Debates of March 7th, 1996

The Budget

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

Mr. Speaker, on a point of order. An unfortunate clerical error has been made. Would you please in our subamendment insert the word "recovery" after "delays economic" so that the passage would read "delays economic recovery and normal job creation". Mr. Speaker, you have it in front of you so there will not be any ambiguity.

[The Acting Speaker (Mr. Kilger)]

I want to thank the hon. member for Capilano-Howe Sound. Is there agreement?

[Some hon. members]

Agreed.

[The Acting Speaker (Mr. Kilger)]

Ultimately, the subamendment brought forward is in order.

[Barry Campbell, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I am honoured to lead off the debate for the government on the 1996 federal budget and to share my perspective on how our government views fiscal policy in the context of overriding economic and social priorities. But before I do that, I want to make a number of comments.

Comments from the official opposition reflect a fundamental lack of logic, as Quebecers and other Canadians will see immediately. Perhaps it is only on the opposition benches that you can suck and blow at the same time. Let me give some examples.

We often hear people from the official opposition sounding like Reformers, complaining that we are adding to the deficit. I heard that this morning. Yet two sentences later we hear it said not to cut and certainly do not cut defence in the province of Quebec.

On the one hand they say the rich should pay more income tax but on the other they say it is not fair to take into account the family income, the combined income of rich people.

They cannot have it both ways. They tell us to look at the tax system. We are responding and looking at the tax system but they do not want us to include people in that consultation that do not agree with their opinion.

We hear from the third party the question of alternate budgets. Perhaps the reason that no alternate budget has been presented this year is that when Reform members presented last year's alternate budget they called for massive cuts immediately across the board and the only increase was going to be crime control and prisons. That is the kind of society they saw emerging from those cuts.

This budget is the third mile post on our government's journey to securing fiscal stability and a dynamic competitive economy, an economy that can provide the jobs Canadians need and sustain the social programs we cherish.

The plan announced yesterday consolidates and extends the actions taken in our earlier budgets. Together these implement a comprehensive strategy Canadians can believe in. This is an important point. The ultimate measure of any government's success is its credibility.

All of us here are aware of the disrespect and cynicism felt toward the political system by too many Canadians. There should be no mystery about why they feel that way. Too often they have experienced governments that seemed focused on special and narrow interests and more concerned with private and hidden agendas.

Our agenda is different. It is a public agenda to serve the interest groups that are the real heart of Canada. People who want jobs, who want medicare and social programs sustained; seniors and seniors to be, worried about their pensions; children made vulnerable by

family breakdown; students, young people looking for their first job experience; charities struggling to respond to the needs of Canadians: these are our vested interests. This budget provides them and every Canadian in every region with renewed hope for our future. We should be proud of that.

I am also proud that our new initiatives do not violate the core commitment of getting Canada's deficit under control. We are reallocating funds to keep the trust of Canadians, not digging deeper into the pockets of besieged taxpayers.

Let me underscore our fiscal philosophy. We are tackling Canada's fiscal problem not as a narrow goal in and of itself but rather because it is a fundamental component of national growth, new jobs, economic security and sovereignty. We will keep hitting or bettering our fiscal targets again and again and again. And that is the nightmare of the third party. Our fiscal progress to date and other actions are paying off. Canada's economic fundamentals are strong.

So, let us begin by looking at this budget from a perspective I believe is everyone's concern: employment and economic growth.

As the minister said, the changing nature of work and the evolution of the economy are such that "we are facing a revolution whose scope and depth rival that of the industrial revolution itself".

Canadians know that direct job creation must come from the private sector. But it is incumbent upon the government to make sure the economic context is the best possible and favours the continuous economic growth necessary for job creation.

This requires first of all a reduction of the deficit because deficits keep interest rates much too high. High interest rates hinder investments, employment, and consumption. In a nutshell, they are an obstacle to job creation.

Deficit control requires, among other things, that we keep inflation low. This contributes to reducing pressures on interest rates and helps control the other costs of doing business. This makes Canada more competitive on foreign markets. We can also see the dividends derived from our ability to control the deficit and inflation.

Short term interest rates have diminished by three percentage points since last year's budget. This means a saving of $2,400 a year on a $100,000 mortgage.

Our increased competitiveness means a strong increase in our exports and a record exports surplus.

It is clear that our work is far from over. Much more needs to be done. Continued progress begins with further fiscal improvement and the 1996 budget delivers. With our first two budgets we established rock hard foundations. With these measures our 1995-96 and 1996-97 deficit targets bringing the deficit down to 3 per cent of GDP are secure.

The steps proposed in yesterday's budget consolidate and extend our first two budgets and further contribute to economic and financial objectives. We are maintaining our focus on reducing program spending because the debt is a problem created by government and the solution has to focus primarily in our own backyard. That is why of the cumulative fiscal actions we have taken from 1994-95 to 1998-99, a full 87 per cent have been expenditure savings.

Together the budgets will contribute $26.1 billion in savings for 1997-98. This action together with reform of employment insurance will ensure that we hit our new deficit target to reduce the deficit to 2 per cent of GDP in 1997-98. As the minister said the other day in this House: 6, 5, 4, 3, 2. When the Liberals arrived the ratio was at almost 6 per cent of GDP. We are heading toward 2 per cent and beyond. We are getting the job done in a balanced, humane, sensitive, reasonable way.

The combined budget plans will deliver additional savings in 1998-99 of $28.9 billion. This means the deficit will continue to drop. It is very important that the debt to GDP ratio also start to fall.

Let me highlight one important fiscal measure we shall achieve.

It is changing financial needs-new money the government must borrow on lending markets.

When we came to power in 1993-94, the federal borrowing requirement was $30 billion. In 1997-98, thanks to our initiatives, it will only amount to $6 billion, or 0.7 per cent of the GDP. In relation to the economy, this is the lowest level since 1970, which would mean that of all central governments of the G-7, Canada would have the lowest budget variance.

There is a related issue. It is not just that the federal fiscal situation is improving. The outlook for the provinces and the territories is also improving markedly. The provincial-territorial deficit was cut to $12.6 billion in 1995-96 from its peak of $25 billion in 1992-93. That is a drop from 3.6 per cent of GDP to 1.6 per cent.

This year Canada's total government deficit should fall below the G-7 average to second lowest behind the United States. By

1997 the nation's total government deficit should be the lowest of the G-7 based on other members' current plans. I am confident that is hard fact, not rosy rhetoric. The government is making sustained fiscal progress and it is driving the opposition crazy.

However, the 1996 budget goes beyond bottom line calculations. As Liberals we know that financial reform must never be an end in itself. The steps we are taking to get our fiscal house in order are a means to an end. What is that end? It is lower interest rates and better job growth. These steps are a means to ensure that we can preserve the Canada that Canadians want.

Canada's social programs can be preserved while being fiscally responsible. The two are not mutually exclusive. The 1996 budget establishes a long term funding arrangement for the new Canada health and social transfer which was announced in last year's budget. This long term funding arrangement will be stable, predictable and sustainable.

The 1996 budget proposes a five-year legislative funding arrangement for the CHST covering the period 1998-99 through to 2002-2003. At the end of the five-year period total CHST transfers are projected to be $2.3 billion higher than 1997-98. This will mark the first time the federal government has taken action to increase the growth in these transfers since the mid-1980s, contrary to some of the things we have heard in this House which have suggested that we will continue to cut transfers forever. The government is moving in the other direction with the 1996 budget.

Most important, as part of this, framework legislation will be passed which says that cash transfers will never, ever fall below $11 billion. The cash component of the CHST will be maintained. A floor will be set. It may be above that but never below. As the minister stated yesterday, this will assure Canadians that the commitment of the national government in support of health care, post-secondary education and assistance to the poor will be intact and strong.

Measures like these to secure social programs on a macro level are vital, but if any group deserves special focus it is young people, especially those buffeted by family breakdown. This budget speaks to them.

It announces a new child support system, a new strategy which is founded on the principle that children come first. First of all, according to the new system, child support payments will not be included in the income of the custodial parent for tax purposes, nor will they be deductible for the non custodial parent.

Second, the government establishes guidelines for determining levels of child support in a fairer and more consistent manner, in order to reduce conflicts between parents who separate.

There is another element of the action plan. The government will be reinvesting the anticipated revenue gains from the new tax rules in measures to benefit children.

Most Canadians agree it is time to prioritize the saving that are realized. Among other things, the working income supplement of the child tax benefit will be doubled. Beginning in July 1997, the supplement will go from a maximum of $500 to $750 and in July 1998 it will be increased further to a maximum of $1,000.

I have touched on some of the actions the budget will be taking to help children, but there is another vital component of the budget which is new support for the charitable sector.

Past budgets have emphasized the need to look to the non-profit and voluntary sectors, to recognize the fine work they do and have indicated that Canadians will be increasingly looking to the non-profit, voluntary charitable sectors when government has declining resources to do everything it might wish to do. That is why the role of charitable organizations has become more important than ever.

It is not enough for government to talk the talk, to say: "Canadians will have to look to that sector. They do a better job in some respects than government does in any event and it has to pull back". We have to walk the walk. We have to give that sector the tools it needs to get the job done. The 1996 budget does that. It takes an important first step in helping that sector to do more by encouraging more Canadians to be partners with charities.

It has been proposed, among other things, that the annual limit for tax assistance on charitable donations be raised from the current 20 per cent of net income to 50 per cent and to 100 per cent in the event of testamentary gifts, gifts on death. Gifts of appreciated property will also be encouraged through the measures being taken.

I want to stress that these are first steps because over the next year the government will be examining other ways to encourage charitable giving and charitable activities.

This is a budget of wide ranging and dramatic action. No single speech can fairly reflect the scope of its plans: the proposed seniors benefit, plans to boost investment and youth training in technology and trade, the measures that will help young people increase their lifetime contributions to RRSPs and tax measures to encourage sustainable development. My hon. colleagues will be addressing these other areas in detail as this debate continues.

I would like to close on the overall bottom line of this budget.

I think that today's budget reproduces and intensifies the positive messages contained in the speech from the throne, so as to restore hope for Canadians in key sectors.

We are continuing to restore fiscal health, an essential condition for job creation and economic growth. We are rethinking the government's role so that it better serves Canadians and the economy. We are securing the future of social programs, viable and fairer programs which help the most needy. We are investing in the future in order to provide new opportunities for Canadians in key sectors.

When we came to office three years ago, the economic challenges seemed daunting. We have taken dramatic action and as a result the economic and fiscal fundamentals in Canada are strong and improving. We will neither squander that progress nor abandon Canadians along the way.

I urge all hon. members to support the 1996 budget and help us get on with the job of securing Canada's future.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Madam Speaker, I listened attentively to my colleague's speech. Finally, he himself stressed the weakest element in the budget speech and the budget itself.

Today, we are experiencing a completely new situation in that there is economic growth, but not necessarily employment growth. When speaking of restoring hope among Canadians, we have to ask ourselves one question: Does the government have any solution that will give jobs to young people coming on the job market and to workers evicted from the work market by new technologies? Those are two categories of people who, today, cannot find a place on the job market despite the economic growth. Considering the budget's content on this aspect, it is not very promising.

I ask the hon. member: Would it not have been better if the government had sent positive messages by making an asset out of the UI fund surplus? By cutting premiums or in some other fashion, the government could have made this money available instead of using it only to cover the deficit. Is the UI fund's surplus not something that should have been addressed in the budget speech as something that could become a positive instrument?

The second element is: What message are you sending to Quebec regions for example when you make it so that the Fonds de solidarité des travailleurs-something that works, that allows capital venture investment of funds provided by workers-is less attractive under the Income Tax Act? That will certainly not help solve the job issue.

The third part of my question is this: How can the federal government simply establish what it calls a technical committee on business taxation, when time and time again for the last two years the official oppsition has been asking for a review of business taxation? After two years and a half in office all the government does is to establish a technical committee. It says that this committee will be made up of economists and taxation experts, but no one will be representing the social view so people can come and ask questions on human resource utilization.

In this society of ours, instead of being evaluated only according to the gross domestic product, why could we not be evaluated also on the way we develop all our human resources? How can we ensure that when 45 or 50-year old workers are laid off because of technical changes, they have an alternative, something to help them start another career. While there was still time before the next election to take concrete measures in favour of job creation why did the federal government not really give priority to the employment issue in this budget?

Why is the government not dealing with current issues?

[Barry Campbell, Liberal, St. Paul's, ON]

Madam Speaker, beginning with the last point on the technical committee, I thought that the opposition members wanted to study business taxation and other taxation issues. What they are saying is that they know exactly what to do right now, so let us just do it. Let us not consult with anybody who disagrees with our opinion. Let us just do what they say. We see things differently. We think Canadians want into the discussion and the process.

As for measures with respect to employment, the budget is right with those suggestions. As the opposition appears to be doing, I would not belittle the investment being made in youth. For instance, let us focus on the $315 million in budget savings which will be put into new employment opportunities specifically created for youth.

Let us not overlook, as the opposition is apparently doing, the technology partnerships Canada program which is laid out in the budget which will bring direct results to the province of Quebec. It has depended to a great extent on the previous DIP for high tech and important jobs for young people.

Let us not overlook, as they seem to want to because they do not want to remind the House, improved funding, increased capital for the Business Development Bank of Canada and the Export Development Bank. That translates into investments and jobs.

Let us not overlook getting the fiscal fundamentals right. That will also contribute to lower interest rates and more jobs.

[Jesse Flis, Liberal, Parkdale—High Park, ON]

Madam Speaker, since this is the first time I am addressing the House in this session with you in the chair, I congratulate you on the position. I know the decorum of this place will certainly improve with your excellent skills.

I congratulate the Parliamentary Secretary to the Minister of Finance on his address to the budget.

I was very pleased that he and the budget stressed the importance of protecting the rights of our children, especially the rights of children in a split marriage. Most parents, whether they live together or are separated, have the interests of their children at heart and provide support payments. However, there are always a few chronic defaulters who use children as pawns and do everything possible to delay the payments, to decrease them, et cetera.

I wonder if the parliamentary secretary could tell the House if there is anything in the budget plans to pursue chronic defaulters. It is not the other spouse who suffers; the children suffer.

I am pleased that Parliament is addressing the rights of the children.

[Barry Campbell, Liberal, St. Paul's, ON]

Madam Speaker, the budget and in particular the new child support package do contain measures with respect to enforcement.

Contrary to members of the third party who seem to feel we should look to the Income Tax Act to induce spouses to support their children, we believe that responsibility is there regardless of the Income Tax Act. We believe that parents under a court order or who have an agreement to pay certain amounts should meet those obligations. I think we all believe that parents have that obligation whether or not they have a written agreement to that effect. It is one of the fundamental principles of being a parent.

In specific terms we are proposing as part of the program to deal with chronic default, with which the hon. member was concerned, a number of features: a federal licence suspension initiative; extended searches to trace defaulters; broader powers for the diversion of federal pensions; generally supporting those ideas with enhanced consultations with the provinces. To a great extent this is a matter of provincial jurisdiction. We are working very closely with the provinces on this matter which is of interest to all Canadians.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Madam Speaker, I was looking at some economic statistics, some of which were in the budget, which indicate that in the first quarter of this year we have for the first time in some 23 years begun to turn the curve on the debt to GDP ratio.

The opposition may not believe that. It comes from the University of Toronto's policy analysis group. It is a major change in direction.

On a national accounts basis our cash borrowing needs for the year 1998 will be zero. That is a computer projection for the year 1998. That basically says we will not have to borrow any new money to finance the deficit.

I wonder whether the parliamentary secretary can confirm for us that our budget projections and the direction which the minister has taken in the budget will bring us to those computer projected goals.

[Barry Campbell, Liberal, St. Paul's, ON]

Madam Speaker, I will not comment on those specific projections because I have not seen them.

However, looking to the budget documents, taking us to 1997-98, in that year our financial requirements will be 0.7 per cent of GDP, the lowest in a long time. The debt to GDP ratio in that year will be declining. Those two ratios will continue to improve after that.

[Michel Gauthier, Bloc, Roberval, QC]

Madam Speaker, it is always a great moment in the life of a government and in the life of politicians when a budget is introduced. It is an important moment as we can tell when we see the media bustle feverishly around the House of Commons or the Quebec National Assembly trying to see, to understand if what is going to be announced will have some impact on our lives. They try to find out if all the affirmations made some days earlier in the different media, in the newspapers-a tax on this or that-will be confirmed and if the government will once again hit the taxpayer with new taxes or increases.

In this case, I watched the media this morning and I read all the documents that the Minister of Finance tabled in the House. I worked with my hon. colleague from Saint-Hyacinthe-Bagot, who is the critic of our party on these matters, and with assistants to try to find out what the Minister of Finance had said and especially, what he had not said in his budget speech. I came to the following conclusion: either the government is short of ideas or it is preparing to call an election. We are going to discuss both scenarios.

I repeat: the government has no imagination. I know that you are going to ask me to prove it and it will be an easy task. Experts admit that they have not seen such a minor, feeble, watered-down budget tabled in the House for in a very long time. The Minister of Finance gave us some general indications on the state of the economy, on his deficit predictions, on the state of the debt. He mentioned a few small programs here and there, made some nicely put announcements, but his speech did not really respond to the need to know of parliamentarians and experts alike.

I decided to push my analysis a bit further. I looked at the documents. I took this one, The Budget Plan tabled in the House of Commons by the Minister of Finance . On page 14, we can read ``Direct budget savings''. Everybody knows, citizens asked us that, that the government's first objective is to reduce the size of the government. We absolutely must succeed in reducing the size of our governments, particularly the federal government, which is the biggest. The government must learn to withdraw, to do more with less, to reduce the size of its departments and organizations.

I tried to determine what direct savings would flow from this budget. Normally, in a budget speech like the one that was delivered yesterday, the finance minister tells us that the government will reduce its spending by three or five billion dollars. That is normally what the minister should have done, but he did not. That made me think.

I checked again and found that there will be absolutely no direct savings in the 1996-97 budget-and I use the minister's own numbers, Madam Speaker. None, and that is not much. There will be no savings in 1996-97. Zero savings, zero for the Minister of Finance. In 1997-98, the savings will reach $0.2 billion. I must come to the conclusion-and that can be checked-that the net impact of the budget on the reduction of the government's size will be nil. Zero again for the Minister of Finance.

That shows that the government is unable to reduce its own expenditures. But you will object that according to the estimates tabled this morning by the President of the Treasury Board, there will be some budget cuts.

All these cuts result from previous budgets. As he is used to, the finance minister announced long term programs. We hear about cuts, but they will apply only next year. The cuts he talked about last year will show up this year in some departments. This year, the minister tells us that he is not cutting, which means that he considers he has finished downsizing the government. To me, that shows a considerable lack of imagination.

After realizing that he had not cut spending, I decided to find out what he himself said in praise of his budget. I checked the document giving an overview of the 1996 budget. These documents from the Minister of Finance are quite interesting. In the first section of this document, the finance minister and his government talk about "securing our financial future". This is interesting. What they fail to say is that we will be paying for a long time. Let me explain.

First of all, they say that the deficit will be cut to about 3 per cent of GDP, as though this 3 per cent was the ultimate objective, the philosopher's stone. Our spending will be cut to 12 per cent of GDP, which, according to the Minister of Finance, is a great achievement. So 3 per cent of GDP, 12 per cent of GDP, and then next year's goal is to bring the deficit down to 2 per cent of GDP.

I, however, looked at a different set of figures. This looked interesting. Like many others perhaps, I thought that the minister had done a terrific job and was on the right track, and then I looked at some other figures. The reality is this: Canada's debt exceeds $600 billion, or $20,000 per Canadian. This is quite something. I am not talking about 3, 2 or 15 per cent of GDP, but about the debt that we will have to pay: $600 billion, or $20,000 for every Canadian man, woman and child. Most interestingly, since this hon. Minister of Finance took the helm two and a half years ago, he has added $110 billion to the debt-as I figured out with my friend, the Bloc Quebecois' financial expert.

In the last two and a half years, this minister who brags about a budget with nothing in it has increased the debt by $110 billion, or $3,700 for every Canadian man, woman and child. Did you realize that, since the Minister of Finance took over this portfolio, he has borrowed or incurred a debt of $3,700 for every Canadian-for everyone of us in this House, for every person listening to us, for every member of our families, for each of our children and grandchildren, for everybody we know. That is a huge amount of money.

I looked at another figure that is more significant than the 12 and 3 per cent of GDP. Thirty-six cents out of every dollar we pay in taxes-and we know what a tax dollar means-go to service the debt, to assume our collective responsibility for this debt.

How can the Minister of Finance submit a budget he claims to be proud of? How can he brag and say: "You see, we are reaching our goals"? The finance minister thinks he is a good manager who meets his targets, but his figures are meaningless for Canadians, considering that, in the last two and one half years, his government put them $110 billion deeper into debt, for a total of $600 billion, that it put an additional burden of $3,700 on each of them, bringing the total to $20,000 per capita, and that 36 cents of each dollar goes to the service of the debt.

I decided to go a little farther in my analysis. You will understand that I was disappointed to see the state of public finances, given what we were told by our friend the Minister of Finance. So, I went a little farther. In that same brochure, which MPs will use to sell this budget, it says: "Getting the government right". I find this rather cute. "Further action is being taken to define a more appropriate and effective role for the federal government".

There is also a reference to Parliament's effectiveness. "In the modern Canadian federation, most departments will have their

budgets cut-". Etc., etc., etc. I checked it out. I kept searching. I certainly did my homework, Madam Speaker. I consulted a brochure tabled by the President of the Treasury Board on the role of the state.

I expected, like most Canadians I am sure, to learn that the federal government would withdraw from certain areas, given that it is involved in numerous fields that do not come under its jurisdiction, that it does not even comply with its own Constitution in that regard, that it is way too big, cumbersome and loaded down with debts, that it has difficulty making good decisions, and that it is overburdened by its bureaucracy. I would have expected the government to say that it would withdraw from certain areas. We could have expected the federal government to give back to the provinces the areas of jurisdiction that belong to them, to put an end to all the duplication and to totally abolish some of the services, which are provided by some departments that have no business providing them, and which duplicate services provided by other levels of government.

I found some real gems in this document. According to this action plan, the objectives of the federal government are to: "strengthen our economy and economic union to ensure a prosperous country for ourselves and our children-that is so nice; enhance social solidarity in Canada-in preserving and modernizing the social union so that the caring and sharing society is truly Canada-wide in scope-this is really fine; pool our national resources to achieve common goals efficiently and effectively; protect and promote Canadian values and identity while celebrating our diversity; and defend Canada's sovereignty and speaking for Canadians collectively on the world stage".

I found in the document a lot of principles and a lot of things that look quite trivial when you read them in a brochure like this one. However, when you know about the federal government's propensity to centralize and to interfere in areas of jurisdiction where it should not get involved, I think you are right to worry about the centralizing hidden behind all these nice principles.

So, I reread the throne speech, the budget speech, and realized something: the throne speech indicated that "the federal government would not intervene in areas of exclusive provincial jurisdiction". One must know the real meaning behind these words. "The federal government would not intervene in areas of exclusive provincial jurisdiction without-"

[Some hon. members]

Ah.

[Michel Gauthier, Bloc, Roberval, QC]

"-without the consent of the majority of the provinces". Which means that if the majority of the provinces consent, the federal government will interfere in areas in which it has no business.

Instead of withdrawing, of minding its own business, of simplifying its machinery, the federal government has chosen to interfere still further in areas of exclusively provincial jurisdiction.

How can anyone conceive of a country where the main occupation of a government consists in seeking out areas of jurisdiction that do not belong to it, just to stir things up? To my knowledge, the only government that does so is the government in Ottawa.

Evidence of this is easy to find. We have been told of the creation of a Canadian securities commission. This is an area in which the federal government has never been involved and in which it has no business being involved, one which will require it to rehire staff, to create a structure, to duplicate what is already being done in Quebec, to complicate things. And why? In honour of what? In honour of its so-called mission, or what it thinks is its mission.

The federal government has also announced its intention of creating a Canada revenue commission. "It would be good if there were only one collector for all taxes in Canada". In the course of history, not only has the federal government funded its war efforts through powers of taxation it did not originally have under the Constitution, but now as well it wants to collect taxes on behalf of all of the administrations in Canada. If this is how a government acts when it wants to cut back, to trim the fat, to mind its own business, my goodness, I wonder where we are headed. Over time, there is an increasing tendency for the government to want to poke its finger into areas where it has no business being.

Some may reply that it might be worthwhile to eliminate duplication. That could be the case, if there were only one department of revenue, one national commission. Have you noticed how the federal government is in a rush to do away with duplication if that means cornering all of the powers for itself, and how reluctant it is to return those powers to their rightful owners?

Not only is the federal government incapable of cutting its expenditures, not only is it incapable of staying within its own federal role and of leaving the jurisdictions of others alone, but on top of that it refuses to act in areas where it ought to have responsibility, employment for one. How many job creation measures-and this is another way of looking at the budget-did the Minister of Finance announce? Is the minister aware of the need to take action to create conditions that are conducive to job creation in this country?

"Jobs, jobs, jobs", as they were saying during the election campaign. So I checked. Did the minister announce major job creation measures? Although, in the budget document, the government claims to be investing in future jobs and growth, students and their families get nothing but crumbs: $165 million over three

years. In the last budget, the minister cut student funding by half a billion dollars. Last year, they cut half a billion dollars but this year, they are investing in jobs and setting aside, for example, $165 million for students.

Have you ever seen anything like it? On the one hand, they cut millions of dollars and, on the other hand, they give away a few crumbs while bragging: "We took action to stimulate employment. We are reallocating $315 million over three years to create new job opportunities for young people by, among other things, doubling the funds for student summer employment". The federal government is incapable of taking action, of making changes, of supporting provincial governments adequately in their efforts to promote economic recovery, but it keeps unemployment hovering around 10 per cent in Canada and it tells us: "We have allocated $165 million for students and their families, $315 million, over a three year period, for new job opportunities, including summer jobs".

The government shows a total lack of vision. This is a trim down budget. There is nothing regarding what was asked of the government itself. There is nothing about stimulating the economy. The only thing this government made in recent years was to ask other governments to make an effort. Indeed, the federal government asked provincial governments to absorb part of its deficit. It asked the provinces to absorb a total of $7 billion.

It is easy for the federal government to lower its deficit when it tells the provinces: "Look, you will no longer receive the money that you used to get from us". So much for that. This means a shortfall of $7 billion for the provinces. It also means $5 billion less each year in the UI fund. It is easy to tell the unemployed: "Listen, there is a surplus of money in your fund, even though the government does not contribute one penny to that fund. That surplus of $5 billion per year comes from your own contributions and those of your employers. Nevertheless, we want to put that money in our pockets. This is part of the federal government's budgetary effort".

Some $7 billion less for the provinces and about $5 billion taken every year from the UI fund. And the Minister of Finance tells us that these cuts will be maintained over a number of years. The minister says: "Look at how good I am. I reached my objectives. I am a remarkable administrator and, in addition to all that, I also injected a few million dollars into the employment sector. Let us hear it for me, after all I am the best finance minister this country has ever had

We are not fooled by the message that was delivered to us. The Minister of Finance has tried to disguise the bad news for the unemployed and for the women who will lose their financial autonomy when they reach retirement age, as a result of the changes the minister wants to make in a few years in the old age security program. So, bad news for the unemployed, for women, for young people too, who will be bearing the brunt of the sizeable cuts imposed upon them by the minister, despite the few millions announced. Bad news for those who were hoping the federal government would finally learn to mind its own business and stay within its own areas of jurisdiction. Bad news, too, for those who had hopes that the government would finally trim some of the fat and become more productive.

In short, this budget reflects one of two things: either the minister has totally run out of new ideas, no longer knows what to do, is running out of energy, sees himself as unable to do more and is settling for apologies about what he has done in his time as minister, or the government is getting ready to go to the people and is trying to butter them up a bit, to use a bit of subterfuge, to say "Well now, things may not be all that great, but neither are we all that bad a government after all".

Before I close, let me say that the people are not fools. We will never be able to accept a government that has put us into debt to the tune of some $3,700 per person in the past two and a half years still wants to invade areas of jurisdiction that do not belong to it, nor will we accept its refusal to trim the fat as it should, or that it is now coming to us with the explanation that the provincial governments need to do their part, need to reduce their deficits, need to assume the federal deficit, in short that it wants to direct things on behalf of everyone within the Canadian federation.

I will be frank: Quebecers cannot accept such a budget. It is a cosmetic budget, one hiding the truth, one which may help the Minister of Finance and his government to hold on for a few more months, but it does not address the underlying problem. It does not address Canada's true financial situation, which is a disaster from all points of view. I believe that people have more respect for those who have courage and who know how to call things by their right name than those who try to disguise them with politics. This is a lesson the Minister of Finance ought to take to heart.

[Bernie Collins, Liberal, Souris—Moose Mountain, SK]

Madam Speaker, it is a pleasure to speak in the debate on the budget presented by the Minister of Finance. It contains measures to satisfy the main concerns that I brought forward on behalf of my constituents.

I would like to take a moment to go through some of the concerns of the constituents of Souris-Moose Mountain. Interest rates affect everything we do. Even a 1 per cent increase can mean a great deal to homeowners, farmers, those who wish to purchase machinery and to the mining companies if they are looking to expand their staffs or their businesses. Interest rates have come down over 3 percentage points since 1995.

The act of keeping our fiscal house in order and doing it in a rational and balanced way is paying off. A lower deficit means lower interest rates, growing confidence in new investments leading to more jobs and growth. That means jobs for young people as

well. For us in Souris-Moose Mountain it offers an opportunity for hope.

This budget offers a framework for that opportunity. We are encouraging education for young people, increasing tax benefits for students to allow them to continue, using summer employment as a mechanism.

Jobs will also continue to come from increased trade. That will continue to be a priority of this government.

One other thing that businesses in my area are concerned about is taxes. I am pleased to say we have set up a special technical committee to review the tax system to make it simpler and more effective. One more thing businesses are pleased with, and several phoned me last night, is we will make sure that banks do not enter into the insurance and the car leasing businesses. I am happy to announce that we have stayed the course and we recognize their concerns.

My constituents told me: "Do not raise taxes". I can tell them there are no tax increases in this budget. There have been no personal tax rate increases in any of the three budgets since we were elected as the government.

We continue to meet our deficit targets and to restore faith in our fiscal management through getting government right: reducing overlap, reducing waste and setting priorities that Canadians want.

Another thing that is extremely important to my constituents is security for families now and in the future. That is why all of these actions in the budget are very positive for stability and sustainability. We want our programs to still be there for our children.

In this budget we are acting now to ensure that social programs are affordable and will be there for Canadians in the future. We will restore growth to transfers to provinces and we will secure stable and growing funding for health, post-secondary education and social assistance.

Let us examine for a moment the Saskatchewan situation. The CHST transfer to Saskatchewan will increase $50 million over the next five years. From the years 1998 to 2003 we will maintain that base level. As well, Saskatchewan will of course continue to benefit from equalization.

Following consultations with the provinces, this budget put the CHST on a secure footing. There will be no further cuts to the CHST. It sets out new five year funding arrangements in which transfers are maintained and then grow.

Also important to Saskatchewan is the federal equalization payments because they will grow also. There are arrangements to safeguard medicare, which is very important in Saskatchewan, and our social programs, and restores stability and predictability for provincial governments.

This is the first time since the mid-1980s that the federal government has taken action to increase growth in these transfers. Our fiscal discipline is paying off. Getting our house in order and setting priorities has allowed us to now budget in growth in spending in the areas that count.

Speaking of these changes, many constituents have been asking since the time I was elected to do something about the taxation of child support payments. It is now done. As of May 1, 1997 child support will be paid but will not be included in the income of recipients for tax purposes, nor will it be tax deductible for the payer. This is only part of the child support package which puts the emphasis where it belongs, on the welfare of the child.

Many seniors have asked us to address their concerns with security for their grandchildren and security for themselves. I am pleased to see a new tax free benefit for seniors that will replace the old OAS and GIS benefits and will secure and ensure the long term stability and sustainability for seniors' pensions.

These seniors benefits will help those who need it most while streamlining the program. It will make the system fairer. It will guarantee that all current seniors, in fact all those who are over 60 years of age now, will receive no less than the current pension benefits. Most people will receive the same or more money under this system.

We in Souris-Moose Mountain in the rural agricultural area of southeast Saskatchewan are heavily dependent on agriculture. These actions have a large impact upon us. As well, we endure many restrictions due to our rural nature. We must overcome distance and resource barriers to be able to contribute to the economy and support ourselves adequately.

This budget builds on actions in the last two years that laid the foundation for changes in the west. Spending reductions, elimination of waste and overlap made room for spending in research, adaptation initiatives and trade. We need to see a continued focus in these areas laying the infrastructure or framework for a new revitalized agricultural sector.

Subsidies have been eliminated and change is upon us. We need adjustment assistance for this major change. And so it has been delivered. This budget will see the time frame accelerated for distributing $300 million in the western grain transportation adjustment fund and $72.6 million under the feed freight assistance adjustment fund.

Just this morning I spoke to the president of the Saskatchewan Association of Rural Municipalities, Sinc Harrison. He said how pleased he was that the government is moving quickly to put money into the hands of rural governments in a faster and fairer manner.

Adaptation support is needed. And so our government delivers again. Direct producer delivery mechanisms for federal funding will set up adaptations and rural development funds and other adjustment initiatives.

We continue to consult with producers and other stakeholders toward a more efficient grain handling and transportation system. We will be selling 13,000 hopper cars. We will continue to discuss with producers the most efficient way of doing this.

This is the kind of budget my constituents have asked for. It is fairer across the board. It deals with all regions of Canada. It secures a future for us both fiscally and socially.

As I travelled throughout my riding, constituents raised concerns. They did not want a fuel tax because we travel such a large area. There was no fuel tax. Others wanted streamlining. The minister has streamlined to make the Government of Canada run more efficiently.

I have had the opportunity to talk about youth employment programs. I talked to the mayor and some councillors in Broadview. They were really impressed with our youth employment program. I am glad to see we are going to double the youth employment program this summer to meet the needs of those students who want to go on to post-secondary education.

In summary, let me say I am happy to be one of Team Canada's players. In a country as diverse as ours, it is a real privilege for each of us to be able to be part of a team that sets objectives and goals and meets them. We do not just talk about them; we meet them. We have set the challenges for the years to come. I know through our Minister of Finance and all who are involved we will meet those challenges.

[Ghislain Lebel, Bloc, Chambly, QC]

Madam Speaker, I listened attentively to the remarks by the member who just spoke and I am tempted to ask him the following question: "Could it be that his political partisanship is making him totally blind?"

When comments are made on a budget as important as the one tabled yesterday, people have the right to know what it will cost them, what awaits them, what are the risks in job terms, what about their own jobs, how big is the debt. The Minister of Finance talks of 2 per cent of the GDP, 3 per cent of the GDP and 15 per cent of the GDP.

[Ronald J. Duhamel, Liberal, St. Boniface, MB]

Of course, one must understand.

[Ghislain Lebel, Bloc, Chambly, QC]

Would you be please quiet. It is a bit as if I took the minister's hat size, divided by his shoe size, less his waist size and said: "There is the amount of your debt". If he puts on weight, it does not work anymore. The same is true for the GDP.

We want Canadians to know that they are in debt to the tune of $20,000 each, babies born this morning arrive with a $20,000 debt. In the past two years, we have added $3,700 to their debt load and to that of those who are not yet born, but are on the way.

I do not think we can close our eyes. The government appears to be acting like a windsurfer who has just come off a great big wave and is on the flat part of the wave. He is turned sideways and is getting ready for the next wave, whenever and however it comes.

This is what a budget plan is. You have to invent, think of the next wave. Right now we are talking about 10 per cent unemployment. Some 400,000 workers in Quebec alone were added to the welfare rolls last year. They are not considered unemployed anymore, and our statistics are therefore lower. But there are people who are not eating or eating very little. The member, with every good intention, I am sure, refuses to see the data of the problem.

My question is as follows: Does the budget tabled by the Minister of Finance meet his expectations? Is he ready for the next wave? He has not convinced me that he is.

[Bernie Collins, Liberal, Souris—Moose Mountain, SK]

Madam Speaker, it is a pleasure to respond to the series of ramblings by my friend from the Bloc.

I certainly do know what it is like for young people. Having eight children and ten grandchildren, I know what they are going to face as they come into the challenges of the future.

What we have done as a Team Canada approach is we have said that we want to lead. When we came in as government there were a series of things we had to do. We had to set some targets. We set those targets and surpassed them. If the member wants to review those I think he should. Let us put them in factual order and see what has happened with this government over the years we have been here. The member may be well advised to check with the new premier of Quebec to see what he will do with the challenge that faces him as the premier of that province.

Yes, it is not easy. No, I do not like to see those who face unemployment. On the other hand, I do say that the task we have been dealt is a serious one and one we do not take lightly. We will continue to set the goals and objectives, whether it is for the youth, the old, or the unemployed. They will know this government is committed to meeting those challenges. They will know that as they come into the workforce there will be a job. If the member had only followed Team Canada he would know that for every billion

dollars of new funds we were able to create in the way of exchange 11,000 new jobs will come into the Canadian economy.

There is a reality there and the member has to address it. Perhaps once he has done that, he will agree with us and will be more than happy to support this budget and the work of the Minister of Finance.

[Rose-Marie Ur, Liberal, Lambton—Middlesex, ON]

Madam Speaker, I would like to address a question to my hon. colleague who spoke most eloquently. It is with respect to the youth and seniors in his rural riding.

In the budget last night there was the community access component of the SchoolNet. He and I both share a rural riding so I know how important the low cost initiative aimed at helping 1,000 rural communities to participate in this knowledge based economy is to my hon. colleague. I would like my hon. colleague to explain to us how this will affect his riding and how beneficial it will be to youth.

[Bernie Collins, Liberal, Souris—Moose Mountain, SK]

Madam Speaker, it is a very important topic for us in rural ridings whether in Ontario, Saskatchewan, New Brunswick, Manitoba or Prince Edward Island. We have to ensure those people in the rural areas will be part of this whole country.

Through this program I am pleased to see that seven of those Internet arrangements were allowed to come into my riding. Now a series of others want to get on to it because it is a program that brings us in very close contact with one another. It provides us with vehicles through the communication network we did not have before. This brings us together because we have distance barriers of rural ridings. It allows us to communicate almost instantly.

In the agricultural sector I have grain farmers who are so excited that they can now use this as a basis for communication worldwide on almost an instantaneous arrangement.

I thank the member for the question. It is a very important aspect of our whole budget proposal and it will take us forward into the next century.

[Ronald J. Duhamel, Liberal, St. Boniface, MB]

Madam Speaker, it is now my turn to talk about the budget and I am doing it with great pleasure.

I would like to start by congratulating my colleague from Souris-Moose Mountain on his speech, which I found quite eloquent and which helped clarify the content of the budget.

Here we go again, as you probably noticed. The opposition parties are saying all kinds of nasty things on the budget. What is interesting is that it is not at all what is being reported by the media. What are people with no political connection saying? Let me share it with you.

Earlier, you heard the Reform Party members and their magical solutions, simple solutions to complex problems; such is their political platform. I am looking forward to seeing what kind of solutions the nearly defunct New Democratic Party is going to offer. What could the Progressive Conservative Party have to say, it is already extinct.

What concerns me is that the Bloc has already started to spread information; in a little while, I will read a quote showing what I mean. Let us look at what today's papers are saying. Le Devoir : No tax increase in Martin's budget. The Bloc and the Reform do not like this, but Canadian people do. Le Droit says it is a good budget. We read in La Presse : ``What the Minister of Finance is telling us is that it is quite possible to wrestle the deficit and yet remain compassionate; he is also telling us that fiscal responsibility is possible without an abrupt change in direction, contrary to what we have witnessed in Alberta and Ontario.'' This is what La Presse is saying.

The Ottawa Citizen said: The budget is a compromise between relief and austerity''. The Winnipeg <em>Free Press</em> said:Budget Boosts Buck'' and Blueprint Encourages Economists''. <em>La Presse</em> :$480 million for young people''.

The Financial Post said: Old and young to reap rewards from continued program spending cuts''. The <em>Globe and Mail</em> said:Education, Jobs to Receive Boost'' and ``Students, Families Get Relief from Taxes''.

This is what the media are saying. The vast majority are praising the budget. They are saying, with great eloquence, that the Minister of Finance gave us a budget that answers the needs of Canadians; they are saying that he listened and responded.

But what happened to the Bloc? They used part of a quote that I will repeat for you: "The government will not use its spending power to create new shared-cost programs in areas of exclusive provincial jurisdiction without the consent of a majority of the provinces". They stopped there. But that was not the end of the paragraph, the rest said: "Any new programs will be designed so that non-participating provinces will be compensated, provided they establish equivalent or comparable initiatives".

Why did the Bloc use only half of the quote? Obviously because it does not want it to work. This is regrettable because the Bloc ought to have been perfectly frank, totally honest and open.

Now, I am going to talk about the four main themes of the budget. The budget of Canadians: securing their financial future in a number of key areas; reaching or exceeding financial objectives; consistently reducing program spending. There is much information proving it is being done. We are going to rethink the role of government. We will take measures to determine a more appropriate role in the context of a modern federation economy. We will guarantee the future of our social programs, restore trust in the old age security system by providing long term sustainability, and guarantee the security and stability of federal support for health care, postsecondary education and welfare. We will also invest in the future, reallocate funds to make new investments, provide help for young people and support technology and international trade. These are essential areas for job creation and future growth.

I would like to be more specific on some of these points. I will talk first about the investments in our future as they are described in our budget, but before that, there are some details we must remember and repeat. There are no new taxes.

There is $2 million in additional government expenditure reductions. This marks the point at which the Canadian economy begins to gain on the accumulated debt. This is a historic, meaningful and significant happening.

There will be investments in our future. To ensure our future and restore the confidence of Canadians, job creation and financial growth are a priority in the budget; the government has allocated resources to new investments in three main areas: youth, technology and external trade.

Action in these fields is not an increase in expenditure but is financed by budget savings through reallocations from lower priorities. Government cannot solve Canada's problems by simply throwing massive sums of public money at them. This is what has created our difficulties in the past. Instead, we must create an economic and social environment which will encourage the economic growth that makes sustainable new jobs possible.

There is still much work to do, unemployment and youth employment in particular. Therefore taking a collaborative partnership oriented approach to building an environment propitious to economic growth and employment is of utmost importance. We need low inflation, low interest rates and declining deficits because these are all critical to the future of our nation, to the future of Canada.

Let me talk for a moment about youth. Most of us will know that the unemployment of youth, those under 25, is very high; it is in the neighbourhood of 16 per cent. This therefore needs to be addressed. They are the key to our future and we must never forget that. We need to enhance the educational opportunities that will lead to jobs. We must help young people get their first jobs. In that objective I applaud the government for asking profitable businesses to reach out and do exactly that.

It is a very commendable initiative and I see some colleagues in the opposition parties nodding; no doubt it means they agree. I am very happy to see that agreement because it does not happen often enough here.

Let us talk about the learning package. There is an additional $165 million in tax assistance to students and their families over three years. There is 25 per cent in educational tax credits and tuition fee limits.

The ceiling on annual contributions to an education savings plan has been raised. Some help is given to low-income parents living alone in the form of a tax deduction for child care; there is also help for secondary school students; that is a new initiative.

Two-parent families are also eligible for the deduction if both parents are full time students. The current age limit for the deduction will be raised from 14 to 16.

There is $315 million dollars for new employment opportunities.

Seven hundred million dollars are already provided through such programs as Youth Internship Canada, Youth Service Canada and summer job programs.

We will double government commitment to summer job programs, from $60 million to $120 million. With these $60 million we created 30,000 jobs, so we hope to double this number. The remaining funds will be used to improve job possibilities for young people in innovative sectors: information technology, environmental technology, tourism, culture, trade and international development.

These investments will build on a new domestic Team Canada style partnership between business and governments to create entry level jobs for youth.

With these new funds, $315 million reallocated and $165 million in tax expenditures, the budget brings total expenditures for youth-specific programs over a three year period from $700 million to $1.2 billion.

I conclude by saying that I could have gone on for another two hours. I am sure that had I seeked unanimous consent of the House the answer would have been yes.

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Madam Speaker, since this is my first speech since you became Acting Speaker, I wish to congratulate you on your appointment.

I would like to share my colleague from St. Boniface's optimism regarding the budget. Unfortunately, like all government members, our colleague from St. Boniface merely watched the finance minister's show in this House yesterday and let himself be hypnotized by the minister's oratorical performance.

What government members failed to do is read between the lines; it is one thing to listen to or read the budget speech and quite another to appreciate or analyze the impact of this budget.

I will take the hon. member for St. Boniface's own example, because I want to give him the chance to repent and perhaps correct what he said in this House a few minutes ago-I will take his own example, student assistance. I will get to my question in a minute if you allow me to continue.

Regarding student assistance, the hon. member reminded us that the budget sets aside $375 million over three years for student summer employment. This is a panacea, the find of the century.

The hon. member fails to mention that, as a result of the cuts to the Canada social transfer that were announced last year, which for Quebec alone amounted to $600 million last year and $1.2 billion for the coming year, Quebec's finance minister will probably have to raise tuition fees by a significant amount.

The few additional jobs that will be created for our students-and I am happy for them-will not be enough to compensate for the increase in tuition fees. That is one consequence of this budget.

I could go on for several minutes on this, but I will give the hon. member for St. Boniface a chance to immediately repent in this House in front of all his colleagues. I will get back to this later.

[Ronald J. Duhamel, Liberal, St. Boniface, MB]

Madam Speaker, I thank the hon. member for his comments and his question. I would have thought that the first thing he would have done was to explain why the leader of his party quoted only half a paragraph.

It troubled me. If the whole paragraph had been quoted, it would have been obvious that that section deals with trying to meet the needs of all provinces, including Quebec. This worries me a little.

He chose to remain silent, so bet it. But I was also surprised to realize that the hon. member is incredibly pessimistic. Since the budget speech yesterday, we hear all sorts of comments everywhere. The only people opposed are members of the opposition parties. I thought such pessimism was exclusive to Reform members, but I see that it is contagious and that Bloc members have caught it. How unfortunate.

How can the hon. member say that the $700 million to which nearly $500 million has been added, totalling $1,2 billion, does not provide significant help for students? This is really sad.

Moreover, as far as cash transfers are concerned, there is a figure of $25 billion, that will be increased to more than $27 billion. That is a lot of money.

Really, the hon. member looked at only a line or two on one page, and he is using that as the whole basis for his argument. One must look at the whole picture. Optimism and understanding are in order.

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

Madam Speaker, I will be splitting my time with the hon. member for North Vancouver.

I was encouraged to hear that the government has listened to what the Reform Party and many Canadians have been saying all along: Do not raise taxes. However, when the Minister of Finance said that he was staying on course and maintaining the current pace, he may as well have been referring to the reckless spending going on in some areas under the guise of regional and economic development.

We have heard the old rhetoric about the need to eliminate overlap and duplication, yet a slew of government offices are still subsidizing private business with taxpayers' money. Various federal agencies are competing with each other and with provincial bodies for the same client and fighting over which can spend the most tax dollars the fastest. There could be nothing more ridiculous.

The government has talked about eliminating direct loans to businesses. What does that matter if it is still dishing out indirect subsidies? It is just a play on words. The government has no business trying to manipulate the private sector. Not only is this grossly distorting the marketplace, it is creating unfair competition among businesses. It is helping some businesses at the expense of others. The government is propping up the economy and creating a

system of corporate welfare. The government is trying to give us a false sense of security and it is costing us big time.

For example, an audit revealed that 17 failed projects supported by the Atlantic Canada Opportunities Agency have cost Canadians nearly $100 million in grants, loans and loan guarantees. This is just one of many examples of wasted money. As if this pill could get any harder to swallow, the auditors concluded that a good look at the failed business plans would have indicated they simply were not viable.

Government spending entities such as ACOA, western economic diversification and others are actually hurting the people they are supposed to help. Atlantic Canadians pay taxes too. ACOA has put Canadians further into debt. Regional development agencies are nothing but a front for wasting billions of tax dollars on political pork barrelling and patronage.

It is no coincidence that Winnipeg received a disproportionate amount of WED dollars. The WED minister, the member for Winnipeg South Centre, became the patronage saint of pork barrelling after his hometown received a disproportionate amount of WED funding between November 1993 and November 1994. That city received more than $12 million. The next highest was Vancouver. Despite its larger population it received just over $2 million. Calgary and Edmonton combined received just over $3 million. There was also the outrageous patronage in Atlantic Canada during the last ACOA minister's reign.

The government cannot continue its reckless spending to buy taxpayer votes using its own money. Regional development agencies must be eliminated as soon as possible. The savings will put a significant dent in our $600 billion debt.

Consider also the senseless waste of money through administrative and overhead costs of WED, ACOA, the federal economic development initiative in northern Ontario and the Federal Office of Regional Development in Quebec. For example, WED has an annual budget of about $478 million.

Add to that list numerous other organizations that grant loans and waste government money. There is the Business Development Bank of Canada, the business development centres, aboriginal business programs, business service centres, women's enterprises centres, community futures offices and others. On top of that the provinces have their own economic development initiatives. These various offices are competing for the same client. They are all funded from the same source, the same taxpayers. These organizations report to different people in different governments.

Ultimately the government's right arm has no idea what the left arm is doing. We have a number of players involved in one game: handing out government money. Too many cooks are spoiling the broth. The pot is already bubbling over with debt. It is rising at $95 million per day and $1,000 per second.

In many cases these organizations refuse to release details of their dealings in the interest of client confidentiality. They are not accountable to those who foot the bill: the public. Canadians get angry when they hear of their money being used to fund businesses that are competing with others. There is the potential for one government funded business to push another publicly funded business into bankruptcy and render it unable to repay its government loan.

It has been argued that giving the private sector a boost benefits Canadians in the long run because it fosters private sector job creation and diversifies local economies. That is rarely the case. It has also been said that even the businesses that fail benefit Canadians by taking people off the welfare rolls temporarily. This is misleading. In reality, while some businesses are temporarily up and running, others are thrown off kilter.

ACOA reported to Parliament that it had created 42,000 jobs between 1988 and 1992 but could not back that claim with any evidence except a Price Waterhouse study of which officials refused to release details. An audit found the agency had based some of its success statistics on proposals rather than on results. There certainly has been a lack of consistent monitoring of long term results by the regional development agencies. Simplifying the tax system to encourage private sector job creation would have been a much healthier way to go.

ACOA has a long history of reckless spending. For example in 1990 it invested $13 million in a wallpaper company that failed, then later paid its loans and the bills to clean up the hazardous waste it left behind.

Why do large firms that rake in billions of dollars in profits receive government handouts? Between 1992 and 1994 federal aid to large corporations included a $200,000 grant to IBM for employee training and nearly $76 million to Pratt & Whitney Canada for research and development. Multimillion dollar companies do not require scarce tax dollars. WED handed out nearly $280,000 between November 1993 and October 1994 to lobby groups, some of which lobby against the government.

The government's priorities are mixed up. It would rather invest half a million dollars in a Newfoundland golf course when the people of Goose Bay, Labrador are still waiting for a decent road to connect them with the rest of the country. That is not regional development. Regional development entities and other money agencies are supposed to be lenders of last resort. That does not mean giving money out to anyone who asks.

Hagensborg Marine Farms Ltd., a project to build the first land based fish farm on the west coast went into receivership in 1991. The more than $1 million it received from WED is lost forever. Altero Technologies Inc. borrowed $475,000 to produce exercise

machines. The company went out of business and the loan was written off. These are just two of many examples.

It is more tempting for entrepreneurs to launch themselves into risky business ventures when it is other people's money that is at stake and with loans that can be written off. Certainly there are some cases in which it may be beneficial for the private sector to be able to turn to government as a lender of last resort. However, there is a much better way to do it without the tremendous waste of money that has been going on in the past.

First, there should be only one money lending agency reporting to one minister and it should eventually be self-sufficient. That is, the interest it makes off loans would be used to cover its operating costs.

It should not be a slush fund for politicians to dole out cash to favoured individuals. Borrowers would have to meet certain criteria, including presenting a viable business plan. National standards must be established. Any duplication with the provinces must be eliminated. Any Canadian needing business help will appreciate a one stop shopping office rather than getting the government runaround.

Money lending decisions must be taken out of the hands of patronage minded politicians and distant bureaucrats. Decisions must be made at the local level by a board of business people with proven track records. This would help ensure decisions are made with a community's or region's best interests at heart. Perhaps the community futures program could be used as a model since this program has been quite successful in some provinces.

All decisions must be open to public scrutiny. Private banks scrutinize and monitor their borrowers. Why would the public expect any less with its money? If this government is really serious about boosting the economy, it will do so by fostering a good business environment. However, that does not mean giving away free money because there is no such thing. It means eliminating the deficit, lowering the barriers to trade, reducing taxes, lowering real interest rates and enhancing labour mobility.

Taxpayers want real action, not the pork barrel of false promises we have been getting in the past.