Debates of April 16th, 1996

The Budget

[Alex Shepherd, Liberal, Durham, ON]

Madam Speaker, I was very concerned about the attacks on the Minister of Finance. It is just more of the same from the Reform Party.

As I understand it, the company of the Minister of Finance has 17 out of 21 vessels registered under Canadian ownership. The company pays taxes. The minister made that statement in the House. It is unfortunate that the Reform Party refuses to take that into consideration. The lack of acknowledgement of facts is not peculiar to this issue. It is common in the Reform Party.

The member said that no jobs are being created in the country. It would appear that from the time Reform members were elected in 1993, they stopped reading, they stopped understanding and they stopped looking at Statistics Canada.

We know that over 500,000 new jobs have been created in Canada. Why speaker after speaker gets up and says: "Jobs, jobs, jobs. You never create any jobs" is beyond me. Can I send you some Statistics Canada productions? The last quarter has had a major net increase in job creation as well. This seems to be the rewriting of history which is common in the Reform Party.

He also talked about when the House was down, he was out running around the country and how the rest of the members in this House were doing nothing. I find that an insult, quite frankly. I was conducting town hall meetings and talking about the Canada pension plan with my constituents. We were looking for real solutions to real problems.

He talked about the concerns of people in his riding in paying their mortgages. He could have gone on to say that through the mandate of the government, real interest rates have declined significantly. Those mortgage payments are a lot easier to pay today than they were in 1993.

I would like to mention two items that are of interest to me, credit cards and the RRSP component being 20 per cent foreign mandated and perhaps it should be more than that.

Do members imagine that taxpayers should subsidize people to invest in other countries? I would have thought they would have been arguing the reverse, that we should reduce the 20 per cent foreign component of RRSPs to encourage more investment in Canada and to encourage small and medium business formation. However, not the Reform Party. The Reform Party seems to think it is quite fine to have that investment capital flow outside of our border to be invested in the United States. It would create jobs down there I suppose.

The member mentioned credit cards. One thing that concerns me is the growth of consumer credit in Canada. We know that 93 per cent of disposable income is now paid toward debt repayments for the average individual, which does not include taxes. It is being paid to banks, to financial institutions, et cetera.

Would members of the Reform Party agree that is an alarming level of credit, that we need to curtail credit spending by individu-

als and possibly the extent of credit financing by some of our financial institutions?

[Jim Hart, Reform, Okanagan—Similkameen—Merritt, BC]

Madam Speaker, on the question on foreign investment, my point was quite clearly that this is what Canadians are saying. They are trying to find ways to get more than the 20 per cent. I am not suggesting they should. I am saying it is the government's responsibility to somehow turn that perception that the better investment is a foreign investment.

I think Canadians want to feel the best investment is right here in Canada. The hon. member is trying to twist, as the Liberals in the House so many times do.

I will answer the hon. member's many other questions. The answers are no, no, no, no and no.

Let us consider some other issues such as what the Liberals could have done and what they did not do. The hon. member sits there smugly while in the budget the Liberal government has attacked the seniors in my riding and seniors across the country with a tax grab on seniors, while the members opposite sit there and smugly hold on to their own MP pension plans.

Take a look at what the Liberals did promise. The Liberals made a promise during the Quebec referendum and into the run-up to the budget. The Prime Minister repeatedly assured Canadian seniors their retirement incomes were safe. In a supplementary document entitled "The Seniors Benefit: Securing the Future" the government restated these claims-

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

Sorry, your time has run out.

[Charlie Penson, Reform, Peace River, AB]

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

The problems associated with federal overspending is what brought me and many of my Reform colleagues into politics in the first place. We recognized that the ballooning federal debt was to endanger the livelihood of most Canadians. If something was not done quickly it would endanger the programs delivered to Canadians who need them the most.

Canadians threw out the Conservatives in the 1993 election because they were fed up with the high spending legacy of the Mulroney Progressive Conservatives and because they were deeply concerned about our debt problems.

Imagine my surprise when travelling through Dallas last week. I picked up a copy of the Dallas-Fort Worth newspaper and I read that the Right Hon. Brian Mulroney was to be giving a keynote address in Fort Worth.

The introduction in the newspaper suggested the Right Hon. Brian Mulroney, former Prime Minister of Canada, will present the keynote address to Tarrant Export 40 awards. It went on to say

that Mulroney was a decisive Prime Minister credited with correcting his nation's disastrous economic course.

Imagine taking credit for something, the exact opposite of which he did, when he had the chance as Prime Minister. It seems that is why there is so much disillusionment with politics in this country.

Brian Mulroney and the Conservatives were elected in 1984 to clean up the mess that was left by the Liberals who had created some $200 billion of national debt. What did he do when he had his opportunity? He doubled that amount. Taxpayers were much worse off after the Mulroney legacy and not vice versa, as he would claim.

I am convinced that if it had not been for the presence of a number of new members in the House, Reform members and some Liberal backbenchers who were elected in the 1993 election, the finances of the country would even be worse than they are today.

We have had some cuts. I think we can take credit for that, those of us who came here in 1993. We were a breath of fresh air in Parliament.

I know that cuts hurt. My riding of Peace River has made quite a few sacrifices in order to reduce federal government spending. However, as painful as these cuts have been, it is tragic that absolutely nothing has been accomplished through them. The cost of servicing the federal debt has grown. We have had a lot of pain but we have not had the gain to go along with it.

As part of federal cost cutting measures in last year's budget there were a number of things cut back in the riding of Peace River. The weather service was cut. Twenty-one jobs at the Beaver Lodge agriculture research station were cut. Air traffic control jobs were lost in the city of Grande Prairie. We lost jobs and services. However, I think Canadians are prepared to make those sacrifices.

There was a real human cost. Nothing can make up for those personal sacrifices made by the people in my riding, but it would have been nice to know that at least the cuts were worth it, that their loss and the loss of people like them had made a real difference in turning the country around. All that happened was the debt grew and the cost of servicing the debt also grew.

Cuts in last year's budget amounted to $4 billion. That is exactly the amount the national interest on the debt increased by. It was all lost to increased interest on the debt.

Not only is Canada threatened by members of the Bloc who want to take Quebec out of Canada, the country is also threatened by the Liberal government. It is not being responsible in getting our finances in order. It is putting the country at risk.

If we look at a pie chart of the budget, the biggest part of the pie would go not to the poor, not to funding for our health care system, not to maintaining our educational institutions; it would go to the increasing cost of servicing our national debt. That is absolutely shameful.

Before the government came into power we were spending $38 billion a year on interest payments to service the debt. That has grown to $42 billion in the past year and under the 1996-97 budget it will rise to $48 billion. There has been a $10 billion increase in the interest on the debt during the three years the Liberal government has been in power. That is tragic.

I believe the picture could have been entirely different. There is an awareness in the country that the deficit and the debt must be tackled. I think the public is far ahead of the government on this issue. The deficit and the debt must be tackled quickly and decisively. Half measures will not do because increasing debt servicing will simply eat up the cuts that are being made.

Provincial governments have received the message. Provincial governments across the land have taken the fiscal problem seriously. They have set firm targets and dates for eliminating their deficits; not reducing them, eliminating them.

The federal government is now the only government in the country which has not set deficit elimination targets. The government talks about rolling targets from year to year. What is the date the government will have a balanced budget?

Without a goal and a target date the people of Canada who are bearing the brunt of the cuts cannot hope that the government will get to where it is supposed to be going.

I would like to speak about my home province of Alberta. The government there is trying through a survey to decide what to do with this year's budget surplus. That is something we have not heard much of for a long time at the federal government level. The Government of Alberta is trying to decide whether to cut taxes or pay down the debt. Soon provincial governments all over Canada will be in the same position.

Not the federal government. Instead it has offloaded its problems to the provinces by reducing block funding for health care, welfare and advanced education. In effect it is asking the provinces to do its dirty work for it.

What is the situation in Alberta? As I said, this year we have a budget surplus. We have growth in the economy. We have the lowest unemployment rate than any other place in the country and we are starting to pay down our provincial debt. This province has made a difference. B.C. and Saskatchewan are currently on the

same track and all provinces have recognized that is the road we have to take. Not only do we have to start reducing deficits and get to a balanced budget, we have to start paying down our national debt.

This is not the first time Canada has found itself under a staggering debt. Right after the second world war Canada had a debt larger in relation to our GDP than we have now, but there were special circumstances. That debt had been incurred because of the great depression of the 1930s and to finance the war effort. It took the Canadian people with their shoulders to the wheel 25 years, a lot of hard work and a lot of will, to pay off that debt.

We know this did not last very long, however, because the Liberals came to power and especially under Prime Minister Trudeau started another spending spree and the spiral started all over again. By the end of the Trudeau era we had built it up to $200 billion again. Unfortunately the current Liberal government is still adding to our debt.

On March 6 the finance minister tabled his third budget. Like his other budgets, it did nothing to address the problem of the debt which now stands at $578 billion. To service this debt Canadians will have to pay almost $40 billion in interest payments this fiscal year.

That sounds like a big number but I would like to put it into perspective. Fifty billion dollars translates into $4.2 billion each month which translates to $137 million a day in interest payments. The average Canadian taxpayer pays $3,700 a year just to cover the interest on debts. Taken as an average of their monthly cheques, it amounts to $309 million a year.

The third budget of the finance minister is no better than the others. It brings us the pain but no gain. We need balanced budget legislation. We need a firm date. It will happen only when in all corners of Canada where Canadians have made sacrifices they come to some kind of fruition through a government committed to a balanced budget and to pay down the national debt. It has to happen.

[Walt Lastewka, Liberal, St. Catharines, ON]

Madam Speaker, I listened intently to the hon. member for Peace River and I appreciate some of his comments and the work he has done in his riding.

On a number of the issues I am not sure it was very clear whether he understood that for every $7 of expenditure reduction there was only $1 of tax balancing out that went into the budget. I am not sure whether he appreciated that expenditures had been cut over time and that working on the deficit is a prime concern and then working on the debt.

As he mentioned, a number of people were affected in his riding with the cuts. That is part of the expenditure cuts by the

government. Is it his view that the cuts should have been harder on the people or that we are going in the right direction and we have to take care of the deficit before there is any impact on the debt?

By having this planned approach allows people to adjust. I am concerned by the hon. member's remarks of cutting more. Does that give people and businesses enough time to adjust?

[Charlie Penson, Reform, Peace River, AB]

Madam Speaker, I thank the member for St. Catharines. I think we agree on a number of areas. I give credit to the government and the finance minister for tackling the deficit problem.

However, where I have difficulty is I do not believe they are going quickly enough to get to a balanced budget. That is the point I would have in debate with my hon. friend from St. Catharines.

We have to look at two experiences of where governments actually moved to balanced budgets and see what the consequences of those were, in Alberta and in New Zealand.

My home province of Alberta has tackled the balanced budget initiative in three years. In fact, it came out ahead of schedule and we are now starting to get the reward and the province of Alberta is beginning to pay down its provincial debt.

What happened during that time? How tough was the hardship? We heard a lot of concerns. I know that Ontario has similar concerns right now. If we ask the average person on the street what difference they felt and how severe was it three years afterward in terms of the cutbacks to their personal lifestyle or their operation in business, with the exception of health care in Alberta, most people hardly noticed it was taking place. In fact, many people felt it was long overdue.

There was a consolidation of school boards. For example, school boards which had been put in place in the 1930s during the horse and buggy era now were no longer needed with modern transportation and communication. One school board was consolidated from three or four and in fact was even more effective because it had a little more buying power.

We need to work quickly. We need some reward at the end. There needs to be a light at the end of the tunnel. By continuing to drag our feet on this we are feeling the pain because we are making all of these sacrifices to increase debt servicing.

The example I used was that $4 billion in spending cuts last year, which I compliment the government for but I believe should have been more drastic, were just eaten up by the increased interest on the debt.

If anyone is under the illusion of how severe this is, think in terms of the size of the interest on the debt and how quickly it is growing as a proportion of our budget. We should be alarmed by

that increase because it is threatening very important social services such as health care and old age security.

The hon. member has asked if we need more time to adjust. My assessment would be no. The Prime Minister of New Zealand during the time of the crash in 1982 advised to go as quickly as possible, because the faster we get there the quicker the rewards take place and then small business will be able to create jobs as confidence in the economy grows again.

[Guy Arseneault, Liberal, Parliamentary Secretary to Deputy Prime Minister and Minister of Canadian Heritage]

Madam Speaker, please note that I intend to share my time with the hon. member for St. Catherines.

I am very pleased to rise today to speak to the 1996 budget. I would first like to congratulate the Minister of Finance. This budget and those tabled by the minister in recent years have always met and often exceeded the government's financial objectives.

The finance minister's budgets work together to help the people of Canada protect their future. To that end, the government has focused its efforts on four primary objectives: maintaining social programs for future generations, ensuring our financial future, rethinking the role of government, and investing in our future.

Although numerous measures will be necessary in each of these areas, today I want to concentrate on those I see as the most important.

One area I am concerned about in the federal government is in securing our social programs for the next century. I know this is a large area to look into in my short 10 minutes but I want to concentrate today on the employment insurance program and go back a bit to when it was first presented in December.

At that time a number of problems were identified. Even before those problems were identified, the minister in his presentation of that proposed employment insurance bill indicated to the House that he was willing to make changes that would be equitable, changes that would be based on common sense. From that time on the Liberal caucus and members of the Atlantic caucus especially have indicated to the minister a number of changes which have to be made.

There is no doubt that the status quo is unacceptable. In my riding constituents have come to see me over the years. They indicated that the unemployment insurance program was not adequate and it had to be updated and modernized. They indicated where the problems were.

I know from personal experience when dealing with a layoff at the Atholville mill and the Dalhousie mill that every time we wanted to have some flexibility in the program we were told it was impossible because the Unemployment Insurance Act did not permit us to do this or that.

I am very pleased to see the government has decided to modernize the UI program. I am also very pleased to see the government has agreed to make changes. The minister from Acadie-Bathurst has decided to listen to the committee. I hope the committee will come up with some good amendments.

I congratulate the members for Fredericton-York-Sunbury, Halifax West, and Etobicoke-Lakeshore for the positive amendments they have put forth in that committee so far. Our commitment and amendments should help clarify the intensity rule by making it more equitable, especially for low income families, as you are so much in tune, Madam Speaker, with regard to alleviating their status at the present moment.

I should also point out another amendment that will be made with regard to the divisor rule. The hon. member for Halifax West has already indicated that he is ready to look at the divisor rule and to link it to the UI rate rather than the flat 20 weeks. That should again alleviate some of the problems that have been put forth or identified in the present bill.

The other thing that should be pointed out is the tremendous job the hon. member for Fredericton-York-Sunbury has done on this dossier altogether on his amendment with regard to the going back 26 weeks for UI eligibility and the counting of hours.

In all of this debate some of the positive things in the bill have been put aside and not emphasized enough. The area of counting of hours for qualifying rather than weeks is going to be positive. It will allow people to qualify sooner. It will allow them to qualify for longer periods. It would also be a way of guaranteeing that all hours count.

The other thing that is important on the other side is the flexibility it will give to the programs. I should mention here the transition fund which will go to high unemployment areas. The government has identified $300 million which will go into that fund and the investment fund, the permanent programs, the $800 million which will be put forth to help create more work.

We realize that the changes are not perfect but what I want to emphasize again is that the government has always been listening and has reacted to the concerns that have been brought up by members of Parliament and especially members of Parliament from the Atlantic region.

The 1994-95 budget measures will help us achieve our deficit reduction objectives for 1995-96 and 1996-97, namely 3 per cent of GDP. The 1996 budget guarantees that the government deficit will go down to 2 per cent of GDP in 1997-98. The deficit will have fallen from $42 billion in 1993-94 to $17 billion in 1997-98.

There is no increase in personal or corporate income tax or excise taxes in this budget. Finally, there have been no personal income tax hikes in the last three budgets.

It is very important to underline the fact of no new taxes because that is what the people have asked us to do. That is what we have heard in our ridings and in the meetings we have had with constituents, from letters and phone calls we have received. People did not want to have an increase in their taxes. The government has responded in a positive way.

The priority area the government has seen fit to work on is getting government right. In this case the budget takes continuing action in reducing waste and inefficiency and in redefining and redesigning the government's programs and activities. Program review, phase one, phase two, it is ongoing. The government has indicated publicly that it will continue that program review to make government more efficient and to cut out a lot of the duplication that exists.

Working at delivering better quality services at lower costs to the taxpayer is what we want. Government must not only spend less, it must spend more wisely. An example of that is in my own Department of Canadian Heritage where a Parks Canada agency will be set up as a form of alternate delivery of services. In that case the agency will continue to report to the Minister of Canadian Heritage but it will allow for the services and the flexibility to be provided in each individual park. It will allow local parks to adjust their mandate to the local situation and to do that in a fashion that is speedier and more efficient.

Our government has been providing the economic and social environment that will encourage the economic growth that makes new jobs possible. The government has worked at keeping inflation down which results in lower interest rates.

The government has also recognized that youth are our greatest natural resource and the key to our future. Since our election a number of programs for youth have been implemented, such as youth services Canada, youth internship Canada and the student summer job action program. In this budget the government continues to build upon the measures taken for youth in the previous budgets. We have provided for on the job training through the reallocation of $315 million over three years to help create youth employment opportunities. The budget also doubles the government's commitment to the summer career placement program.

With regard to Canadian heritage the minister has announced renewed funding for Radio-Canada International which was again a request from Canadians, again a sign that we have listened to Canadians. They told us that it was an important feature of our culture, that it was an important feature for Canadians. We have reinstituted that funding to allow it to continue for another year. The minister is now searching for new ways of funding that service.

I should also point out that the minister has indicated to this House and publicly that a special culture fund is being set up to assist our cultural industries. That should be in place very shortly. The details will be announced publicly whenever they are ready.

I want to thank the Speaker for letting me speak this morning. I hope the hon. members opposite will applaud the Minister of Finance for bringing down a budget that will really benefit this country.

[Nic Leblanc, Bloc, Longueuil, QC]

Madam Speaker, I would love to congratulate the Minister of Finance for his supposedly excellent budget, as claimed by the hon. member for Restigouche-Chaleur. However, I find it difficult to do so, because I did not see anything very original in this budget.

Given that the tax burden continues to increase, that the deficit remains enormous, and that the debt continues to grow, does the hon. member agree that the government should go after the workers and the unemployed, particularly in New Brunswick, to collect more money? The budget provides that an extra $5 billion will be generated through higher contributions and fewer weeks of unemployment insurance benefit entitlement for the unemployed.

At the same time, the government is reducing transfer payments to the provinces to the tune of $3.5 billion per year. The extra money collected from the unemployed and the reduced amounts paid to the provinces total about $8.5 billion per year. This is more or less the amount by which the deficit will decrease in the coming year. This budget is not about innovating.

It makes the same old mistakes. Moreover, it increases the burden of the poor and of the most vulnerable members of our society, including the unemployed, while making them pay so much in unemployment insurance contributions, and making small and medium size businesses, particularly in Quebec and in New Brunswick, pay so much more.

I really wonder how the hon. member can congratulate the Minister of Finance.

[Guy Arseneault, Liberal, Restigouche—Chaleur, NB]

Madam Speaker, I want to thank my colleague for his question. I would like to point out to him that the government has two priorities: to put our financial house in order and to create jobs.

To answer the question put by my colleague about our financial future, I would say that if he had reviewed the figures in the budget, and I will repeat them because I mentioned them in my speech, he would have obviously noted that the deficit for 1995-96 will decrease to 3 per cent of the gross domestic product and that it will continue to fall. By 1997-98, the deficit will have dropped to 2 per cent and it will continue to diminish until it gets to 0 per cent.

In 1993, the deficit reached $42 billion. By 1997-98, it will have come down to $17 billion. So, it is widely recognized throughout the country that the Minister of Finance is acting responsibly and putting our financial house in order. We are making progress. The figures we have here go to prove it.

In terms of job creation, I think the minister has identified new initiatives with one priority in mind, our youth. It is one of our priorities, our future, the future of our country. In my view, this is our most important natural resource. It is very important that it be identified as one of our priorities. It is the first time that a federal government has made a priority of this very important issue.

The hon. member made some comments about the unemployment insurance program, based, I think, on the act itself, which we are currently amending to help solve the problem he mentioned.

[Walt Lastewka, Liberal, St. Catharines, ON]

Madam Speaker, I would like to thank the member for Restigouche-Chaleur for splitting his time.

Today we are debating the 1996-97 budget. I am pleased to have the opportunity to represent the city of St. Catharines in this debate. I want to focus my comments on creating jobs because that is what the budget is all about, creating the atmosphere and positive attitude for businesses to create jobs.

During the election in 1993, unemployment in St. Catharines and Niagara was around 15 per cent. Last year, it was below the national average of 9.1 per cent, still too high but moving in a positive direction. It is not due to government handouts. It is due to the open process for budget review, cutting red tape, working with small businesses, working with people, working with communities. By working together we have obtained economic stability, growth and deficit reduction.

The government ran on a platform of creating opportunity. Liberals believe that a federal government must work with Canadian business to provide the proper supports and to create a positive climate for economic growth. That is what I endeavour to do in my riding. I meet with local business people in St. Catharines every week to try to find out how their businesses are doing, what they need to succeed and how government can work to help and not hinder business growth.

I was telling the House a couple of weeks ago about a company in my riding, Lincoln Fabrics, which has the ISO 9002 standard. This company is the first fabric supplier of this type in North America to achieve this high level of quality manufacturing and management. I am going to make sure that people, governments and businesses know about this achievement because it is companies like Lincoln Fabrics that set the industry standard. It is companies like Lincoln Fabrics that create jobs.

I met recently with two companies which make wood products. These companies are going to work with the EDC to sell 100 per cent of their manufactured wood products to Germany. This is a very important step for these companies and is an example of how governments can create the opportunity for jobs within businesses without throwing money at them, instead working with them. These businesses need information, they need contacts, they need people who can open doors. With this help they can expand and create jobs.

I have worked with a business from the greater Toronto area. It was going to move to the United States because of the duty hit it was taking on imported goods and the requirement of up front money, excess paperwork and administration. The government passed Bill C-102 which provides for duty deferral and a free trade zone system. Now that business is staying in Canada, keeping Canadians employed.

Bill C-102 is important for a lot of companies. In St. Catharines we compete directly with U.S. businesses across the border. They had a major advantage over Canadian companies because of their free trade zones. We have changed that. A group of St. Catharines' companies worked with me and with the finance department to make sure the new legislation was effective and useful for businesses.

Local companies in St. Catharines are also looking forward to benefiting from the government's Canada community investment program or CCIP. Communities and businesses outside major urban areas like Toronto, Halifax, Montreal, Vancouver, Edmonton and Calgary need help. Areas like mine have smaller populations with fewer businesses but they have very active business potential which needs the assistance of the Canada community investment plan announced in the budget.

I believe many local projects which could have created jobs have been lost because of lack of financing, venture capital and a co-ordinated community investment fund. For example, did members know that the inventor of the plastic hockey stick is from my area? What they may not know is that he could not obtain funding in Canada so he had to go to the U.S., which meant jobs in the U.S.

How about the inventor of no-lead shotgun shells, John E. Brown, who was forced to go to the U.S. for funding, and we lost more jobs?

We must continue to find solutions to help Canadian inventors and entrepreneurs find risk and venture capital from Canadian sources. New programs like CCIP can help to create jobs. I have just outlined how government policies and programs through finance and industry have already benefited and will continue to benefit businesses in my area and areas across Canada.

The budget announced last month will continue to help business. It helps because it continues the path of fiscal accountability and stability. It helps because the bottom line is that the deficit must be brought under control in order to improve the Canadian economy and we are doing exactly that.

Canadians will not see a drastic slash and burn approach by this government. They will see an aggressive loyalty to bringing our fiscal house back in order. It took many years to create the deficit and it will take a few years to get in line.

In 1993 the deficit run up by the last government was $42 billion or 5.9 per cent of GDP. This year the target is $24 billion, which means the government will have met its target of 3 per cent of GDP. Meeting targets is very important. Next year with a deficit of $17 billion for 1997, the debt to GDP ratio will be down to 2 per cent. This will put us in a position where the economy can finally grow faster than the debt.

As the finance minister said on budget day, it sets the stage for the first meaningful decline in the debt to GDP ratio since 1974-75. It sets the direction for meeting targets, building confidence and allowing people and business to make their home and business plans and build a better future for Canada and Canadians.

As I have just outlined, first and foremost government is putting its fiscal house in order. That is an important initiative the government can take to ensure the economic future of our country.

Action is being taken to directly foster job creation and growth in several ways. This year's budget reallocates $270 million to encourage technology and innovation over the next three years. This includes programs like Technology Partnership Canada and expanding the SchoolNet program introduced in 1994. Every member in the House should be working with their schools to promote SchoolNet in their area. It is an investment in young people.

When talking about unemployment, the focus must be on youth. Not just because they are the future of our economic success, but because young people have a much higher rate of unemployment than the overall population. In many cases it is their first job and it is very important.

The budget addresses the issues of education and improved job opportunities for youth. First, we have provided secure, long term funding for transfers to provinces which help to pay for post-secondary education. They asked for it and it has been given to them for five years, $25.1 billion. The student loan programs have been expanded to provide financial assistance.

In this year's budget the government is providing an additional $80 million a year in tax assistance to help students and their families with the cost of tuition.

Three hundred and fifty million dollars is being reallocated to help create jobs for young people over the next three years. This includes doubling the funding for student summer employment this year. The funds will also be used to help young people with the school to work transition. That can be a real barrier to getting a first job. This is in addition to the funding for the Youth Internship Canada and Youth Services Canada programs which have been very successful in my riding of St. Catharines.

There are many other items I would like to touch on, including the information from the Canadian Export Association on what the government has done.

In summary, I want to emphasize that the budget is about jobs. The government is working to create an economic and business climate so that jobs will be created, while at the same time being sensitive to the needs of our most important resource, people.

[Philippe Paré, Bloc, Louis-Hébert, QC]

Madam Speaker, I am pleased to take part in this budget debate. Based on the budget speech, it is possible to make an overall assessment of government action.

When we look at the action of this government, we are reminded of the old saying "all talk, no action". I will demonstrate this reality in two ways. I will compare the speech from the throne with the budget speech and I will also compare speeches that were made on Canada's foreign policy with the reality that this government is inflicting upon us.

The speech from the throne tells us that the government intends to withdraw from a number of areas under provincial jurisdiction. Four or five areas are mentioned, and members will recall that, in Quebec alone, the cost of duplication and overlap has been estimated at $3 billion by the Bélanger-Campeau commission. So when we look at the speech from the throne, we have a tendency to think that the government is going in the right direction.

But, at the same time, what do we learn in the budget speech? That the government intends to establish a Canadian securities commission when such commissions already exist in the major provinces, including Quebec.

The government says it will withdraw from the area of job training, but look at all the procrastination around this so-called withdrawal. We can see that it has really no intention of withdrawing from this area.

The government is establishing a committee of tax experts, but the experts it appoints to this committee are all certified accountants that are experts in tax avoidance.

So what are the government's real intentions when it says it wants to reform the Canadian tax system? We can have our doubts about that.

The federal government is creating a health services research fund. We will now have a new area where there will be duplication and overlap.

In the speech from the throne, the government says it wants to ensure the viability of social programs. Let us take a look now at what is happening in reality: $7 billion cuts in transfers to provinces, and let us not forget that these transfers are for major services such as health care, income security and post-secondary education, that is colleges and universities.

It claims to be contributing to ensuring the viability of social programs by its unemployment insurance reform. Let us look at a few points here. With the UI reform, all workers start contributing with the first hour worked. So the little guy, the person who never contributed in the past, will be forced to pay into a fund, with no assurance at all of being able to draw anything out of it later on, of course.

At the same time, maximum insurable earnings are being lowered. Again the little guy will be forced to contribute, while the ones contributing in the past on up to $42,000 will now contribute up to $39,000, and yet the speech still claims the intent is to ensure the viability of social programs.

The government is more or less rifling $5 billion from the unemployment insurance fund, still for the purpose of ensuring the liability of social programs, of course.

In the throne speech, the government claims to have finally controlled the deficit. Now, the 1996-97 increase in the debt is $24 billion. Since this government came in, the debt has gone up by $110 billion and yet it is patting itself on the back, claiming to have gained the upper hand over the deficit.

The government tells us in the throne speech "we will be making changes to Canadian federation in order to bring it more in line with what Quebecers and Canadians want". Their last invention, the principal homeland of French culture in North America, has made them the laughing stock of everyone. We have only to look at the political cartoons and the newspaper editorials of the past two days. Everybody is making fun of it, and this is practically the only answer the government can come up with, since it is incapable of reaching a consensus within its own ranks on this question.

The second main element I am going to address, Canada's foreign policy, I will look at from two points of view: aid to developing countries and human rights. When the Liberal Party was in opposition, it criticized the Conservatives for their foreign policy, but it is interesting to compare the priorities the Conservatives set for themselves in Sharing Our Future and the Liberals' in Canada in the World .

The Conservatives set out their foreign policy under four headings: attacking poverty, helping people help themselves, promoting development and, finally, partnership in foreign policy, which was a key concept. What about the Liberal's famous foreign policy made public in 1995? When the document was tabled, of course, the Minister of Foreign Affairs spoke of the generosity and compassion of Canadians. While it is true of Canadians, it is not true of the government.

Now let us look at the facts. The three pillars of Canadian foreign policy: prosperity and jobs through trade, security for Canadians in a stable world-God knows it is not stable-and, finally, exporting our cultural products and values. They even dare to add, "to ensure our success in the world".

So the concept of generosity appears in speeches as does the concept of compassion, but when it comes down to really formulating a policy and stating it, it appears that everything is centred on trade relations.

We have a very typical case to demonstrate the failure of Canadian foreign policy. It is the case of a resident of Sainte-Foy, Mr. Tran Trieu Quan, who has been a prisoner in Vietnam for over two years. He is a businessman who made a business transaction. He was simply the intermediary between an American company, which went through its Canadian subsidiary to deliver cotton to Vietnam. He was simply the go-between. There were fraudulent dealings in the transaction. The Government of Canada knows he is not responsible. Interpol in Ottawa has shown that Mr. Tran was himself a victim of this shady deal, the company's scapegoat, but the Canadian government says it cannot do a thing to help Tran Trieu Quan to return home.

There are actions the government could take. Remember that the Prime Minister, in his first trip to the Asian Pacific, signed, among other things, an agreement for a co-operation project with Vietnam worth $36 million. Just as the Prime Minister of Canada was about to sign, he could have set his pen on the table and told his Vietnamese counterpart: "I would be very happy to sign this co-operation agreement but there is a little problem. A Canadian

citizen has been a prisoner in your country for a number of months. Until Mr. Tran Trieu Quan is released, no trade agreement can be signed".

As you may also recall, the Canadian government helped Vietnam eliminate its debt to the International Monetary Fund. The IDRC has projects in Vietnam. The former Minister of Foreign Affairs increased financial aid to Vietnam by $20 million.

The April 13 edition of Le Journal des affaires reports that CIDA has just awarded a $7 million contract to Stikeman Elliott and Experco Limited, companies based in Montreal and Drummondville. Although this government continues to give millions of dollars to Vietnam, it is unable to take whatever actions are necessary to ensure Mr. Tran Trieu Quan's release.

This shows the very wide gap between what the government says and what it can or cannot do.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Madam Speaker, I thank my hon. colleague for his presentation here today. By and large as we are both members of the opposition, our job is to keep the government's feet to the fire.

I have travelled a fair amount in Quebec in recent days and I think that we have a particularly serious problem in our country. As the economy of Ontario or Quebec deteriorates it pulls everybody else down because they are so dominant in the country. Even with the most cursory glance we can see the dynamism that has existed in Toronto and we can compare that to Montreal which at one time was Canada's premier city, the premier city in North America.

When we go to Montreal today, it is with the feeling of unease when we see what has happened in Montreal over the last few years. An illustration of this is taken from the magazine L'Actualité in November 1995. In 1980 before the separatists really started to ruin the economy in Quebec and hurt the economy in the rest of the country, the residential vacancy rate in Montreal was 3.4 per cent. It is now 6.8 per cent. The business vacancy rate was 3.3 per cent and it is now 19.7 per cent. The public debt in Quebec in 1980 was 20.3 per cent of gross provincial product. Today it is 40.9 per cent.

To put this into context, the cost of servicing the debt that the country has is $47 billion, more than all of the social spending put together. Many Canadians define themselves by our social spending and perhaps even more so in the province of Quebec. Yet the ability to continue to spend on the very programs by which Canadians define themselves is threatened by the enormity of the debt and the cost of servicing the debt, which this year is $47 billion.

It is interesting to note that the former leader of the opposition on becoming the premier of Quebec has changed his spots once again. He has now put fiscal responsibility as the number one priority of Quebec rather than separation.

There are examples, evidence and proof that this incessant drive for the separation of Quebec is costing all of Canada, but by far it is costing Quebec and the citizens of Quebec far more than it is costing the rest of the country. It is very hurtful to the economy and to the people of Quebec. Would the member consider that perhaps this is an appropriate time to continue to work within the federation to evolve a new relationship for all provinces and particularly the province of Quebec but to do so within Confederation where we will all end up being winners rather than trying to make winners and losers?

[Philippe Paré, Bloc, Louis-Hébert, QC]

Madam Speaker, if we could erase the last 130 years and if the hon. member for Edmonton Southwest were to ask his question, we would probably say: "Yes, he is probably right". We could experiment and try to see if Canada, with its English-speaking majority, and Quebec, with its French-speaking majority, can live in harmony at the economic, social and other levels.

The reality is that history cannot be erased. For a great many years, Quebecers have felt constrained in this country. Their English-Canadian partners have never been as open to them as they would have liked. So much so that Canada is even unable to accept the concept of distinct society, to recognize that Quebec and Quebecers are different. They tried to sell this reality by using another phrase: "principal homeland".

If Canada cannot accept Quebec as a distinct society, how can Quebecers trust the federal government to ensure their survival, their social, economic and cultural development?

[Nic Leblanc, Bloc, Longueuil, QC]

Madam Speaker, I am very pleased to rise in this House today to share some information for the benefit of the people of Quebec and the rest of Canada.

I would like to take a brief look back to find where the problems we are currently experiencing stem from. Where do our financial, social and economic development problems come from?

First of all, let me say that these problems can be traced back to the early 1970s and the Liberal federal government we had then. Let me explain.

In 1970, the Liberal government, here, in Ottawa, was running budget surpluses of approximately $247 million. Between 1970 and 1984, the average annual deficit was $17 billion. Starting in 1970, 1972, 1973, the federal government decided to centralize more powers here, in Ottawa, and to develop national standards for health and education in particular, business subsidy programs and

loosely regulated procurement policies. The federal government was determined to become the grand centralizing master of Canada. That is where the problem stems from.

I am for free health care, for free education as much as possible, and for research and development subsidization. But at the same time, we must be honest and warn the public that all this will cost, that it has a price tag, that they will have to pay for all this.

That, however, is not the course the federal government took at the time, choosing to make the whole range of services available without increasing taxes. What duplicity. That is when they started running progressively higher deficits-$2 billion, $5 billion, $10 billion, $15 billion-up until 1984, when the deficit quoted in the last budget tabled by the then finance minister, Marc Lalonde, had reached $40 billion, while revenues were approximately $60 billion at the time. You can imagine just how huge a deficit that was.

All this because the federal government wanted to show the people of Canada, and Quebec in particular, that it was the almighty boss on whom depended the achievement of the quality of life we had to have and deserved as a have country.

All these commitments have cost us a fortune. In fact, between 1970 and 1980, so much money was injected by the government in the economy that it caused it to overheat, creating artificial economic conditions, which made the inflation rate climb by up to 12 per cent per year. The best solution the government could find to curb this inflation was to let interest rates rise as high as 21 per cent. This caused a terrible and savage recession. That is what the federal government, and the Liberal government in particular, did between 1970 and 1984.

Between 1984 and 1993, the Conservatives were in power. I was a member of that government from 1984 to 1990. Between the years 1970 and 1984, the Liberal government made many long term commitments, including long term bonds and mortgages. Consequently, when the Conservatives took office in 1984, it was very difficult for them to reduce the deficit, in spite of their extraordinary efforts.

There was also a lack of political courage. The Conservatives continued to spend too much. During those years, there was an average shortfall of $4 billion per year in government programs and services. In other words, each year people paid $4 billion more than they received in services and programs. That was already an enormous amount.

Yet, the debt increased by an average of $30 billion per year. This means that between 1984 and 1994, the deficit reached $30 billion per year. The federal government was still spending too much. It kept this overheating of the economy.

Once again, the solution found by the government-the only one that it could find-was to ask the Governor of the Bank of Canada to increase interest rates in 1990. Of course, that was an easy solution which required little courage on the part of the government.

Increasing interest rates results in lower growth, which in turn means lower inflation. However, it also triggers a recession. We had a terrible recession in 1981 and people had not forgotten about it in 1990. That recession not only reduced inflation but actually triggered a deflation. That has been going on since then, which means almost six years now. This is nonsense, really a lack of courage for a government to act in this way.

The Minister of Finance has not been very inventive in his 1996-97 budget, nor very courageous. All that he has done is to decide to add $5 billion a year to his revenues from the unemployment insurance contributions made by employees and employers. Five billion of the employees' and employers' money. This is scandalous.

At the same time he has decided to transfer $3.5 billion less to the provinces. Calculating the receipts from the unemployment insurance fund, $5 billion, and the $3,5 billion less to the provinces, that gives $8.5 billion more to the government. This is the equivalent of what the Minister of Finance proposes in his budget, which is to reduce borrowing requirement from $26 billion to $16.8 billion.

The amount is almost the same. Make the unemployed pay more, transfer less to the provinces, that makes up the difference. Not a very imaginative solution. Scandalous in fact.

If the Minister of Finance had decided to transfer $3.5 billion less to the provinces, and at the same time had decreased the taxes collected from those same provinces, there would perhaps have been some grounds for saying that at least there was some spirit of decentralization, that the minister wanted to give more responsibility to the provinces, But no, that is not what he is doing. He will keep on taxing the people in the provinces in the same way, while at the same time cutting back on expenditures by $3.5 billion.

In conclusion, the cause of our current difficulties is the present federal regime.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Madam Speaker, as always, the hon. member delivers a reasoned and thoughtful paper to the Chamber.

I would like to follow up on a question and comment to the earlier Bloc speaker. I suggested that regardless of our biases, whether we think funding for social programs should be 100 per cent government funded or 0 per cent government funded, the

quest for the separation of Quebec has cost the country dearly over the last 15 years.

Is our responsibility to the past or to the future? Is our responsibility to our grandparents or to our grandchildren? For whom should we be toiling in the Chamber?

[Nic Leblanc, Bloc, Longueuil, QC]

Madam Speaker, on the subject of the cost of sovereignty, I have just mentioned that it cost the federal government hugely to retain its authority and to increase its powers in order to further centralize the government here in Ottawa. I explained this in my speech. I think the member for Edmonton Southwest failed to grasp the message I was trying to get across, despite its simplicity, in my view.

In other words, huge sums were spent all over the place without any thought to medium and long term benefits. Accordingly, the federal government spent huge sums to show people, and particularly Quebecers, its authority and to demonstrate how they could not live without it.

On the subject of the future, we are well aware that, as was explained during the referendum, it currently costs between $2.5 billion and $3 billion to manage duplication. These costs were calculated by experts and not by the Parti Quebecois or the Bloc Quebecois.

The experts are not calculating the value of the shortfall or inefficiency. However, it could be said that the inefficiency of this duplication, which is creating a lot of inconsistency in our programs and funding, might mean we are talking about a shortfall of $10 billion.

So if everyone looked after their own business, the provinces would have their full responsibilities in many areas, and the federal government would be a sort of overseer, as was intended in confederation. Initially, the federal government served simply as a sort of co-ordinator, and the provinces were autonomous. If we follow this management style, we might well survive. At the moment, however, the government does not appear to want to decentralize. It is just the opposite. Each time new rules are set or legislation is passed or amended in this House, the aim is always to give more power to the federal government and less to the provinces.

Clearly, it is not going to happen in a hurry, unless Quebecers decide once and for all to take over their responsibilities so that they can get out of the current economic slump.

[Roy Cullen, Liberal, Etobicoke North, ON]

Madam Speaker, it is a pleasure to speak for the first time in the House. I hope I will have a chance next week to speak at length.

Working in business in Canada we hear interest rates have been reduced to a level at which the spread between interest rates in Canada and in the United States has moved to a favourable position. Interest rates in Canada are now lower than in the United States, which is creating a huge potential for investment in Canada and in the province of Quebec.

I will echo to some extent the comments of the member for Edmonton Southwest. The difficulty we have is that investment capital is coming into Canada but with the instability of Quebec we see businesses leaving Montreal, we see more people leaving Quebec. As a person born and raised in Montreal, I think that is tragic.

We have an opportunity to attract capital into Canada for the well-being of Quebecers and Canadians.

Contrary to what the member for Longueuil said, the budget dealt with innovation in a very large way. I will try to capitalize on that opportunity in my riding which has a large innovative sector. I know we can produce some good results. I ask the hon. member to consider that for the province of Quebec and his riding as well.

The member talked about transfer payments. In this budget the transfer payments were reduced but the provinces were warned many years ago. The transfer payments were reduced in the order of 3 per cent to 4 per cent at a time when we were cutting the machinery of government by 8 per cent or 9 per cent.

When is the member's party going to recognize that the prosperity of Quebecers is tied to keeping Quebec in Canada and getting investment in the country?

[Nic Leblanc, Bloc, Longueuil, QC]

First of all, Madam Speaker, I must congratulate the new member on his election to this House.

Now, to answer his question, I should say that, as far as we are concerned, the political context does not really hinder economic development all that much. We sincerely believe that it is the poor management of the federal system and the enormous debt that the federalists have accumulated that hurt the economy.

As for interest rates, they are quite low these days, but they are still too high when considered in relation to inflation. The difference between the rate of inflation and interest rates is still well over three percentage points.

At present, interest rates should be around 5 per cent. The difference should never exceed 3 per cent. It is a yardstick that must be applied. If we compare interest rates to the rate of inflation, it is clear that interest rates are still higher than they should be in relation to inflation.

[Susan Whelan, Liberal, Essex—Windsor, ON]

Madam Speaker, I will be sharing my time today with the member for Brome-Missisquoi. I rise today to speak in the 1996 budget debate.

The Canadian dream that built Canada on principles of sharing, caring, fairness and compassion is alive in this budget. The course charted by the Minister of Finance and the Prime Minister is the correct one for Canada, for us, for now and for the future. This budget sets the stage to lead Canada throughout the 21st century.

We as Canadians must remind ourselves of the greatness of the Canadian experiment and return our energies to the endeavours which reflect our collective values. The foundation on which we achieved success in the past and will continue to succeed in the future is our ability to understand, to compromise and to change. As a government and as a country we must rethink the role of government.

From this budget we will guarantee the future of our social programs, restore the trust in the old age security system by providing long term sustainability and guarantee the security and stability of federal support for health care, post-secondary education and welfare. We will also invest in the future by reallocating funds to make new investments, provide help for young people and support technology and international trade. These are the essential areas for job creation and future growth. We will take the necessary measures to redefine the role of government in the context of a modern federation economy.

My riding, the ethnically diverse riding of Essex-Windsor, consists of more than 70 different groups and reflects the shared values of Canadians. Pluralism and multiculturalism, the fact that we can be different and yet all be Canadians, these are the fundamental characteristics of my riding of Essex-Windsor and of Canada.

My constituents have participated actively in prebudget consultations for the past two years. I am pleased to say the Minister of Finance has listened once again. My constituents asked for no new taxes and there are none. As well, the warden for the county of Essex for 1995, Mr. Lyle Miller, expressed his concern over the replacement of the Canada assistance plan. This budget alleviates that concern.

The federal government's objectives of the Canada health and social transfer are to safeguard medicare and social programs, to return to growth in transfers, to guarantee the cash floor component and to restore stability and predictability by five year funding arrangements.

It was also raised by one of my constituents, Mr. Andre Marentette, a member of the group Canadians for Constitutional Money, that our foreign borrowing is too high. Not only is he correct but this budget will for the first time in years make us less dependent on foreign loans. How? As we reach our objectives of deficit reduction, we decrease our need for foreign borrowing.

Not only are my constituents concerned about our investment in the future, it is one of the very reasons I sought public office. I assured my constituents at my nomination that "a new Liberal government will invest in Canada's greatest asset, our people. And by investing in them, we invest in our future".

This budget does just that. It invests in our future to ensure not only our future but to restore the confidence of Canadians.

This government has allocated resources to new investments in three main areas: youth, technology and external trade. Action in these fields is not an increase in expenditure but is financed by budget savings through reallocations from lower priorities.

Government cannot solve Canada's problems by simply throwing massive sums of money at different areas. This is what has created our difficulties in the past. Instead we must create an environment that encourages economic growth and make sustainable new jobs possible.

We need low inflation, low interest rates and declining deficits to build a growth environment. These are all critical to the future of our nation, to the future of Canada.

To talk about the future of Canada, let me speak for a moment about youth. Most of us will know that the unemployment of youth, those under 25, is very high. It is in the neighbourhood of 16 per cent. This needs to be addressed and it was in this budget. We must help our young people to take the first step to get their first job. In that objective I applaud the government for asking possible businesses to reach out and do exactly that.

There is $315 million allocated for new employment opportunities. There is $700 million already provided through programs such as youth internship Canada, youth service Canada and summer job programs. In this budget we will double the government commitment to summer job programs from $60 million to $120 million. With the $60 million last year, we created 30,000 jobs. We hope to double that number.

The remaining funds will be used to improve job possibilities for young people in innovative sectors: information technology, environmental technology, tourism, culture, trade and international development. These investments will build on a new domestic Team Canada style partnership between businesses and government to create entry level jobs for youth. With these new funds, $315 million reallocated and $165 million in tax expenditures, the

budget brings total expenditures for youth specific programs over a three year period from $700 million to $1.2 billion.

As well let us talk about the learning package. There is an additional $165 million in tax assistance to students and their families over three years. There is a 25 per cent increase in educational tax credits and tuition fee limits. As well the ceiling on annual contributions to an education savings plan has been raised.

Canada must also invest in science and technology to increase productivity and competitiveness which fuel export growth and ensure job creation at home. Encouraging export growth is a priority for this Liberal government. One billion dollars in exports represents about 11,000 jobs for Canadians.

In 1995 the value of Canadian exports exceeded that of imports by $28 billion. Along with the budget this Liberal government unveiled a new science and technology strategy which will target promising sectors. Technology Partnerships Canada will support the development of advanced manufacturing and materials, aerospace, environmental technologies and biotechnology. Funding will increase from $150 million in 1996-97 to $250 million in 1998-99.

Access to the information highway will also be increased by the SchoolNet program. By 1998 all of Canada's educational institutions and libraries will be connected. As part of SchoolNet, 2,000 computer students will connect 50,000 small businesses to the Internet.

To further encourage trading growth, the Business Development Bank will receive $50 million in additional capital allowing the bank to lend up to $350 million more to growth, knowledge based and exporting businesses. The Export Development Corporation will receive $50 million in new equity for innovative export financing.

We have talked and talked about the red book but by today I think we can come to this House with a remarkable balance sheet showing real achievements, particularly on the fiscal front. The Prime Minister recently noted we have finally turned the corner on deficit reduction. This has been done without raising personal income taxes in any of our three budgets. Turning the corner allowed the government to move forward on other fronts. The government is reallocating funding to provide increased support for job creation in three vital and key areas: youth, technology and trade.

It will be remembered that we talked about a deficit of 3 per cent of the GDP. It is now a reality. Now we are looking forward to and talking about a deficit of 2 per cent for 1997-98.

With regard to social programs, the Liberal Party is the political party which provided Canada with a social system, a social safety net which is the envy of the rest of the world. Once again, I am proud to say in this House that the Liberal Party is the party which is able to meet the true challenges of this country. This government has met that challenge by rethinking the social safety net for the long term in order to provide security to those who will grow up in this country, to offer people in the 1990s a safety net meeting their expectations and to ensure that our country is ready for the next century.

This government is prepared to put people first.

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

Madam Speaker, it was with great interest that I listened to the rhetoric from the member opposite.

April is tax month, the month when most Canadians fill out their annual tax forms. Madam Speaker, how many Canadians do you think would be willing to walk into a department store at the end of every month, slap down a cheque for $500 and then let the clerk decide what to bring them for their money? How many people would let that clerk go to the shelves and decide what the customer will get for their hard earned wages? Would people be willing to tolerate being forced to go to the store every month and lay down a huge sum of money to buy things they do not necessarily want or need? What I am trying to say is we need to change the system and bring back democracy to the way our government spends our money.

The member opposite talked about how the government is not increasing taxes. Nothing could be further from the truth. Since this government has taken over, personal income taxes have risen over $1,000 per person and the hon. member says they are not raising taxes. What a bunch of you know what I am talking about, Madam Speaker. I am fed up with the Liberals misleading the public.

We need a tax system that does not just focus on collecting more money, but allows people to determine how it is spent. We would never go to a store and allow them to simply tell us what we are going to get for our money but the government tells the people of this country what they are going to get for their money.

The member said the government is going to put in place all of these new programs. She talks about reducing government spending and then goes on to list all these new programs. Do people have people a choice? How about a tax form that tells the government what the priorities of the people are. We have real problems with the way government when elected does not carry out the wishes of the people.

The hon. member went on to talk about how health care is a priority. Is it when we reduce funding for health care and increase it in other areas? She talked about multiculturalism in her riding. I have multiculturalism in my riding as well. In fact English and French are not the dominant features there.

I took a survey as to how my people want their money spent and multiculturalism was almost at the bottom of the list, yet this government emphasizes that kind of thing. People want to look after those programs themselves.

The system is rewarding lobbyists, special interest groups and corporations. What about the tax concessions and grants to the corporations, the very corporations that pay the bills for this Liberal government to get elected? Then when it gets elected it turns around and rewards those corporations with tax concessions and grants.

How about asking the taxpayers if that is how they want their money spent? I think the member gets the message. It is about time the Liberals started listening to the people and stopped misleading the people about how great it is to have all these new programs and to spend all this extra money when in fact they have increased taxes drastically but they try to portray the image that they have not.

I wonder if the member would like to go to a department store and slap down a huge sum of money every month and have them determine what she is going to get for it. Taxpayers deserve to have more input into how government spends their money.

[Susan Whelan, Liberal, Essex—Windsor, ON]

Madam Speaker, I am quite surprised by the hon. member's comments. As he knows, for the first time in history the government has held prebudget consultations for two years in a row. What better opportunity for Canadians to have their say and to have their input into what the budget says?

My constituents participated. I do not know if his constituents did. They came and said what they wanted. The majority of the things that were heard at the meetings of the past two years in my riding and in other ridings were reflected in the budget.

We have met deficit reduction targets. How many governments in the past, including the Tory cousins of the party opposite, have done that? They could not meet those targets in the last 10 years. I would like to think that we did exactly what we said we were going to do in the election campaign. We kept our promise. We said 3 per cent of GDP and we have gone beyond that.

Liberalism and multiculturalism make this country great. They make it what it is. I am glad to be Canadian. I am glad to be part of this party.

[Denis Paradis, Liberal, Brome—Missisquoi, QC]

Madam Speaker, I am pleased to rise today to speak to the budget. The theme of this year's budget is "securing the future". I think that securing the future is exactly what is needed in these difficult times.

In the last few weeks, I had the opportunity to tour my riding of Brome-Missisquoi, to visit every town and village and talk with the people. I can tell you that the main concerns or needs of the people of Brome-Missisquoi-which are probably similar to those of other Canadians-are as follows. I will try to list them in order of frequency.

Their first concern is taxes. I will get back to this in a minute to compare public expectations with what is in the budget. Second, bureaucrats and their red tape. Third, duplication between the federal government and the provinces and how it can be eliminated as quickly as possible. Fourth, how to decentralize the management of certain programs. Fifth, how to achieve recognition of Quebec's distinctiveness.

I will now go back to the people's first four concerns in light of the finance minister's last budget. The budget starts out by stating that we must secure our financial future.

One year before the Liberal Party came to office, budget figures pegged the deficit at $42 billion. The deficit fell to $37.5 billion one year later and to $32.7 billion two years later. The new deficit forecast is $24.3 billion, then $17 billion for next year.

I mentioned earlier that political choices have to be made, and political choices are important. We could have cut the deficit down to zero tomorrow morning. But what about social programs? What about the most vulnerable in our society? I think we must go ahead without forgetting the needs of the most vulnerable in our society.

We will eventually eliminate the deficit, but the new Canada social transfer will help the most vulnerable in our society make it through. I think that this is important, in the choices the government made.

The second point is rethinking the role of government. I was telling you earlier about the concerns of the people of Brome-Missisquoi, about the need to reduce duplication.

Let me give you an example. The speech from the throne provides for the establishment of a national food inspection agency. Now, this is a measure that will help eliminate duplication. Currently, when it comes to food inspection, we have inspectors from Agriculture Canada and Health Canada at the federal level. At the provincial level, we have inspectors from the Régie des marchés agricoles du Québec, as well as from the Fédération des producteurs, which administers the joint program for that sector. Then, if we are talking about restaurants in Montreal, there are city inspectors who make regular visits to these establishments. That makes a lot of inspectors in the food inspection sector.

An agency like that will allow us to offer a partnership to all the other levels of government, because it is in the best interests of the

citizen. The citizen at the end of the process will not get the visit of five inspectors dealing with five different issues during the same week. This is an example of how to streamline operations and help eliminate duplication between the federal and provincial governments.

A similar example is the proposed revenue commission. Again, and this is particularly true in Quebec, the GST and the TVQ are harmonized. Agreements were signed by the federal and Quebec governments and things are going well. However, if we can increase the number of such agreements between Ottawa and the provinces, so much the better. Again, this will benefit citizens and taxpayers. In that sense, I believe the Canadian government is making great efforts to eliminate or reduce duplication.

A budget is about the moneys to be allocated or to be spent in a given year. Earlier, I stressed the importance of protecting seniors, as well as those who need to get an education and those who need health care services. As I said before in this House, thanks to the new Canada social transfer, the federal government will no longer send three cheques to the provinces, that is one for education, one for health and one for social security. It will be a single cheque. Provinces will be able to take that single cheque and spend it according to their own priorities.

Last year, when this was announced, the big cheque which combined the previous three cheques was cut about 4 per cent. But we should look at the facts. The federal government cut its program spending by 7 per cent, but transfer payments to the provinces by 4 per cent only. Better than that, the Minister of Finance announced in his last budget that the federal government had agreed to a new five year funding framework for the Canada social transfer, starting in 1998-99.

The first two years, the federal contribution will be kept as its current level. Then, in the following years, the transfers will increase at a rate linked to economic growth. What this means is that the federal government will not, as other governments are doing, transfer its deficit to the next level of government. The federal government will continue to assume its responsibilities, under the Canada social transfer, for health, education and social security. This is important.

I have the privilege of sitting on the public accounts committee of this House, where we can examine the way senior officials and deputy ministers manage, one after the other. This allows the Canadian government to be managed as well as can be, to cut spending and streamline operations to stay within budget, to see where we are going with our budgets from the inside, and to monitor those who spend money week after week and month after month. This allows us to save. These savings do not penalize the citizens who, I repeat, are the reason we are here in this House.

In conclusion, I want to speak about the best part of this budget. The best part is the job creation program for our youth. We have

increased the resources allocated to the youth summer employment creation program from $60 million last year to $120 million this summer, for all of Canada. This is a real investment in the future, it is a measure that will help young people across the country who represent our future; therefore it will foster our progress as a society.

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

Madam Speaker, I listened carefully to my colleague from Brome-Missisquoi, who sits with me on the Standing Committee on Public Accounts. I have one brief question to ask him.

He has talked a lot about duplication and overlap. Does he not agree that one of the best means to eliminate duplication and overlap would be to take away one level of government, that is the federal government, and to make Quebec sovereign?

[Denis Paradis, Liberal, Brome—Missisquoi, QC]

Madam Speaker, at what price? I think two or three levels of government can very well co-operate together. My colleague from Beauport-Montmorency-Orléans knows full well that there is a program that worked very well last year and the year before, and that is the infrastructure program.

It is not a program from one government, it is a program that called for the co-operation of the federal, provincial and municipal levels and it was set up quickly. It has worked properly, and I am even sure that his riding must have benefited from this infrastructure program. I think the solution for the future-I was talking about young people earlier-lies in young people, but also in co-operation and joint action. I appeal to all my colleagues of the Bloc Quebecois to show willingness to co-operate and to take joint action, so that we can now revitalize the economy and ensure that we live in a province and a country that are even more prosperous.

[The Deputy Speaker]

It being 2 p.m., we will now proceed to statements by members.