The House resumed from April 24 consideration of the motion that Bill C-31, an act to implement certain provisions of the budget tabled in Parliament on March 6, 1996, be read the second time and referred to a committee.

Budget Implementation Act, 1996Government Orders

11:10 a.m.

Bloc

Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Madam Speaker, I am pleased to rise on Bill C-31, a bill recently introduced by the Minister of Finance, which not only implements several budgetary provisions but also adds to the provisions of the latest budget brought down by the Minister of Finance some elements of the agreement on the GST reached the day before yesterday between the Minister of Finance of Canada and three of the four maritime provinces.

My argument will focus on two major aspects of the bill: first, the part dealing with certain provisions of the Unemployment Insurance Act and, second, certain provisions of the agreement on the GST, and those calling for the outrageous amount of $961 million to be paid out in compensation to the maritime provinces.

But before I go on, I must say that I deplore the fact that the government does not like to be told the truth, to hear certain facts about the unemployment insurance system, the GST or the outrageous agreement entered into with the maritime provinces. Instead of responding to these statements and debating the issues in public, in front of the people, the government chooses to hide behind a wall of silence, stifling debate with a gag order not once but twice today. This is a shame and a disgrace.

Regarding the unemployment insurance system, I would like to start by commending my colleagues, particularly the hon. member for Mercier, the hon. member for Kamouraska-Rivière-du-Loup, the hon. member for Lévis, and all those who have supported them in literally besieging the human resources development committee, whose members were once again trying to limit debate, something we will not abide. The real issues must be raised. I congratulate my colleagues on doing just that and we will keep on fighting with their support.

Our position on unemployment insurance is clear and, regardless of the gag put on us and the government's attitude in trying to hide the truth from the people who elected it, we will press on. The only thing that this bill is good for is to be tossed out. This is the only way the unemployment insurance system can be properly reformed today.

Let me restate our main reasons for opposing this reform. First, the proposed reform is unfair, because it will be harder to qualify and two categories of unemployed will be created, depending on how frequently they are unemployed. Second, this is a regressive reform, because there will be a single rate of contribution and the maximum insurance earnings will be reduced to $39,000.

Third, by lowering the maximimum to $39,000, the Liberal Party of Canada is doing a favour to large corporations, since those that can afford to pay insurable gains totalling $39,000 annually are precisely the big corporations that contribute to the Liberal Party's coffers.

Fourth, the reform is detrimental to job creation, since the new contributions structure favours capital intensive industries, at the expense of labour intensive industries.

Fifth, the reform will generate poverty, because it lowers the rate of benefits while taxing workers from the very first hour of work.

This debate on Bill C-31 gives me an opportunity to reiterate the position of the Bloc Quebecois regarding this issue. The proposed unemployment insurance reform is not agreeable to Quebecers and Canadians as a whole. The government must withdraw its bill and start the whole exercise all over, do some real thinking, and come up with a real unemployment insurance program that will help the poor in our society, instead of hitting them hard with cruel measures.

As regards the GST, there are many things we could say and repeat to the Minister of Finance. There are many things we could say and repeat to the Prime Minister, now and then. There are many things we could say and repeat to all government members regarding the numerous promises they made concerning this tax.

Why did the government, this morning, limit to only one day, or 100 minutes for the official opposition, the debate on the new agreement reached between the maritime provinces and the federal government concerning the GST? Why did it do that? I will tell you why. It is because this government is ashamed of the Liberal Party's promises that have not been kept. This government is ashamed of the attitude of its Prime Minister, who reneges on his commitments. This government is ashamed of the attitude of the Deputy Prime Minister, who said she would resign if the GST was not abolished. We are being gagged because the Prime Minister failed to meet his commitments. This is why.

Not that long ago, the government made very clear statements. We have recordings, newspaper articles and even videos of that, just as in the case of the numerous scandals involving the Department of National Defence. Prominent members of this government have made a formal commitment to Quebecers and Canadians, especially during the election campaign. They have made a promise. This Prime Minister stated in a CBC interview in 1993: "We will scrap the GST".

What is the Prime Minister saying now? He keeps repeating we should read the red book. But what did he say personally? He indulged in petty politics by promising Quebecers and Canadians that he would eliminate the GST. We have his commitment on tape. It was recorded. And that has nothing to do with the red book. He promised that he would kill the GST. And what is he doing now? He is breaking his promise.

On October 18, 1993, on the CBC, the Deputy Prime Minister made a statement that is just fine when you want to entice voters during an election campaign:

"I have already said personally and very directly that if the GST is not abolished I will resign".

So, she promised to resign if the GST was not eliminated.

What is she doing now? She is laughing at us. She is laughing at Quebecers and Canadians with her broken promises. Shame on her. We would have thought that, as it was said during an election campaign, they would stop saying they would if they did not really mean it. But that was not to be. On May 2, 1994, about six months after coming to power, the Prime Minister repeated: "We hate this tax, and we are going to eliminate it".

How can they take such an attitude now? How can they try to hide behind an agreement with the maritimes, an agreement that not only leaves the GST in place throughout Canada, but also buries it in the price?

How did we get from a formal commitment to some kind of political hybrid that makes the Minister of Finance look good and gives the Prime Minister the opportunity to say: "Look, we have done something about the GST", when what he promised was not to do something about the GST, but to scrap it? How can a government deceive the voters this way? It is unacceptable. It is so totally unacceptable that there is a general outcry in Quebec and in Canada.

About the hidden tax, for instance, let me remind the House that, as early as 1994, the Canadian Chamber of Commerce made a survey and concluded that 70 per cent of its members were opposed to a sales tax, the new GST or any new value added tax, being hidden in the price of goods. Seventy per cent of its members were against such a measure in 1994. The Canadian Chamber of Commerce carried out another survey not so long ago, last February in fact, and realized not only that the situation had not reversed, but, quite the opposite. There are now 76 per cent of Canadian businesses that are opposed to the new GST being hidden in the price of goods.

When there is almost unanimous consent within the Chamber of Commerce on this issue, why should the government come up with such a hypocritical initiative? The Canadian Taxpayers' Association, through its president, also reacted strongly against a hidden GST. Why? First, because it allows the government to conceal what the real financial situation is in Canada. It also allows the federal government to conceal its mismanagement of public funds and the fact that it is standing on the brink of a financial abyss, with an accumulated debt of over $550 billion. That is the first reason.

The second reason is that by hiding the tax-as the Minister of Finance has done in the agreement reached with the three maritime provinces and which he would like to extend to the rest of Canada-the government has found a roundabout way to increase the tax, year after year, without the consumers in Quebec and the rest of Canada knowing about it.

In fact, while in opposition, the Liberals vigorously attacked the previous government on the GST and emphasized the very same things we just mentioned. In 1989, the Liberal opposition minority report said: "Moreover, if the GST is hidden in the sales price, it will be a lot easier for the government to raise it later". This is what was said in the Liberal minority report of 1989. It also said: "Nothing will prevent the government from regularly raising the GST." This is still according to the 1989 Liberal minority report.

This is what the Liberal Party was saying then. I find it peculiar that they should do a complete turnaround a few years down the road. How can the people of Quebec and Canada trust a government like that?

As such, the agreement is a bad deal. Why? Because not only is the problem of the hated GST not solved, not only is this tax hidden and there is no national reform, since this is restricted to the maritimes only, but this will cost Quebecers and Canadians outside the maritimes at least $961 million over the next four years to compensate the maritime provinces for the revenue loss they will experience after replacing the actual federal and provincial taxes-totalling some 19 per cent in the maritimes-by a single federal tax of 15 per cent.

This is a $961 million political compensation that has nothing to do with federal compensations like, for example, the one that followed the abolition of the Crow's Nest rate for the transportation of western grain. They said then that economic distortions were created.

These economic distortions are being eliminated, but there must be compensation for those who, since 1897, benefited from this preferential transportation rate. That is not the same thing. That was an economic compensation. This compensation is political. We are supposed to believe that the government is doing something about the GST, that it wants to harmonize the consumer tax collected by the federal government and the provinces, when in reality this accord is a smokescreen for a broken promise and an outrageous expenditure of $961 million over the next four years.

This is a lot to pay so that the Liberal government can pull the wool over our eyes, to the tune of almost $1 billion over the next four years. This is not right.

Not only that, but the finance minister is keeping something else from us about this agreement, and that is that in four years, when the $961 million have been paid, equalization payments will kick in. It is not just $961 million. After the fourth year, we will continue to pay, on average, approximately $250 million annually to the maritimes for this bad deal, this political deal that the finance minister signed this week.

The new deal between the federal government and the maritimes will cost $1 billion to Quebecers and Canadians outside the maritimes. It is a high price to pay for Canadians for a bad deal, a political deal, which maintains the GST.

It is not the only price. After four years Canadians will continue to pay compensation to the maritimes by equalization payments. When one reduces the taxation base, as in the proposal of the Minister of Finance, equalization increases automatically.

In Quebec we realized harmonization for five years without any cost to the federal government, without any cost to Canadians in other parts of Canada. Why is it not possible for the Liberal government to do the same thing in all territories of Canada? Why is it not possible to avoid paying $1 billion to the maritimes?

Not only is this agreement costing us dearly, not only does it solve nothing, not only is it a smokescreen for the Liberal Party's broken promises, but in addition there is a danger that it will set a precedent of interfering in the fiscal autonomy of the provinces.

I would like to tell you what the deputy premier of Quebec said when he heard about this agreement, because there are fears in Quebec about the agreement. He said, and I quote: "Certain conditions cannot be gotten around, including full fiscal autonomy for Quebec, which must retain full flexibility to set the base and the rate".

His concerns are not without foundation, because in the paper tabled Monday at the same time as the agreement, it is clearly mentioned that the new Canada revenue commission, the one which was announced in the speech from the throne and which came up again in the last budget speech, will be responsible, in place of the provinces, for managing the new tax, the Liberal government's new hidden and hypocritical GST.

As this paper points out, if application of this agreement between the federal government and the maritime provinces is to be expanded to all of Canada, over the next few months there will be many approaches made to the various provinces to get them, Quebec in particular, to give up their taxation autonomy, administration of the sales tax, the right to set the level of their own taxes-something Quebec is totally free to do today-and particularly the right to determine which goods and services are to be taxed. This is what lies hidden behind the agreement reached between the maritime provinces and the Minister of Finance.

We can but regret this agreement, this political agreement, this bribery of the maritime provinces, aimed at getting what the Minister of Finance and the Prime Minister want. We can but regret, as well, what occurred here yesterday at 5.21 p.m. Since I saw it as a tragic moment for Canadian parliamentary history, I took note of the exact time the Minister of Industry tabled a notice of motion to gag us in the debate on Bill C-31, as well as on the outrageous agreement between him and the maritime provinces.

This agreement will be terribly costly for us. A minimum of $1 billion over the next four years, $250 million from the tax dollars of Quebecers to foot the bill for a political agreement entered into with the maritimes. This agreement will serve to increase competition between Quebec businesses and those in other provinces, New Brunswick, for example.

Such a situation is not right, particularly since we in Quebec have come to an agreement with the federal government, have made an incredible effort to harmonize the tax, have defined highly efficient mechanisms for its application and administration, and now are rewarded for our efforts by the federal government's presenting us with an agreement that has been thrown together, a political agreement that will cost Quebec $250 million, and the rest of Canada some $750 million.

I can understand why Quebec is starting to rise up, and the other provinces as well. It is not right for a federation to be administered the way the federal government is administering this one. Nor it is right for it to renege on its commitments, as the Prime Minister and the Minister of Finance are doing.

Budget Implementation Act, 1996Government Orders

11:30 a.m.

Liberal

Brent St. Denis Liberal Algoma, ON

Madam Speaker, I listened with great interest to my friend and colleague. He is an eloquent speaker, but as is all too often the case, only part of the picture is presented and is not one we on this side of the House agree with.

The member questions the finance minister and the government's making an arrangement with the three Atlantic provinces because they saw it was fit, fair and just to provide a degree of compensation to assist with the transition. This is especially the case because of the lowered provincial rate portion of the harmonized tax.

I am a member of the House of Commons finance committee, as is my colleague. I went through the extensive consultations in the spring of 1994 which covered a wide range of witnesses across the country and a wide range of issues. We looked at about 20 options for replacing the GST. There was no doubt the best replacement for the GST was a harmonized system involving provincial taxes and the federal GST.

We had the concurrence of the Reform Party on this suggestion.

Budget Implementation Act, 1996Government Orders

11:30 a.m.

An hon. member

Wrong.

Budget Implementation Act, 1996Government Orders

11:30 a.m.

Liberal

Brent St. Denis Liberal Algoma, ON

We only have to look at the minority report to confirm that fact

I will deal specifically with the member's points in the latter part of his presentation and why the province of Quebec should not now receive some payment for having harmonized some years ago. We appreciate that Quebec had the foresight to harmonize. It was the right thing to do and obviously the government of the day thought so. It is still a good plan. No doubt there are some improvements that can be made and as a government we look forward to working with Quebec on that.

However, statistics will show Quebec actually gained from the harmonization. In the maritimes because of the tax base and the desire to lower the provincial rate of tax, a 5 per cent threshold was decided on. For any province which harmonized above a 5 per cent cap, compensation would be provided for loses above 5 per cent. As we calculate it there would be no loss for Ontario. As we see it

there was no loss for Quebec. Some other provinces might experience a loss.

As a government we are being responsible and we are prepared to provide some limited degree of compensation. This is not a political decision. This is a country that is not built on cheque book federalism, it is a country built on partnerships among all the regions of this great nation. Every area is treated equally but we cannot treat every area the same.

Did Quebec gain when it harmonized its provincial tax with the GST?

Budget Implementation Act, 1996Government Orders

11:35 a.m.

Bloc

Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Madam Speaker, my colleague is being a bit facetious in asking such a question. Harmonizing taxes, reducing the paper burden and simplifying the administration of taxes are all good things. Nobody said they were not. This is in fact what Quebec has understood and has been doing since 1991. We harmonized the federal tax and the Quebec sales tax, but not at a cost of $1 billion. Not at all.

We harmonized the bases gradually, through discussion, through an administrative agreement, the kind you are so fond of. You are always advocating administrative agreements, everyone's full understanding and participation by all the provinces. And what are you handing us this week-a slapdash agreement with three of the four maritime provinces.

Without consulting any government in any province of Canada, least of all Quebec, you announce that from now on this will be the basis of discussions. And then you bring out this agreement, which will cost $961 million over the next four years over and above the equalization payments, which will take over. And now we have to pay. Button it and pay up is what you are telling the governments of Ontario, Quebec, Alberta, Saskatchewan, Manitoba and British Columbia.

This is not how it was in Quebec. There, we could see the advantage of harmonizing and of simplifying the administration. We could also see that the more we simplified and cut back administration, the better our economic performance. But we never asked for anything. The only money the federal government gives the Government of Quebec is for services rendered, because it administers the federal government's GST. And that is what is not right.

Furthermore, I do not think we are alone. Some may call us evil separatists and perpetual federalism bashers, but it is not true. See how rational, very rational we were with the GST, unemotional even. In Quebec we harmonized it. Not only are we criticizing this ridiculous agreement, but like the rest of Canada, we in Quebec find this whole business unacceptable. It is not right that the rest of Canada should pay for an agreement that is going to allow people in the maritimes to save 4 per cent in provincial tax.

If it were an equalization adjustment, it would be a completely different matter. Let us not mix apples and oranges as the Minister of Finance is so good at doing in order to confuse Canadians. That is not right. Do not forget-and my colleague knows it full well because he sits on the finance committee-that when a tax base in a province or a group of provinces is reduced from 19 per cent to 15 per cent, as is the case with the new consumption tax, the new hidden GST, and the federal government pays out $961 million in compensation, the federal equalization formula must kick in.

Whether we like it or not, it is automatic. Put a 15 per cent consumption tax base in the equalization formula, a reduced base, and after the fourth year or maybe after the third year or maybe immediately-we do not yet know the specifics of the political deal signed between the Minister of Finance and the three maritime provinces-given the equalization formula, Canadians will necessarily have to pay, not for four years, but ad vitam aeternam, as long as the principle of equalization is in effect in this country.

This is a bad deal. Because we are making people aware of this bad deal, because we are bringing to their attention your poor management, political deals made to give the impression that the government is acting on the Prime Minister's commitment to eliminate the GST, we are being gagged. It is not right to deal with such important matters in this manner.

I would be very careful if I were you because, when you go back to your ridings this weekend or the next, you may find that some of your constituents are disgruntled. During the 1993 election campaign, some people thought: "Wow, this will be a good government. It will abolish the GST, scrap it. We will vote for them".

But the situation has changed since Monday. The Minister of Finance admitted he cannot keep that promise, while the Prime Minister told us they had kept it. Who should we believe? I think we must trust the intelligence of Canadians. They know perfectly well that the GST is there and for a long time, but that it will be hidden from now on.

So I think a lot of your constituents will be waiting for you with two messages by next week: you did not keep your promises and the government acted hypocritically.

Budget Implementation Act, 1996Government Orders

11:40 a.m.

Liberal

Jean Payne Liberal St. John's West, NL

Madam Speaker, I am pleased to speak on the implementation of certain provisions of the budget, presented on March 6, which are very important to my riding.

While the 1996 budget meets the federal government's commitment of sustained deficit reduction, a balanced budget by and of itself must never be our only goal.

The Liberal government has the challenge of safeguarding and ensuring our social programs remain effective well into the next century. The new Canadian health and social transfers, which consolidate transfers for health care and post secondary education, began on April 1, 1996. Because it is block fund it offers more flexibility to the provinces, allowing, for example, for the development of innovative programs for people receiving social assistance.

Greater flexibility will reduce administrative costs and allow the provinces to adjust to the new funding levels while protecting program quality.

The 1996 budget introduced a five-year funding arrangement for the CHST for 1998-99 through 2002-03. The CHST will be stabilized at 1998-99 levels for two years. Then it will begin to grow.

There will be no cuts to the CHST beyond those announced in last year's budget. By providing predictable funding the government is demonstrating its commitment to safeguarding health care and other social programs valued by Canadians. The provinces will be able to plan programs with clearly set levels of federal funding in following years.

When the CHST begins to grow in the year 2000-01 federal transfers will increase for the first time since the mid-eighties. While the CHST will promote innovative solutions, established national principles will continue to be upheld. Provinces must still provide social assistance without imposing residency requirements.

The government will continue to vigorously defend the five principles of the Canadian health care system. It will also work with the provinces to develop other shared principles and objectives for the new transfer. Funding will remain constant at $25.1 billion for the first two years and will actually increase over the remaining three.

Although the cash component of the Newfoundland CHST will decline initially, transfers will resume growth sometime during the five-year arrangement. The federal government is guaranteeing the cash component of the transfer will never be lower than $11 billion during this five-year period. Newfoundland will benefit from the tax component as well as from the cash guarantee.

By putting a floor of $11 billion under the cash part of the CHST the federal government is ensuring the principles of the Canada Health Act can and will be enforced throughout Canada.

A new seniors benefit will replace the existing old age security and guaranteed income supplement. The new system is designed to help those who need it most. In my riding of St. John's West there are many single seniors and many senior couples who live on incomes well below $40,000 a year.

Over these past few weeks I have met with many of them and I have reviewed with them the new seniors benefit. It was found that they will be better off under the new system than under the old one. The new benefit will be tax free and fully indexed to inflation. The new system targets those who need it most and ensures the system is sustainable in the future.

Fiscal progress should always be the means to a greater public end such as lower interest rates, more jobs and then a more prosperous and secure nation. Fiscal progress must give us the green light to move forward on priorities such as the preservation of Canada's social safety programs, programs that have helped establish Canada as one of the most envied and respected nations in the world.

In order to meet this end, as the Prime Minister has said, we have to provide a long term funding arrangement for health and social programs and arrangements that are growing, stable, predictable and sustainable.

Budget Implementation Act, 1996Government Orders

April 25th, 1996 / 11:45 a.m.

Bloc

Gilbert Fillion Bloc Chicoutimi, QC

Madam Speaker, my colleague opposite was very brief, she addressed only two points in Bill C-31. She forgot quite a few others. She kept silent on many issues this bill is trying to hide.

I would like to remind her that this bill contains provisions on unemployment insurance that were supposed to be in Bill C-12 originally. This morning's gag orders will prevent us from really discussing Bill C-31, also dealing with unemployment insurance, and Bill C-12 at committee stage. So when will we have the opportunity to address these issues?

Bill C-31 amends the Unemployment Insurance Act so that, retroactively to January 1 1996, maximum weekly benefits will drop from $445 to $413. Why is this government introducing the same measure twice? Why use two bills, C-31 and C-12, to enact the same legislation? Is the government afraid of some kind of complication? Does it fear it will not be able to respect the deadlines set in the budget?

Bill C-31 does, in a roundabout way, what the government should be doing directly with Bill C-12. With each new bill, we should be discussing new issues. Will my colleague be happy this weekend when she meets her constituents? Will she be able to explain what is happening with unemployment insurance?

Budget Implementation Act, 1996Government Orders

11:45 a.m.

Liberal

Jean Payne Liberal St. John's West, NL

Madam Speaker, I omitted to mention at the beginning of my speech that I will be sharing my time with my colleague from Provencher.

When I began my speech I indicated that I would be referring only to elements of the budget that were very important to my riding. These dealt with the CHST and the seniors benefits.

Over the last two or three weeks I have spoken to a great many people in my riding about both of these matters. About 90 per cent of the people I spoke to will be better off under the new seniors program.

I am extremely pleased that the Minister of Finance and the House had the foresight to look at those who are most in need of the benefits that they will now receive under the new program.

Budget Implementation Act, 1996Government Orders

11:50 a.m.

Bloc

Jean-Guy Chrétien Bloc Frontenac, QC

Madam Speaker, the member for St. John's West should know that to be liked, appreciated and respected a tax must be simple and fair.

How could she explain to Canadians as a whole that this tax is fair when her government is going to take close to $1 billion of taxpayers' money to buy, to conclude a political deal with three provinces who, it appears, could but benefit from teaming up with this new government which was has been in power for two and a half years already?

Hardly 12 months ago, this same government paid $1.6 billion directly to western grain producers when the Crow rate was abolished. This time, it is going to spend $1 billion to compensate a small portion of the Canadian population who will pay less in provincial sales tax and GST.

Does she believe this tax is fair and simple while Liberal members when they were in opposition were dead against-

Budget Implementation Act, 1996Government Orders

11:50 a.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

We are now resuming debate.

Budget Implementation Act, 1996Government Orders

11:50 a.m.

Liberal

David Iftody Liberal Provencher, MB

Madam Speaker, it is with pleasure that I rise in the House to participate in the debate on Bill C-31, an act to implement certain provisions of the budget tabled in Parliament March 6, 1996.

I would like to take this opportunity to discuss the portion of Part II of Bill C-31 that deals with the sale of government owned railway cars, or hopper cars, as they are known. In the budget of the Minister of Finance on March 6, 1996 he announced that in order to continue the transformation of the western grain handling and transportation system, the government would do primarily two things. First, it would dispose of its fleet of grain hopper cars and second, it would minimize its role in the day to day operations of that system.

The government has committed itself to selling all of its fleet of 13,000 grain hopper cars. This policy change is designed to enhance the competitiveness of the grain handling and transportation system while keeping increases in freight rates paid by producers to a minimum.

I would like to remind the House of a couple of incidents, in particular in the use of grain hopper cars in the export of grains to the Vancouver port, the difficulties that western farmers have had in the control over that process. I am pleased to say that this allocation process will give western Canadian farmers greater control over that export process.

These decisions were adopted from a package developed by senior executive officers or the SEO group. This industry group was tasked last year with reviewing car allocations, the disposal of the government hopper car fleet and the Canadian Wheat Board's role in transportation. The review was announced in the 1995 budget. The report by the SEO group was carefully reviewed and it is important to note that several of their recommendations were not accepted due to concerns voiced by producers and producer led groups.

Two of the discarded proposals which were very important included a proposal by this group to sell the government cars to the railways for $100 million with a $1 per tonne freight rate increase for up to five years to cover the cost.

Second, producers were also concerned about the lack of a producer's voice on a proposed car allocation policy group. The Minister of Finance listened to these people. He listened to the producers and he acted accordingly.

I should point out that between 1972 and 1979 Canada had a Liberal government that listened to the pleas of farmers who were concerned about the transportation of grain at that time. It spent up to $500 million with interest payments on those capital costs to provide an additional 13,000 grain hopper cars for western Canadian farmers.

How will the commercialization of the grain hopper cars affect farmers? Selling the fleet will allow for the efficient use of grain hopper cars. Cars will now be allocated on a commercial basis responding to market need. This will improve the ability of farmers to get their products to market quickly. It is an essential element, particularly with regard to a disposable good such as grain and in getting it to our international markets in the Asia Pacific rim and eastern Europe.

The government has already acted in its latest budget to protect the farmer's position by limiting the freight increase associated with the sale of the cars to 75 cents per tonne, as announced in the finance minister's budget. It will also postpone that same increase by another year to 1998. Further, efficiency improvements will generate reductions in the freight rates which should offset the increases over time.

Other measures, such as legislating the fair sharing of productivity gains between farmers, railways and shippers will assist farmers. The other side of the coin is how will this policy affect the railways?

Currently cars are allocated on an administrative basis which is not effective. Selling the fleet will result in more efficient use of the cars that will be allocated in response to market demand.

The railways will be given the flexibility they need for efficient day to day operation of the system. These efficiency improvements will over time result in lower costs for the railways and consequently lower freight rates which will help farmers. Proposals to buy the cars will be encouraged by all interested parties including-from my perspective most importantly-producer friendly entities. Producers, farmers, the railways and any other interested party will be given their say.

As the budget stated, the federal government will consider all proposals put forward for the disposition of these cars. It will take into account the interests of producers, shippers and railways and the need to make the most efficient use of these cars.

Bill C-31 seeks to implement the measures I have outlined and to implement the budget the minister has given. The commercialization of these cars is a sound and productive measure of the budget. It should be allowed to be implemented at once. Producers, grain companies, railways and ultimately Canadians will benefit from this privatization exercise.

As my colleague, the Minister of Transport recently stated: "We have to ensure that Canadian grain reaches world markets as efficiently as possible. Improving global trade in this way enhances Canada's international competitiveness, a key element of the government's economic growth and jobs strategy."

Budget Implementation Act, 1996Government Orders

11:55 a.m.

Bloc

Jean-Guy Chrétien Bloc Frontenac, QC

Madam Speaker, could my colleague, who welcomes the fact that the government is providing a great deal of assistance to western farmers to help them adapt to the elimination of the Crow rate and sale of hopper cars, remind his finance minister that, over five years, he has cut $220 million in subsidies to dairy producers, nearly half of whom are located in Quebec, without offering them any transitional help?

This same government paid $1.6 billion directly to producers, $1 billion to promote export and $300 million to improve transportation-hopper cars, as the member explained so well.

In total, the Canadian government will spend $2.9 billion on western grain producers, and close to $1 billion to help three maritime provinces harmonize the GST and their provincial sales tax.

Does he not believe that his government is using a double standard?

Budget Implementation Act, 1996Government Orders

Noon

Liberal

David Iftody Liberal Provencher, MB

Madam Speaker, it is my pleasure to answer the member's question. I want to refer to a response by the member's former colleague and that is the one-sided picture always presented by the Bloc on these matters.

Some of the largest dairy producers in the province are in my riding of Provencher. The riding of Provencher produces almost 50 per cent of the milk in Manitoba. Of course I too was concerned about any possible decreases in subsidies to dairy farmers. I remind the member again that it was a Liberal government in the early 1970s which brought in that support system and continues to defend it also for Quebec farmers.

In specific response to his question about the subsidy, he must know, ought to know and should be telling his constituents and his dairy farmers that they have been allowed to pass those costs on, through the Canadian Dairy Association, to the consumers. Over a three or four year period, the reductions in those subsidies will be recovered by the dairy producers.

It is my pleasure here today to give the hon. member that information so he can share it with his dairy farmers in Quebec if he does not already know that.

Budget Implementation Act, 1996Government Orders

Noon

Reform

Myron Thompson Reform Wild Rose, AB

Madam Speaker, to wrap up on the issues the member was talking about, I would like to know how much of the program is designed after this transpires. After there is privatization in the selling of the hopper cars, how much will then become farmer operated and farmer driven rather than by government? Is the government going to back out as most farmers believe they should or will it continue in this area?

One major thing that concerns all Canadians, including farmers, on which I have not heard anything from that side of the House, from the Prime Minister, the finance minister, right down the list and about which nobody talks, including the hon. member, is the huge national debt. It is literally tearing the guts right out of a number of opportunities and programs particularly in the agricultural area as well as thousands of other places.

Why are the huge growing debt and the interest payments on it which are becoming the greatest expense we have not being addressed by any member on the opposite side of the House?

Budget Implementation Act, 1996Government Orders

Noon

The Acting Speaker (Mrs. Ringuette-Maltais)

I am sorry, but the time has expired. Resuming debate.