Debates of April 16th, 1996

Krever Commission

[Grant Hill, Reform, Macleod, AB]

Mr. Speaker, the Krever inquiry into the tainted blood scandal in Canada is becoming even more bizarre. It has been reported that the Red Cross has paid $150,000 to two of its senior officials to report to that inquiry.

Could the minister tell us how much the Liberal government is prepared to spend to defend its buddies, specifically former health ministers Monique Bégin and Jake Epp?

[Allan Rock, Liberal, Minister of Justice and Attorney General of Canada]

Mr. Speaker, the question is a little unclear. I have to tell the hon. member that we are engaged as counsel for the Government of Canada before the commission of inquiry and we are going to be there as long as we can be of use to Mr. Justice Krever.

Centre For Magnetic Fusion In Varennes

[Stéphane Bergeron, Bloc, Verchères, QC]

Mr. Speaker, my question is for the Minister of Natural Resources.

The minister said recently in the House that a readjustment of her priorities was behind the closure of the Canadian centre for magnetic fusion in Varennes, one of the rare federal investments in research in Quebec. At the same time, the minister maintained funding for the ambitious research project of the neutrino lab in Sudbury, Ontario.

Can the minister explain why the Ontario project found favour with her while the sole financial involvement of the federal government in a long term energy research program in Quebec was cut?

[Anne McLellan, Liberal, Minister of Natural Resources]

Mr. Speaker, let me assure the hon. member that the project to which he refers is not the only energy research project funded by my department or this government-

[Stéphane Bergeron, Bloc, Verchères, QC]

Long term.

[Anne McLellan, Liberal, Edmonton Northwest, AB]

Nor long term, in the province of Quebec. In fact I would like to reassure the hon. member that approximately 25 per cent of the regional R and D spending in my department is spent in his province.

[Stéphane Bergeron, Bloc, Verchères, QC]

Mr. Speaker, I would like to inform the minister that those are not long term research programs.

Will the minister admit that the new priorities of her department will mean nothing but minor spinoffs for Quebec, which has only one of the 28 Candu reactors and where no research is done in this sector?

[Anne McLellan, Liberal, Minister of Natural Resources]

No, Mr. Speaker, I would not admit that.

As I have indicated to the hon. member before, AECL has determined that its priority is the Candu reactor and the export sales of the Candu reactor.

Let me assure the hon. member when he talks of benefits to the province of Quebec, the sale of one Candu 6 represents potentially $100 million worth of business in Quebec and 4,000 person years in work.

Canadian Broadcasting Corporation

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, the latest paperweight on the heritage minister's bookshelf is the Juneau report. She will recall that this report, which was originally due in September, then November and then January, had a cost that went from $900,000 to $1.6 million to $2.57 million.

The real obscenity is the fact that the commissioners received $300,000 split two ways. Who was it in her department who approved this obscene payment of $150,000 to those commissioners for eight months of part time work?

[Sheila Copps, Liberal, Deputy Prime Minister and Minister of Canadian Heritage]

Mr. Speaker, I am disappointed but not surprised that with all of the challenging issues facing the CBC over the next number of months the member for the Reform Party can think of nothing else but to criticize the cost of the Juneau report.

In fact, the three members involved in the Juneau report included their travel and per diem costs which were in line with others that are paid by government. They passed all Treasury Board guidelines.

What I think is really sad is at a time when public broadcasting really needs the support of the Reform Party, I wish its members would get together with the government in support of long term stable funding for the CBC.

Cape Breton Development Corporation

[John Solomon, NDP, Regina—Lumsden, SK]

Mr. Speaker, my question is for the Minister of Natural Resources.

The member for Cape Breton-East Richmond, the current Minister of Health, said on October 7, 1993: "If elected, the Liberals would want to increase coal production at Cape Breton Development Corporation. With an increase in production no downsizing would be executed".

A delegation from Cape Breton has come to Ottawa to stop the Liberals from adopting a plan that would see DEVCO eliminate growing export markets and would result in DEVCO's privatization and the loss of jobs and to adopt instead a plan that offers both jobs and profits.

Can the Minister of Natural Resources give her assurances that DEVCO's management will work in close co-operation and partnership with the community and the union to fulfil the pledge by the Minister of Health of increased production and no loss of jobs?

[Anne McLellan, Liberal, Minister of Natural Resources]

Mr. Speaker, what I can assure the hon. member is that the management and the board of directors of DEVCO will work in partnership and consultation with the community and with the unions.

In fact, in a virtually unprecedented exercise of consultation, last week the board of directors and the management of DEVCO met with community representatives and with representatives of the union to talk about the long term future of DEVCO.

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

The Budget

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

Mr. Speaker, I will be splitting my time with the member for Calgary Centre.

I am pleased to have the opportunity to speak on the budget on behalf of my constituents in Comox-Alberni. Canadians have listened for years to promises to bring spending under control and they are fed up with governments who are more concerned with re-elections than with the fiscal health and economic well-being of the country.

The last federal budget surplus was in 1970 when the government took in $139 million more than it spent. That was 1970. Since then, former Prime Minister Trudeau increased Canada's debt and it has been spiralling out of control ever since. It is not surprising that our present Prime Minister was finance minister during that period.

The deficit for this fiscal year was down to $33 billion and the Liberals have been doing a smart job in dropping the deficit down, but it has not been going down fast enough. That is only part of the problem. With a national debt of $580 billion and growing every second, Canada is in serious financial trouble. There is little in this budget to deal with this problem.

By not aggressively attacking the debt, the government is giving billions of dollars to the banks instead of spending it on Canadians in need. It is true that the Liberals have made modest cuts in programs, however, by not aggressively attacking the debt, any savings in spending are simply eaten up by payment on the debt.

Canadians are now paying 35 cents of every dollar simply to service the debt. Twenty years ago this figure was 11 cents. It has shot up by a factor of three times. Rather than serving Canadians, this government chooses to send that money off to the big banks.

In addition, this budget not only fails to make the necessary changes required to balance the budget, it makes its cuts by offloading the debt on to the backs of the provinces. For example, 73 per cent of Ottawa's spending cuts in the next year are in federal transfer payments for health, education and social programs.

Last year transfers were cut by $2.5 billion for the next fiscal year and by $4.5 billion for the 1997 fiscal year. This budget cuts transfer payments by another $1.4 billion over and above the $6.8 billion announced last year.

On April 1, provinces will be dealing with $8 billion in reduced transfer payments. By 1998 total transfers to provinces will be reduced by 24 per cent from 1994 levels, a 24 per cent drop in four years.

In terms of attacking the deficit, most provinces are well ahead of Ottawa in deficit reduction. Rather than following the lead of the provinces, this government is taking advantage of their political resolve and is down loading the federal debt on to the provinces.

Without a doubt this government's cuts to federal transfer payments is a feeble attempt to simply make the provinces, which already have balanced budgets, pay the federal debt. At the same time, and this is what infuriates Canadians, this government continues to make very little effort to cut back on government waste.

For example, despite the fact that civil service jobs are being cut, the budget for executive training has been increased by $6 million.

Statistics Canada's budget increased by 47 per cent and Treasury Board had a 12 per cent increase. The list goes on.

While the provinces are being hit hard with transfer payment cuts, this government is still on a spending spree. Provinces such as British Columbia have had it up to here, especially when they are being unfairly targeted by this and previous governments.

British Columbians are forced to cough up more than their fair share of funding and in return what do they get? Less and less. To illustrate, the level of funding under the Canada assistance plan to British Columbia, not to mention Alberta and Ontario, has been frozen since 1990. The Liberals promised to lift this cap, but like many of their promises, they have broken this one as well.

British Columbia, like Alberta and Ontario, continues to be a cash cow for the rest of Canada. In return British Columbians are being deliberately overlooked by this government which is more interested in serving the needs of central Canadians than the so-called rest of Canada.

British Columbia has received less than its fair share of transfer payments for years. For example, B.C. receives 30 cents on the dollar for its social assistance funding from Ottawa, while most other provinces receive 50 cents on the dollar toward their social assistance programs. Does that sound fair? Well, it is not.

There is another glaring inequity. This coming fiscal year Quebec will receive $11 billion in transfer payments. Ontario will receive $10 billion in transfer payments. What does B.C. receive? Three billion dollars in transfer payments. That is unequal and it is obscene.

Federal cuts to social program funding since 1990 have already cost B.C. taxpayers $1.7 billion. Over the next two years B.C. loses an additional $1.2 billion in federal funds for health, social services and post-secondary education. With all the cuts in transfer payments, British Columbians are fed up watching their taxpayers' dollars go to Ottawa with very little coming back the other way.

The level of cash transfers to the provinces is rapidly approaching the point at which Ottawa will lose any influence in setting health care and welfare standards. If this situation continues, why should B.C. be forced to follow Ottawa's standards for welfare when it is simply not coming through with the transfers? The answer is very simple. Ottawa will cease to be a player.

Over the past 30 years, federal spending in B.C. has been significantly lower than any other province or region in Canada. For example, B.C. receives a measly 5 per cent of major crown projects valued at over $100 million despite being the third most populated province in Canada. This is discrimination of major proportions.

The government has not only failed to represent B.C.'s interests in Canada, but it has also failed to represent B.C.'s interests on the international front. For example, the United States is challenging Canada's sovereignty over the inside passage between Vancouver Island and the mainland and is demanding the return of $300,000 in fees collected from U.S. fishermen in 1994.

Last November the American Congress passed a bill declaring the right of free passage to U.S. vessels through B.C.'s inside passage. Clearly this American bill undermines B.C.'s and Canada's sovereignty over its internal waters guaranteed under the Oregon Treaty of 1846. B.C.'s sovereignty over its own territory must be protected, yet the foreign affairs minister views this situation, and I quote his words, "as an annoyance". It is no wonder that British Columbians are worried about their federal representation regarding this issue and other issues such as the ongoing dispute regarding softwood lumber and the treaty regarding salmon.

I am forced to ask the question: Who in this government is looking out for B.C.? The answer: There is not one member of Parliament in the entire Liberal caucus, let alone in cabinet, who is willing to stand up for British Columbia. It is long overdue for this government to recognize the west and its vital contribution to Canada.

British Columbia expects more from the federal government. B.C. expects federal representation and recognition that B.C. makes a major contribution to the country. It is long past time for the Liberals to recognize that B.C. is more than a cash cow for Canada.

British Columbians are not prepared to sit in the back seat any longer. British Columbians are asking themselves what value they are getting for their dollar. When the net costs seem to far outweigh any benefits, it begs the question: Why should B.C. remain in the game?

In conclusion, British Columbians will simply not tolerate these injustices any longer. They are demanding equal treatment and it is becoming very apparent that only a change in government will bring that about. Come the next election, British Columbians will vote for change. They will turf out the Liberals in B.C. who are not representing their interests and will send a complete slate of 32 Reformers to clean up the mess created by the old line parties.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I listened with interest and incredulity. I cannot believe some of the things I heard from the member.

Sometimes when I think about what happens in this place, I wonder if members forget the old cliché that if you are not part of the solution, you must be part of the problem.

I want to remind the member of comments made recently by Premier Mike Harris of Ontario after his election and after looking at the finances. He publicly announced, after knowing for two years

exactly what the adjustments in transfer payments to the provinces would be, that 95 per cent of the fiscal problems of the provincial government had nothing to do with the federal government. They were problems in the financial management of the province.

I spent a number of years working on a volunteer basis on the board of the Mississauga hospital. Over those nine years there were tremendous changes in the health care system. There was a significant change in the average length of stay from approximately 7.2 days to approximately 4.9 days. There was a tremendous shift in technology. There was a tremendous shift in medical knowledge and chemistry. There were significant savings. That hospital reduced from 600 beds to 500 beds and served more patients because of the improvement in technology.

Of all of the savings that were achieved by the Mississauga hospital and by every other hospital across Canada, not one penny was transferred back to the federal government. The federal government has continued to fund at the same level and has received no credit for health care improvements over the decades.

Does the member not believe that we have to look for ways to improve the productivity of all operations, including health care, that we have to look for ways to ensure funding is satisfactory for the provision of good service, not the same level of dollar service, but improved productivity and a better value for the dollar being spent?

Changes are being made. The federal government is only getting its share of the savings. It is simply one example which shows this member has not carefully thought out the reasons the federal government should share in the savings that have been achieved across Canada.

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

Mr. Speaker, the member clearly illustrates what I have just been saying. Instead of commenting on the problems or solutions in British Columbia, he tells us what is going on in Ontario. That has been the problem for the last 30 years. We have been hearing about central Canada to the exclusion of British Columbia.

The member also misses the point that Canadians clearly want to see the best uses made of their tax dollars which in many cases are wasted by government. The government is in areas where it should not be and it should get out. That is where the government should cut. It should not cut transfer payments to the provinces in health, welfare and education. The government wants to cut $4.5 billion which is obscene.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, I rise today to address the budget of the federal government. I will do a couple of things. First, I intend to compare a good budget with this Liberal government's bad budget. I want to make a few points before I start.

The job of a finance minister and the purpose of a budget is to represent fairly and accurately the balance sheet of a nation. Let us examine the record.

On page five of the budget speech the minister of myth-sorry the Minister of Finance-claims, brags and asserts: "In this budget we are not raising personal taxes. We are not raising corporate taxes. We are not raising excise taxes. In fact, we are not raising taxes". All the backbenchers rose and applauded. All those good members of Parliament rose to applaud.

However, on Table 3, at page 19 of the "Budget in Brief" entitled "Summary of tax measures," we clearly see that he has raised taxes this year by $100 million. Next year he projects to raise taxes by $245 million and the year after that by $390 million. Is that a deliberate misrepresentation or was it simply an oversight on his part when he chose to use such inflammatory rhetoric?

The finance minister-sorry, the minister of myth-also brags and claims that he has broken the back of the deficit, as if that was the problem. He has identified the wrong problem. The problem is the debt and the interest cost to service that debt.

He tells us half of the equation. In algebra we all know that two sides of an equation must balance or there is something wrong with the equation. All he talks about is one side. He talks about cutting the deficit and getting it down to five or six. He always starts at six. I forgot about the part where he inflated the Conservative government's miscalculations: six, five, four, three, two, but he never tells us when we get to zero. At the same time, he does not tell us the other side of the equation.

The real problem is that while the deficit is going down it is not going down fast enough. He was too chicken and too slow to make the cuts in the first year of his operation when he should have. He waited over two years. The debt is going up. It is rising by $40 billion, $30 billion, $25 billion, $30 billion. He came in at $508 billion. He is going to exit at $608 billion by his own projections. He does not talk about that. All he talks about is half of the story.

We also know the GST is a great contributor to the underground economy. He promised in opposition to get rid of it and/or replace it which has not been done. Now the finance minister, the minister of myth, is saying that harmonization is the answer. He is saying this is how it will be replaced.

However, in opposition that man stood here in defiance of the finance minister at the time and said: "Harmonization is no answer. If you harmonize with the provinces and their provincial sales taxes all you accomplish is that you never get rid of the GST. We would get rid of it. We would not harmonize". That was basically what he said.

Now that he is the finance minister he is harmonizing the GST which will increase costs for the provinces. He has a non-starter there and he knows it. He is trying to bribe the Atlantic region. That is how he is trying to solve his problems.

This budget is targeted at the financial markets. He did a good job there. He was smart. It helps monetary policy and helps to bring stability at a time when we are very concerned about the poor job the Conservatives did. I will give him credit for that, it did help. He set a target for a deficit and he met it. He kept setting targets which he met.

However, those targets were so soft that it was like saying let me on the ice, coach. I will skate up and down that ice once without falling. Do you think you could do that, Mr. Speaker? I think so. I think most Canadians could do that even if they were out of shape like I am.

My point is this budget has appealed to the analysts because of what the finance minister has done, which is what one generally does. A person sets a target and if his corporation meets it he is looked on favourably. However, this budget should be about people, the taxpayers, our children and our grandchildren, the shareholders in this country. He has let them down tremendously.

Every baby who is born in this country has the obligation of a $20,000 debt right off the bat. That is the baby's share in helping to pay off and service Canada's debt and deficit. Every taxpayer owes about $40,000, federally speaking only. This budget is not for our children and grandchildren. They will pay dearly for this ever increasing debt.

By making the four points as I have made them and by pointing out from the start that the finance minister's obligation is to present a budget that fairly and accurately represents the finances of the country, do you, Mr. Speaker, feel that he has represented the financial picture fairly and accurately? Regardless of your opinion, Mr. Speaker, I submit that he has not. However, we both know that the ultimate decision on this budget will be made by the taxpayers of this country.

I would like to get to the comparison of a good budget and a bad budget. The good budget I refer to has been put together by the minister of finance of the province of Manitoba. This budget has a number of tremendous features which this finance minister could learn from and could actually adopt.

The Manitoba government has introduced an act, the balanced budget, debt repayment and taxpayer protection legislation for which it has received nothing but compliments and praise from all groups across the country, both business and taxpayers. This budget clearly shows it has a surplus. There is an operating budget of $385 million and a surplus of $48 million. Does the federal government have that kind of a budget? No.

The provincial government can offer an increase of $70 million to local governments because it has a surplus budget. Rather than offering more to the provinces, the federal government has to offer less. It makes its spending cuts on the backs of the provinces by transferring $7 billion of the Canada health and social transfer to the provinces. It is a wonder rocks are not thrown at the House of Commons but instead are thrown at buildings like Queen's Park.

The Manitoba budget has a tax rate reduction. There is tax relief for the provincial taxpayers of Manitoba. Does the federal government have a tax reduction for the Canadian taxpayer? No.

The major difference between the budgets of the Manitoba government and the federal government is in the definition of an operating balance. The Government of Manitoba takes its revenues and expenses and then under expenditures it includes the public debt costs. It shows operating revenue which is made up of expenses and the interest costs to service its debt. That is what it calls operating revenue.

In the federal government's presentation of operating revenue or balance, the government takes its revenues, subtracts program spending and defines operating balance to create the illusion, the misconception, that it has an operating surplus. Then it subtracts the interest costs to service the debt.

It is an accounting difference of opinion. Both are legal and both are acceptable but one is deceiving. One view tries to show the federal government is doing a better job than it is. Saying that it has an operating surplus without including the interest costs to service the debt does not fairly and accurately represent the financial status of the federal government.

It is a small difference in accounting procedure but it is a huge difference in the psychology and perception of the Canadian taxpayer. We have to stop this game of smoke and mirrors. I do not want to call the finance minister the minister of myth. I want to give the finance minister a compliment for recognizing the needs and the problems of this country.

Half the solution to a problem is identifying the problem. The problem, I will repeat, is the debt. The Liberals can brag all they want about how the deficit is coming down, but tell me why the debt is going up. They can brag all they want about the spending cuts they are making, which they never promised to do but thanks to us they are. However, why is the interest cost going up? The cuts are equal to the increase in costs. Where are we? We are treading water. The time bomb is ticking and might burst one day.

We all talked a few years ago about hitting the wall. That wall is when nobody who gets elected to this Chamber has the courage to do what is right. To do what is right is to be fiscally responsible, to present a balanced budget and to have a social conscience, to properly define legitimate government programs, not the give-

aways the government continues to support. It is not to reduce transfers to provinces and transfer the problem.

We have to reduce transfers to individuals because some are too generous. A lot of them are too generous. But no, this government will not do that. It wants to continue the game of getting elected the old way.

This is what the province of Manitoba thinks about the great social values of this wonderful Liberal government. This year, the Liberal government reduced federal funding to health, education and family services by $24 million. Next year it will reduce it by $147 million and the year after by $220 million. The province has to handle it.

The finance minister from Manitoba said: "We had hoped that in setting its priorities the federal government would recognize the importance Canadians attach to health, education and family services. The federal budget proves little evidence of any priority emphasis on these vital services".

Our zero in three budget cuts to these three programs of health care, education and welfare were only $3.3 billion. The government's cuts were $6.6 billion while ours were $3.3 billion less. Talk about slash and burn.

[Morris Bodnar, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, the hon. member has been comparing the federal budget to the Manitoba budget and for some reason overlooks the Reform Party's budgets.

The Reform Party budget makes certain suggestions for cuts, for example, cuts to seniors' benefits, 15 per cent; unemployment insurance, 22 per cent; aboriginal peoples, 24 per cent; post-secondary education, 9 per cent; health, 11 per cent; the Canada assistance plan, 34 per cent; equalization, 35 per cent; other transfers that are not caught in that web by another 6 per cent; total cash transfers over and above all of that by another cut of 24 per cent to provinces; other social spending that is not caught by this, another 15 per cent; a total cut on average of 20 per cent in social spending.

Is the hon. in favour of these types of cuts in light of the speech he has made?

[An hon. member]

He has you there.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, I hear another comment in the hinterland of backbenchers whose voice sometimes sounds like a trained seal.

However, we are not supposed to really answer questions in the Chamber. We are supposed to avoid them. I will do the unusual. I will answer this gentleman's question.

Mr. Speaker, you bet in our zero in three budget we had cuts and you bet we had the cuts he is talking about. To talk percentages is one thing. To talk numbers is another.

We proposed $25 billion worth of cuts over a three year period, an average of $8 billion a year. We would have found that area where we are wasting the most money.

I find it ridiculous and ludicrous that we have an initiative called eliminate child poverty by the year 2000, while a million children are starving in this country and we spend through our taxation system currently $9 billion through five different programs. Why can we not take the first billion dollars we take in and find those million children and give them the money they need so they do not have to be put up for adoption, so they have food, shelter and clothing? That is the waste that we are talking about. That is the kind of program we would like to see.

Another difference is, unlike the politically sensitive and politically nervous Liberals who are afraid, who do not have the political courage to do what needs to be done, we would have made the cuts in the first year. We would have started the cuts and in the first year the cuts would have been in the neighbourhood of $8 billion, or $9 billion, or $10 billion. The government has now made $7 billion in cuts two years later.

The difference is that by the end of this mandate the government will exit adding over $100 billion to the debt, whereas our program if adopted would have added only $50 billion. What this is all about is having the political will to do what is right for the Canadian taxpayer.

By not acting when they should have the Liberals have just deferred the problem, delayed the problem, run up the costs. The politicians who will follow this bunch, who will follow us, will have a greater problem because the interest costs are rising.

We had a balanced budget and that is what the government should have done. If a government is ever elected that has the political will to present a balanced budget and to do it and create a surplus budget like Manitoba, it should follow that model. That model is good. It should get some advice from people who finally can create surpluses. That is what we need.

[John Bryden, Liberal, Hamilton—Wentworth, ON]

Mr. Speaker, it is a pleasure to rise in this debate on the budget. I will address one small aspect but one which is very important to me.

During his budget speech the finance minister suggested there would be increased opportunities for Canadians to donate to charities and he proposed raising the annual limit on charitable donations from 20 per cent to 50 per cent and that the limit would be increased to 100 per cent for gifts willed to charities.

The rationale behind this, as it emerged from the minister's remarks, was that as government gets more and more out of services to Canadians it is hoped charities in Canada will take up the slack, as it were.

I applaud the minister's intention in giving greater opportunities for charities to have a larger role in bringing services to Canadians and giving Canadians, in turn, an opportunity to donate more effectively to charities.

In one sense the finance minister's move is premature. Unfortunately the charitable industry in Canada, which consists of some 73,000 charities with about $86 billion in revenue, is an industry which is essentially unregulated.

It is controlled almost solely by certain amendments to the Income Tax Act, 1976, which pertain basically to a few rules about how charities should spend their money and provide for an annual information return that charities have to fill out.

Beyond that there is little regulation of this huge industry. This is exceptional. In Britain, the United States and in France the charitable is very closely controlled under a great number of regulations.

The problem is that with the lack of government regulation comes lack of accountability. Over the past two months I have undertaken a rather elaborate study of charities by looking at their T3010 forms. This is an annual financial reporting instrument they have to fill out. This form is very inadequate for getting a grip on what they are doing but it is the only tool the public has.

In reviewing these forms and in examining quite a spectrum of charities, perhaps 500, all kinds of problems come to the surface. There are charities engaged in actual political activity, supporting or opposing political candidates. There are companies giving funds to foundations and then borrowing back the money, which is not something we want to see. We see excessively disproportionate fundraising costs versus the amount of funds raised.

There are marketing firms that actually set up charities in order to give themselves an income. There are charities that do not fit definitions of charities. The definition of charity is so loose that virtually anyone can apply to set up a charity and be successful and get the tax breaks associated with it.

Some charities are engaged in all manner of special interest group campaigns that have little or nothing to do with helping the general public. It goes on and on. There are offshore charities that raise money in Canada that are controlled entirely offshore. There is no accountability even there.

Perhaps the most salient point, there are charities that have huge finance and management costs quite disproportionate to the amount of money they spend on the charitable activities.

When the finance minister proposes getting the charitable sector more actively involved in serving Canadians, we have to consider whether the charitable sector is at present able to fulfil the function adequately and effectively.

The ultimate problem is that for years Revenue Canada has resisted suggestions, including suggestions coming from the auditor general, that charities be subject to penalty when they fail to comply with existing rules and regulations.

Unfortunately there is no penalty to discipline charities that are abusing their responsibility other than revocation of charitable status. This is a lengthy and difficult process which usually does not occur except in very small numbers.

We have the fundamental problem associated. Where it has enormous meaning to what the finance minister has proposed with respect to encouraging Canadians to participate in charities is something called the 80 per cent rule.

In 1976 an amendment to the Income Tax Act required that charities spend 80 per cent of their tax receiptable donations on charitable services. That left 20 per cent for management, administration and salaries.

Unfortunately the authors of that amendment confined it purely to tax receiptable donations when charitable income is mainly and ultimately, believe it or not, from government. Most governments at every level support charities which may be universities, hospitals or CIDA charities associated with foreign affairs or charities associated with Heritage Canada or Health Canada.

Unfortunately because the 80 per cent rule applies only to tax receiptable donations, it does not apply to grants from government or funds raised by other means, for instance, bingos. It does not apply to bequests left by people in their wills. If we examine a couple of hundred T3010 forms we would find that the vast majority of charities are nowhere near the 80 per cent rule with regard to their total revenues.

Charities are by a large not very well managed. Some charities are spending perhaps 30, 40 or 50 per cent of their total revenue on actual charitable activities. This is quite an enormous inefficiency which Canadians would be very concerned about when they put up their charitable dollars.

The problem is we have no way of controlling that with charities as the legislation now stands. The revenue minister cannot dictate to a charity to improve its management. There is the possibility of an audit of a charity but an audit looks only at fraudulent use or improprieties by a charity. It does not look at the ethics of spending by a charity. Consequently a charity could be very small and could choose to pay $180,000 to its executive director or, as was recently in the news, the case of the Red Cross deciding to pay $1,000 a day to a former principal officer so he could testify before the Krever commission.

There are all kinds of ethical problems within charities because there is no mechanism for an ethical audit. One reason there is no mechanism is that there is not the level of disclosure or regulation existing either within the law or any other means which pertain to charities. We have no decent control on how well charities do their business. Therefore the finance minister proposes involving charities more and more with helping Canadians and taking over where government leaves off in providing services to Canadians.

We are sure the level of management of these charities is actually below that of our own bureaucracy. We must ask ourselves if the finance minister's move is wise. The finance minister is aiming in the right direction. Before we can involve charities in the way proposed in the budget speech we must have legislation which will set the house of charities in order.

We need new legislation similar to what has been put forward in the United Kingdom where charities have been completely overhauled. We need to do this in Canada and then the finance minister's proposal to tap the generosity of Canadians to support charities, bring new services to people and to encourage the very good charities and get rid of the ones that are poorly managed. Then it will be a very fine move.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Mr. Speaker, it was interesting to listen to the remarks the hon. member made with regard to charities.

It reminds me of the illustration of somebody trying to pick a tiny sliver out of somebody else's eye but cannot do it because of the log in his own eye.

He says charities are not well managed. Before he criticizes charities for not being well managed or having high administration costs, why does he not look at his own government? If he is to correct something and complain about high administration costs, why not first of all look in his own back yard and see the huge bureaucracy which has been created here in Ottawa?

If we are to create another bureaucracy to regulate charities, it will not solve the problem. It will only compound it. On his statement that charities are not well managed, I suspect that a lot of them are a lot better managed than the government is.

He also said charities are allowed to lobby government. The government funds special interest groups that turn around and lobby the government for more money. If he sees a problem with charities' being concerned about some of the moves of government, those charities have values and they would like to see the government translate some of those values.

The problem I have with that approach is how can we complain about charities when we have special interest groups receiving huge sums of money directly from the government to lobby the government? If that is not unconscionable, if that is not a huge problem, I do not know what is. We must look in our own back yards before we start trying to find more ways to collect tax.

A typical Liberal Party move is when it does not have enough money it tries to figure out another way of collecting the money without giving the impression it is actually increasing taxes. It does this all the time and now it will go after charities.

There may be a need to tighten it up but we must first of all fix the big problems in the country. We must reduce government spending. The Liberals should look at the bureaucracy they have created before they start going after charities.

The hon. member is trying to find fault in areas in which I think there may be some small problems. However, let us fix the big things instead of picking away at some of these little things.

How can we get involved in the regulation of charities if we do not share their goals? Government typically gets involved in all of these things and tells others how to do it when it will destroy a lot of the things these charities are aiming to do in society. Charities play an important role in our society. If the government is to start undermining what they do I have grave concerns about that.

[John Bryden, Liberal, Hamilton—Wentworth, ON]

Mr. Speaker, I am mystified by the member's challenge about the simple premise that charities be more accountable. There is a major revenue issue here in the sense that there is $86 billion in revenue going through charities without proper monitoring or decent monitoring by Revenue Canada. Therefore if we have only 10 per cent abuse in that sector we have $8.6 billion that has been lost to the economy.

As to the issue of special interest groups, many of the special interest groups funded by government are charities, which is precisely the problem. I do not believe they should be charities. I do not believe they should have charitable status, particularly if they are advocacy groups.

This is an area in which I am merely calling for legislation to bring a greater degree of accountability to public organizations. The member does surprise me by finding this unacceptable.

[Marlene Cowling, Liberal, Parliamentary Secretary to Minister of Natural Resources]

Mr. Speaker, I am pleased to participate in the budget debate, bringing a rural Manitoba perspective to the discussions.

The budget brought forward by the finance minister is yet another reason why the approval rating of the government by the Canadian people continues at unprecedented heights. We are providing the kind of government Canadians want. We are tackling the deficit while protecting social programs. We are governing with integrity. We are listening to what Canadians are saying and responding.

This is definitely a good news budget. It is good news for rural Canada. It is good news for the resource sectors, agriculture, mining, forestry and energy. It is good news for our greatest resource, our people. It is good news for jobs and economic growth. It is good news for all Canadians.

There is more optimism in the agriculture sector than I have seen in all of my years as a farmer. Farmers are receiving their WGTA payments right now. They are using this money to diversify their operations and bring in new efficiencies. Farmers are at the cutting edge and must be to compete in today's competitive world market.

The elimination of the WGTA is encouraging a boom of value added processing in Manitoba. This is crucial for job creation and economic growth. Increasingly we are adding value to the commodities we produce in our home communities instead of sending these raw resources east, west or south.

Since the 1995 budget the following projects have been announced in rural Manitoba: a $55 million investment in a canola crushing plant in Ste. Agathe; a $40 million hog processing plant announced by Schneiders meats; a $200 million expansion of the Simplot fertilizer company in Brandon; a $5 million pasta processing plant in Altona; an $8.9 million investment by Canmera Foods in its Altona canola crushing plant; an $18 million investment by Carnation Foods in Carberry's potato processing plant; an expansion of the Canoat plant in Portage.

In my riding of Dauphin-Swan River a very industrious group from Russell is putting together an ethanol and cattle finishing plant that will be a windfall for many surrounding local communities. We also have a group of farmers wanting to set up an inland terminal in the area. If this is not a demonstration of optimism in the future of farming, I do not know what is.

All of these examples clearly show the confidence farmers and agri-food companies have in the future of agriculture and in the future of rural Manitoba. It shows the confidence they have in the Liberal government.

It is because the Liberal government and the Minister of Finance are creating a climate of opportunity that these crucial projects are a reality. These are the types of projects which will continue to encourage job creation in rural Canada.

Dollars are tight. We all realize that. The challenge becomes setting priorities and doing what is best for the agriculture sector in the long term.

What are we doing to keep farmers on the land and to create jobs for our children so they can remain in their home communities? We are investing our limited financial resources in infrastructure, in research, in adaptation measures and in international trade to help the agriculture and agri-food industries expand for the food production sector.

We are already well on our way to exceeding our goal of $20 billion in agriculture exports by the year 2000. Our exports have risen by about 30 per cent over the last two years alone.

This is good news for the farmers in my riding of Dauphin-Swan River. It means strong, long term markets which will keep and help farmers. It will also keep the prices up as well as the demand.

A good example of how we are responding to the farm community is the decision to accelerate the payment of the $300 million adjustment fund to compensate for changes to the pooling of the seaway costs. Instead of spreading the payments over six years, the money will flow within three years, putting money in farmers' pockets faster and making improvements to local infrastructure.

The Canadian agriculture and agri-food sector has a proven record of successfully adapting to the constant changes facing the industry. In the years to come new trade agreements, new markets and new technologies must and will be met with the same determination.

Similarly, the measures we have taken in the area of natural resources also further the government's commitment to rural Canada and to sustainable development and to jobs and growth in the forestry, mining, energy and earth science sectors.

Our focus on renewable energy and energy efficiency will contribute to growth and jobs at home and abroad. The renewable energy sector offers significant potential to help Canada move toward our international climate change and the commitment to stabilize greenhouse gas emissions at 1990 levels by the year 2000.

Through changes to legislation and regulations we are creating an environment that encourages growth in the energy and mining sectors to create jobs and fuel the economy.

Our financial constraints have meant that we have had to make some tough decisions.

We are streamlining our involvement in nuclear energy and we are working with AECL to find alternative sources of funding and other agreements.

These efforts are progressing very well and the Minister of Natural Resources is to be commended for her commitment in this regard. I also commend the minister for her commitment to building partnerships with stakeholders in the natural resources sectors. She has worked tirelessly with industry and the provinces to ensure that Canada will continue to reap the economic benefits the resource sectors bring.

The minister is following through on the Liberal government's commitment to work with Canadians for the good of Canada.

There was a great deal of rejoicing in Dauphin-Swan River that the budget contained no new taxes and no tax increases. Canadians told us to tackle the deficit through spending cuts rather than tax increases. We are listening to Canadians. We are surpassing our deficit targets without raising taxes. Deficit cutting is very important but most important are our people, the greatest resource Canada has.

Liberal governments in Canada have a long history of helping people at home and abroad. I am proud to be part of this government, which is continuing this proud tradition. In the budget we have provided the balance Canadians want between the economy and social programs. We are meeting our tough deficit targets while making strong financial commitments to medicare and pensions. This is good for Canada and good for Dauphin-Swan River.

We are establishing a stable, secure and growing financial commitment to medicare, post-secondary education and social assistance. After a two year levelling off period we will be increasing transfers to the provinces in each of the next three years. It will be up to the provinces to spend those dollars smarter, to ensure the people of Canada continue to have access to quality health care and education. We are continuing our commitment to older Canadians.

While other parties want to let seniors fend for themselves the Liberal government recognizes the contribution seniors have made and will continue to make to Canadian society. The budget announced a new seniors benefit designed to help those who need financial assistance the most. The new program will protect current seniors, improve benefits for low income seniors and guarantee that future generations will be able to count on benefits when they retire.

Although we have cut our federal spending significantly we recognize that in today's economy we need to better target resources to benefit families. We are helping families through changes to child care expense deductions and increases in the working income supplement and through improving the employment insurance program for low income parents.

Like all budgets, this is a budget for the present and for the future. It is providing Canadians with a growing economy while reducing the deficit and it makes a strong commitment to the well-being of our greatest resource, our people.

I applaud the Minister of Finance for this budget and his commitment to all Canadians.

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, I listened very carefully to the remarks made by the Parliamentary Secretary to the Minister of Natural Resources, and there is something I do not understand in her remarks. She seems not to be telling the whole truth.

For example, she said this was an extraordinary budget for the agricultural sector. She may be right if she is talking about the agricultural sector in western Canada, but she forgot to say that the agricultural sector in Quebec is really penalized by the rules put in place by the present federal government. Here is an example. The transportation of wheat used to be subsidized, which allowed all Canadians and people all over the world to buy wheat at a lower price. It also allowed Quebec producers to buy wheat for the production of poultry, pork, eggs and so on.

So what did the government do? It decided to subsidize western wheat producers directly and, at the same time, to eliminate the dairy subsidy that was paid to Quebec dairy producers. Is it not gross injustice? Maybe the member should say that clearly to this House and to the people of Quebec who are watching.

I remember working very hard to prevent subsidies from being paid directly to wheat producers. It was a lot more equitable to all Canadian producers when the government subsidized the transportation of wheat instead of subsidizing wheat producers, and I say it again, to the detriment of Quebec and Ontario agricultural producers.

I would like the member to give me a clear explanation and to tell us the whole truth on that subject.