Debates of April 15th, 1996

The House resumed consideration of the motion that this House approves in general the budgetary policy of the government, and of the amendment.

The Budget

[Marlene Catterall, Liberal, Ottawa West, ON]

Madam Speaker, I am pleased to have the opportunity to address the 1996-97 budget.

Since the beginning of our mandate in 1993 the government has been faced with many significant challenges. These challenges have been met directly, openly and honestly with the people of Canada.

We all know that too many Canadians are unemployed, that Canadian businesses are still having a hard time, that we must get down to work right away to maintain social programs that are the envy of the world. We all know this, and our government intends to deal with these issues that concern all Canadians.

Much progress has been made to date in achieving the goals of job creation and economic growth, and the sustainability of social programs. The unemployment rate has declined two full percentage points since the Liberals formed the government. Over 600,000 jobs have been created and inflation is at its lowest level in 30 years. Interest rates have remained low largely because of the successful action on deficit reduction. Interest rates are critical to the maintenance of job creation and economic progress.

We have also tackled the maintenance of the health care system and social programs through progressive reviews in consultation with Canadians.

The 1996 budget accomplishes much to complement the work that has been done to date. To progress with the job creation and economic growth agenda, the government has in the budget focused on three priorities: youth, trade and technology.

Despite reduced spending in virtually every area of government activity, spending on youth has been substantially increased. This budget will provide an extra $315 million over the next three years toward creation of jobs for young Canadians. An additional $165 million is being provided for students. The federal government will work closely with provinces and businesses to help young Canadians find that crucial first job.

Since we came to office, Canada's exports have soared. This increase in trade has been the driving force behind job creation and economic growth. Team Canada's trade missions have been highly successful, generating $20 billion in sales for Canadian businesses.

The 1996 budget will further aid the development of exports by giving the Export Development Corporation $50 million in new equity capital for export financing and the Small Business Development Bank $50 million to assist small and medium sized businesses, in particular, to participate in international trade.

I said the third priority was science and technology. Leadership in the knowledge industries means more jobs, lasting jobs and better jobs for Canadians. High knowledge industries have contributed more to recent job growth than all other industries combined.

Over the long term, businesses using new technology will create new jobs faster than old jobs disappear. This is why technology is a key element of the job strategy.

Through the 1996 budget special support is being provided to key sectors such as aeronautics, biotechnology, environmental technology and the development of the information highway. Just one example is the student connection program which will hire 2,000 students to show 50,000 small companies how to use the Internet to help their businesses.

This is an area of investment of scarce dollars that is particularly important for my community and for the national capital region. The region has been significantly affected economically by downsizing in the public service which will amount to a total of 15,000 jobs disappearing over three years starting with the last budget. As we seek to diversify the local economy, local governments, the business community and the federal government working in co-operation, the importance of high technology development to our region is absolutely crucial.

At the same time the government is making efforts to improve the situation of the public service. The wage freeze legislation will expire this year. It will not be renewed. It will not be extended. Beginning in June annual increments to public service employees will again be the order of the day. A return to collective bargaining as the wage freeze legislation expires is something to which we all look forward.

I want to speak very briefly about a couple of things that are of particular concern to my constituents because deficit reduction without tax increases does not come easily and does not come without pain, nor does ensuring the sustainability of social programs like our pension system.

The government is acting to ensure that the public pension system, which has done so much to alleviate the poverty of seniors, continues. It will be done by increasing benefits to the lowest income seniors and by ensuring that those now receiving benefits or within five years of receiving old age security or other retirement benefits will continue to have the right to those benefits.

As the minister looks toward the development of this legislation I want to raise with him some concerns that have come to my attention. First is the very short time frame for implementing the rollover of RRSPs into RRIFs or retirement income. This is causing great concern to people who have made investment plans under the rules that existed. They are saying we need a better phase-in period.

I also want to draw to the minister's attention my concern that the legislation implementing the changes to pensions as well as to RRSPs should pay attention to the need to improve the economic status of retired women. Ninety per cent of the poorest elderly in this country are women. I do not think any of us need an

explanation as to why that happens; work history and a variety of other situations.

We have an opportunity as we implement changes to the pension plan to also equalize the retirement income of women. I urge the minister to do that. I would be happy to share with him some ideas on how that might be done.

In conclusion, this has not been an easy budget. It has involved some difficult choices as has every one of our budgets since 1993. It is a reasonable balance between the kind of compassionate, caring society we want and the fiscal restraint that currently is necessary to get us to a much better future for the entire country. I am pleased to speak today in support of it.

[Leon Benoit, Reform, Vegreville, AB]

Madam Speaker, the member indicated that her government is concerned about maintaining social programs into the future. She is concerned particularly about maintaining pensions.

If that is the case, why does her government continue to increase the amount of money spent on interest payments on the debt from $38 billion to about $50 billion since it has come into power? Why did her government leave in place a pension plan that is totally out of line with what is acceptable to Canadians? If the government was serious about maintaining social programs and pensions, it would not have left in place the pension plan that it has.

How can Canadians believe that her government is really, truly concerned about the future of social programs when its actions say otherwise?

[Marlene Catterall, Liberal, Ottawa West, ON]

Madam Speaker, I think it behoves the hon. member for Vegreville to acknowledge those areas in which the government has made substantial progress.

Specifically the member talked about the debt and the deficit. I sat in this Chamber through five budgets of the previous government and saw threats, promises, cutbacks and sacrifices so that we could get the deficit under control. The deficit just kept going up.

Our government in just two budgets has been able to substantially reduce the amount of the deficit. The hon. member knows very well that in the next two budgets we will have dropped not from 6 per cent of GDP in deficit to 3 per cent as we committed at the last election, but to 2 per cent, in other words not by 50 per cent but in fact by 66 per cent. That will bring the deficit from over $45 billion when we took office to $17 billion by the time our term is over.

Regarding pensions, this is the first government since the MPs pension plan was introduced in the 1950s that has actually reduced it to the tune of $3.3 million worth of savings to Canadians. It has reduced the benefits by over 20 per cent. We have met every single one of our commitments on that matter and have gone beyond them.

Yes, it is still a very generous pension plan. It is one for which, as the member knows, MPs pay very generously as well, far more than most other pension plans. It needs further reform but one cannot disrupt the lives of people who have served in this House for decades by suddenly saying they do not have the pension plan they thought they had.

In terms of the sustainability of pensions generally, 75 per cent of seniors in this country live on incomes of under $26,000. Ninety per cent of the poorest seniors are women who are either single, widowed, divorced or separated.

I regret as much as anybody in this House an end of a universal pension plan which is an entitlement of citizenship. I also realize the necessity of looking after those lowest income seniors when resources are limited. I am pleased that we are going to be increasing benefits to those lowest income Canadians in retirement.

[Leon Benoit, Reform, Vegreville, AB]

Madam Speaker, in the last election campaign when Reform proposed targeting old age security to those most in need, the Liberals promised that they would never end universality of old age security. Now the finance minister has done that.

We could not believe them on the GST. We cannot trust them on old age security. The numbers the hon. member used in terms of deficit reduction are yet to happen sometime in the future.

The Liberal government has made a little progress on the deficit. Canada's debt is the second highest in the industrialized world and it is still being added to every year.

It is so difficult to understand how members of that party can say with a straight face that they are doing what has to be done to assure that the money will be there for social programs into the future because they have not.

[Marlene Catterall, Liberal, Ottawa West, ON]

Madam Speaker, as I encouraged the member to do on his first question and comment, I suggest that he might want to accurately reflect what our government has done. He knows perfectly well that deficit reduction is not something for the future. He knows very well this is the first government in over a decade that has successfully reduced the deficit from $45 billion to $30 billion. That is a one-third reduction in only two budgets and that is a substantial reduction.

On pensions, let me just say we are not like the Reform Party. It wants everybody to have to rely on themselves for their pensions.

[Dianne Brushett, Liberal, Cumberland—Colchester, NS]

Madam Speaker, it is a pleasure for me to rise in the House today to address the 1996-97 budget as presented by the Minister of Finance on March 6.

When our government was elected in October 1993, Canadians from coast to coast to coast told us that reducing the deficit and the debt must be our number one priority. This budget along with our two previous budgets showed Canadians that we have been and continue to be listening.

When this government was elected the annual deficit was more than $42 billion. By the end of the 1995-96 fiscal year we reached the deficit reduction target of approximately $32 billion. We are on target to reach our original goal set for the 1996-97 fiscal year of a deficit of 3 per cent of GDP which will be approximately $24 billion.

The Minister of Finance has already set two rolling targets to take us into the second half of our mandate. These targets will reduce the deficit to 2 per cent of GDP by fiscal year 1997-98. By the turn of the century, by the year 2000, I personally hope to see that the deficit is realized to zero and the introduction of a balanced budget to this House.

The 1996 budget continues on the track of reinventing government. Last year through a major program review we managed to protect vital programs while reducing spending to its lowest level of GDP in almost 50 years. This year we have further reduced program spending in order to move closer to a balanced budget. Federal program spending this year will represent 12 per cent of GDP, its lowest level since 1949 and down from 20 per cent only a decade ago.

Liberal governments over the years have played a leading role in building Canada's social programs. Today faced with dramatic changes to our society and our economy, the Liberal government must ensure that these programs remain effective and financially sustainable.

One way the government is doing this is through the new Canada health and social transfer which consolidates transfers for health care, post-secondary education and social services. The transfer is a block fund which offers more flexibility to the provinces. This flexibility will allow for the development of innovative programs for Canadians receiving social assistance. Greater flexibility will also reduce administrative costs and will allow provinces to adjust to the new funding levels while still protecting programs that Canadians desire.

This budget introduces a five year funding arrangement for the CHST for the years 1998-99 through to 2002-03. The CHST will be stabilized at the 1998-99 levels for another two years and then will begin to grow. There will not be any cuts to the CHST beyond those announced in last year's budget. When the CHST begins to grow beyond the year 2000, federal transfers will increase for the first time since the mid-1980s.

The CHST will allow provinces to plan programs to meet their needs with clearly set levels of federal funding. By providing predictable funding, the government is demonstrating its commitment to safeguarding health care and other social programs that are valued by all Canadians.

As we all know, part of the CHST is made up of a cash transfer which was scheduled to gradually decline. However, in response to concerns about diminishing cash transfers, this government has announced that the cash component will be kept above a floor of $11 billion per year for the five years between 1998 and 2003.

While the CHST will give more power to the provinces, the cash transfer will guarantee a strong federal presence for programs of national priority such as post-secondary education and social assistance.

In addition, the government will continue to vigorously defend the five principles of the Canadian health care system: comprehensiveness, universality, accessibility, portability, and public administration. The federal government will also work with the provinces to develop other shared principles and objectives for this new transfer.

This budget is good for Canadians. For the third year in a row there will be no increase in personal income tax rates nor will there be any increase in excise taxes.

Additionally, the budget marks a significant turning point. In our first two budgets we were forced to make a lot of tough but necessary decisions in order to clean up the economic mess left by the previous government. Unlike those budgets, this budget has a more direct focus on the future, a more sustainable plan, a long term plan for Canadians. This focus is reflected in our attention to our youth, our attention to working families and in particular to seniors.

February's throne speech put the problems facing Canadian youth into the spotlight. Youth unemployment and underemployment are a serious concern in my riding of Cumberland-Colchester. Young people throughout the area feel that they have to leave home, in fact many of them must leave the country to find employment.

This budget announces concrete measures which demonstrate that the Liberal government is serious about improving opportunities for young Canadians. To make education more affordable, tax credits for university and college students and their parents will increase. This budget will also stabilize the funding that we transfer to the provinces for post-secondary education. In addition, it lays out a plan to increase that funding over time.

This budget will double federal funding for summer jobs. In 1996-97 we doubled the number. There are 200 more jobs in my riding. The deadline was April 12 and we encouraged employers in all sectors of our society to get out there and employ our youth this summer allowing an extra 30,000 young Canadians to gain vital experience and help finance their education. It also challenges the

private sector and other levels of government to do their share to create opportunities and to assist our youth in finding their first job.

My riding of Cumberland-Colchester consists of hard working families who work long hours with fewer benefits to try and stretch that paycheque as far as they can. These families will benefit from this year's budget.

Parents who wish to return to school in order to find better jobs will now be able to make full use of the child tax credit. This includes parents who show the courage to return to high school. We are raising the age limit for the child care deduction from 14 to 16 years so that more parents who work nights can claim it. As well, we are doubling the working income supplement of the child tax benefit. This will mean an extra $500 a year for low income working parents.

This budget is also committed to security for the elderly through the availability of old age security and the guaranteed income supplement. The budget includes a new seniors benefit to be implemented in the year 2001. This tax free benefit will replace the existing OAS and GIS programs. More than 70 per cent of our seniors will actually receive higher benefits under this new system, many of whom are single women.

Pensions for today's seniors, near seniors and their spouses will be protected. Seniors will be guaranteed to receive an amount that is no less than the current pension plan. The new system will better respond to the needs of low income seniors and will ensure a responsive, affordable system for our children and grandchildren. Let there be no doubt that we will look after our elderly and that this budget is the first step in doing so.

There are a record number of single parent households in this country. When a marriage breaks down, the children are always the first to suffer. I have received many letters from men and women alike who are concerned about the current child support system. This budget speaks to those concerns and introduces measures to improve the system, measures that include a revised tax treatment of child support payments.

Currently child support payments are taxable for the recipient and tax deductible for the parent paying support. This is wrong. Payments are supposed to provide support for children. They are not income for parents. The budget proposes that all child support awards agreed to on or before May 1, 1997 will not be included as income of the custodial parent for tax purposes, nor will they be tax deductible for the parent paying the support. The government will also introduce new guidelines and enhance enforcement for the collection of child support payments.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

I regret but the member's time has expired. Questions or comments. Resuming debate.

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

Madam Speaker, this is the third federal budget I have spoken on since I came to Ottawa. In each budget I have expressed major disappointment: in the first, because it did not deal with the fiscal realities that faced Canada in 1994, the deficit and the debt; in the 1995 budget, because it missed a tremendous opportunity to put Canada on a positive fiscal course which would see the deficit eliminated and the debt paid down within the next five years.

Like Liberals of old, the Liberals who started deficit financing rather than making tough decisions, these present day Liberals again put off tough decisions. This refusal to come to grips with Canada's debt problem plus interest on the deficit means that the debt has continued to soar. By the end of March it was over $578 billion. The Liberals by failing to address this issue have added over $200 billion to the national debt.

As the debt grows, so does the interest that must be paid. The government now pays $47 billion in interest on the debt. This is more than it pays on elderly benefits, unemployment insurance, payments to aboriginal peoples, foreign aid, the CBC, and science and technology combined.

Let us face it. This is not just a waste of the taxpayers' money. It affects how business and industry reacts to our country. This kind of mismanagement of the country's economy does not create a climate for investment, it does not create confidence.

If the government had proceeded immediately in the 1994 budget to address Canada's problems with the economy, the confidence for investment and job creation would now be with us. The job creation proposals in the budget which we all know will not create a single long term job would not have been necessary and would not be with us now eating up taxpayers' dollars.

If the right economic road had been followed in the beginning by these Liberals, they would now be in a position to reduce taxes. A reduction in income taxes, a reduction in payroll taxes, unemployment insurance premiums and the elimination of the heavy regulatory burden which follows Canadian companies would go a long way to stimulate investment in Canada. These are the measures that should have been announced in this budget.

A failure to deal with the deficit and Canada's accumulated debt is not the only shortcoming of this budget. This budget also has severe human consequences. The finance minister and the Minister of Justice through their combined wisdom have seen fit to get involved through the budget in the payments made by the non-custodial parent to the custodial parent after divorce. Starting in May 1997 these payments will no longer be tax deductible by the

paying ex-spouse and will not have to be included in the income of the receiving spouse.

Why the government will not leave the issue of taxation of child support payments to be dealt with by the parties themselves with the help of a mediator is beyond me. However what worries me even more is the fact that this new rule can be made retroactive. It can be made to apply to payments that are now being made. This means that thousands of Canadians, who prior to budget day thought the matter of child support was well settled, are now reviewing their child support agreements to see how this budget will affect them.

Now that the paying ex-spouse may no longer claim a tax deduction for the support payments, he or she will have less money to look after their new family as well as to help the ex-spouse and the children of the first marriage. Who is going to benefit from this massive tax grab? Not the parents involved in the divorce, not the custodial or the non-custodial parent and certainly not the children.

Who will benefit? The government. No new taxes in this budget. That is a very dishonest statement. The government already knows it will make over $250 million on this new program in a major tax grab.

What if some of these ex-spouses are already having a difficult time making support payments and keeping up with the demands of a new family? Without the help of a tax deduction might they be less inclined to make full support payments? Is the government building a new monster, another social problem on the backs of divorced parents?

As well, thousands of family law lawyers across the country are down on their knees thanking the justice minister for increasing their billable income for at least the coming two years. This piece of legislation has opened the floodgates to more litigation. How dare the Minister of Justice and indeed the Liberal members of the House of Commons justice committee decide to vote down my private members' bill on grandparents rights because it might increase litigation and then support this budget measure which virtually by definition will increase litigation. Perhaps my bill in reality did not increase litigation enough for them to support it.

What about seniors issues? Seniors issues are put off to be dealt with in the next century. If the old age security and the guaranteed income supplement need to be changed or need to be replaced, why put it off for four years? Again, if a tough decision which might affect the government's popularity could be made, the Liberal solution is to put it off at least until after the next election.

More than that, I believe the Liberals in this budget have broken faith with our seniors. During the Quebec referendum period and in the run-up to the budget, the Prime Minister repeatedly assured Canadian seniors their retirement incomes were safe. In a supplementary document entitled: "The Seniors Benefit: Securing the Future" the government stated: "Current seniors have the right to continue in their retirement secure the change will not affect them. That is guaranteed". This is what the government said but this is not what it has done.

Let us look carefully at the actions of this government. The government reduced the mandatory withdrawal age for RRSP contributors from 71 to 69. Seniors will pay more in taxes over their retirement. Because of this budget, seniors will have to remove their retirement savings from the their RRSP accounts attracting tax a full two years earlier than would otherwise be the case.

Could it be that when reality hits our seniors and they realize they will not be better off, that in fact they will be forced to roll over their RRSPs at 69 years of age instead of 71, they will realize that this Liberal government has increased their tax burden and taken away direct savings from their many long years of hard work as dependable Canadian taxpayers?

Is it that by placing the proposed new seniors benefit to come into force in the year 2001 the government hopes to coast in on the next election and by the time that our seniors realize they have been hit with a new and higher tax on their retirement income it will be too late?

This government seems to be maintaining its do nothing attitude and closing its eyes to an increasing debt of close to $600 billion. No change that negatively affects seniors, I do not think so.

What else did this budget do? The government froze the RRSP contribution limit at $13,500 until 2003, lifting it marginally thereafter. Again this affects the ability of Canadians to provide for their own retirement. Again the government's promise to seniors has been broken.

As I said earlier, seniors are living longer healthier lives, retiring later by some. They want the right to service their own retirement. They want the government to live up to its promises.

Then there are the Liberal make work programs. The Liberals will spend over $65 million in the next five years to establish a commission to study health care needs. Canada's health care needs no more studies. This is simply a way to put Liberal friends on the commission. Then there are the other make work projects for youth. None of them create meaningful long term jobs. I know it, my party knows it and worst of all, the Liberals know it but again, it looks good and it sounds good to the electorate.

The only long term permanent jobs are created by industry in a healthy marketplace. Industry will only create these jobs when it is

confident the government is moving in the right direction. Tax relief might have been a good answer in part of this budget.

With this budget the Liberal government has missed a great opportunity to do something for the future of Canada. It did not. Perhaps it is time it stepped aside and let the people of Canada decide on the future of this country.

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

Madam Speaker, it is as clear today as it ever has been that Canadians do not want rhetoric from their government. What they want is action. What they seek is real progress.

These are the standards that Canadians have set. These are the standards by which this government wants to be judged. Seldom in our history have so many experienced such anxiety. Canadians feel our very way of life is at risk. They look at medicare and feel it is threatened. They look at the pension system and wonder if it will be there in the years to come. They consider the economy and worry that the gale force winds of competition and change will carry away their jobs. And Canadians think about their children, our youth, and ask what kind of opportunities will be left for them.

These are damning statements from a member of the opposition but that is a direct quote, the opening paragraphs of the speech by the Minister of Finance to this House, the budget speech on March 6, 1996. That is the admission of the Minister of Finance to the House and the country: the government does not have the answers that are required, does not have a plan and, halfway through its mandate, has done virtually nothing to address the major concerns of Canadians.

Let us look at these questions. Canadians feel their very way of life is at risk. That is a statement by the Minister of Finance. Of course it is at risk. Why? Taxation is going up and up, contrary to what the Minister of Finance says. While he says that he has not raised taxes, everyone knows that he has raised taxation revenue from Canadians by taking a dollar from the seniors, by reducing the amount that they can put into RRSPs. They are going to be cut off at age 69 instead of age 71.

The minister knows full well that the basic exemptions for income tax are not indexed for inflation at all as long as inflation is under 3 per cent. He has taken unemployment insurance premiums out of Canadian taxpayers faster than would otherwise would be required.

What a litany of exercises by the Minister of Finance. By squeezing more dollars out of this program and collecting a little more from that program, ensuring that Canadians have to pay more somewhere else, all the while he is claiming that he has not raised taxes. I will give him his due. While he has not raised the general rate of taxation, he has done everything in his power to raise taxes by every other means at his disposal.

That is why Canadians feel that their very way of life is at risk. The Minister of Finance says that Canadians look at medicare and feel it is threatened. They have every right to feel it is threatened. The government remains absolutely committed to keeping its head in the sand. It stands by its five principles that unfortunately are outdated.

Medicare has stood us well until now, but unfortunately we have a plan that we can no longer afford. Changes are required. What does the government do? It does absolutely nothing. It has not changed one thing, other than transfer less money to the provinces. It is allowing them to figure out how to deliver health care within a framework that was devised 30 years ago. Unfortunately the provinces are finding that they cannot live within the new restrictions. That is why medicare is threatened.

It is up to the government to do something to demonstrate leadership. If I recall, the Prime Minister campaigned in the last election that he would convene a conference of the health ministers to resolve the crisis in health care. That was going to take place by June 1994. It will soon be June 1996 and we are still waiting for that to happen. That is why health care is threatened.

Seniors look at the pension system and wonder if it will be there in the years to come. The actuaries have said that there is a $600 billion shortfall in the Canada pension plan.

Today the government has started a travelling road show to ask Canadians what they want. Where is the leadership from this government? Where is the commitment by the government to the seniors who have worked hard all their lives? Now that they are retired and dependant on their savings and the money that they paid to the Canada pension plan in the belief that old age security was going to be there for them, these are the things that are threatened.

Seniors are concerned. They are asking if the pension system will be there for years to come. We have said and seniors are saying it more and more that it is not going to be there. The newspapers today are suggesting that the premiums are going to double in order to maintain the program that is currently available.

I am not sure the Canadian economy can afford a doubling of premiums. That is why Canadians are concerned. Is the Canada pension plan going to be there for the seniors of today, far less the seniors of tomorrow? It is an answer to that question which we want from the government.

In the budget speech the minister said that old age security and the guaranteed income supplement are going, that they will be finished in the year 2001. No more old age security. No more

guaranteed income supplement. The programs that seniors have depended on for the last generation or more are going to be wiped away.

Where does that leave them? We know the minister is going to introduce something called a tax free benefit to seniors. However, is that going to be better or worse for seniors? They do not know, which is why they have every right to be concerned.

Not only is the government saying it has a serious problem with the Canada pension plan but it does not know how to fix it. In the same speech the Minister of Finance states he is taking away the old age security and the guaranteed income supplement and is replacing it with something called a tax free seniors benefit which, as far as we can tell, could in many cases pay seniors less than what they are receiving today.

Do seniors not have the right to be concerned? I think they have a right to be concerned. I would think the government would say that they have a right to be concerned. Yet halfway through its mandate, the Minister of Finance is making statements at the beginning of his speech which are almost an admission of failure to manage the programs that it was elected to manage.

The government considers the economy and worries that the gale force winds of competition and change will carry away the jobs. Does anyone remember what was the promise of the election campaign of this government? It was jobs, jobs, jobs. Now it is saying that people are concerned that the changes in the competition will carry away their jobs. What is the government doing about it? Not very much. Nothing at all.

The government spent $6 billion on an infrastructure program and the President of the Treasury Board said it created 8,000 permanent jobs. This is 8,000 jobs for a $6 billion investment. Was that value for money? I do not think it was. As I have said many times, the government would have been better to have put the money in the bank and given the people the interest.

There are many more things I would like to speak about, such as the privatization of NavCan and CN Rail. We are now hearing that the food inspection branch is going to be set up in some kind of unaccountable, removed from government, removed from criticism by the members of Parliament. We hope it is going to do a good job.

The government says it is committed to cutting down on waste. There are many issues that I would love to talk about and continue on. I have only got to the first half of the first page of the minister's speech. I could go for days. Unfortunately I cannot.

[Marlene Catterall, Liberal, Ottawa West, ON]

Madam Speaker, I have to make the same comment I made to the person questioning me after speaking on the budget. I think one of the best things we can all do as parliamentarians for our constituents and for Canadians generally is to give them the facts.

Therefore, when the member who has just spoken talks about taking away the old age security and the GST and talks about those programs as being gone, finished, wiped away, he knows that is not the truth. He knows perfectly well that any senior now receiving a benefit will continue to receive exactly that benefit. He knows that any person within five years of being entitled to those benefits will be entitled to continue receiving them for the entire period of their retirement. He knows that is a commitment of the government and of the Prime Minister personally. It is precisely what is laid out in the budget, unless those seniors now aged 60 and looking forward to retirement at 65 determine that the new combined benefit is in fact to their advantage.

The member also knows that combining those benefits and directing them is going to make sure that 90 per cent of the elderly poor who are at the lowest level of income, 90 per cent being sole support women, will in fact get more not less. He knows that the benefits for today's seniors are not in danger.

That is quite a bit different from the Reform Party plan which requires everybody to put something aside for their own retirement under some kind of private RRSP system.

I remember the days when my father made $90 a month. This plan would require many families to choose between putting food on the table for their children or providing for their retirement 40 years hence. As a mother, frankly I know what choice I would make. That is not security in retirement.

As well, he knows that the Prime Minister has kept his promise concerning health care by establishing the national health forum which the Prime Minister personally chairs. Perhaps the hon. member would consider doing what I and many Liberal members have done in our ridings and hold a forum in which his constituents can give him their views, as mine have done, on what their priorities are for a sustainable health care system for the future.

The member asked about the infrastructure program. Was that value for money? Ask the 100,000 plus people who had a job for that time if they thought it was value for money.

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

Madam Speaker, the member asked for the facts. Let me give the facts.

"There is widespread anxiety, particularly among the young, that the public pension system will not be there for them when they retire". That is a direct quote from the Minister of Finance. "First

the CPP must be put on a sound financial footing and done so in a way that is sustainable, affordable and fair". Another direct quote from the Minister of Finance.

Carrying on: "Clearly, the government should have acted some time ago to address this problem". A direct quote from the Minister of Finance. I can go on and on.

The point I am trying to make is that seniors and everybody else listened to the Liberals when they said jobs, jobs, jobs, when they said that is going to be there for them. The Liberals told Canadians not to worry about their pensions because they would make sure they will be there. What did we find out? There were no answers coming from the government. The facts speak for themselves. These were direct quotes from the budget speech by the Minister of Finance to this House on March 6, 1996.

[Charles Caccia, Liberal, Davenport, ON]

Madam Speaker, in the few minutes available I would like to put forward some thoughts on future budgets.

First, let me congratulate the minister on his announcement on March 6 of the change to the Income Tax Act regarding investments in energy efficiency and renewable energy sources. This is an initial step in the right direction which will help in keeping our red book promise to reduce carbon dioxide emissions.

The main point I would like to make today is to express the hope that sooner or later, but preferably sooner, the government will find it possible to conclude the policy of deficit reduction and review and expand public sector expenditures in an effort to improve the social and economic conditions of most Canadians, particularly low and middle income earners.

We have witnessed with apprehension the phenomenon of certain large corporations, banks and other financial institutions making record profits by continuing to "downsize" their workforce. The time has come, as one observer recently put it, to downsize downsizing for the sake of social peace and stability.

The Easter recess has allowed me time to note the profound malaise caused by unemployment and poverty and to bring back to Ottawa from Toronto and Montreal recent images and impressions of the hardships Canadians are presently enduring.

In increasing numbers people are sleeping on sidewalks and in telephone booths and are reduced to begging for change in our downtown urban areas. Families are struggling to make ends meet. There are even reports that the financial hardship resulting from cuts to welfare payments in Ontario has become a factor in parents offering their children for adoption. Cash strapped municipalities are finding it almost impossible to provide basic services, from road maintenance to public libraries to providing an adequate number of teachers, to mention a few.

Social housing applicants are waiting longer and longer, in some cases several years, before their turn comes.

High youth unemployment set at 15.3 per cent in March has eroded the confidence and hope of our young people to find meaningful work commensurate with their training and career plans. It is no wonder that youth are without jobs when thousands of people have been and continue to be thrown out of work as a result of corporate and government layoffs, including the 10,500 provincial civil servants recently cut by the Harris government in Ontario.

Consumers are hesitant to buy even small appliances because of the uncertainty posed by potential job loss. Companies such as General Motors are closing down auto parts plants in Oshawa and Windsor because of low cost competition in the U.S., all in an effort to please the insatiable corporate appetite for larger and larger profits. Also, Kenworth Trucks in St. Therese, Quebec is giving notice that it intends to shift and enlarge truck production to its plant in Mexico.

New housing starts remain at a record low while the savings rates of Canadians stay at record low levels and the percentage of after tax personal income going toward servicing their debt is at a record high.

The poverty gap, that is the amount of additional income that would be required to bring all Canadians above the poverty line, amounts to a staggering $15.2 billion with single parent mothers representing one of the largest groups living in poverty.

It seems to me that these points call for a number of measures, the most pressing being the urgent necessity of redistributing incomes. Personal and corporate tax expenditures alone still cost the federal government billions of dollars in lost revenue. Some of these expenditures are necessary and warranted but others such as the non-taxation of gambling and lottery winnings, alone amounting to some $900 million in lost revenue in one year are not.

To give another example, the tax concessions in the resource sector such as the Canadian exploration expense and the Canadian development expense are conservatively estimated at $150 million a year. These expenditures are no longer justifiable if development is to become sustainable.

Over the past 30 years corporate taxes as a percentage of federal government revenue and as a percentage of GDP have declined. There was a corporate tax rate reduction from 46 per cent to 38 per cent under the Mulroney regime, thus reducing the corporate fiscal burden in Canada to one of the lowest among OECD countries.

While the social safety net has undergone intense scrutiny and reductions, for example unemployment insurance and the Canada assistance plan, outside of small increases in the large corporation tax and corporate surtax in 1995-96, increases in corporate taxation remain untouched in this budget. This policy has produced a serious imbalance between the treatment of social and economic policies.

For these reasons, sooner rather than later the Minister of Finance needs to shift his focus of attention from deficit reduction toward a policy which will: one, restore fairness and progressiveness in the tax system so as to bring back the confidence of Canadians in their government's sense of social justice and equity; two, give poverty issues the attention they so urgently require; three, provide low income Canadians with adequate social measures to ensure they can live in dignity; and four, translate the government's commitment to sustainable development into coherent policies that will ensure future growth while taking into account the need to protect our freshwater resources, the necessity of clean air to breathe, the fragility of many ecosystems, the need to adequately conserve our agricultural soil and the need for sustainable fisheries and forests, to name a few.

In addition, our sustainable development policies must respect our international commitments from the management of toxic waste to the ratification of the law of the sea, from the biodiversity convention to our commitments to lower carbon dioxide reductions under the climate change convention. All of these are important Liberal commitments we must work to realize.

In conclusion, I have a few words on the phasing out of the old age security pension over the next five years and the Canada pension plan. The replacement of the old age security pension with the proposals for new seniors benefits involves basing benefits on household income instead of on individual income as is the present case. Unfortunately the losers in the scenario are married women who have no income of their own who at the same time have no legal entitlement to the income of their spouse. I urge the government to redress this inequity over the next five years to ensure that married women retain the same degree of financial independence they have presently under the old age security pension.

On the Canada pension plan, I congratulate the government for launching today public hearings in Toronto which will help decide on the future of the CPP. Our increasing senior population makes it necessary to do in Canada what has already been done in other OECD countries namely, to increase contribution rates so as to retain both the present retirement age and level of benefits. This is a small price to pay for a retirement plan which benefits most Canadians who cannot afford a private retirement plan and which permits mobility from province to province and from job to job.

The Canada pension plan is one of the best plans of its kind in the world. It is funded entirely by contributions from employers and employees without a penny coming from taxes. It serves Canadians well and has done so for some 30 years. It ought to remain as a public fund owned and operated by the public sector for the benefit of many generations of Canadians to come.

[Jack Ramsay, Reform, Crowfoot, AB]

Madam Speaker, we have seen governments over the years bring forward budgets that have expressed their concern about overspending and deficit spending, yet each year the debt has grown and grown and grown. Since 1993 we have heard exactly the same kind of rhetoric, that everything is fine, we are on track, be happy and do not worry. Yet the debt has continued to grow year after year after year. The finance minister will not tell us when he believes we will stop sliding into debt. In other words, he has not set a date like many of the provinces have for a balanced budget.

Seeing as how the interest payment on our debt is the greatest threat toward our social programs, including our senior citizens programs, that enormous amount of money we have to pay on an ever rising debt which is going to amount to approximately $50 billion by 1997, which is just next year, is the government prepared to tell Canadians when it expects to balance the debt? Would the member be prepared to offer an estimation of what the debt will be when the government finally reaches a point when it is no longer overspending and borrowing, but instead living within its means? What does the hon. member think that debt and the associated financial interest payments will be?

[Charles Caccia, Liberal, Davenport, ON]

Madam Speaker, the hon. member is engaging in a typical Reform misconceptual game of linking debt with social security payments and I think he is wrong. He is completely wrong because the social security system cannot be seen in isolation as a factor that runs counter to economic interest.

Whatever penny or dollar is spent in terms of pensions is returned to the economy very quickly through expenditures by seniors who certainly know how to use their revenue. Usually that revenue goes to the cornerstore, to the supermarket, to transport and other commodities.

Therefore there is no conflict between the well-being of the economy and the well-being of social security. On the contrary, by ensuring that our seniors receive an adequate pension payment, adequate security and the ability to live in dignity as they do now, we also pump the money back into the economy and everybody benefits from it.

I noticed on the part of the hon. member the same tendency as that of the hon. member for Prince Albert, a desire to spread some fear among Canadians about the future of their Canada pension plan. The Canada pension plan as it stands today is not in any

danger at all. It is a pay as you go scheme. It is a scheme that takes care of the immediate present and will be put in a condition to take care of future generations as the number of seniors increase by adequate adjustment in the contributory benefits.

In doing so we can look forward not just to a few years but decades and decades of Canadians having a pension plan that will at least meet the basic requirements of an individual. It is a system and a scheme that for the last 30 years, as a result of a fine Liberal measure, has served us well. I must make sure the hon. members of the Reform Party understand that the Canada pension plan does not receive one penny from the taxpayers. It is a self-sustaining plan.

[Sue Barnes, Liberal, Parliamentary Secretary to Minister of National Revenue]

Madam Speaker, I am pleased today to rise to discuss the Minister of Finance's March 6 budget.

This budget proves that the government is keeping its promise to put Canada's fiscal house in order. The 1996 budget consolidates and extends the actions taken in the 1994 and 1995 budgets. It continues our work to create the proper climate for economic growth and job development. It meets and even betters our fiscal targets.

It ensures the sustainability of Canadian social programs so that those who need assistance receive assistance. The budget relies on government expenditure cuts to meet our goals. There are $1.9 billion in cuts in 1998-99.

Program spending stood at 16.8 per cent of GDP when this government took office in 1993. It will be reduced to 12 per cent in 1998, the lowest level since 1950. Taken together this government's first three budgets have introduced seven dollars in cuts for every dollar of tax increases. Our borrowing requirements will drop from $30 billion in 1993-94 to $6 billion in 1997-98. As well the ratio of debt to GDP will drop by more than one percentage point in 1997-98. In other words, the economy will finally be growing faster than the debt in 1997-98. The hon. member asked that question just moments ago and I have just provided the answer.

The cuts we have made are strategic. We are remaking government to meet the needs of Canadians in a globalized high tech world. Government may be smaller but it is more efficient. Services are provided more quickly where and when Canadians need them.

I would like to review the budget measures relating to Revenue Canada. We are strengthening our ability to combat the underground economy. The underground economy is not a victimless crime. It hurts honest taxpayers who are forced to pay more than their fair share of taxes. It places honest businesses at a competitive disadvantage. Revenue Canada is undertaking new enforcement measures to address this. Some $3.8 billion of additional taxes have been assessed. More resources are going to our audit program aimed at unincorporated businesses and self-employed individuals and we expect this to bring us further net revenues of about $100 million.

Over two years ago the government consolidated revenue administration at the federal level. Sales, income and excise tax collection were integrated with customs and trade administration into a single department. The integration has performed as expected. By eliminating administrative overlap, considerable savings have been generated for the government. More important, the change has meant better service for Canadians. Administrative costs have been cut and the burden of compliance for taxpayers has been reduced.

There has been excellent progress, but the job is not finished. The budget confirms that the government will create a new institution, the Canada revenue commission. The new commission will enhance internal efficiency by providing increased administrative and financial flexibility.

The real gains for taxpayers, however, lie in the possibility of greater co-operation between the federal and provincial governments and the streamlining of revenue administration.

We must also ensure that our social programs are affordable and sustainable into the future. The budget contains measures to provide secure, stable and growing funding for health, post-secondary education and social assistance.

The Canada health and social transfer, CHST, introduced last year provides the provinces with enhanced flexibility to design and administer their own programs while safeguarding medicare and other social support.

Since the cash component represents a sizeable part of total federal spending, we could not put our finances on a sustainable basis without reducing the transfers. That is why funding arrangements for 1996-97 and 1997-98 decline.

Following consultations with the provinces, the 1996 budget now acts to extend the CHST but there are no further cuts. We have set out a five year schedule in which transfers grow and the cash component is stabilized and increases over time.

The budget provides additional protection to the provinces. A new cash floor will guarantee cash transfers of at least $11 billion in all years. We also want to ensure that Canada's retirement income system will be there for Canadians when they need it.

Over the next 30 years the number of seniors will more than double while the proportion of Canadians working to support the pension system will decline. Recognizing the wide public concern

over this situation, the Prime Minister has promised to protect the pensions of today's seniors.

Beginning in 2001, a new seniors' benefit will replace the old age and guaranteed income benefits. The new benefit will be tax free and fully indexed to inflation. Those most in need will receive $120 more a year than under the current system. The vast majority of seniors will be as well or better off.

Those 60 and older on December 31, 1995 can opt for the new system or the old one, whichever is more advantageous. The Prime Minister's commitment to our senior citizens will be met and surpassed.

There will also be fairer, more affordable tax assistance for retirement savings. The government is committed to assisting individuals to save for their retirement. At the same time, our fiscal position calls for reasonable limits on the amount that can be saved with tax assistance.

For this reason RRSP contribution limits will be frozen at $13,500 through to the year 2003 but then will increase to $15,500 by the year 2005. These measures will affect only individuals earning over $75,000. Thus, individuals earning less will continue to be able to save up to the full 18 per cent of their earnings.

This is consistent with the government's objective of directing tax assistance to the large population of modest and middle income Canadians. Because our younger population is facing different challenges we have eliminated the seven year limit on carrying forward unused RRSP contribution room.

The budget also introduces improved tax treatment, new guidelines and better enforcement to ensure that adequate child support is paid regularly and on time to the custodial parent.

We are now in a situation in which six out of ten children who live with lone parent mothers are living below Statistics Canada's low income cutoffs.

The Thibaudeau case in the Supreme Court simply brought home what many had been saying for years. We have to make it simpler, faster and more efficient to get child support into the hands of the parents to the benefit of the children.

The government consulted the Canadian public widely on this point. It became clear that few Canadians think it is right to tax child support as though it were the custodial parent's own income. Nor should the person paying the support receive a special tax break merely for performing the ordinary obligations of a parent.

For this reason, child support will no longer be included in the taxable income of the custodial parent, nor will it be deductible to the payer. Custodial parents will no longer have to worry about setting aside a portion of the support they receive to pay taxes on the amounts and payers of the support will not have to make high payments and then wait for the deduction at year's end.

The working income supplement of the child tax benefit is intended to help low income parents meet the costs of things like transportation and child care when they go out to work. It can also help to compensate for the loss of certain material benefits which parents lose when they go off social assistance to enter the labour force.

To encourage this type of initiative and to help low income families make the transition we are doubling the maximum annual benefit in two stages from its current level of $500 to $750 in 1997 and $1,000 in 1998.

When it is fully implemented, Canada's low income working families will have an extra $250 million annually to assist them with their child care expenses. About one-third of the families eligible for these benefits are single parents. We will thus be targeting what we have identified as a serious locus of child poverty.

The government has taken a number of actions to reallocate funds to increase Canada's investment in youth, technology and trade, all very important areas to Canada's future. To encourage education for young Canadians an additional $165 million over three years is being funded by reallocating money from within the tax system. We are increasing the limits on education tax credits, the limit on the transfer of tuition in education credits and the limit on contributions to registered education savings plans.

There will be more flexible child care expense deductions for low income parents who are in school or attending training programs.

We are creating new employment opportunities for youth by reallocating budget savings. We will double the funds for student summer employment to $120 million this summer. We will increase support for programs like Internship Canada and Youth Services Canada to help young people who have left school to find employment opportunities.

Canada is a nation at the cutting edge of high technology. To ensure our continued predominance in this field, the government is establishing the Technology Partnerships Canada. This new fund will encourage private sector investment in high technology products and processes and assist in technology diffusion. New equity capital will be made available to increase the lending efforts of the Business Development Bank in strategic growth sectors such as the new technology area.

When this government took office it was charged with a double task: to address Canada's increasing fiscal burden without destroying the social fabric that has made this country one of the most

admired in the world. We can achieve this only by ensuring the kind of economic health that made our unique social system possible in the first place.

The government has followed its jobs and growth agenda with one clear objective: to build an innovative economy that will mean prosperity for all Canadians. We are succeeding. Employment in the first quarter was up by 91,000, the largest quarterly growth in two years. The overall unemployment rate is down nearly two points from 11.1 per cent to 9.3 per cent. Interest rates are down and inflation is at its lowest level in 30 years.

Let us give credit where credit is due: to the Canadian people for their resourcefulness in a difficult time, to the private sector for its willingness to partnership and to explore innovative ways of doing business and sharing and joining with government, and to the Minister of Finance for his sure and measured handling of our national finances.

[Jack Ramsay, Reform, Crowfoot, AB]

Madam Speaker, I commend the member for her very clear message.

There are two questions I would like to ask her. The first one centres on the child support payments and the changes there. I believe those changes will cause some concern across the country. The non-custodial parents who have contacted me are very concerned about something that is not mentioned in the proposed bill that will be coming forward, their visiting rights and access rights the courts grant them and which are not lived up to by the custodial parent.

I ask the hon. member if she believes that the visiting and access rights should be linked with the child support payments.

My other question is whether the member sees a danger in the rising debt inasmuch as the interest payments that we have to make on the debt are drawing away from the revenue dollars we need to support our social programs.

[Sue Barnes, Liberal, London West, ON]

Madam Speaker, I thank the hon. member for his question.

When there is change there is anxiety about the change. It is true that people will call into a constituency office and say they are worried about the specifics of change which they think could adversely affect them immediately.

The first thing we must say is that there will be clear material given to people so they may understand the changes coming. With this budget we put out a special tax booklet identifying all the questions and answers relating to the changes in support payments.

We did another interesting thing relating to Revenue Canada. We allowed Revenue Canada, after the request from the Justice Department, to get information necessary to enforce payments of delinquent supporters. I believe this measure will go a long way.

I want to make it clear that Revenue Canada will not be releasing addresses to individuals requesting that information. However, we have done something to help with enforcement.

The changes we are talking about do not relate to visitation rights. That is not what we are talking about here. We are talking about tax treatment, a tax policy that will be implemented through the self-assessment process at Revenue Canada, which is the most successful in the world. Canadian taxpayers are honest for the most part. We are hoping to enhance the livelihood and to help with the real economic needs of children in homes where money is due to them from a non-custodial parent. We are changing the tax treatment to make it more efficient, more simple and faster. There will be concerns.

As a government we will spend money to assist in the administrative changes necessary. I can assure the House that the changes were necessary and were done after massive consultations. Members of the government crossed the country over a year ago asking for input from custodial parents. We got the input and we listened. Finally, after nearly a half a century of one system we are about to change and modernize our laws.

[Pauline Picard, Bloc, Drummond, QC]

Madam Speaker, I am pleased to take part in the debate on the recent budget tabled by the Minister of Finance. We would have preferred to comment on a budget showing the government's determination to be more effective and to reduce its size and its non-productive interference. However, this is not the case.

We would have liked a budget showing that the government has a minimum of compassion and is sensitive to the plight of our 1.4 million fellow citizens who are jobless and who realize every day that the election promises of "jobs, jobs, jobs" were nothing but empty words. Unfortunately, there is no compassion for the unemployed in this budget.

We would have liked a budget showing that the government got the message that we, on this side of the House, have been conveying to it for two and a half years by reminding it of the urgent need to restore justice and tax fairness for overburdened average taxpayers, while companies avoid paying taxes on record profits. Again, this is unfortunately not the case.

We would have liked a budget showing that the federal government had finally decided to put its house in order, instead of resorting to the easier solution of leaving to others the responsibility of taking real measures by dumping its deficit onto the provinces. Unfortunately, this is not the case. The budget that we have to comment on is not of the courageous type. What the Minister of Finance has tabled is in fact a non-budget. It is a kind of economic statement on the country's financial situation, in which everything is explained by magic, that is as a percentage of the GDP, rather than by using actual figures. It is an economic statement which does not propose any real and effective measure to

face the problems that confront us and that can be summarized in very simple and concrete terms: 1.4 million unemployed and a debt of $600 billion.

Expressing reality in hard figures, rather than projecting it through the rose coloured filter of percentages of GDP, is harsher, as well as less savvy from the political point of view. Harsher, because behind these real figures are real human beings, people who each and every day face the hard reality, real problems, and people who are getting more and more worried.

It is very sad to realize that a sizeable number of our fellow citizens are no longer concerned by government administration, have lost their illusions, can no longer relate to all of the contradictions coming from this government, contradictions raining down on their heads every day about administration, taxation, social services, as well as constitutional matters.

Understandably so. This government had promised employment-remember the red book refrain of jobs, jobs, jobs-and held out great hopes, for young people in particular. But their imagination dried up after they came up with the red book slogan. There had been a government promise to do away with the GST. The Prime Minister said he was going to scrap it, and the Deputy Prime Minister said she would resign if that was not done. This government's imagination was hard pressed to find the most effective means of trying to say what had not been said, and of convincing people that they had not heard correctly.

What people were meant to hear was not that the GST would disappear. What they were meant to understand was that, in light of the present economic situation, and in order to keep the deficit at 3 per cent of the GDP, the GST would have to be harmonized by adding the provincial taxes to it. That is what the members of the government would now like people to have understood, although their main campaign slogan was something quite different.

Strangely enough, today the Minister of Finance is using the same expressions, when speaking on the GST, as the Conservatives used during the election campaign. Within two and a half years, then, our Liberal friends have, in addition to reneging on their promise, espoused the same position as the Conservatives, a position they had so emphatically decried. The government does the opposite of what it says; no wonder our fellow citizens have so little confidence in their political leaders.

Another one of this government's contradictions is its commitment to streamline the federal bureaucracy and make it more productive. They promised the people they would cut fat in order to preserve social programs. What the government is saying in this year's budget is that there is no more fat to be cut in the bureaucracy, when most of our fellow citizens feel that the federal government is living high off the hog.

In fact, as the finance minister's figures confirm, the real budget savings will amount to 0.0 per cent in 1996-97-which is nothing to write home about-and to around 0.2 per cent in 1997-98. We can only conclude that the government feels there is no more to be done in its own backyard and has given up on the greater challenge of reducing the size of the public service. It is, of course, easier to take over the UI fund, cut transfer payments to the provinces, and let others deal with the problems.

The government has brought down a budget with few real measures to stimulate the economy. Yet this budget clearly shows the government's inability to resolve three nation wide problems: the employment crisis, the debt crisis and the constitutional crisis.

This budget contains no concrete measures for the jobless. The government boasts about injecting another $60 million into the summer student employment program and investing $150 million in the technological innovation fund.

It forgot to mention that what it gives with one hand, it had taken away several times with the other. It cut post-secondary education by $150 million plus another $300 million in 1997-98. In the 1995-96 budget, it cut $32 million from research and development for the Canadian Space Agency, $65 million from the three granting councils, and $11 million from the National Research Council. Those are the facts.

The government fails to provide tax incentives to promote job creation, helps itself to the UI fund instead of lowering premiums, and cuts benefits to workers' venture capital corporations whose sole purpose is to create and maintain jobs by investing in small and medium size businesses. This budget does not stimulate employment, it stifles job creation.

This budget does not contain any new government debt or deficit reduction initiative. Instead of putting its own house in order, the government is shovelling its problems into the neighbours' backyards. The provinces end up having to bear the brunt of the federal deficit reduction effort. While the federal debt has grown by $133 billion since the Liberal took office, tax shelters remain and unnecessary spending continues, including outrageous military spending.

Finally, this budget increases federal government's interference in areas of jurisdiction that are not its own, which is where the very essence of the constitutional crisis in Canada rests. Instead of showing goodwill and withdrawing from areas of provincial jurisdiction, the government is devising new initiatives to interfere even further while continuing to spend and getting deeper and deeper into debt. Three new angles has been found to undermine the

provinces' autonomy, namely the health research fund, the Canada revenue commission and the Canadian securities commission.

This is how, after tabling three budgets, this government has lost any credibility it may have had. It had promised to eliminate the GST, to create jobs, and to steer clear of constitutional matters. It has reneged on its promise in every instance. The people of Quebec and Canada can no longer trust this government.

[Alex Shepherd, Liberal, Durham, ON]

Madam Speaker, I heard the hon. member say in her speech that jobs had not been created.

It always amazes me when opposition members talk that way. All they have to do is get a copy of a report by Statistics Canada and they can see that well over 500,000 new jobs have been created since the last election. In fact, for the last quarter, just about every month there has been new job creation in Canada.

Second, long ago the province of Quebec harmonized with the GST. I will tell the House why this is a good thing for Quebec and Canada and how governments should co-operate and work together. Manufacturers in the province of Quebec have the ability not to include retail sales taxes in the sale of manufactured goods for export. Quebec was clever enough to notice the advantages of harmonizing the GST.

Unfortunately my province of Ontario does not see that. Where I live General Motors is a major manufacturer. The manufacture of automobiles in Ontario includes a certain element of retail sales tax. That gives Quebec a tactical advantage over Ontario in the export of automobiles to the North American market.

I would like to suggest to the member that rather than attacking some of the advantages of harmonization, she should be applauding the government for its foresight in trying to apply the harmonization method that has been used in Quebec across the rest of this country.

Finally, I would like to suggest that if she contacts Statistics Canada it will tell her the net new job growth on a month to month basis. She will see that we have been very successful in creating new jobs in Canada.

[Pauline Picard, Bloc, Drummond, QC]

Madam Speaker, I will repeat what I said when responding to the speech from the Throne.

In this budget, taxpayers expected the government to take important measures to get its finances in order and create jobs. Given that 1.4 million people are out of work, the Minister of Finance could have shown a minimum of compassion by introducing job creation initiatives. This is what matters at this point in time.

I am not an expert in the fields of finance and economy, but I do know, like everyone else, that when people have jobs, they pay taxes and that helps the economy. Putting people to work might help reduce the deficit. However, as long as the government keeps trying to cut here and there, particularly at the expense of the poor and of the unemployed who truly need help to find work, it will not succeed in promoting economic recovery.

[Gaston Leroux, Bloc, Richmond—Wolfe, QC]

Madam Speaker, as official opposition critic for heritage and cultural industries, I cannot stop myself from referring to the throne speech in my response to the budget speech.

What is written in the conclusion to the throne speech must be noted as something of great importance to the cultural industries, "Culture is at the core of our identity as Canadians. The Government is committed to strong Canadian cultural industries". This speech also confirms the government's desire to ensure the viability of the CBC, the National Film Board and Telefilm Canada. The statements of principle in the Minister of Finance's speech are, however, unequivocal. The Liberals want to reduce expenditures, while at the same time encouraging improved job prospects. Such a contradiction! Regrowth and reducing expenditures in the same breath. They claim to have a strategy which works via reallocation.

Let us be serious now. Contradictions do not belong in administration. The Liberals are full of great statements of intent, which we all know very well they have no intention of putting into practice. This government's sole objective is to make cuts, and its true cultural policy is to make cuts in culture. With a policy applied to strategic sectors that is threatening social cohesion through massive budget cuts, and threatening economic growth through a systematic layoff policy, we cannot look at the future with any hope.

Yet, if there is one sector that is strategic for maintaining cohesion and social equilibrium in Canada and in Quebec, it is culture. And what is this government doing? In the Liberal Party of Canada's budget, national cultural institutions are facing cuts of 9.7 per cent. Telefilm Canada, the NFB and the National Archives are the most affected, moreover. Let us take an example. The CBC alone is being hit the hardest, with cuts of $102 million between fiscal 1995-96 and fiscal 1996-97. According to Mr. Beatty, its president, there will be additional cuts of $48 million.

Telefilm Canada will face cuts of $19 million in the upcoming fiscal year just when it is looking at the possibility of going multimedia. The National Film Board alone will be hit with cuts of $10 million on top of the $16 million cuts in the 1994-95 budget.

The National Archives will be cut by $11 million. Publishing support programs will be cut by $14 million, and the heritage and cultural development program will cut by $22 million in the coming fiscal year. Contributions to the cultural infrastructures project will be cut by 69 per cent in 1996-97, on top of the 44 per cent in 1995-96. This is totally unacceptable.

I ask this House if this the expression of a desire to develop cultural industries in Quebec and Canada. How can the Liberals claim to be promoting job creation with such cuts? How do we assure the long term viability of the CBC, the NFB and Telefilm Canada? When the government systematically cuts the operating budgets of these organizations, there is no guarantee of a future.

When everyone knows the importance of our cultural institutions, how do we convince the government that it is heading in the wrong direction? This lack of political will to develop the cultural industries is having a dramatic impact, let us face the facts, on lost jobs.

The $227 million cut from the CBC since 1995 represents 2,400 lost jobs, and the forecast cuts of $150 million between 1996 and 1999 will mean another 2,500 positions, making a total of 4,900 jobs lost in the years the government is giving expression to its alleged intention to develop Canada's cultural industries.

Such job losses have a significant impact on the cultural fabric of society in Quebec and Canada. Culture is made up of real people: actors, screenwriters, authors, musicians, performers, composers, model makers, make-up artists, costume designers, scenic artists, and others. They are the raw material of cultural creation and production. The very essence of our identity could be ruined and driven to despair by this Liberal government's extensive cuts and lack of strategy, vision and policy in cultural matters.

The prospect of an Anglo-American culture threatens our culture, as everyone knows. The Canadian Minister of Finance's budget is a major culprit, as it jeopardizes the very existence of our cultural industries.

That is one of the reasons why the Government of Quebec claims full responsibility for the management of its share of the federal funds allocated to cultural industries. The federal government's estimates for heritage and cultural industries directly threaten all of us as a culture. In these circumstances, the Bloc Quebecois, as the official opposition, urges Ottawa to withdraw from the whole area of culture and communications. While the Government of Quebec was increasing its contribution to cultural funding by 4 per cent a year and its share of all public expenditures affecting Quebec culture from 32 to 37 per cent, the federal government's contribution fell from 45 per cent in 1989-90 to 34 per cent five years later.

According to Louise Beaudoin, Quebec's Minister of Culture and Communications and Minister responsible for the Administration of the Charter of the French Language, although Quebec makes the greatest effort in Canada, it is not enough to compensate for the federal government's gradual withdrawal from culture. It is certainly logical.

At a time when Quebec is taking action and increasing its budgets to ensure the viability and development of its culture, the federal government continues to withdraw and to cut funding. The Government of Quebec has no use for the more or less political goals pursued by the Department of Canadian Heritage through the distribution of millions of flags. At a time when everything is being cut, they suddenly found $17 million and hired 10 full time telephone operators to handle callers who want the flags promised to them by some deputy minister. As we speak, at a time when everybody is being hit by budget cuts, including those who create our culture, who guarantee our identity and development, they have just spent close to $7 million.

Meanwhile, on the other side of the Ottawa River, the federal government plans to reduce the funds spent on culture, something that would greatly compromise our cultural future.

In closing, this budget shows once again the government's inconsistency and lack of vision and respect for Quebec culture. We must, however, admit that the federal Liberal government is true to itself, making and breaking its own promises as it pleases.

[Eleni Bakopanos, Liberal, Saint-Denis, QC]

Mr. Speaker, what our friend opposite said about protecting culture is most interesting. A question comes to mind however: What culture is that? The Canadian culture, which includes the Quebec culture? Or are all cultures lumped into one?

I think the best way to protect a culture, a language or a people, as our friends opposite would say, is through the Canadian government, the federal government, as opposed to the provincial level of government. The measures we have adopted in this budget are but one way of ensuring that a typically Canadian culture is preserved, so to speak.

[Pauline Picard, Bloc, Drummond, QC]

That is blackmail.

[Eleni Bakopanos, Liberal, Saint-Denis, QC]

Blackmail yourself, Madam. Let me speak.