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.