Mr. Speaker, it is my pleasure to launch third reading of Bill C-31, the 1996 budget implementation act.
Of all the legislation proposed by a government, it is budgetary measures that stand at the core because they define the bottom line capabilities and concerns of government itself. This is especially true of Bill C-31. It is legislation dedicated to dramatic discipline change, change in the way government operates, change in how government spends and change in how government establishes and addresses its priorities.
These changes were not proposed just for the sake of it. Our initiatives reflect a reality experienced by governments in Canada as well as elsewhere in the world: they have to reassess their roles and responsibilities.
This does not mean that we have to give up the activities that are the government's reason for being: promoting job creation and economic growth as well as protecting people who are suffering great hardships because of change. Both these missions remain sacred for our government.
However, in this era of diminishing resources and intense global competition-a reality that has an influence on the operation of our economy-we must examine ways to fulfil these responsibilities more efficiently and more economically. We must also make better decisions about the priorities that are under our jurisdiction and about those that are more obviously the concern of other stakeholders in our society.
Getting the government right: that is the challenge at the very heart of this bill. I would like to point out to the House very briefly a few examples taken from the bill itself.
The bill includes measures to allow the Minister of Transport to privatize the government's fleet of grain hopper cars. Other clauses will remove the 10-year ceiling that was imposed on the repayment schedules for students who borrowed money under the Canada Student Loans Act. This will benefit students and may well save the government money by reducing the number of loan defaults. We propose to amend the Radiocommunication Act allowing the Minister of Industry to obtain greater revenues by auctioning off radio spectrum licences.
An important thrust of our government is to develop alternative ways to deliver services. That is why we will be introducing new service agencies and other mechanisms to deliver services to Canadians with the emphasis on better service and greater efficiency. To aid in this process, this bill includes legislative amendments to give the government the administrative mechanisms necessary to ensure a smooth transition to the new service delivery modes.
For instance, changes proposed to the Canada Labour Code and Public Service Staff Relations Act will permit the introduction of successor rights. That means unions will continue to represent their employees as they move from public service employment to other employers within federal jurisdiction. Collective agreements of course will continue to be in force until the terms expire.
We also want these new service agencies to have the tools they need to operate effectively and affordably. We will amend the Financial Administration Act to allow for multiyear appropriations for these organizations.
In the future, we will certainly not be able to improve the efficiency and the effectiveness of the federal administration without giving consideration to our employees, the people providing the services Canadians expect.
As we all know, collective bargaining in the public service was suspended when the previous government implemented the Public Sector Compensation Act. This act will expire, as provided for, in February 1997, when the collective bargaining system will come back into force.
However, when we negotiate conditions of employment with labour unions during the next three years, it will be necessary, in our opinion, to suspend binding arbitration for dispute settlement. We simply cannot afford having independent arbitrators, who are not accountable to Parliament, making decisions that do not reflect our financial situation.
Employees of the House, of the Senate, of the Library of Parliament and of the Canadian Security Intelligence Service are exempted. This is because they do not have the right to strike and are dependent on binding arbitration. In their case, arbitrators will have to take into consideration salary settlements in similar occupational groups in the public service.
This bill will provide authority for a 2.2 per cent increase for non-commissioned members of the Canadian forces. This measure will address the disparity in wages between members of the forces and public service employees, a disparity that existed before the wage freeze.
We are amending the Public Sector Compensation Act to reinstate performance pay after a five year suspension in annual increments for those employees for whom it was suspended when
we introduced the in-range increment freeze two years ago. The bill also contains reform measures regarding public service pensions.
All public service employees, those who will be transferred out and those who stay, will benefit from changes we propose to the Public Service Superannuation Act. This includes the two year vesting of pension benefits and new lock-in provisions. Pension benefits of public servants transferring to other organizations will be fully protected.
I must underscore the fact that the government will consult on the details of these proposals before they come into effect. Amendments to the Public Service Superannuation Act will also give us the flexibility to extend coverage under the act for a limited term to employees who are transferred out of the public service.
There are two further measures we are taking so we can deliver better service while being fiscally responsible. First, we will modify the Financial Administration Act to give Treasury Board the authority to establish group insurance plans for the public service, to set terms for the management of those programs and to acquire such programs by contract. This will allow these programs to be managed in a way that is more consistent with insurance practices in the private sector.
Second, we propose to amend the Public Service Staff Relations Act so that the government can better meet its ongoing youth employment responsibilities. We plan to provide students with learning opportunities and facilitate their transition from school to work. Their employment benefits will reflect their training status.
This is legislation centred on change. It is also legislation that will provide new certainty in an important area of Canadian activity, that is, federal support to provinces to better secure this country's social programs. This bill will amend the Federal-Provincial Fiscal Arrangements Act. We propose to provide secure stable funding for the Canada health and social transfer for an additional five years through to the year 2002-03.
As I have said before, and as the minister has emphasized, there should be no mistake about our commitment to this funding. In fact, in the three years beginning in April 2000, CHST levels are projected to rise. By 2002-03 total CHST entitlements are expected to be $2.3 billion higher than the level set for the fiscal year 1997-98. To provide additional assurance to Canadians, this legislation sets a floor, an ironclad guarantee that cash transfers will be maintained at or above the $11 billion level.
This proposed legislation also provides a new formula for allocating the CHST among provinces. Under this new formula which will be phased in over five years, existing disparities and per capita funding across provinces will be cut in half. Let me point out that the gradual phase-in of the new formula not only gives provinces time to adjust, it gives them maximum certainty in their planning.
It is also worth repeating that this single consolidated block transfer represents a more flexible and mature approach to federal-provincial fiscal relations. It gives the provinces extra flexibility as they design and administer their own programs while safeguarding the social programs Canadians rely on and support.
I remind hon. members of changes that this bill proposes to the Unemployment Insurance Act. Effective January 1 of this year the maximum insurable earnings are to be reduced to $750 per week in comparison with the $845 level which would have resulted under current legislation. Similarly, the maximum weekly benefit drops from $465 per week to $413. These measures will save $200 million in the second half of this year and reduce the UI payroll tax burden on working Canadians.
This bill also amends the Old Age Security Act to lengthen the period of time before newcomers to Canada become entitled to full guaranteed income supplement or spouse's allowance. Under the current system, some immigrants obtain full benefits with as little as one year's residence in Canada. Restricting this easy access will improve the fairness of the system and lessen the burden on Canadian taxpayers.
There is a final issue this legislation deals with which is part of an important national initiative announced just a few weeks ago, and this is adjustment support for the Atlantic provinces in harmonizing their sales taxes with the federal GST. Some voices in the country have tried to make political hay of this decision. However, I am convinced, and the government is convinced, that it is acting in a fair and responsible way and in the long term interests of Canadians.
This bill provides approximately $960 million in adjustment assistance to the provinces of Nova Scotia, New Brunswick, Newfoundland and Labrador over a four-year period. This is intended to cover a fair share of the initial revenue losses they experience under the harmonized sales tax regime.
The government firmly believes, given the benefits that will flow from harmonization, that the total cost is reasonable and responsible. It is fully in keeping with firmly established practices of providing assistance when federal initiatives entail major structural change for provinces. Let me emphasize that this adjustment assistance will not jeopardize our deficit targets. These targets are secure.
In addition to the three provinces previously mentioned, Prince Edward Island, Manitoba and Saskatchewan would also qualify for assistance should they agree to harmonize their sales taxes. Ontario, British Columbia, Alberta and Quebec would not.
This deserves one last comment, more particularly in view of the remarks made in the House and the media when the Quebec finance minister recently sent a bill to the federal government.
In a nutshell, this is a totally groundless request that has everything to do with a separatist project and nothing to do with facts, history and economic common sense.
We are providing this adjustment assistance only to provinces that experience, through tax harmonization, a drop of more than 5 per cent in revenues from their retail sales tax.
But Quebec did not lose any money when it harmonized. Therefore, it is not entitled to any assistance.
Quebec has decided to spread the harmonization process over six years, and has been able to increase its revenues in the process because of the wider tax base of the value-added tax, while it kept taxing many business inputs.
On the basis of the partially harmonized sales tax system in place between 1992 and 1995, Quebec would not have qualified for assistance and once fully harmonized it still will not qualify.
The three Atlantic provinces that are now harmonizing have decided to move to a single tax all at once. This means they will not have the option of boosting revenues during the phase in period. Therefore, the adjustment assistance is essential to ensure they have the opportunity to participate in a single sales tax system on the same basis as Quebec and the other larger provinces.
I have taken up more time than normal at this stage of legislation but Bill C-31 deserves the effort because it will implement wide ranging beneficial change in so many areas.
Let me conclude with the same observation I made to the House finance committee. This bill is the heart and soul of the government's fiscal agenda as laid out in the budget. The story here is quite simple: getting government right. It is one we should all agree on in principle. I trust that the House will provide its approval so we can get on with meeting that goal.