Debates of March 7th, 1996

Petitions

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

Mr. Speaker, the second petition, pursuant to Standing Order 36, deals with Bill C-32, the grandparents issue.

The petitioners request Parliament to please look seriously at the Divorce Act to consider changing it in order to allow grandparents standing in the court to ask for access.

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

Mr. Speaker, the third petition is from petitioners asking for changes to the Young Offenders Act, looking at things such as deterrence of the offender, accountability of the offender and rights of the victim.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, I rise, pursuant to Standing Order 36, to present a petition today on behalf of Helen Hawthorn and 25 other residents of North Vancouver and Vancouver.

The petitioners draw the attention of the House to the fact that the Constitution Act of 1982 guarantees freedom of conscience and religion in the Canadian Charter of Rights and Freedoms, and that recognition of conscientious objection exists in Canada.

They pray and call on the Parliament of Canada to establish peace tax legislation by passing into law the private member's bill of the member for Burnaby-Kingsway, the conscientious objection act.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, pursuant to Standing Order 36, I wish to present three petitions to the House.

The first petition has to with the family. The petitioners would like to draw to the attention of the House that managing the family home and caring for preschool children is an honourable profession which has not been recognized for its value to our society.

The petitioners therefore pray and call on Parliament to pursue initiatives to eliminate tax discrimination against families who decide to provide care in the home to preschool children, the disabled, the chronically ill or the aged.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the second petition is from Sarnia, Ontario.

The petitioners would like to bring to the attention of the House that consumption of alcoholic beverages may cause health problems or impair one's ability, and specifically that fetal alcohol syndrome and other alcohol related birth defects are 100 per cent preventable by avoiding alcohol consumption during pregnancy.

The petitioners therefore pray and call on Parliament to enact legislation to require health warning labels to be placed on the containers of all alcohol beverages.

[Paul Szabo, Liberal, Mississauga South, ON]

The third petition, Mr. Speaker, has to do with corporal punishment.

The petitioners point out that whereas section 43 of the Criminal Code allows school teachers, parents and those standing in the place of a parent to use reasonable force for the correction of pupils or children under their care; and whereas the 1994 study in Ontario found that 85 per cent of all reports of physical abuse of children began as attempts to discipline; and whereas the use of force for correction teaches children that violence is an acceptable method of dealing with conflict, the petitioners call on Parliament to end legal approval of this harmful, discriminating practice by repealing section 43 of the Criminal Code.

Questions On The Order Paper

[Paul Zed, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I ask that all questions be allowed to stand.

[The Acting Speaker (Mr. Kilger)]

Is that agreed?

[Some hon. members]

Agreed.

[The Acting Speaker (Mr. Kilger)]

Before we move on to debate I wish to inform the House that due to the statement by the minister, Government Orders will be extended by 39 minutes.

The House resumed from March 6 consideration of the motion that this House approves in general the budgetary policy of the government.

The Budget

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, I rise on a point of order. Pursuant to a discussion we had the other day in the House I rise to seek the unanimous consent of the House that the NDP be allowed to respond after the spokespersons of the three official parties in the House.

[The Acting Speaker (Mr. Kilger)]

Is there unanimous consent?

[Some hon. members]

No.

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

Mr. Speaker, we often say that we should sleep on something, and I did. However, I am still of the same opinion as yesterday, and I have the same arguments against the last budget of the Minister of Finance.

To us, this budget is window-dressing. It was a big production meant, first and foremost, to hide the real damaging effects of the finance minister's measures on the economy and on jobs, and to hide also the real state of the federal government's finances.

The minister who, for months, has been saying that he is a good manager, that he will reach his budgetary targets and make sure we see a definite improvement in public finances, forgot to tell us that the accumulated debt will top $600 billion this year. He forgot to tell us also that since he has been in the job, and after three consecutive budgets, he has added more than $110 billion to the debt. Is that good management of public finances? Is that controlling the medium-term debt? Is that having regained control of public finances? I wonder whether it is not the contrary. I does not make any sense.

If it had not been for the Unemployment Insurance Fund which, after a reform that everybody is denouncing across Canada, produced an annual surplus of $5 billion; if it had not been for the systematic transfer of deficit problems to the provinces; if it had not been for the economic growth of the last two years, the Minister of Finance would certainly not have reached his target for the deficit, which is 3 per cent of GDP.

It is by tampering with reality, by dipping into a fund to which it does not contribute any more-the unemployment insurance fund-by dumping its responsibilities onto the provinces and by taking into account the evolution of the economic situation only that the Minister of Finance gets to present this overall picture.

But this is no way to improve public finances. This is no way to put public finances back on the right track. There are two ways, and both involve systematic elimination of the shameful waste that we have seen for the last two and a half years. Since we have been elected, we have come to know the machinery of government. We know there is waste, we know there is duplication, we know there is a lot of overlap.

As far as this first way of really improving public finances, the Minister of Finance announced yesterday that the fight against waste is over. This is no joke. Even in his budget plan, we see in his table on page 14 that, in the direct budget savings for 1996-97, he expects additional cuts in the government machine of 0.0; that means zero. There are no cuts this year. It is over. There is no more waste, no more duplication, no more overlap, no more fat anywhere. It is zero.

Next year, it will be 0.2; what does it mean? It means $200 million in a budget of over $150 billion. It is an insult to taxpayers in Quebec and Canada to present such a plan for reducing waste, for downsizing the cumbersome government machine. And the Minister of Finance claims to be a good manager of public finances.

Why, for example, did he not follow the suggestions of the official opposition, which asked him, among other things, to continue to make massive cuts in national defence? It is not normal that, in peace time, the armed forces still require an investment of tens of millions, even hundreds of millions of dollars in different types of war time equipment. There is talk, for example, of anti-tank missiles or ultra sophisticated equipment for submarines.

There is talk of investing in all kinds of weapons and equipment, when all experts agree that we could cut $1.5 billion from the defence budget and amend DND's mandate so as to provide for the maintenance of peacekeeping forces around the world. That is the way to make public finances healthier and more rational-common sense would also prevail.

Why did they not propose, for example-and I am sure that most taxpayers in Canada and Quebec would be agreeable-cutting the nearly $50 million allocated to the other House, to parliamentarians who doze off during the throne speech? People noticed that, too. The time has come not only to get rid of the deadwood but also to give in to official opposition demands to eliminate, once and for all, all appropriations to these people who are paid to do nothing or to sleep.

As for the "jobs, jobs, jobs" that were promised in the last three years, this slogan can still be heard but it is getting fainter and fainter as the months go by, for the very good reason that this

government not only did not put forward significant measures to create good, lasting jobs but also made cuts, in the finance minister's last budget, that apply to the levers or ways used to create jobs.

Let us take, for instance, the finance minister's attack on labour sponsored venture capital funds. This is incredible. The Fonds de solidarité des travailleurs du Québec, for example, works well and helps maintain 40,000 jobs. Yesterday, the finance minister decided to pull the rug out from under their feet- this also applies to the newly created CSN fund-thus undermining this instrument that is so important to Quebecers. This is not normal.

It is not normal to talk about creating jobs while at the same time undermining the basic tools used to create jobs and spread the benefits of economic growth throughout Quebec. The same goes for Canadian funds in all parts of Canada. This is what they call taking measures to promote employment? Had we known this, we would have explained to the people that when they were talking about "jobs, jobs, jobs", what they really meant was job cuts. That is what the government was proposing.

Student summer employment, that too is to laugh at the face of students in Quebec and Canada. A sum of $120 million has been earmarked for student employment creation, it is true. But did you know how much money was taken away from students through transfer cuts to post-secondary education and so on? This year, the government has cut or plans to cut $150 million.

Do you know how much will be cut next year? Approximately $500 million. On the one hand, $650 million is taken away from students over two years, while, on the other hand, $120 million will be provided to create summer jobs. I can understand why they are upset and why they came out, Mr. Rebello first, to denounce the government's attitude. They are being laughed at.

Another measure designed to discourage job creation was announced yesterday in the finance minister's speech. As you know, to maintain one cent of the employees' or employers' contribution to the UI fund, the jobs of 6,000 Quebecers or Canadians have to be sacrificed.

The Minister of Finance could have announced yesterday plans to substantially reduce the unemployment insurance premiums paid by employers and employees. Instead of appropriating the UI fund surplus he could have announced that it would be used to alleviate some of the problems faced by the economy these past couple of years in creating employment. He could have come out and said: "We will balance our budget by systematically eliminating waste and create thousands of jobs by lowering employer and employee premiums".

Instead, premium levels remained unchanged. When we hear that this government is about jobs, never has it been more obvious

than yesterday that this government is working against the creation of the thousands of jobs our economies need, in Quebec and Canada.

Regarding the Canada social transfer, the minister announced, and immediately recanted-but it is nonetheless written on page 59 of his budget plan-that cuts would be shared among the provinces on the basis of population.

What does this mean? I will repeat it over and over again: This means that Quebec, which represents about 25 per cent of the population, will support 40 per cent of the cuts to the Canada social transfer. On page 59 of his budget plan, the minister said, and I quote: "-each province's allocation will be further adjusted to more closely reflect its share of Canada's population".

Solutions are thus being delayed by a few years, but the machinery is clearly on the move to have Quebec absorb 40 per cent of the cuts to be made under the social program transfer.

Yesterday, the minister told us: "Do not worry. The issue will be discussed. Nothing is definite yet". Well, maybe nothing is definite, but there seems to be a clear and precise intent in the budget toward making cuts based on population, and Quebec would clearly lose out if other criteria than population were applied. That is unacceptable.

Does anybody know what the cuts imposed by the federal government on the provinces will amount to this year and the next? These cuts of $2.5 billion plus $4.5 billion will total $7 billion in the next two years, and Quebec alone will lose $650 million this year, more than $1 billion next year, and 5 billion over the three following years. For the government, stabilizing public finance means offloading its deficit onto the provinces and making Quebec pay more than its fair share.

With this budget, not only harmful budgetary measures are being introduced, but principles are being trampled.

Some struggles lasted for decades, but now the gains that were made are simply pushed aside. I am referring to the measures proposed in the budget regarding old age security and women.

The Minister of Finance decided that the progress made by Quebec and Canadian women was not important. In just three lines, he pushed aside what was gained over 50 years of hard struggle to promote gender equality and financial independence for women by making these priorities secondary issues and moral values for Quebecers and Canadians.

The minister proposes to use the family income as a criterion to determine the level of benefits to be paid to Quebec and Canadian households. This clearly penalizes women. Earlier today, I listened

to the reaction of some women. They were outraged by the fact that the government's action will set them back several decades behind.

Remember, not that long ago, when a woman had to get her husband's signature to borrow money at the bank. What difference is there between using the household income, to which the man is usually the main contributor, and the way loans were granted to women a few years ago? In terms of principles involved, it is a shame to have included such a measure in a budget.

Let us now take a look at the tax system. Yesterday, the official opposition made what I would call a small gain. Why? Because the Minister of Finance has finally understood that there were inequities in Canada's tax system, that there were all kinds of loopholes in the corporate tax system, and that, ultimately, every Quebec and Canadian taxpayer pays for the loopholes used mostly by major corporations to avoid paying their due to Revenue Canada.

After urging and pressuring the government and the Minister of Finance for two and a half years, we have finally convinced them that it is necessary to do a major clean-up in the corporate tax system, whose exemptions cost us at least $10 billion annually-and this figure is based only on the measures that are known, because we do not know the impact of just as many loopholes.

The minister has just realized that you clean up government finances not by making cuts that impact on provinces, not by making cuts in the unemployment insurance account, not by surfing on the economic conditions, but by taking action in an area which I feel is fundamental, taxation.

We see that, while he realized that, he does not really intend to do anything to remedy unfairness in the tax system. Why? For two reasons. First, he proposes to establish a working group, which he calls a technical committee on business taxation. The members of that working group will be mandated to work behind closed doors, in camera, without anybody knowing where their discussions are going and exactly what tax breaks are available to businesses-some might no longer have any justification-and the cost of these tax breaks to the public purse. If they work behind closed doors, it may be to hide a little strategy that would go like this: change two or three tax breaks; then, once two or three of them have been changed, say that nothing more can be done.

That is not what the minister was asked to do. That is not what Quebecers and Canadians expected from the finance minister. We asked for an open process, for a special parliamentary committee that would swiftly review, in the open-that is what democracy is all about- the whole range of tax breaks available to big corporations at a cost of billions of dollars to the public purse, year after year.

This is what we wanted and what the people want. Instead of that, we are faced with a closed process, a review that will take place behind closed doors. What kind of credibility can such a review have? How can we trust it?

There is something far worse than that, however. If one looks at the membership of this working group, one realizes that it does not make any sense to have people from corporations or universities who not only have their own set agenda, but may also be in a conflict of interest because of the committee's mandate. We notice for example that one member comes from the Simon Fraser Institute, an institution not particularly well known for social-democratic leanings. It is not known to favour big business having to pay its fair share of taxes. It clearly came out in favour of cuts in social programs as the only means to get our financial house in order. Here we have a representative of that venerable institution on a committee whose mandate is to review the corporate tax system and point out to us unfair aspects of the system we can deal with so that all corporations, and not only some of them, pay their fair share. That is quite something. It certainly does not do much for the credibility of this working group.

But there is even worse than that. People from Ernst & Young and Price Waterhouse will sit on this technical committee whose mandate, I repeat, is to find out how we can close loopholes corporations and big taxpayers use to avoid tax. One of these is tax havens. For the last two years and a half, we have been decrying the tax treaties Canada has signed with countries that are considered like real tax havens, such as the Caribbean or many others. In these 11 countries, corporate income tax rates are a lot lower than ours, something like 10 per cent of the Canadian tax rate. Therefore, profits are transferred to affiliates set up in these tax havens, taxed at a much lower rate than the Canadian one, and then sent back here. These profits are not subjected to any further taxation measure. By transferring their profits and losses in this way, corporations manage to avoid paying any taxes to Revenue Canada.

Well, can you believe that the two companies I referred to earlier, Price Waterhouse and Ernst & Young, both have affiliates in countries considered as tax havens? That is unbelievable.

As the Leader of the Opposition put it so eloquently yesterday and again today, that is like inviting the fox into the henhouse, and I would even go so far as to say that it is like inviting the fox to lunch.

"Price Waterhouse, P.O. Box 3910, Nassau". Do the hon. members want the phone number? I have it. "Ernst & Young, Nassau, the Bahamas". "Ernst & Young, Gibraltar", that is another country considered to be a tax haven. "Ernst & Young, the Cayman Islands", the best of all tax havens, with 28,000 companies for 30,000 people. Incredible, right? "Ernst & Young, rue d'Italie, Geneva", Switzerland being another famous tax haven. "Price Waterhouse, Les Échelons Street-nothing to do with taxation echelons, as we call them in French-, Guernsey", the British Isles; another marvellous tax haven. "Price Waterhouse, P.

O. Box 3910, Nassau, the Bahamas", again, I have the fax and phone numbers for those who think it might be useful.

That does not make any sense. Quebecers and Canadians are being laughed at. The minister no longer has the political will to solve the problems related to corporate income tax. He no longer has the political will to do so. This hare-brained scheme, this creation of a closed group with obvious conflicts of interests, proves it. They talk of a delay in the production of a paper, which could come out sometime by the end of the year, because it is still on the agenda. This paper will probably be released after the election.

This reminds me of the initiative that the Minister of Finance announced last year concerning family trusts. He said: "Yes, we will abolish some privileges associated with family trusts but only in 1999", giving all those with millions and millions of dollars stashed in these luxury tax exemptions enough time to find other tax shelters, thus denying the government any new money, since capital will have fled by 1999 to other tax havens in order to avoid taxation.

The only tax initiative in this paper by the Minister of Finance is the creation of the Canada Revenue Commission. The only purpose of this sole initiative is to once again isolate Quebec. In his paper titled: Budget Speech , which he read to us yesterday, the finance minister told us: ``Canadians know full well that there is only one taxpayer. A number of provinces have asked us why there was not, as well, only one tax collector?''

This is the object of the Canada Revenue Commission.

Has anyone realized what we are saying in these two sentences to Quebec, which is the only Canadian province to levy its own income tax, the only one that acquired, the very hard way, since Mr. Jean Lesage, the tax autonomy that it had always wanted and that went with Quebec's distinct society?

Does the minister of Finance realize that what he is saying about the possibility of setting up a national revenue commission, combined with the provision in the speech from the throne concerning the possibility that the federal government would create a Canada-wide program in areas of exclusive provincial jurisdiction, where a majority of provinces agree, makes for a very explosive mixture? Does he realize that?

Sometimes, I wonder if the minister of Finance is aware of the impact of his budgetary policies. Ever since taking power, he has announced a whole series of measures aimed at, firstly, isolating Quebec, and secondly, further centralizing all aspects of social, economic and political life in this country.

He has announced a national securities commission, in a field of exclusive Quebec jurisdiction. No problem, let us do it! Last year, he announced Bill C-100 on financial institutions. Once again, the Bank of Canada and other federal institutions are moving in and even shoving aside institutions such as the Quebec Securities Commission or the Inspector General for Financial Institutions.

Now we are being told that it might be a good idea to do away with duplications and overlaps, and why not, while we are at it, do away as well with the tax autonomy of the Quebec government. Now that takes a lot of nerve! On top of that, he has something planned which has been in the works for about two years, and that is the implementation of a Canada-wide sales tax.

This national sales tax would be administered by the Canada Revenue Commission; as a result, if the government of Quebec decides it does not want this second version of the GST, it will be forced to accept it because it is said clearly in the speech from the throne that if a province wishes to opt out of this new national program, it could do so only if it proposed to apply exactly the same program with the same criteria or equivalences in the province.

In other words, if the federal government decides to create a new national sales tax that is not wanted in Quebec because the Quebec government wishes to control its tax base, what goods and services to tax or not to tax, it will not be able to do so because it will be forced to accept the new tax, a majority of provinces having decided otherwise in its place. Those are the hidden intentions behind the budget speech and the orientations of the speech from the throne.

When we are talking about disguising, that is also what we mean. And it is ironic, as I said yesterday, and I will say it again today, that when it is speaking of eliminating duplications and overlaps, the federal government is not looking in its backyard, but in the provinces' backyards. That is where, in its opinion, duplications and overlaps are to be found, even in strictly provincial fields of jurisdiction. That takes the cake!

One last point on which I would like to inform the people of Quebec, and of Canada as well, is the treatment of the milk subsidy, which affects particularly Quebec's milk producers.

You will recall that, last year, the minister of Finance cut $32 million in the budget for Quebec's milk producers. While cutting $32 million in the budget for Quebec's agricultural sector, it planned to increase by $2.9 billion the credits extended to the Prairie provinces. It planned to make $32 million worth of cuts in

Quebec while increasing by $2.9 billion the credits allowed to the Prairie provinces. Such is the Canadian agricultural policy.

What the minister told us yesterday is that not only did Quebec pay more than its share while the Prairies received several billion dollars more, but also that the government has made a unilateral decision to cut all subsidies to dairy producers in Quebec and Canada. This decision affects Quebec producers in particular since approximately 47 per cent of industrial milk production subject to subsidies comes from Quebec. Strangely, this measure hurts Quebec. There are no phoney committees set up, no panels of experts who are in a position of conflict of interest and who are prejudiced. The government has decided to cut and that is all there is to it.

Do you know how much Quebec dairy producers will lose? Between $80 and $100 million. In tough times, at a time when they have to adjust to the new rules imposed by the recent World Trade Organization agreement, to the opening of the borders and to stronger competition, at a time when they have to consolidate their industry to be more competitive in a global trade environment, the government is depriving them of $100 million, and we are supposed to think that this is a good budget. That is going a bit too far.

The conclusion is the same as yesterday. I hear my Liberal colleagues who are laughing. They think that this inequity, this unfairness toward Quebec is funny.

In closing, I move the following amendment:

That the motion be amended by replacing all the words after the word "That" with the following:

"the budget statement by the Minister of Finance be rejected by this House because: it proposes no real job creation initiatives and does not reduce government spending, most notably the approximately $50 million appropriated annually to the Senate; it uses the Unemployment Insurance Fund surplus to reduce the budget deficit and reduces social transfers to the provinces; it undermines labour sponsored venture capital funds, such as the FTQ and CSN funds; it does not propose a transparent process for achieving genuine reform of corporate taxation, or an unequivocal determination to undertake such reform; it undermines the provinces' fiscal autonomy; it eliminates subsidies to dairy producers without offering them adequate financial compensation; it jeopardizes women's financial independence by adopting household income as the basis for determining seniors' benefits."

[The Acting Speaker (Mr. Kilger)]

The amendment is in order.

We now move to the next stage of debate where members will be entitled to a 20-minute intervention subject to 10 minutes of questions or comments, unless there are other indications as to whether members might be splitting their time.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, I will be taking 10 minutes.

Mr. Speaker, do you remember a time when you had aches and pains and went to the doctor for help? He may have given you some bitter tasting medicine and assured you that you would be well in two weeks. When you left the doctor's office you probably already felt better because your worries were relieved and you knew that all would be well within a definite period of time.

Canadians feel the pain and are worried about their economic situation. There are 1.4 million of them who are unemployed. Their neighbours who work for the government are expecting a pink slip any day. The daughter graduating from university has no job yet. There is a long wait at the hospital for the operation needed by one of their relatives. There is disturbing talk about the viability of the Canada pension plan. This is only a partial list of what worries and pains Canadians in 1996.

Canadians expect their doctor, the government, to help them. They expect the budget to offer relief and hope. They were disappointed. The doctor said: "Keep on taking the bitter medicine I prescribed for you last year. Sorry, while I think you will be all right, I cannot give you a definite date when you can stop taking the medicine and stop worrying".

Canadians are not satisfied with the measures by the government in this budget. The measures are not adequate to restore fiscal balance within a definite time frame. The uncertainty continues as there is increasing talk about a recession, another Quebec crisis or international financial upheaval.

Just a tiny bit more medicine in the form of spending reductions in this budget would have done the trick. Canadians were ready for it. They want to get it over with. They want to get back to normal. What did they get instead? A budget that interrupts a momentum gained by last year's tough love measures.

No one believes that next year's budget leading up to an election will restore this momentum. These facts are also known to international investors. They will not give up their demand for getting at least one or two points more on Canadian bonds than they can get on U.S. bonds.

As a result there is no interest rate relief. High interest rates are the main obstacle to job creation. They burden Canadians with higher mortgage payments and leave them with less income to spend on consumer goods and services that would result in the hiring of more Canadians. Investors cannot afford to build those factories. The interest costs make them non-competitive in international markets.

What worries Canadians also is what a number of media reports noted. The budget signals a shift away from deficit fighting into an election mode. The traditional Liberal methods for buying votes have reappeared.

Money we do not have is being spent to help summer student employment. I feel sorry for those students when in a few years they become taxpayers and have to repay these gifts from Ottawa in full, plus an awful lot of interest on top.

Money we do not have is going into the support of high tech industries. There are pious assurances that the money goes out through recoverable loans and in partnership. Some leaders of high tech industries say they do not want such programs. They do not like having to pay general taxes so that money can be given to competitors who will make life tougher for them. They know there are plenty of venture capitalists out there who lend money to those with economically viable projects and who are large enough to spread the risk.

It is only the high tech ventures that are rejected by the private investors as being too risky that the government will support. Almost by definition, a collection of them will end up not earning enough to repay the government. This is how loans made by the government inevitably turn into subsidies.

Finally, I am on a personal crusade to point out the almost criminal injustice that is being perpetrated on future generations of Canadians. They do not have a vote in Parliament. No one in the system is representing them. They can be taxed without cost to sitting politicians.

We are passing on to the helpless future generations not just a visible debt which already requires to service it about $50 billion of interest every year or 35 per cent of current tax revenues, but we also have burdened them with the cost of services for the elderly. It has been estimated that when the bulk of baby boomers retire in 2030, young or unborn Canadians will be required to pay another $50 billion for medicare, old age security benefits and the Canada pension plan.

Only economic growth, expected to be small, will relieve them of the burden of having to pay at least 70 per cent of tax revenue on the visible and hidden debt they are inheriting. The interest of these unborn or young Canadians obviously does not carry any weight in the minds of those who designed this budget.

It may be on target, as the minister keeps on boasting, but it is also adding shamelessly $90 million a day to the visible debt. I ask the minister and his colleagues: Where is the vaunted Liberal compassion? Does it get applied only to those who can vote for them in the next election? Do the young and future generations count for naught because they cannot vote?

Let me summarize Reform's and my objection to this budget. It coasts. It is giving up momentum in the move to a balanced budget. It fails to provide a definite end to the nation's trauma and uncertainty. It delays the time we are out of the tunnel and the sun shines once more on the possibility of lower interest rates, more jobs, tax reductions and a return to the good old times when budgets are balanced. It sends the wrong message by starting the traditional Liberal spending that precedes and election. It shows no compassion for future generations. It is a bad budget for the current generation; it is a terrible one for future generations.

I move:

That the amendment be amended by adding after the word "Senate" the following: "and in particular, its impact on investor confidence results in these investors continuing to demand high interest rates on Canadian bonds, which delays economic and normal job creation" and;

By adding after the words "transfers to provinces" the following: "and in particular it does not offer Canadians a definite date within this government's mandate in which the deficit is eliminated, and in which economic growth once again would make feasible discussions about tax cuts, debt reductions and the restoration of social program spending".

[The Acting Speaker (Mr. Kilger)]

I will take the suggested subamendment on behalf of the member for Capilano-Howe Sound under advisement. I will ask our clerk and table officers simply to verify that it is procedurally in order and I will render that decision momentarily.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

Mr. Speaker, the hon. member for Capilano-Howe Sound lamented and shed endless crocodile tears that the budget spent money the government did not have and thereby increased the deficit. I know that he and his party are enthusiastic at the prospect of reducing the deficit, but I did not hear in his speech anything about the proposals for cuts he would make in government spending. I know they do not like cuts in defence spending.

I would like to have the hon. member for Capilano-Howe Sound tell us where he would cut the billions of dollars required to bring the dollars into balance.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, I thank the member for his question. Indeed it is a legitimate question.

I do not believe that in the past opposition parties have been as courageous and open as the Reform Party has been in presenting alternative budgets, even though the job to propose methods is the responsibility of the government, not the opposition. The opposition's task is to criticize, and this is our main task. As I suggested, we have done so.

I will send the member the taxpayers budget as prepared last year. In there all of the cuts are presented. I did some calculations. It would take 5 per cent out of program spending this year and next year and the sun would shine on Canadians again. We would be out of the tunnel.

From what I hear from my constituents, this is what they would like to have more than anything else. They have continued pain and uncertainty of having to take bitter pills of continuously hearing cuts already on the books and which are still coming, and yet there is no hope.

This is a budget without hope. Everything is more cuts. More cuts have been announced for 1998-99, outside of the range of the government. That is all it is. There is no hope, nothing but pain. I believe it is a strategic error to do that, on top of the fact that the government has on its books an increase in the debt of $112 billion, if all goes well, which many are questioning.

It will be over $600 billion that we are handing to future generations. I want to know how the member opposite will face his grandchildren and tell them he has left them as a permanent gift the interest costs and amortization on $600 billion, and that he was in the House of Commons while it went from $300 billion to $600 billion.

[The Acting Speaker (Mr. Kilger)]

Clearly a lot of members are anxious to participate in this debate, but I must now resume debate with the hon. member for Medicine Hat.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, in the 1993 election one of the things the Liberal government did was set up expectations. It campaigned on the promise that it would create jobs, jobs, jobs. Those were the expectations it left Canadians with.

In the 1996 budget and over the previous two and a half years we have seen nothing that solves the problem of the high unemployment we have in this country.

Today we have youth unemployment of 16 per cent to 18 per cent. We have 9.5 per cent overall unemployment. That is simply unacceptable. The government has failed miserably in its promise to create jobs for Canadians.

There are many good reasons for that. One of the things Canadians were hoping for in this budget was some tax relief, some light at the end of the tunnel. There is nothing like that in this budget. This budget is simply a cipher. It is a willow wisp. There is nothing to it. It is hollow. Anything proposed is over the hill and into the next millennium.

Canadians were hoping there would be something indicating stronger social programs down the road. They have certainly talked about the mechanics of social programs as they now exist and how they would change them. There is nothing in this document that explains it all. Nothing explains where the money will come from to sustain these programs over the long haul. By continuing to add debt on to debt the government is simply weakening these programs.

The government set very high expectations. It encouraged Canadians to think positively about what would come under a Liberal government. Unfortunately it dashed those hopes in the 1996 budget. It is simply an empty document with a lot of hot air.

It want to talk specifically about some of the challenges we face and how the government has failed to deal with these issues. I have talked about jobs, higher taxes and the unsustainability of social programs as they presently are. Now I want to talk about the cause of those things, why we have those problems.

The reason we have high unemployment is not that the government has failed to come up with short term, make work job creation programs, dusted off programs from the 1970s. That is not why we failed to deal with the unemployment problem. The problem is a debt of $575 billion. That has contributed to a structural problem with unemployment. That is why we have had 11 per cent, 10 per cent, and 9 per cent unemployment over the years.

This budget has completely failed to deal with that problem.

The Liberals are laughing at this. It is a big joke that we have unemployment. I do not think it is a joke. I do not think that when they went door to door saying they would solve the problem they made a joke of it. They led people to believe there was something serious going on and that they would solve it.

They have failed miserably to address the problem in the budget. They have not got to the root of the problem, the huge debt of $575 billion.

The only way we can create the jobs Canadians so desperately desire is to lower taxes and interest rates. The only way to do that is to wipe out the deficit and begin to pay down the debt. They have failed completely to do that. They have added $112 billion to the debt over the course of their mandate.

Not only have they failed to meet the hopes of Canadians with respect to jobs and job creation, they have contributed to the problem. They have added unemployment and for that they will be judged very harshly.

One of the concerns Canadians have, particularly those who are job creators such as small business people, is that we have extremely high taxes. The finance minister and members opposite have been crowing that they did not raise taxes in the budget. Raising taxes should not be a standard of a budget; it should be the exemption.

We have seen 22 tax increases since the government came to power. It has added $5.9 billion to the personal debt load of Canadians. That is shameful. Is it any wonder there are record bankruptcies in Canada. Is it any wonder people are so pessimistic about the future of the country.

The budget did not address that problem. There is no mention of tax relief. The reason there is no mention of tax relief is that the only way we can have tax relief is by wiping out the deficit. The government has failed miserably to address that problem.

The government did talk about a tax of one kind, in a very innocuous way about the GST. If I remember correctly, during the election campaign hon. members opposite told Canadians they would abolish the GST. They would axe it. They would kill it.

The Deputy Prime Minister on CBC national television on October 18, 1993, a week and a half before the election, said the GST would be abolished under a Liberal government and if not she would resign. Two and a half years and three budgets later, the Deputy Prime Minister sits in her seat and smiles. She knows the government has succeeded with its ruse, at least until now.

Canadians will not forget the issue. They will not forget that promise. They are already cynical about the promises politicians make. They will be very hard on the Liberals for that promise which they have failed to keep.

Not only have they failed to keep their promise with respect to the GST, the very tax they said they hated and would abolish, one which the finance minister called a stupid and contemptible tax, but they are talking about augmenting and strengthening it. They are talking about making it a tax which would reach more goods and services. They are talking about creating a super tax which in Ontario alone, according to a recent University of Toronto study, would kill 70,000 jobs. How does that square with their commitment to create jobs? It does not square at all.

I will talk about social programs. We have a situation in Canada today in which people are fearful about not being able to collect the pensions into which they have been paying over the course of their lifetime. The government has done nothing to address that issue. It has gone the other way.

The government talks about making changes to RRSPs which would mean that Canadians could contribute only until age 69 instead of age 71 and therefore they will not be able to save as much for their retirement. On the other hand CPP is in terrible danger. That works against the principle of merit. It works against the principle of initiative, that people should look after themselves. We are working against that. Why are we doing that? It makes absolutely no sense. We are making the pension system unsustainable on the one hand but also robbing people of the ability to save for themselves on the other hand. It does not make any sense.

Again, is it surprising that people feel pessimistic when the government does not deliver on its implied promise that somehow things would be better when the Liberals got to power.

I will conclude by saying Canadians want some hope. They want to feel optimistic about their future. This government led them on in the 1993 election by saying: "We will provide you with jobs, jobs, jobs". Implied in that was prosperity; implied in that was that we would have a strong social safety net. None of that is happening. Quite the contrary, it is going the other way.

In fact this budget has been a budget of irresponsibility in the sense that despite the fact the government knows that these problems sit over the heads of Canadians like a very sharp sword, it has not done a thing to deal with them.

[Paul Zed, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I have listened carefully to the hon. member. I was hoping perhaps he might share with us either his personal views or his party's views on a couple of specifics, namely the seniors benefit, the child support changes, the credit for infirm dependants and the charitable donation changes.

The hon. member talked about the fact that there were no issues which dealt with securing the social safety net. There are some very concrete specifics on which we would certainly like to hear from the Reform Party, particularly as they relate to seniors and young people. I would be anxious to have him respond to the specifics about what this government has proposed in this budget.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, the hon. member has asked me to comment on the specifics. Let me comment on them as a whole first.

The government has majored on the minors with respect to these programs. It has tinkered with the mechanics of these various programs but it has not addressed the underlying problem which is that we do not have enough money to sustain these programs. That is the underlying problem.

We do not have a particular problem with the direction in which the government has moved with respect to old age security and the guaranteed income supplement. It makes some sense to us. We have applauded the government for that. We have publicly said we agree with that direction.

However to major on the minors gives people the impression that somehow the government is providing some long term sustainability for that program. That is not the case. We are simply going deeper and deeper into debt by not announcing a date by which we

will balance the budget. Therefore these programs ultimately are destined to become unsustainable.

On the question of child support payments, we have a concern about what the government has proposed. I am very concerned that by heavily taxing people who are currently getting a tax deduction for paying child support, we are going to end up driving a lot those people away from making their child support payments.

We support the idea that there should be stronger enforcement measures. There must be stronger enforcement measures. That is where the emphasis should be in our judgment. We also want to see more money end up in the hands of the children. That has got to be the idea behind this.

In what the government is setting out to do I think it is going to end up driving a lot of people who pay child support payments away from doing that. It is going to give them an incentive to skip their child support payments.

With some of the other things the hon. member has mentioned, for instance child tax credits and things like that, again the government has not got to the underlying problem. If we give somebody $120 or $10 more a month or whatever it is, that is peanuts compared to the debt the government is asking them to assume the moment they take on a job. They pay for that debt in the form of higher taxes and weakened social programs down the road. They pay for it in the form of higher interest rates. They pay for it in the form of higher unemployment. It is simply ludicrous to give them $10 in one hand and to take $10,000 from them on the other hand because of the interest on the debt.

Although tinkering around inside the envelope of the programs is fine, unless the government deals with the underlying structural problems then it is really not doing the job it was sent here to do.

[The Acting Speaker (Mr. Kilger)]

I would like to resolve the issue of the subamendment.