these will not take effect right away.

These measures will be implemented in five years, so that taxpayers will not panic but think: "This may be bad news, but at least we have five years to prepare for it". We have five years to brace ourselves. It is as though people were saying: "Who knows? Many things can happen in five years, so perhaps there will be a miracle and today's bad news will not materialize in five years". This was the government's strategy in tabling this budget, which in fact is designed not to frighten anyone but which does not help improve the situation in any way.

Let us examine some of the measures one by one and see what great plans the government has. Let us start with the national debt.

When the government was first elected, in October 1993, Canada's national debt stood at $508 billion. Today, in the 1996-97 estimates, the federal debt is forecast to reach $602 billion. Next year, last year of this government's rule, the debt will have risen to $619 billion.

For most people, it is difficult to imagine an amount of that magnitude. What does $619 billion represent? When you win $1 million at the lottery for example, you know that $1,000,000 is this figure with six zeros. When you deal with billions, one billion equals one million millions. The government debt is 609 times one billion. Just in the past few years of Liberal government, since 1993, this debt has grown by $110 billion or $112 billion. That is a lot of money.

If the government managed to save, say, $5 billion-or five million times $1 million-every year by making sure that its income was $5 billion higher than its expenditures in its budget, at that rate, by putting $5 billion per year toward repaying the amount by which the debt has increased so far during the Liberal government's mandate, it would take 21 years to repay. This means that, in four short years, the Liberal government has moved us back 21 years. And that is just for the debt incurred over the past four years.

Now, if we were to apply this to the total debt, which is $620 billion, or $619.7 to be more precise, and decided tomorrow morning to repay this debt, by managing wisely, at the rate of $5 billion per year-That is a lot of money, you know. In the past 25 years or more, we have never managed to save that much in just one year in Canada. Every year, for 20 or 25 years, we have accumulated budget deficits. Instead of accumulating surpluses, we accumulated deficits. This means that we spend more than we save.

Let us assume for a moment that the reverse is true and that, tomorrow morning, through sound management, we were able to save $5 billion and use that money to repay the accumulated debt of $620 billion. It would take, listen to this, Mr. Speaker, 120 years to pay off Canada's current debt. So, 120 years to repay the debt. Needless to say that none of us will be around to see that. I do not even want to think about it, because it would be so appalling. It just does not make any sense.

Imagine how much hope and determination one needs to say that this country needs, for the next 120 years, budgets that will allow it to save $5 billion. Right now, we are not able to lower the debt. We barely manage to marginally lower the deficit. And we do so through artificial means. The government says: "The deficit went down from $42 billion in 1993-94 to $24 billion in 1996-97, an $18 billion reduction". However, there is still an extra $24 billion added on to the debt. Next year, we will look at 1997-98. It is anticipated the deficit will then be around $17 billion.

How did the government manage to achieve these deficit reductions? It did not do so by spending less but, rather, by using two main strategies. First, it gives the provinces less money than it used to for social programs and services, health and education being the main ones. This year, in comparison to previous years, the provinces will suffer a $2.5 billion shortfall. Next year, it will be $4.5 billion, for a total of $7 billion.

For Quebec, this means a shortfall of about 25 per cent. In other words, this year our province will receive about $650 million less in transfer payments. Next year, the shortfall will be about double that amount, that is $1.2 or $1.3 billion.

At this rate, I am not sure that many people would still say that Canada is the best country in the world, as is so often claimed by the Prime Minister. At the rate of $5 billion per year, it would take 120 years to pay off our country's debt of $620 billion. If this is the best country in the world, I do not want to hear about the others. It must simply be terrible. Imagine, if that is what the finest and the best looks like.

Clearly, the situation cannot continue as it is, and clearly the government's presentation of the budget in this form is what the leader of the opposition has most aptly called a cosmetic operation. It is an operation which seeks to disguise, to cover up, the magnitude of our economic ills. It is an operation aimed at making people forget that decisions were made two years ago from which there can be no going back. It is also an attempt to make people forget that decisions made to-day will kick in in five years time, whether we like it or not. Which ones are they?

I am referring to the Canadian Social Transfer. This is $7 billion, and we know that implementation has begun. The government has not had to make any new statements; they know that there are $4,5 billion that will not go out to the provinces this year. I had started to talk about how that was financed, as the government knows very well.

I said that the government was financing this, financing the reduction of its deficit in two ways, but I gave just one.

I spoke of the Canadian Social Transfer, where it recovered $7 million, but there is another way. When the federal government decides to collect money, I do not think it can be trusted. As soon as it gets its grubby little hands on some money, you cannot be sure what it will do with that money. Think of what happened to Canadians' unemployment insurance contributions.

There was a time when the federal government participated in the unemployment insurance fund, putting money into it to help out those who were unemployed. However, in recent years, the unem-

ployment insurance fund has been fed only by employee and employer contributions. Only those who work pay in contributions, with their employers. This money is what is will be used to pay unemployment insurance to those who, unfortunately, are out of work.

Now in the past two years, the unemployment insurance situation has improved so significantly that a sort of unemployment insurance profit has been made. In other words, more money is coming in from workers and employers than is being paid out for unemployment-$5 billion last year.

In all fairness, this figure of $5 billion should go to the workers and employers from whose pockets it all came. However, as employees and employers trusted the government, they have said: "You are a trustworthy body, you will collect this money for us and will keep it in reserve, in the bank, and when you need it, you will give it to us for the unemployed".

The government, which already had this responsibility, decided to keep it, of course, because that would also allow it, until the money was needed, to make whatever use of it it felt justified.

When you put money into the hands of someone who needs it, is it not a great temptation for that person to use the money until the unemployed need it? Since the government is running a deficit, and needs money to look good, to be considered a good manager, when it sees $5 million not being used, it grabs it saying: "I will pay it back later, if the unemployment insurance fund ever runs a deficit".

In other words, when employers and employees decided to put their UI contributions into the hands of the government, without reservation, it was as if the fox had been put in charge of the henhouse.

The English have a another way of saying that. The Minister of Finance, who comes from Quebec, often uses the expression: "Do not put the rabbit in charge of the lettuce". For Quebecers who may not have understand, it means that to keep the lettuce, we should not give it to the rabbit or else, when time comes to eat the lettuce, there might be some missing.

That is roughly what happened with the unemployment insurance fund: the government acted like a fox, or like a rabbit in front of a box full of lettuce. With its growing appetite-and we know how voracious the government can get-it took a large helping. Indeed, it took $5 billion paid by workers and employers and said: "With this, I can reduce the deficit by $5 billion". Adding $5 billion to $7 billion, we get the $12 billion that are not being transferred to provinces: "Mission accomplished, we have reduced the deficit by $12 billion".

That is why, in the budget, the government did not change a thing in its approach, in the way it collects UI premiums and in the way it pays UI benefits. If the government had wanted to, it had an ideal opportunity to take advantage of the situation to create jobs. Here is $5 billion paid by workers that are not used for unemployment insurance. It could have taken this opportunity to lower UI premiums, which would have left in the economy $5 billion more that could have been used to create new jobs. The government should have jumped at this opportunity, if it had been sincere, having promised during the last election campaign to create "Jobs, jobs, jobs". It had the opportunity to create jobs, but it did nothing. It did not jump at the opportunity. Instead it jumped at the opportunity of making a good show.

Why is the government trying to improve its image these days? Why does it need so much to improve it? Government members, from the Prime Minister and the Minister of Finance on down, surely watch television. They must watch television. They must see what is going on in the other provinces. They must see what is going on in their own province, in some cities, when the government announces measures that will affect the underprivileged.

I wonder if the government is not paving the way, just in case it might no longer be able to run the country in a few months from now. The Axworthy reform, which was withdrawn at prorogation, is a bill which the government is trying to reinstate right now. This reform is not all that popular. Thousands and thousands of citizens, people from the provinces of Quebec, New Brunswick, and Ontario, are complaining about this reform, calling it inhuman because it mostly picks on the less-privileged.

Could it be that the government that is about to reinstate this bill, which will surely prove to be very unpopular, is trying to rebuild its image just in case it has to call an election? It could be. The government might have to call an election because of its unpopular measures, so it might be thinking: "Maybe we should start preparing some ground work here."

It is a pity that I only have a few seconds left, Mr. Speaker, because I have so much more to say, but I will rely on my hon. colleagues to take part in this debate and decry not only the government, but also the budget, which, as I said before, does nothing to correct the disastrous debt and employment situation we have in Canada.

[Paul Devillers, Liberal, Parliamentary Secretary to President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs]

Mr. Speaker, I have an opportunity today to comment on the government's budget and to highlight its main components which, I believe, will benefit all Canadians in the short and long term.

I would first like to commend the government-unlike my colleague from across the way-for respecting the voters' will,

which was clearly expressed as regards taxation. Canadians do not want any tax hike, because they believe that they are already paying their fair share of taxes.

The government has chosen to fit this tax freeze into an overall strategy which consists in guaranteeing our financial future while continuing to put our public finances in order. In this regard, the 1996 budget is consistent with the 1994-95 budget, and this will enable us to reduce the deficit to $24.3 billion in fiscal 1996-97 fiscal year, or 3 per cent of the GDP. This development shows that the Minister of Finance will undoubtedly meet his deficit reduction targets.

Given the delicate state of the Canadian economy at the present time, the federal government could have opted for harsher measures. In fact, some provincial governments, such as the Ontario government, have chosen this path which, I think, does nothing but exacerbate the economic problems we face. The Liberal government rejects any solution based on ideologies that are narrow and prejudicial to Canadians. Our attitude toward the economic changes that have to be made is one of pragmatism and fairness to all levels of our society.

I will give as an example the Canada Health and Social Transfer, which will benefit from secure, stable and increasing funding over five years, receiving $25.1 billion the first two years and an increase based on economic growth for the next three years.

I will say that, contrary to what some sovereignists are saying, there is no new reduction of transfers to the provinces. This criticism is unfounded because it refers to the reductions announced in the 1995 budget. On that subject, I would like to indicate that those reductions from the 1995 budget represent 3 per cent of provincial revenues, not the astronomical amounts mentioned by our critics.

The most disadvantaged in our society will not be forgotten in this budget and by this government. Budget cuts will not be made on the back of students. All Canadians can count on stable funding for health insurance.

Do these measures aimed at securing the future of social programs come from a government that could not care less about the well-being of the community? Do these measures bear the mark of this economic laissez- faire, both unbridled and lacking in social conscience? No. These measures show the will of the government to guarantee the social programs that Canadians presently enjoy while allowing for fiscal consolidation.

I was quite pleased by some of the measures announced by the finance minister. He announced two specific improvements that will benefit children. One measure will see the child care deduction extended to passive income such as unemployment insurance.

I had proposed this amendment to the finance minister which was spurred by the experience of a co-operative education student and constituent, Ms. Janet Lewis, who worked in my office. She was on unemployment insurance at that time and therefore could not claim the child care deduction even though she needed child care in order to get her high school diploma. This inequity has now been addressed in the government's budget.

I would also like to mention that the new budget will give $250 million more a year in supplementary assistance to some 700,000 low-income Canadian families, a third of which are single-parent families.

This is quite significant since the earned-income supplement under the child tax benefit will be doubled in the two next years, going from $500 to $750 in July of 1997, and to $1,000 in July of 1998. Let us not forget that our children hold the future of our country in their hands and that child poverty represent a threat. I think that that initiative will bring more social and economic equity in Canada.

I noticed with pleasure that the government dealt with the situation of youth on the job market by reallocating funds from other programs to the Student Summer Employment Program. That is a step in the right direction. Nonetheless, I hope that the government will take more initiatives to create more new jobs for all Canadians.

In this regard several initiatives come to mind. The government's infrastructure program is a fine example of job stimulation, obviously benefiting the workers who obtain direct jobs from the project but also the economy as a whole. The future continuation of this program would, I believe, be beneficial to Canada's economy.

A project to stimulate the construction industry would also go a long way on the job front. This project, apart from the creation of construction jobs and industry spin-offs, would also contribute to the social development of communities, allowing the government to kill two birds with one stone.

By bringing changes to old age pension benefits, the government is once more confirming its support of the principle of equity by better targeting benefits in order to give better support to low income Canadians and by reducing or eliminating benefits to high income seniors. Liberals have not forgotten the concept of a just society. They stand by it and have shown it in the budget.

Need I mention, as many hon. members already did, that the new seniors benefit will be tax free and fully indexed?

This budget is based on a sense of moderation. It will allow the government to reach its goal of fiscal consolidation. In fact, the government acknowledges the need to put its fiscal house in order but not at the expense of a just society.

Economy is only a means of making society work. It is not an end per se and should never be.

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, I did not have time to say everything I wanted before and this gives me the opportunity to ask a question of my colleague opposite who praised the measures proposed by the government.

He did not say much about the measures proposed by the government in its budget with regard to corporate taxation. For months and years now, the Bloc Quebecois has been asking the government to act to ensure that all profitable businesses pay at least a minimum tax. We are not talking about start-up businesses which are struggling and losing money, but there are thousands of businesses in Canada, some say between 60,000 and 70,000, which have been profitable for years and which are still not paying a cent in taxes because of the existing Canadian legislation.

We learn in the budget that the government is creating a technical committee to review business taxation. It will carry out studies to determine the appropriate level of taxation. Should corporations be paying more taxes or less? Should tax shelters be revisited? Should they be eliminated or should new ones be created? What should become of tax havens, for example?

The government announced the creation of that committee in its budget and said that seven or eight experts would be members of that technical committee. There will be university professors, chartered accountants, scientists and some experts who already manage funds in tax shelters because they have offices in tax havens. These people will be members of the committee and will advise the government on the approach it should use.

The finance minister said, at lunch time today, that it is normal to consult people who know about tax shelters if you want to get some adequate recommendations. If we were to push the comparison a bit, we could say that it is like creating a Hell's Angels committee to help the government change the legislation on organised crime. We have almost gone that far.

I would like to know my colleague's opinion on these measures his government wants to implement.