House of Commons Hansard #26 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was budget.

Topics

The BudgetRoutine Proceedings

10:50 a.m.

Bloc

Stéphane Bergeron Bloc Verchères, QC

Mr. Speaker, first of all, I want to thank the hon. member for her question. Contrary to what she has suggested, I want to point out that I am far from being opposed to the idea of the government supporting the poor in our society. That is not the issue.

What I said in my speech is that we are creating two classes of senior citizens. I think this is what makes this new program totally unacceptable.

Let me give you another example, that of a seniors couple with a family income of approximately $80,000 a year, currently entitled to benefits. Let us compare that couple to another with a family income of about $45,000, after the year 2001. The couple currently receiving pension benefits from the program would still enjoy these benefits after the year 2001, even with an income of $80,000 a year, whereas the couple whose income would total $45,000 a year would not be entitled to these benefits under the new policy of this government.

This is totally unacceptable, and this is what I condemned in my speech; it was not the support given to the poor in our society.

The BudgetRoutine Proceedings

10:50 a.m.

Bloc

Réjean Lefebvre Bloc Champlain, QC

Mr. Speaker, our economy is faltering. The unemployment rate is still at harmful levels. The tax system must be reformed. Very few jobs are being created, and only by the private sector.

In such a context, the government must show its leadership. Recently, Mr. Chrétien and his team missed a good opportunity to change our economic environment and adjust it to the realities of this century's end. The budget tabling process is a public management tool that must include adjustment and stimulation measures that will help us reach our collective goals.

But Mr. Martin chose to bring down a budget which closely resembles an election budget containing watered down initiatives and lacking concrete job creation measures. The Liberals have soon forgotten the promise to create jobs they made during the last election campaign. In the past year, the unemployment rate went down by only 0.1 per cent. Concretely, this year's budget proposes a summer job creation program for students and a technological investment fund aimed at preserving jobs.

But in order to do so, the government is reducing tax benefits for workers' investment funds, a favoured job creation tool. Moreover, the cuts in research and development announced last year are being implemented this year, which is slowing down all the more innovation and research in Quebec and in Canada.

Indeed, job creation is not the Liberals' priority at the moment. Moreover, they are determined to go forward with their unemployment insurance reform, which they have the gall to call "employment insurance" in spite of all the public opposition and demonstrations.

With this bill the government should be able to give workers the tools they need to get the jobs available on the market. In fact, every year, 300,000 jobs remain unoccupied in Canada because of a persistent lack of consistency between the training given in our institutions and the needs of employers.

The government's objective is clear: increase UI fund surpluses and take them over at the workers' expense. It is time those funds were administered by the people to whom they belong and served the purpose for which they were collected. Only then could we speak of a real employment insurance. Without changes in that direction, the government must withdraw its bill.

The government continues to insist on making the poorest elements of our society finance its overspending and its inability to put public finances on a healthy footing. The reform, in its present form, in unfair because the conditions of eligibility are tightened and it creates two categories of unemployed: frequent users and

the others. Moreover, by lowering the benefit rate, it will throw more and more seasonal workers into poverty.

In an economy built on small enterprises, farms and small retail stores, like in my riding, there is a lot of seasonal work. The people occupying temporary jobs do not do so because they want to. Why then penalize them as if they had a choice?

The proposed reform is eroding the buying power of our workers.

During the 1993 election campaign, the Liberals talked about eliminating the GST. Now they are talking about replacing it, about harmonizing it with provincial taxes. They are slowly setting the stage for the introduction of a national sales tax.

The federal government should transfer to the provinces the tax room occupied by the GST. The government is quick to forget its campaign promises, especially now that it seems more preoccupied with the next election. But Canadians have a good memory.

Fortunately, the Martin budget contained no tax increases for individuals but, indirectly, consumers will have to absorb part of the cost of the dairy subsidy. This budget provides for the phasing-out of the dairy subsidy over a five-year period starting next year. This will result in a loss of $76 million for Quebec dairy producers, who produce 47 per cent of industrial milk in Canada.

For farmers in my riding, this means an annual loss of about $1,500 each, or more than $7,500 between now and August 1, 2001. Members will recall that the dairy subsidy was introduced in the early 1970s to lower the selling price of dairy products and make them accessible to the largest possible number of consumers because they are good for their health. Once again, in a roundabout way, the government is making our small businesses and consumers pay the bill.

On another subject, the new seniors benefit, which will replace the old age security and guaranteed income supplement programs in the year 2001, will be based on the family income of pensioners. On the one hand, the government is encouraging people to invest in RRSPs and, on the other hand, it is saying that seniors whose family income exceeds $45,000 will be penalized.

For a couple, this represents an annual income of $22,500 per person, a figure which is relatively easy to reach for individuals who contribute $2,000 a year to their RRSP for about thirty years.

The Martin budget changed the situation for all those involved in the long term planning of their retirement. There will no longer be a universal old age security system. The minister just said that such a universal system will have disappeared by 2001.

In conclusion, the government is restricting access to programs and is quietly passing on the bill to low-income people. The noose is getting tighter and tighter. Enough is enough. We will not be fooled by this collective impoverishment strategy. The government must ensure a fair distribution of the present tax burden. The social and financial security of our children depends on it.

The BudgetRoutine Proceedings

10:55 a.m.

Liberal

Alex Shepherd Liberal Durham, ON

Mr. Speaker, I listened to the member talk about the redistribution of income. I think that was his last comment. I was surprised how he took exception to the proposals in the budget to restructure old age pensions. Basically the budget sought to define those people who are most in need in our democracy, those people who have less income in their retirement years. It sought to underpin their incomes in their retirement years. Indeed it actually increased their real disposable income. It made those payments non-taxable.

I heard the member say at one point in his speech there was a need to redistribute income. At another time I heard him take some exception to the fact that we have spent a lot of time in designing this legislation to create that safety net for the elderly.

I know as well that a committee is currently travelling throughout the country talking about the Canada pension plan. I am sure also that one of the parameters there is to ensure that those funds will be available for those people who are most in need.

These are things which I think are courageous of the government. We could simply forget about the Canada pension plan and by the year 2015 the cheques would stop coming. That perhaps would not hurt people who have high incomes but of course for those people who had not anticipated that it would create undue hardship.

Our government has taken the time and the energy to recognize there is a problem coming, maybe not tomorrow but by the year 2015. We want to deal with problems today so a future generation of Canadians will have adequate means for retirement.

I would like to know how the member can argue that we are not redistributing income while at the same time he argues we should not be underpinning the retirement incomes of seniors who have less income than others.

The BudgetRoutine Proceedings

11 a.m.

Bloc

Réjean Lefebvre Bloc Champlain, QC

Mr. Speaker, I thank the hon. member across the way for his comments and his question. In connection with redistribution of income or old age pensions, I must point out that the hon. member did not really listen to my speech, since I did also refer to the unemployment insurance fund, with its $5 billion surplus, which the government is using to attack the least well off in our society. There is also the whole question of milk subsidies, which our Quebec farmers will no longer be getting.

What the province of Quebec wants is a fair redistribution of income, because that income affects people, the least advantaged segment of the population and the health of the people in our ridings,

Then there is the disappearance of universality in 2001, which will penalize those who have contributed to the pension plan all their lives.

In my opinion, the Martin budget makes a poor distribution of income.

The BudgetRoutine Proceedings

11 a.m.

Liberal

Marlene Catterall Liberal Ottawa West, ON

Mr. Speaker, on a point of order, our next speaker has not yet arrived. If the Chair wishes to proceed with the next speaker from the Reform Party that would be quite acceptable to us.

The BudgetRoutine Proceedings

11 a.m.

Reform

Charlie Penson Reform Peace River, AB

Mr. Speaker, our next speaker is not prepared either.

The BudgetRoutine Proceedings

11 a.m.

Bloc

Yves Rocheleau Bloc Trois-Rivières, QC

Mr. Speaker, I shall continue in the same vein as my hon. colleague from Rosemont, on just how seriously our colleagues over there and next to us here are taking this budget, whether they are showing any real interest in criticizing it. This is a very serious matter, since it is so insidious and involves long term measures that will commit future governments, while not dealing well with the short term.

I shall continue, nevertheless, keeping those subtleties in mind.

The angles of attack-That, Mr. Speaker, may be the reaction of a man of the people to the silence from government members and Reform members.

It is certainly not for want of things to criticize about this budget. We could talk about old age pensions, as has already been done; about the government's intentions concerning the revenue commission-where not only is the federal government intervening in an area of jurisdiction which is provincial under the Constitution, but where it also wants to push aside the only province that stood its ground in this matter and respected the Constitution, namely Quebec. Now it wants to shove Quebec aside and take over everything in a Canadian context.

We could also criticize the way this government is dealing with the deficit. It is doing so at the expense of the least well-off members of society, that is the unemployed, by blithely dipping into the unemployment insurance fund to the tune of $6 billion yearly, a fund financed by workers' contributions. This is something that must not be lost sight of, something that must be mentioned again and again. Contributions come from employers and from employees. The cuts are being made at the expense of the provinces. They are blithely cutting transfer payments which ought normally to go to the provinces.

But my intervention will deal mainly with the systematic attacks against worker funds. Two important worker funds appealed directly to Quebec. The first one, the CSN fund, was created recently and has known an almost resounding success, if we consider that they had a rather short timeframe to set it up. The second one, the largest, is the Fonds de solidarité des travailleurs du Québec, the flag ship of Canadian worker funds. The latter represents a third of all worker fund assets in Canada.

The federal government is going after those worker funds on two levels: first by reducing the tax credit granted to taxpayers and funds from 20 per cent to 15 per cent, and secondly by lowering the maximum contribution allowed from $5,000 to $3,500 per person.

The Fonds de solidarité is a huge success on both the financial and business levels. Since it was established in 1983, it has succeeded in creating or preserving 38,000 jobs. This is not peanuts. The fund did much better than previous Canadian governments.

It funds various projets. In the riding of Trois-Rivières, which I represent, the Tripap mill has closed its doors, the old CPFC, Canadian Pacific Forest Products Limited, had closed down. It was revived thanks to the energetic efforts of the Fonds de solidarité and provides 450 jobs today.

The Fonds has taken action at Novabus; Biochem Pharma, a pharmaceutical company particularly active in AIDS research, and Shermag, in Sherbrooke. In the Laurentians, it has been involved with the Château Mont-Tremblant and its ski resort. In the Mauricie region, in the Prime Minister's riding of Saint-Maurice, the Fonds provided financial assistance last year to a factory known as Desavenn Sac Inc., which had taken over part of the market left by the former Twinpac factory, in Cap-de-la-Madeleine, which had manufactured industrial paper bags for sugar, flour and chemicals that were exported throughout North America.

We can see how vital the Fonds de solidarité is for Quebec's economy. I am all the more pleased as the opposition critic to see that the Fonds has adapted over the years. It is now setting up regional development funds. Sixteen will be set up shortly. One in the Mauricie region was set up last fall. These 16 regional funds will complement the main fund of the Fonds de solidarité. Some of them are called SOLIDE, that is local job development investment corporations; thirty had already been set up by the end of 1995, with the co-operation of the Union des municipalités régionales de comté throughout Quebec.

In addition, the Fonds de solidarité in fine tuning its activities set up specialty funds in the areas of health, biotechnology and high technology in order to meet borrowers' needs.

It is all the more upsetting to see attempts being made to undermine the actions of the Fonds de solidarité instead of further supporting them. The value of this fund was demonstrated by a study undertaken by Carleton University for the Canadian Labour Market and Productivity Centre. It was not done in Quebec, but by Carleton University, not far from here.

This study shows that the Canadian tax system recovers within three years its tax incentives for fund management. Therefore, there is no reason to try to undermine workers' funds, in particular the Fonds de solidarité. On the contrary there is every reason to encourage it. This is in contrast with the statements by our colleague, the member for Willowdale, and former chairman of the finance committee, as reported in an article published in the January 18 issue of the Soleil . It states that ``the chairman of the committee maintains that these funds are granted generous exemptions which warrant strict controls''.

This same attitude is observed in the industry committee, where it is claimed that what the workers funds "cost" the Canadian tax system-some ten millions dollars-should be reduced further, when everyone knows that this is a direct incentive for the economy of both Canada and Quebec.

It is also a direct social and economic commitment because we know their effect on job creation, tax revenues, unemployment insurance benefit reductions, as well as the importance of a job for a family in terms of consumption, quality of life, reduction of drug use, reduction of spousal abuse, and so on. We know what unemployment means, we know what a job means. People who are able to create or maintain jobs should be encouraged, not discouraged.

These measures are all the more alarming in the context where this kind of federal government's intervention is taking place, since the government was elected with the slogan "jobs, jobs, jobs". We will keep on reminding the government of it, this government that created 65,000 part-time jobs-that is for 6 to 12 months-since coming to office. It is still boasting about its infrastructure program, and it was elected with such a slogan.

In this budget there is no framework or incentive for private corporations to create jobs. It is a well-known fact that, these days, major corporations tend to make prohibitive, outrageous profits-it is particularly true for banks-while allowing mass layoffs. We must question the ethic of such a phenomenon.

I worked for the Quebec government, dealing with businesses in financial difficulty and I know they must consider the possibility of eventual mass layoffs. This is certainly quite logic. When a business is having a hard time, it must rationalize its operations and one possible solution is to layoff people. It is sad, but it is in the order of things.

But when profits reach such levels as they have recently in areas like the oil, telephone and banking industries, to name just a few, and when these industries still downsize and lay off people in numbers such as we have seen, for example at Bell Canada which plans to lay off 10,000 employees in Quebec, no doubt for very logical and justifiable corporate reasons, we must question such operations just as we must question the attitude of banks which make five billion dollar profits but, at the same time, do not hesitate to launch massive layoff plans.

In another context, while they say that solidarity funds and labour-sponsored funds are too expensive, they do tolerate unpaid income taxes amounting to $6 billion and seem to be totally insensitive to that. They should start with this type of operation, put investigators to the task if need be and collect all those unpaid taxes before they hit on good, competent people who are efficient at job creating, particularly those people from labour-sponsored funds such as the Fonds de solidarité des travailleurs du Québec.

As far as efforts are concerned, they require efforts on the part of the labour-sponsored funds, but they ask banks for a 65 million dollar effort over two years when these banks are reaping profits of $5 billion. Furthermore, according to present trends, it seems that these profits will be even higher next year. This $65 million contribution is almost equal to the total cost of labour-sponsored funds across Canada.

I must also add that this is happening in a context where the federal government's policies in the area of economic development, particularly regional economic development, are almost morally questionable. Consider the debate about the coast guard, the introduction of cost recovery measures in the coast guard without any impact studies. The government went ahead with only one thing in mind: to meet the goal it had set itself, that is to recover by March 31, 1997, the $20 million forecasted in its budget for aid to navigation.

It wants to recover $20 million out of $160 million by the year 2000, without considering the real profitability of it, the real impact on users of the St. Lawrence River, namely shipowners. What would happen if, after having done their calculations, they decided that, economically, the St. Lawrence River was no longer a good place to do business because costs outstripped profits? It would be catastrophic. This type of calculation should have been done by the federal government. Just imagine the impact on the ports of Montreal, of Quebec City and all the other harbours which I might call secondary along the St. Lawrence River, like those of Sorel, Trois-Rivières, Sept-Îles, Baie-Comeau and Chicoutimi on the Saguenay River.

This type of measure impacting directly on labour sponsored funds is part of another scheme which is just as much a dodging of responsibilities as the user fees for the coast guard are.

Personally, I am shocked by the government's attitude toward the Fonds de solidarité des travailleurs du Québec in particular because, for us, this fund demonstrates the ability of Quebecers to look after themselves, to be imaginative and capable of being creative. We will not let the federal government go in that direction for very long. And the Liberal Party of Canada will pay the price for it, especially in Quebec.

The BudgetRoutine Proceedings

11:15 a.m.

Bloc

Richard Bélisle Bloc La Prairie, QC

Mr. Speaker, on March 8, I took part in a television program called "Droit de parole" on the Radio-Québec network, along with representatives from various social and economic groups; employers, unions, women's groups, young people and chambers of commerce were represented.

A SOM-Le Soleil poll released during this program shows that only 33 per cent of the population rely on the budget to promote job creation, while 53 per cent rely little or not at all on this same budget to reach this job creation objective.

Also, when asked about the future of pensions, increasingly, fewer young people and members of the middle class say they rely on the federal government to ensure the future of the public pension system.

In a period of accelerated technological and social change, where confidence in democratic institutions should be high, the government is showing no leadership whatsoever. The government has lost all credibility with a growing number of Canadians. This had led, spontaneously, to the founding in Canada of about twenty new groups, such as the group Conference Confederation 2000, which met at the Château Laurier in March, following last October's referendum campaign, to fill the political vacuum left by this government. The emergence of these groups shows that nature abhors a vacuum, and at present, the vacuum is the government that is in place here in Ottawa.

What are the main causes of such a lack of credibility of the Canadian government with its citizens? Government rhetoric changes from month to month; federal ministers contradict each other, and policies put forward often cancel each other out.

This lack of direction is reflected in the deficit reduction measures and some job creation measures which are supposed to be found in the federal budget.

The Minister of Finance emphasizes in his budget that the deficit will be $24 billion next year and $17 billion in two years. The Minister speaks only of the future. But let us not forget that the deficit is now very close to $33 billion and that it was $37.5 billion last year. That is the reality. These are not projections.

And if we add the $5 billion coming from the unemployment insurance account surplus, which in actual fact belongs to the employers and the workers and which the Minister has appropriated, the real deficit for this year remains close to $38 billion, and the one for last year was $42.5 billion. This is the same deficit level that we saw during the last year of the mandate of the Conservative government. At that time, the Liberals condemned the deficit.

To justify rolling the surplus of the unemployment insurance account into the consolidated revenue fund and reducing the deficit accordingly, the Minister says that if there is a shortfall in the unemployment insurance account during the next recession or during the next major the increase in the unemployment rate, the government will make up the shortfall in the account.

Imagine the burden the minister is placing on the unemployment insurance account and future government deficits. What is even more disquieting about the minister's deficit projections is that we are currently in full economic upturn; recovery is under way. The U.S., for example, recorded over 700,000 new jobs in February, the highest since 1983.

What will happen to the deficit in the next recession, which the economists are predicting for around the end of this decade? The Liberals place much emphasis on the last two Conservative deficits, which hovered around the $40 or $42 billion mark after the recession at the beginning of this decade.

It must be kept in mind, however, that in 1990-91 and 1991-92 the deficits inherited from the Conservatives were in fact $32 and $34 billion, the same as this year's deficit. In the good growth years from 1987 to 1990, this deficit was $28 or $29 billion, even less than the current figure.

Even in the Conservatives' day, the deficit was under $30 billion in the growth years, and around $40 billion in the recession years. The Liberals have done no better, even after raising taxes and pillaging the unemployment insurance fund.

The next recession is, therefore, liable to plunge us back into a vicious circle, into a deeper whirlpool than before. Debt servicing will be close to $50 billion next year, and a 1 per cent variation in interest rates adds $1.3 billion to the deficit. Worse, in the medium term, it has a $3 billion impact on the debt.

The Minister of Finance has no room whatsoever to manoeuvre, given the size of the debt accumulated so far. The impact of any change in interest rates is far too great. There is but one solution: what should have been done was to clean up business taxation right away, instead of striking a committee of experts to examine the question. Clean up by fighting waste throughout government

machinery and by cutting the defence budget much more substantially.

The deficit should have been reduced to $35 billion last year, $25 billion this year, $15 billion next year and $5 billion two years hence so that there would be a surplus in 1999 of $5 billion that could be applied to the debt creating the financial manoeuvring room that is so lacking now.

This is the only consistent program needed, and the government was incapable of instituting it.

The Liberals created the debt in the 1970s and early 1980s. In the 1990s, they are going at indebtedness with renewed vigour. They have no budget sense and will never be able to manage a budget.

We have to get rid of this government before it becomes the cause of our demise. Ask our international creditors about the scope of the real political instability we all talk so much about. Ask them whether it comes really from popular consultation or the inability of our political leaders to balance the budget.

In terms of jobs, the budget tabled by the Minister of Finance is just as pitiful as it is in terms of the deficit and the debt. There is no major job creation measure. The budget for student jobs is increasing we are told from $60 million to $120 million, although it was already at $84 million before the Liberals reduced it.

So they double the budget for little summer jobs, but because the Liberals reduced transfer payments for post-secondary education by $450 million in two years, the provinces will have to double tuition fees. At this rate, many students will be unable to continue their studies and will have to keep for much of their life the little summer job created for them. This is what is commonly called dead end jobs.

There is always a double standard. The government gives with one hand what it takes away with the other. In the budgetary reallocation game, the President of Treasury Board makes up in new expenditures all that was saved in government cuts. All the savings should have gone to balance the budget. The whole accounting exercise of cuts and reallocations translates this year into a real net increase in expenditures of $34 million and barely $200 million in savings next year.

This government, therefore, is still far too interventionist, and the measures put forward in the Minister of Finance's budget fail utterly to resolve the problems of the deficit and employment.

The BudgetRoutine Proceedings

11:25 a.m.

Papineau—Saint-Michel Québec

Liberal

Pierre Pettigrew LiberalMinister for International Cooperation and Minister responsible for Francophonie

Mr. Speaker, this is the first time I rise in this House, and it is with great emotion that I speak today as a member of Parliament. I would first like to thank the people of Papineau-Saint-Michel for their confidence in me and I want to tell them that I will always be proud and happy to represent them, to promote their interests and to defend their rights in this country.

My first loyalty is to them, since my primary role in our wonderful parliamentary democracy is to speak on their behalf. I heard their concerns and their fears, as well as their hopes, their determination and their common sense. I invite the people of Papineau-Saint-Michel, whatever their allegiances, to continue to communicate with me and tell me what they think. I am here for them; I would not be here without them.

In this era of upheaval resulting from the revolutionary force of globalization, liberal democracy faces its main challenge. We must say loud and clear that freedom is the goal pursued by human beings.

The people of Papineau-Saint-Michel will always find in their member of Parliament a representative willing to spend all his energy on protecting the freedom we enjoy as individuals, as well as that enjoyed by our respective communities. And because the time has come to redefine the role of government, I am very proud to make my first speech in this House on the finance minister's budget.

This budget meets the ambitious objectives set by the Government of Canada: to put the nation's finances in order to protect our financial future, while at the same time rethinking the role of government in the economy and in the lives of the people.

The finance minister's budget stays the course set by the government at the beginning of its mandate, and rightly so. We are finally getting out of the deficit spiral. Our deficit will fall to 2 per cent of GDP by 1997-98, ahead of the commitments made in the last general election. And this with no increase in personal or corporate income tax, or even in excise taxes. There were no personal income tax hikes in the last three budgets.

Putting the nation's finances in order will prepare the ground for a more vigorous, job creating economy. A lower deficit will help reduce interest rates, increase confidence and promote new investments leading to more jobs and stronger growth. The government's performance with respect to employment deserves to be acknowledged. The unemployment rate dropped from 11.2 per cent in 1993 to 9.6 per cent today. There is still much work to be done, but we are on the right track.

This budget, presented in the middle of an election campaign, was very well received by the residents of Papineau-Saint-Michel, who voted in with a strong majority a member of the Liberal government.

The people of Papineau-Saint-Michel accepted the necessary yet respectful decisions made regarding pension benefits. I could feel it in my riding: my constituents realize that this is the only

budget approach that can actually boost the economy and ensure that our social programs will be maintained in the future.

As Minister for International Co-operation, I am responsible for projecting Canadian solidarity internationally. Canadians share a tremendous sense of solidarity in every respect and wealth is redistributed among the regions of Canada to ensure that all Canadians enjoy public services of a quality second to none in any federation on this planet. From this solidarity arose Canada's solidarity with less privileged countries. The Canadian International Development Agency is an institution that Canadians and Quebecers alike can be very proud of.

We are investing in the future, in our youth and in technology. This budget promotes export development, since international trade was responsible for creating 80 per cent of jobs created over the past few years. The people of Papineau-Saint-Michel appreciated this budget, but they are nevertheless worried. They are worried about the future of Montreal, and the east end of Montreal in particular.

Formerly the industrial and financial metropolis of Canada, Montreal is taking a radical shift toward the new economic order. While a part of Montreal, represented by high technology industries like aircraft manufacturing and computer science, consulting engineering and pharmaceutical products, is thriving, another part of Montreal cannot cope with such rapid and drastic changes in production modes and lags behind in the globalization movement. That is my part of Montreal, the one I represent in this place, the east end of Montreal, and this part of Montreal is choking to death.

The people of Papineau-Saint-Michel appreciate this government's economic policies. They made this very clear in the last election, but they also came to me with their concerns about unemployment, by which they are hard hit. They told me they wanted to work.

But my constituents realize that economic and monetary policies alone, however good they may be, are not enough to achieve the desired goal-and for us, Liberals, the goal remains employment. Even the best policies cannot help them achieve their goal if the political climate is not favourable. That is why every bone and sinew of Quebec must immediately come together to stop the brain drain and capital flight that have picked up since October 30.

Montreal, this large North American city, cannot develop in the restrictive economic conditions created by sovereignist pressure in Quebec and associated climate of political instability. Quebecers energies should not be wasted in divisions and political jockeying, but rather focused on strengthening Quebec's civil society and paving the way for its integration into rapidly forming transnational networks, strategic alliances and cultural coalitions. The Quebec society will show much more convincingly that it is mature, distinctive and distinct by resolutely engaging in a successful integration process that is now much more important than the obsolete nation state model.

Throughout the world, identities are becoming more complex and allegiances are multiplying. The French are becoming increasingly more European, and both the French and European identities reinforce each other.

The Quebec identity is strengthened by the Canadian identity, particularly in light of the fact that the latter is strongly impressed in the head and heart of Quebecers, who greatly helped define that Canadian identity. Indeed, Quebecers greatly helped define the Canadian identity. That identity, which is more closely integrated to the North-American reality, helps many of our businesses and organizations by enabling them to be part of international networks and world alliances.

To think that we would strengthen our identity by giving it only a Quebec dimension is to totally misunderstand what is going on in the world today. On the contrary, such a measure would deprive our identity of elements which ensure its richness, its vitality and its future. The strength of an identity lies in its ability to reflect the facts and realities of a society.

To be sure, the solution of the sixties, namely a strong central state, allowed Quebec, which was lagging two or three generations behind Ontario and the rest of North America thanks to its elite, to make up the lost ground. All that took place within the Canadian federation. However, 1960 was also the golden age of decolonization; the welfare state was in its glory. That was 35 years ago. We are talking here about a Quebec nationalism-not sovereignism but nationalism-that is unifying and perfectly compatible with a modern Canadian federalism that is ready for globalization.

The nation state is a political model that is now obsolete. Without excluding a feeling of belonging, the Quebec nationalism of the 21st century must be modern and fully affirm itself in the economic, technological, linguistic, cultural and financial sectors. Quebecers have a unique opportunity to show that a normal people, to use the expression coined by the Bloc Quebecois, chooses to express its distinctive features, its determination and its intelligence by redefining its needs and its priorities in a contemporary way.

To be politically mature is to share its sovereignty with its neighbours. Are the French, the Germans and the Dutch any less sovereign? Are they less mature politically because they have transferred some powers to Brussels?

Sovereignists insult Quebecers when they travel abroad and say that Quebecers will chose sovereignty once they are free. We are a free people. We have chosen Canada every time we were consulted in the last 200 years.

The Quebec society should be well advised to focus its energy and nationalism on the new rising world rather than on yesterday's world. Any people in 1996 would prefer to be part of the G-7 countries, that have a lot of influence over the evolution of our world and exercise real leadership over the rest of the world. Any people would obviously prefer that.

By the way, during 18 of the 20 years the G-7 countries have existed, Quebecers have led the Canadian delegation. Last June, at the Halifax summit, Jean Chrétien, from Quebec, played host to heads of state; André Ouellet, who was the member for Papineau-Saint-Michel before me and who had a remarkable political career, welcomed the ministers of foreign affairs; and the Minister of Finance, another member of Parliament from Montreal, greeted his counterparts from the other G-7 countries.

So, these three Quebecers have, in a sense, the opportunity to work closely with people in Washington, Tokyo, Bonn, London and Paris, and I am proud to be part of a nation that is carving out a place for itself in this world.

Far from preventing the Quebec society from integrating into the world, Canada is letting Quebecers play a role in international relations which they could not have if Quebec and the rest of Canada did not maintain the remarkable international reputation they have built together.

For instance, because of its dynamic presence within the French-Canadian community, Quebec can promote the growth of the French language both at the national and international levels. My role as Minister responsible for Francophonie helps me see Quebec's constant contribution to the French-speaking world. Nevertheless, the Canadian francophone community is not limited to Quebec, and it is our duty to also give this community a voice in the world.

It is only because it is part of the Canadian federation that Quebec meets the geographic criteria of the Asian and Pacific Council, an organization that is crucial to our relations with several economies which, in these times, are experiencing the most remarkable economic growth. Included in the growing industrial sectors in that region are several sectors where Quebec has a major competitive advantage: telecommunications, transportation, energy and development infrastructure.

Quebec must no longer exclude itself from Team Canada missions and from the economic and trade advantages that these missions bring to our businesses. Canada's reputation and the strength it gets from the association of the economic and political leaders of a great country, which is an influential player within the major and even the most exclusive centres of power, open a lot of doors and create a lot of business opportunities.

Quebec needs to be recognized by the rest of Canada. It needs the recognition of its unique mission in North America. This recognition must be reflected in the attitude of all Canadians and must find its place in the Canadian Constitution. But to fulfil its mission, Quebec needs all the advantages that come with being part of the Canadian federation.

To rejuvenate and revitalize Canada, that is our mission, my mission. We have to address the real underlying issues and not limit ourselves strictly to the legalistic formalities of constitutional process, however essential this process might be.

We need a new language, a new master plan which begins with a solid understanding of our common interests. The new generation in all regions of Canada must express its determination to overhaul federalism by renewing it, not dismantling it.

Obviously Quebec has a special contribution to make to that new Canada. Its distinctiveness in economic terms is certainly a worthy contribution. Obviously Quebec has a special contribution to make in cultural terms. Quebec is an asset in a world that is shrinking and the French language is an asset in many foreign markets in Europe, Africa and Asia.

For decades our constitutional debates have been inward looking, this region against that one, this linguistic community against that other one, individual rights versus collective rights. We need to give much more attention to the opportunities and threats from the outside world.

I remain convinced that when we re-establish dialogue among ourselves and look together at the outside world we will realize that we have more in common than we think, certainly enough to build solidarity, to maintain common institutions and a common country. We will certainly find we have enough to be generous toward Quebec and its special mission in this country and on this continent.

If enough people in the new generation everywhere across Canada accept this formidable task their creativity, their tolerance for our differences will in the end reinvent federalism.

The centralized nation state of the 19th century does not really excite Quebecers, and a majority of them will always choose an updated thoroughly rethought federalism over an ambiguous and doubtful sovereignty.

The 21st century will be the century of integration of societies similar to what the Europeans are now building with some difficulty. Despite the hesitations, despite the lamentations, the European

Union is the future of Europe and Europe moves toward federalism as it approaches the next century. As Alain Minc, a respected French public figure told us last fall commenting on the European difficulties, le Canada c'est notre rêve, Canada is our dream.

Canada has a long tradition and much valuable experience in the accommodation of integration with distinctiveness. It can make a remarkable contribution to the 21st century as an example of tolerance, justice and democracy. Canada could continue to play a role in world affairs which divided we cannot play. Let us modernize what we have. Let us adapt it to the challenges of the next century.

If Canada did not exist today the chances are we would be working hard to create it. Let us work just as hard to reinvent it. Every generation of Canadians in a sense did so in the past. It is the task facing our generation and Canada deserves a victory.

The BudgetRoutine Proceedings

11:45 a.m.

Bloc

Benoît Tremblay Bloc Rosemont, QC

Mr. Speaker, I must begin by congratulating my neighbour, the hon. member for Papineau-Saint-Michel on his election. If he has been elected, it must mean the campaigning is over now, something I think he has forgotten.

During that entire campaign, the minister who was then a candidate refused to take part in an open debate. Now he is in the House, and here there has to be debate. He cannot make just any old statement without some reaction. Those are the rules here. When a person claims to be an expert in international affairs, he has to be able to prove it. I want to give him the opportunity to do so.

The minister is dazzled by Canada's performance, with an unemployment rate that has gone from 11.2 per cent to 9.6 per cent since 1993. Could he explain to us how our American neighbours, with whom we do 80 per cent or more of our trade, have managed during that same time to have an unemployment rate of 5.5, 5.6 per cent? If this is lotus land, it must be an absolute paradise on the other side of the border.

There are other things that more important, or equally important. We are told that people found this to be a wonderful budget. Does that go for the tens of thousands of people who moved from unemployment insurance to welfare while the federal government was cutting benefits and increasing contributions to such an extent that it created a $5 billion surplus in the unemployment insurance fund, shifting tens of thousands of people onto welfare rolls and then washing its hands of its responsibilities to the provinces? The federal government has traditionally paid 50 per cent of welfare costs. That is no longer the way things are, however. The federal government abandons the unemployed to the provinces, but no longer assumes part of the costs.

As for political matters, I am obliged, unfortunately, to recognize that the member for Papineau-Saint-Michel truly represents Liberal Party tradition in this House. Perhaps his speech was prepared before last weekend's meeting of the Liberal Party of Canada in Quebec, because they just buried the constitutional debate by a sort of unanimous motion, which was also approved unanimously by all the federalist allies of the Liberal Party of Canada.

So we are in a position where a little knot of Quebec Liberal members-thanks to the Bloc now, we can show that it is a little knot of federal Liberal members-alone is right. This reminds us of something. They alone are right. They are open minded. They represent Quebec's identity.

Well, I think the minister is going to have to take reality into account. The reality is that nearly 50 per cent of Quebecers voted for sovereignty. This is major progress. The minister adds "sovereignty-partnership". Of course, of course, we are modern. We are modern my friend, and we know it.

The minister should remember that it is thanks to Quebec that Canada adopted free trade. More than anywhere else in Canada, we are open to things modern and to international trade. It is very clear. It is also clear that we are open to partnership.

I welcome him. It is a welcome that promises vigorous debates, because it is clear that, on this side of the House, we very definitely do not share the vision of the member for Papineau-Saint-Michel.

The BudgetRoutine Proceedings

11:50 a.m.

Liberal

Pierre Pettigrew Liberal Papineau—Saint-Michel, QC

Mr. Speaker, I thank my hon. colleague from the riding next to mine for this opportunity to participate in the debate. I would like to mention that I had the occasion to debate during the last campaign and everybody agreed that it was fortunate for my adversary that there was no other debate because the score would have been even worse.

The BudgetRoutine Proceedings

11:50 a.m.

Some hon. members

Hear, hear.

The BudgetRoutine Proceedings

11:50 a.m.

Liberal

Pierre Pettigrew Liberal Papineau—Saint-Michel, QC

You asked about unemployment because I was applauding the fact that it has declined.

In Lille recently, there was a conference of industry and labour ministers during which President Chirac asked a very interesting question. He said: "Is there a third method, half way between the American way, where jobs are created very rapidly and social programs are almost nonexistent, and the European way, which is extremely rigid, where social programs are on a much larger scale, yet where job creation has been stagnant if not regressing for the last few years?"

The answer is: Canada. We talked about that with President Chirac. Canada is the third way between European rigidity, which leans more toward socialism, and the American way, which leans more toward the free market but does not adequately protect its people.

I am extremely proud to say this Canadian way, this third way in the world, is the method that the Liberal government has supported year after year for the last few generations.

You say you are surprised that the electorate appreciated the budget. I was right there campaigning, my friend; I saw the constituents and I knew, the minute the budget was brought down, that the election was won because they were reassured about pensions. Let me remind you that we have brought the Liberal Party score from 52 to 60 per cent and that the Bloc Quebecois went from 39 to 34 per cent.

The BudgetRoutine Proceedings

11:50 a.m.

Bloc

Michel Bellehumeur Bloc Berthier—Montcalm, QC

Let us not forget Lac-Saint-Jean.

The BudgetRoutine Proceedings

11:50 a.m.

Liberal

Pierre Pettigrew Liberal Papineau—Saint-Michel, QC

The Liberal Party's performance also improved in Lac-Saint-Jean where it received 8 per cent more votes. We were very proud of that fact.

I want to speak about what happened last weekend. It takes real intellectual dishonesty not to recognize, in the resolution adopted by the party at that meeting, that the objective of the Liberal Party of Canada is to have the resolution defining the principles of the distinct society enshrined in the Constitution. That is what the resolution that was voted on said.

In fact, I cannot understand this sudden attachment to the words "distinct society", which our friends across the way have always despised. As a Quebecer, I can tell you that I am perfectly prepared to work with you toward enshrining distinct society in the Canadian Constitution. But do you really believe that the words "distinct society" truly reflect the reality, when, just a while ago, you were telling me that it was an empty shell?

Enough is enough; such hypocrisy has to stop. It is no use crying over something you have already rejected. Do not interfere with our work and, hopefully, we will find better words, if those ones do not adequately reflect what the rest of Canada thinks. What I want is for Quebec and the special, unique, particular and distinct role it plays in Canada and North America to be recognized by the rest of Canada and enshrined in the Constitution. I got into politics to see this Canada emerge in the next-

The BudgetRoutine Proceedings

11:55 a.m.

The Deputy Speaker

I regret to interrupt you, and I would like to ask our new colleague to please address the Chair, and not his colleague opposite. The question and comment period will be shared by two speakers, starting with the hon. member for Calgary Centre.

The BudgetRoutine Proceedings

11:55 a.m.

Reform

Jim Silye Reform Calgary Centre, AB

Mr. Speaker, first I would like to compliment the new Minister for Intergovernmental Affairs on his maiden speech in the House of Commons.

I found myself agreeing with a lot of what he said in the latter part of his speech. I do believe in Canada and I do believe in federalism. I would certainly hope that both the Liberals and the Reform Party can work together to hold this country together because it is worth saving, unlike what the Bloc Quebecois would like to do with this country.

Having given him high marks on that part of his speech, I feel now that I will hit a little bit around the belt. I have to give him an F on finance because he said two things in his speech which I take exception to and which I would like him to elaborate on.

He said that the government has tackled the spiralling deficit and that solved the problem. I do not know how much the member understands about finance, but if he feels that by continually spending more money than is brought in and by continually adding to the debt that the problem will be solved, then I feel he had better revisit his math courses.

While he brags about the deficit going down from $42 billion to $37 billion to $32 billion to $24 billion, he fails to say that the debt is going from $508 billion to $545 billion to $578 billion to $602 billion. He may brag about a $24 billion deficit next year, but the debt will have increased to $578 billion. The year after where the projections are really fuzzy, he states a deficit of $17 billion and the debt will be $602 billion. The problem is the debt and the interest costs to service the debt. I would like his opinion on that fact.

This second point surprises me. He said that in the last three budgets the government has not increased taxes. Well, he just got here yesterday and I have to tell him that the government has increased taxes. Before he replies to that, let me point out to him that when this government came in, the revenue was $116 billion and is projected to go to $141 billion.

When he stands in the House of Commons and says that the government in its last three budgets has not raised taxes, he has been given false information. He has not researched the information. It is a disservice to the Canadian public to tell them that taxes have not been increased.

In answer to me he will then have to say that all this extra revenue has come from a growth in the economy and that there has been nothing done in the income tax system. There have been no excise taxes introduced, no taxes on seniors, no taxes on anything.

Before the member answers, he had better make sure he has the correct answer because the answer will stay with him for the rest of this Parliament.

I would like the member to answer those two questions because the budget does show that there are taxes.

The BudgetRoutine Proceedings

11:55 a.m.

Liberal

Pierre Pettigrew Liberal Papineau—Saint-Michel, QC

Mr. Speaker, first allow me to thank my colleague from the opposition for his offer of collaboration to recognize this great country we have and to do everything we can to accommodate every major partner of it. It will be essential and important that we all work together.

Members will know that there is an important majority of Quebecers who want us to adapt federalism to the new needs they have and to the needs of the 21st century. I can say that there is a great majority of Quebecers who would be very happy to see what develops in the next few months.

It is true that all major partners of this federation need to feel more comfortable in this country. We have to respect each major party of the federation for the contributions each makes to the federation. That is true for the regions as well.

Quebec has a special mission in the country. It contributes some elements that are unique to the personality of the country and to the identity of the country.

The BudgetRoutine Proceedings

11:55 a.m.

Reform

Charlie Penson Reform Peace River, AB

What area does not?

The BudgetRoutine Proceedings

Noon

Liberal

Pierre Pettigrew Liberal Papineau—Saint-Michel, QC

That is true. However, I am talking about the linguistic distinction in Quebec which is a major asset. In business, when one deals with foreign markets, the fact that we have a bilingual country is an extraordinary asset. It gives us a special voice in world affairs. We are all very attached to it. We need to make sure we protect that voice in our country.

I am delighted to now turn to finances. I come from the business community, which I do not miss, but I am delighted to talk to members about finances. I am extremely pleased to explain to my colleague that 6 per cent of the gross national product was the deficit when we arrived in 1993. We are moving to 2 per cent. We have gone from 6 per cent to 2 per cent for the first time in our history. This is extraordinary. We are now-

The BudgetRoutine Proceedings

Noon

The Deputy Speaker

Unfortunately, the hon. member's time has run out.

The BudgetRoutine Proceedings

Noon

Reform

Jim Hart Reform Okanagan—Similkameen—Merritt, BC

Mr. Speaker, I will be splitting my time with the hon. member for Peace River.

I rise on behalf of the people of Okanagan-Similkameen-Merritt to respond to the annual budget proposed by the Liberal government. My constituents and I are very pleased and anxious to reply to what we have heard.

The people in my area of the country want to hear something that would be of some use to them, for example, paying the mortgage on their homes, keeping them gainfully employed, contributing to their RRSPs, among other things. In fact, the people at our town hall meetings in Grand Forks, Merritt, Oliver and Penticton cited unemployment, crime and taxes as their major concerns.

I can hardly express the eagerness that the people of Okanagan-Similkameen-Merritt feel in terms of their willingness to work toward getting the nation's financial house in order. In the smaller communities in my riding the people know that their financial security and that of their families can be realized in a healthy, prosperous national economy.

The people who write to me or speak to me at town hall meetings and other events throughout the riding express a high measure of confidence in our ability to eliminate the federal government's annual budgetary deficit. This would create jobs for Canadians.

A recent poll indicates that some Canadians feel that deficit elimination measures would increase unemployment levels. Nothing could be further from the truth. Interest rates would fall. More economic opportunities would result for small business. More job opportunities would be created. Tax relief would become a reality.

The people in my riding have made it very clear that they support the Reform Party's plan to give economic stability and tax relief to Canadians. In turn, Canadians would be able to confidently plan their futures.

Canadians want to be able to buy a new car or house or plan a vacation or contribute to their retirement funds. Too many Canadians are in the position of just making ends meet or trying to pay off what seems to be the never ending credit card balance.

The Liberal Party of Canada should listen to this voice of confidence that is coming so loud and clear from western Canada.

My constituents and I are concerned that Liberals are afraid to eliminate the deficit. Reform members, following what we have been told by Canadians, are prepared to eliminate the deficit. We know that the federal government must abandon the old tax and spend types budgets. We know that governments should make it possible for the private sector to create jobs.

Canadians know that successive Liberal and Conservative governments over the past few decades have failed in this regard. They have failed to create jobs. It has been shown clearly that job creation must come from a healthy private sector.

My constituents and I know that the Liberals have different ideas. The government's annual budget is supposed to flow from the people to the government. The Reform Party continually tries to drive home to the Liberals what Canadians are saying. The people in my area of Okanagan-Similkameen-Merritt have been specific when they speak of what should be the economic agenda for our nation.

During the extended recess in this place for most of the winter months, when the Liberals decided there was no work to do probably because it was too cold, I met with many of the constituents from Okanagan in British Columbia. In fact, while the Liberals were sitting close to their wood stoves getting warm I managed to hold town hall meetings in my riding.

The people told me that they are concerned about personal security. What they are talking about is first, good jobs; second, higher incomes resulting in lower taxes; third, safer streets; fourth, social security programs they can count on including health, education, pensions; fifth, political stability.

Following the unveiling of the Liberal Party's budget we now have some measure of the great distance from these priorities the Liberals have placed themselves and the federal government. The list of priorities I have just read is far removed from the priorities the Liberals have established for the government to pursue.

In the city of Penticton in my riding during the month of January 1996, $4.48 million was paid out in unemployment insurance. In 1995 about $34 million was paid out in UI; in 1994 $43 million; in 1993, $45 million was paid out in UI.

The Liberals are very proud of this type of reduction in UI payments. They try to cite their election platform of jobs, jobs, jobs, their infamous infrastructure program and their deficit reduction measures as being responsible for the drop in UI payments in my riding.

The other side of the coin is the increase in the number of social assistance recipients in the same area in my riding. The provincial government has changed the criteria for receiving social assistance and the federal government has tightened the qualifications for receiving UI payments. The figures I received from my constituency, which are a matter of public record, show clearly that the people who were formerly unemployed are now receiving social assistance. The apparent drop in UI payments is not an increase in the employment level at all.

In addition to what I have just said, there is a large opportunity to create jobs in the Okanagan valley. This is true of our nation as a whole. Deficit reduction will lead to higher employment levels and in the smaller communities such as in my riding in places like Princeton, Merritt, Okanagan Falls and Grand Forks.

Deficit reduction will lead to higher investment. International investors will have confidence investing in the economy once our financial house is in order. Canadians will determine that investment at home is more attractive than investing abroad. The private sector will be able to expand along with higher investment levels. The private sector will be able to create long term, high quality, sustainable jobs. That is what we need in this country.

For example, people speak to me about making contributions to their RRSPs. They note that only 20 per cent of their investment

can be placed in foreign investments. In the majority of cases, Canadians feel that foreign investments are most attractive. This situation should be reversed. Canadians should be expecting to get equal or better results, a better return on their money, by investing at home.

What is worse is that affluent Canadians with a great deal of money to invest are investing in offshore ventures in order to escape the taxes they would be required to pay if they chose to invest in Canada. An example of that is the Liberal finance minister, a classic case of a Canadian evading taxes by registering his company's vessels offshore.

Canadian Press reports the Liberal minister's steamship company, held in blind trust, has six ships registered in tax free havens. One of these ships was built in 1982 with the help of a 9 per cent federal government subsidy. The president of the B.C. Federation of Labour says that this is "precisely what is wrong with the tax system. If the people started paying the taxes already in place, we would not have a deficit problem".

The Liberal finance minister, by registering his ships offshore, escapes paying Canadian taxes-

The BudgetRoutine Proceedings

April 16th, 1996 / 12:10 p.m.

Liberal

Guy Arseneault Liberal Restigouche—Chaleur, NB

Madam Speaker, a point of order. When members enter into debate they must remain on a subject. They must deal with the administration of government.

The member has quite clearly pointed out in his speech that what he is discussing is in a blind trust. It has nothing to do with this government. He should get back on to the subject. His constituents would appreciate that. The Speaker has already ruled on that matter.

The BudgetRoutine Proceedings

12:10 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

Resuming debate. The hon. member has one minute left.

The BudgetRoutine Proceedings

12:10 p.m.

Reform

Jim Hart Reform Okanagan—Similkameen—Merritt, BC

Madam Speaker, I appreciate that. The point is that the finance minister's company made $10.2 million profit in 1989 and $12 million in 1990. All Canadians would agree that there were millions of dollars in taxes that ought to have been paid here on a profit of over $20 million.

With that, I will conclude because I want to be sure that today's time was spent on delivering the response of the people of Okanagan-Similkameen-Merritt to the Liberal's budget without being overly critical of the Liberal Party of Canada.