Debates of Oct. 21st, 1997

Supply

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, I would like to ask the leader of the NDP a question which has been raised to me by my constituents from time to time. I have not been able to confirm the accuracy of the claim and it would be helpful to have this put into the record.

Numerous constituents have contacted me over the last year or so to say they have heard reports that it is easy for the hon. member to be a socialist because she inherited a significant amount of money, that she is actually quite wealthy and it is very easy for her to go around the country saying all these wonderful things about how the government should spend more money when she does not have to worry about anything herself.

I would like to ask her a couple of questions. Is it true that she indeed is quite wealthy? If she is, why does she not spend some of her own money as she suggested the banks should do to create jobs and relieve poverty?

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I find the member's question truly astounding. I have to say that it is precisely that kind of cheap politics that erodes public confidence in politics these days.

It is very tempting to say to the member that it is not his business to know what the personal circumstances are of individual members of Parliament. Let me take the opportunity since that member has had the audacity and frankly the ignorance to stand up in this House to ask that question to make it clear that it is not his business.

It is a matter of public record that when my father died four years ago after a desperate struggle with Alzheimer's I did not inherit one single cent. I did not inherit any money because my father believed in a country that is not based on herited wealth. He believed that we should have a fair tax system in this country that redistributes wealth in a way that would enable, in fact require, the Government of Canada to invest in health care for all, not just for the privileged, to invest in education for all, not just for those who can pay high tuition fees, to invest in jobs for all, not just for those who happen to come into their jobs through nepotism or patronage or through being well connected with the corporate elite.

I make not one single apology for my father's success as a businessman in this country who was absolutely committed to working in effective partnerships between the public and the private sectors. Nor do I make one single apology for the fact that my father struggled and worked throughout his lifetime to try to advance a social democratic Canada and the policies for which we continue to struggle in this Parliament.

I am happy to address any sensible, reasonable question this member or any other member may want to ask, but I hope that this is not an indication of the small mindedness, the petty mindedness of that member or his party and an indication of what we can look forward to in this Parliament.

[Steve Mahoney, Liberal, Mississauga West, ON]

Mr. Speaker, I also would like to remark that I found the type of questioning which was directed to the leader of the New Democratic Party to be rather disgusting in a place which frankly should be above that kind of personal attack.

I would find myself not agreeing in many instances with the hon. leader of the New Democratic Party but I at least respect the legacy of the New Democrats having come from a labour family. My father was the national director of the United Steelworkers of America for 20-some years. I know the dedication and hard work which were put into developing social policies.

We should give credit where it is due. The New Democrats can indeed take some credit for some of the social programs which exist in this country, not the least of which is medicare.

Having said that, I would ask the leader of the New Democratic Party to explain to this House how that party's policies will work for Canada. We have seen what happened in the province of Ontario from 1990 to 1995. We have seen the devastation that occurred as a result of some of those policies which may have seemed good on paper but in reality did not stand the test of good government.

I would ask the member to respond.

[The Deputy Speaker]

The hon. member for Halifax for a brief reply.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, it is very hard to give a brief reply to a question which asks me to analyse the five year record of the Government of Ontario under the New Democratic Party. Let me say briefly two things.

One is that some of the difficulties which the New Democratic Party encountered in its five years in office in Ontario had to do with the financial chaos and some of the failed policies which it inherited from the Liberal government which preceded it.

Second, it has to be recognized that as a result of the free trade deal into which the government plunged us with the Liberals giving their endorsement having initially said that it should be renegotiated, the province of Ontario suffered the largest job loss of any government in the history of this country in a short period of time. That of course had immense implications for a government trying to deal with that situation in the midst of a recession, at the same time that the federal Conservative government, followed and accelerated by the Liberal government, was offloading and downloading federal responsibilities left, right and centre.

Yes it is true that Ontario was reeling. The tragedy that we see today is the hardship which was created by the current Conservative government. It effectively has been a partner in crime with the federal government in its continued offloading and downloading of costs and services to the municipalities and on to the backs of individuals.

There is no short answer to this question, but I look forward to many weeks and months of debating the real issues which underlie the effectiveness or ineffectiveness of the federal and provincial governments in this country.

[Lorne Nystrom, NDP, Qu'Appelle, SK]

Mr. Speaker, the most important challenge facing us today in this country is putting Canadians back to work, putting Canada back to work. We now have 1.4 million Canadians who are unemployed, 1.6 million Canadians who are underemployed or who have just dropped out of the workforce and millions more on welfare across this country. Officially 9% of the Canadian population is unemployed. Our challenge is to figure out ways to put these people back to work.

I will say at the outset that I am an optimist. We have an opportunity now. We have turned the corner in terms of the fiscal crisis in the country. We can now turn our energies and resources toward setting goals and targets to put the Canadian people back to work and to build a strong and robust economy to make this country the greatest country in the new millennium. This is the challenge and that is what we have to do.

It is a sad commentary in our country when we have more food banks than we have McDonalds, when we have people who are living on welfare, in poverty and without decent housing. Farmers are going bankrupt. Students are dropping out of universities because they cannot afford the tuition fees. It is a sad commentary when we come from the wealthiest country in the world yet so many of our people do not have an opportunity to do what they want in life, to have a decent job, a decent trade and a decent skill in order to raise their families. This is a national disgrace.

We should have the same determination and zeal to fight the war on unemployment and to set targets and goals as this country has had on the war on the deficit and setting targets and goals over the last five or six years. This makes sense.

I disagreed with many of the ways the government tackled the fight on the deficit. I disagreed with many of the provinces in the way they fought the deficit. But at least there was a plan, there was a goal and a timetable. Now we should do the same thing when it comes to fighting for jobs in the country and for putting the Canadian people back to work.

Mr. Blair has targets and timetables in terms of youth unemployment in Great Britain. The same thing is being done in other countries around the world, so why can we not do that in this country? I am afraid now that the finance minister has wrestled the so-called inflation demon to the ground he is going to allow interest rates to rise and slow down the economy and add to more unemployment in the country.

When we look at what happened in the past, it was not government programs that caused the debt in this country, it was the interest rates. A couple of years ago a study by Statistics Canada showed that 50% of the debt was caused by high interest rates. Only 6% of the debt was caused by government programs. The other 44% was caused by tax expenditures and tax loopholes and the failure to have a fair tax system in Canada.

It worries me when I see stories in the paper about the possibility of interest rates rising once again. We have this great inflation demon raising its head again. Inflation is 1.8%. With inflation at 1.8% and 9% of our people unemployed and the Canadian dollar sitting at about 73¢ American, why is the government now concerned about fighting inflation?

What the government is going to do is cool down the economy. It has already raised interest rates twice this year. In all likelihood it is going to increase interest rates again in the next few days, certainly within the next week or two. When it does, the banks increase their lending rates to small business, homeowners and farmers and the whole economy slows down. People lose their jobs, people are laid off and the wage fare is once again going to remain flat and stagnant in the months and years ahead.

The challenge is to get out and do whatever we can as a nation to put our people back to work. To make sure, the Minister of Finance in his talks with Mr. Thiessen, the governor of the Bank of Canada, should say that a 1.8% inflation rate is not too high, it is not too dangerous and it will not hurt the economy. Instead let us keep interest rates in the country low so we can stimulate the economy and put Canadian people back to work. This is extremely important.

I want to look at the negative part in the manner in which the government fought the debt and deficit. Only 6% of the deficit is caused by the government's programs. About one-half of the 6% was spent on social programs. Because of the cutbacks of billions of dollars we have many needless victims of the war on the deficit. I think of the people who go to the food banks, those living in poverty. There are the cutbacks in the health care system, the line-ups in the emergency rooms, people waiting to get into hospitals and the cutbacks in transfers to the provinces for health, education and social programs. There is tremendous poverty and third world like conditions on many of our First Nations reserves and in the inner cities.

These are the victims of the war of the Minister of Finance on the deficit. It did not have to happen. The natural growth in the economy because of the drop in interest rates in the last few years would have been enough to bring down the deficit within the targets the Minister of Finance set two or three years ago. He did not have to leave a carnage of victims across the country.

Once again I warn the government that if it listens to the Governor of the Bank of Canada and the Minister of Finance we will be back in the same old vicious cycle of higher interest rates, fewer jobs, flat wages and people suffering because of the monetary and fiscal policies of the government across the way.

Instead we need more money spent on health and education. We have to restore at the minimum the funding that was there two or three years ago before the beginning of the cutbacks. We have to restore transfers to the provinces in these important areas. We also need a sensible targeted tax cut.

We are suggesting dropping the GST entirely on some essential goods in Canada such as children's clothing and books and increasing the tax credit for low income people, an expenditure that would cost about $1.2 billion which would not only be a relief to people who need it the most but would create jobs in terms of stimulating the economy. These are some of the things that need to be done.

I will be introducing a motion very shortly in the House to establish a community reinvestment act, an act that is very similar to what we see in the United States. It would require banks and financial institutions to invest a certain proportion of the money they take out of a community back into the community. That is a way of creating jobs. More important, it is one way of trying to rectify some regional inequities in Canada.

Today we have a recovery, so they say, but the recovery is very unequal. The recovery is primarily in four or five regions of the country: Alberta, southern Ontario and two or three other regions. In much of the country there is no recovery. In much of the country there is still a great recession. In much of the country people are still going hungry and there is still poverty.

One way of trying to redistribute income and opportunities a bit is to have a community reinvestment act where banks and financial institutions have to invest a certain amount of the money in deposits they receive from a community back into the community. Those are some things that can be done.

We have a great opportunity. We have turned the page. We have a new parliament that is much more balanced than the parliament we had in the last three or four years, a parliament that can be much more progressive. The government must change its ways and get off that neo-conservative agenda of the Margaret Thatchers and the Ronald Reagans it has been following in the last four years.

The government has to stop listening to the Reform Party which wants to make it more conservative than Conservatives and start listening to the people who want a good, progressive government which gets involved and shows some leadership from coast to coast.

Canadians want a strong government that tries to correct inequities. They want a strong government that supports social programs and social spending. They want a strong government that once again will show some leadership in making the number one issue in the country the creation of jobs by setting targets and timetables; by keeping down interest rates; by having targeted tax cuts; by investing in people, health, education and social services; and by investing in research and development. Then we will build a strong and competitive economy and make Canada the best country in the 21st century.

[Ronald J. Duhamel, Liberal, Secretary of State (Science]

Mr. Speaker, I have a series of questions for my colleague.

First, with respect to the additional spending he mentioned in certain areas that obviously could use that kind of assistance, does he have any indication of the costs involved? He mentioned a number of proposals.

Second, with regard to reductions in certain tax measures, how much would that cost the federal treasury? If we were to look at both the expenditure levels and the dollars lost in terms of the adjustments to some programs that he suggested, could he put them in the current framework of the deficit and the debt?

I also have two very brief questions with respect to his intention to have banks invest some of their profits. Has he, his party or anyone else done an analysis of how much money is involved, what it would produce in actual tangible results and what impacts there might be on the operations of banks?

For example, might they need to or feel they need to do something in terms of reduction of employees?

I have a final question. Are there lessons to be learned from the New Democratic governments in power today? I do not say that facetiously or tongue in cheek. For example, in British Columbia and Saskatchewan, unless I am badly informed and I do not think that is the case, there are opportunities in terms of some proposals made by my colleague that have not been followed up.

Perhaps he would answer those questions.

[Lorne Nystrom, NDP, Qu'Appelle, SK]

Mr. Speaker, I will take these questions very briefly in reverse order.

What can we learn from the NDP government in Saskatchewan? Indeed we can learn from most governments across the country. In Saskatchewan, in particular, when the cutbacks came from the federal government in health and education, the provincial government backfilled those cutbacks so that spending was at least stable in those areas.

Spending has not increased in constant dollars or in real dollars because inflation has gone up. We still have a problem in that province in terms of spending on health and education, but that problem is not as severe as elsewhere because the Saskatchewan government backfilled the lost federal dollars.

The same thing happened when it came to some cutbacks in areas involving Indian and Metis people. Again the provincial government tried to backfill some of it.

As a consequence, along with Alberta we have the lowest unemployment rate anywhere in the country. It is under 6% and it has been consistently under 6% for a long time. That is better than my hon. friend's province of Manitoba which has a similar economy. One reason for it is investment in social programs.

Recently Saskatchewan is the first province in the country to balance its budget. That happened three or four years ago. There have now been four successive surpluses in the province and a commitment by the province to spend a third of a surplus on new spending for health and education, about a third on tax cuts and a third to pay down the accumulated debt.

We can learn from the Government of Saskatchewan that investing in social programs is a good idea for helping the people and for creating jobs. That is a legacy of the Saskatchewan CCF and NDP with Tommy Douglas, Woodrow Lloyd and Allan Blakeney. I know the member in a previous incarnation was very proud of some of those programs in terms of the ideas he promoted in the province of Manitoba, and I hope he still is.

Now I will go to the banks. I am not talking about an act that would force banks to invest a proportion of their profits in communities but an act that would force banks to invest a certain percentage of their deposits in the community where its deposits were drawn from. We would tailor it after what exists in the United States. Economists who have looked at say that it would create about 60,000 new jobs.

I will make one final point. Just reinvesting money again into health and education to bring us up to the levels of the federal government before the cutbacks would cost about $7 billion. That would be a very positive thing for the government to do.

[Jim Peterson, Liberal, Secretary of State (International Financial Institutions)]

Mr. Speaker, in rising to comment on the motion of the fourth party today, let me remind Canadians about what we have been able to accomplish.

When the government took office we had a deficit of $42 billion. In just three short years we were able with the support of Canadians to bring that deficit down to $8.9 billion.

During that period we have seen our national debt peak at $583 billion. In the last year we have been able to pay that down by $11 billion. This is not an abstract exercise in dealing with the deficit and debt. We have seen very practical results.

As a result of our prudent fiscal management, monetary and fiscal policy since we first took office, we have seen interest rates fall by a full five percentage points. From two percentage points over the American rate to below short, medium and long term U.S. interest rates.

A couple of weeks ago when interest rates went up only 25 basis points, mortgage rates continued to fall, showing that these policies are working.

The hon member for Qu'Appelle said that high interest rates cost us jobs. How does he think we got the low interest rates which are starting to produce jobs? It is because we have been responsible fiscal and monetary managers.

We have also seen the pay-off in terms of low interest rates and growth of our economy. Our economy is now growing by OECD and IMF estimates over the next few years at the rate of 3.7%. This is the highest of G-7 countries. In the second quarter of this year we saw how our economy grew at an annual rate of 4.9 per cent. This is the way that we are going about the important task of creating jobs.

No one in the House on any side, I would venture to say, does not realize that probably the most difficult thing we as members of Parliament go through as individuals is seeing qualified people who want to work and have the capacity to contribute not being employed to the full extent of their capacities. If any one of us had a wish, I am sure we would all agree it would be to ensure that every Canadian had a job commensurate with their abilities and capacities. How do we do that?

We are seeing the results of our prudent management of the economy now paying huge dividends. When we took office there was 11.4% unemployment. It has come down to 9%. We know that is not good enough but in the private sector in Canada, which is the only place where jobs will be created, we have created 1.1 million new jobs. This is an extraordinary record of accomplishment.

In the first nine months of this year we have created 279,000 new jobs. Estimates are that over the next two years we will be creating them at the rate of at least 300,000 new jobs a year. This is the pay-off for what we have introduced.

I am very sympathetic to NDPers when they talk about the need for jobs. They are telling us that we have to set targets. Did either of their two speakers today tell us what the targets should be? No. Here is how they told us they would achieve them. Let me go through them.

They said that labour sponsored venture capital funds should be forced by the federal government to do retrofits. They cannot do retrofits. Are they talking about increased tax incentives for these funds?

They talked about further tax cuts. I will just go through the list the first two speakers put before us. At the same time they called for increased spending on health care, education, training, culture, environment, child poverty and housing, as well as a major expenditure program on the GST tax break. They were talking about eight new expenditure programs.

They also said “Let inflation go, just let it go. We do not have to worry about inflation”. The actions taken to date do not have an effect on monetary policy until a year to a year and a half down the road.

The member for Qu'Appelle said that high interest rates cost us jobs. How do we get high interest rates? By allowing inflation to go amok. It was when interest rates were at 22% that inflation was in the double digits.

We are never going to allow Canada to go that way again. We are going to keep interest rates low by managing the economy sensibly. Members of the NDP have come out—we will see the details of it later—with a program they think will create jobs, 60,000 they say. The community reinvestment act, which they are going to enact in Canada, will require funds taken as deposits in a community to be reinvested at least to a certain extent in that community.

We have looked at this. Do members know who the net losers would be? They would be the Atlantic provinces and a couple of the prairie provinces because they are now the net beneficiaries of the lending of our banks.

More money is lent to these poorer areas of Canada than is taken from these provinces in deposits. If that is the type of policy that they are advocating for Canada, either their research is wrong or they are on a totally wrong track in trying to give hope to the areas of Canada that most need it.

We are not unmindful of the need to keep fighting to get unemployment down. We are particularly concerned about youth unemployment, which is almost double the rate of unemployment in other areas of the economy. That is why we introduced the federal public sector youth internship program. That is why we have brought in the youth employment strategy which involves summer placements, international internships and science and technology internships.

I am particularly proud of the 6,000 jobs that have been created for the First Nations and Inuit peoples through the internship program that has been provided there.

Yes, regrettably in our quest to deal with the tremendous deficit and debt problem, unfortunately we have had to make cuts in transfers to the provinces, cuts in health care, which when analysed in total, including tax points that have been transferred and cash transfers, is an overall cut at its maximum of $3 billion.

If half of that was allocated to health care, it would be less than 3% of the total health care budget in Canada. We do not like to have to do that but we did have to cut. Our cuts to the provinces were at the level of 8%, whereas cuts to program spending were in the order of 13%.

At the same time, needs have been recognized and increased funds have been allocated in the 1997 budget for health care, $150 million for better approaches to providing health care, $50 million for the health care information system and $100 million for children's health initiatives.

We are very mindful of the fact that education is the key to future prosperity. That is why we have taken recent measures. On Canada student loans, which have a 30-month grace period, the limit has been doubled to $4,000 for registered educational savings plans. We have increased the amount that is deductible for student tuition fees and tuition credits are up. We are conscious of how that has to be done.

We are criticized by the NDP in terms of culture. Yes, our cultural industries are key, not only a major player in the economy, employing almost 900,000 Canadian, but also in defining who we are as a people.

That is why new moneys are allocated, $25 million a year, to the Canada Council starting next year, with another $10 million to it to help us honour the millennium.

One of our most important initiatives in health care, education and the cultural sector was to recognize that as governments have to cut back, perhaps the private sector could contribute more. That is why in so many areas tax incentives have been enhanced, to allow the private sector to help contribute in these areas.

We are going to continue our responsible course. We are not going to inflate ourselves into joblessness and high interest rates. Our path is working. Let us stay the course. Let us finish the job.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Mr. Speaker, it was with interest that I listened to members from the New Democratic Party as they alluded to my home province of Saskatchewan. The success of those in Saskatchewan in achieving some of their goals in recent years is because they adopted a policy that was not unlike the NDP policy with the premier there, but they followed a more conservative policy.

Last weekend when I returned home—this hits both the opposition and the NDP—an 80-year old lady who is very close to me fell and broke her hip and her shoulder. She had just finished waiting six days, not six hours, in agony to get a post-operative bed. I would like to inform the members to my left that these are some of the horror stories in Saskatchewan at the present time. I know there is restructuring and I know they are trying to make amends, but do not ever let it be known that all is well in the province that initiated medicare because it certainly is not.

Every day horror stories cross my desk from my constituency and beyond. Which province probably has the longest waiting list for hip surgeries? Saskatchewan. Which province has cut more beds per capita than any other province? Saskatchewan. Which province at the present time has the longest waiting list for access to an MRI machine? Saskatchewan.

Let it be made known that in order to get to the point they are at today with the cuts from this government, all is not well in the socialist medicare system of Saskatchewan. As the result of the delays for MRI machines, people are now going to North Dakota where they can get an MRI diagnosis within two days once they apply.

The following statistics just came in. The trans-Canada highway in Saskatchewan is a national disgrace and some of the blame has to be borne there. There is no question about that with the robbery of the excise tax and Saskatchewan getting about 4%. Hon. members know that when they put 50 litres of gas in their gas tanks, $5 goes to the federal government through its excise tax, and about 40¢, that is all, is returned to Saskatchewan.

While the provincial government has been a little better, the eastern and western sections of the trans-Canada highway that runs through Saskatchewan are presently untwinned. Already this year that highway has claimed seven lives unnecessarily. That same small stretch of untwinned highway has claimed 38 serious accidents. Do not tell us about all of the glories, about what is happening across Canada. In Saskatchewan alone these are the facts and no one can get around it.

I listened with interest to this speech because we do not hear much in the House about my province. I will leave that with hon. members. While I congratulate them for some of things that are being done, let us not deceive the people that all is well in socialist Saskatchewan.

[The Deputy Speaker]

The Minister of State for International Financial Institutions has the opportunity to respond to the remarks just made, although I must say that the Chair is having some difficulty determining the relevance of the comments to the speech of the hon. minister. The minister has one minute to respond.

[Lorne Nystrom, NDP, Qu'Appelle, SK]

With respect, Mr. Speaker, I want you to check the record. He said that I was trying to deceive the people of Saskatchewan or the people of this country. I am not sure if that is parliamentary. It is a very polite word for lying. I wonder if you would check the record, Mr. Speaker—

[The Deputy Speaker]

The hon. member may wish to, but I do not think I heard him saying anything which was contrary to the rules. I do not think “trying to deceive” is unparliamentary.

[Jim Peterson, Liberal, Willowdale, ON]

Mr. Speaker, we have heard an eloquent plea on behalf of our health care system which is dear to every Canadian. It is the one program we have that is universal.

In spite of the difficulties we have faced, last year we increased by $1.5 billion the cash floor for transfers under the CHST going to health care. We have ensured that over the next five years an additional $6 billion will go into this area of provincial jurisdiction.

The principles of the Canada Health Act are very important to Canadians. That is why we are not going to sacrifice, as the Reform Party would have us do, the five essential principles of the Canada Health Act. We will defend those principles in every way possible. Canadians do not have to worry about that. We are not a Reform government.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, I am pleased to rise today to speak on the NDP opposition motion which is before the House.

I was pleased to hear the hon. leader of the NDP clarify the question which I asked on behalf of my constituents. I realize that a number of members of the House were a bit upset by the question. The leader herself seemed a bit agitated. However, I make no apology for asking the question on behalf of my constituents.

I am a great believer in not putting up with rumours that go around. I would rather go to the source and ask for actual information. That is what I did today.

I am pleased that the member had a chance to put something on the record. It means that I can mail out that Hansard to those constituents and that will put an end to the matter. I thank her very much for doing that.

[Elinor Caplan, Liberal, Thornhill, ON]

Why don't you apologize?

[Ted White, Reform, North Vancouver, BC]

I hear a member opposite saying that I should apologize. I will never apologize for asking questions in the House on behalf of my constituents. Let me make that very clear. If we turn this place into a politically correct place where we cannot ask questions on behalf of our constituents, then we cannot represent them. I express in the House opinions from all sides of the spectrum. Those who were here in the last Parliament will know that. Mostly I speak to Reform policy, but there were many occasions on which I brought forward points of view from my constituents which disagreed with Reform policy. I see that as my duty.

To get on to the matter at hand, I was happy to hear that the hon. leader of the NDP was pleased with her father's contribution. By being a successful business person he was able to support the political philosophy of which he was in favour.

It reminded me of another famous socialist from a different country, the Hon. David Lange, who was prime minister of New Zealand. I had the good fortune to meet with him for about two hours in 1995. He told me about the terrible problems he went through in 1983 when New Zealand was on the verge of bankruptcy and the awful decisions he had to make as a Labour Party prime minister, which is equivalent to the NDP.

He told me that he had come to recognize that you cannot have good social programs unless you have a vibrant private sector. I believe that relates very well to what the leader of the NDP said when she said that by her father having a successful business he was able to contribute to the goals of his political philosophy.

I think that is something that we really need to remember here. If we treat business as the enemy in trying to achieve the things that the NDP are trying to achieve, then we are really not going to get any progress down that road at all.

Reform unfortunately is not in a position to support the motion as it is written because we really feel it is illogical. It mixes the cause and effect and really contains a lot of erroneous assumptions that do not tie together.

For example, the motion suggests that measures to bring government spending under control lead to high unemployment. I would venture to say that the evidence throughout the world is exactly the opposite.

If we look, for example, close to home at the Klein government in Alberta, by reducing government spending dramatically, running surpluses and reducing taxes, the unemployment levels in Alberta have plunged. It is the place in Canada right now that is generating a huge number of jobs and the economy there is really barrelling along.

We can look at the Harris government of Ontario and see similar sorts of things beginning to happen now. The Harris government was preceded by an NDP government which followed the sorts of policies that are being proposed by the NDP where this tax and spend philosophy actually kills jobs. It creates unemployment.

We can look to the United States where any of the states that have cut taxes and reduced government spending have created jobs. In New Zealand, where I am originally from, the unemployment level there now is below 5%. Yet the government is only one-third of the size it was in 1983.

The evidence is overwhelmingly opposite to what is being proposed by the NDP in the motion.

I did mention the NDP government in Ontario. In 1990 it tried to spend its way out of the 1990 recession. All it did was bring the province to the edge of bankruptcy.

We see the same problems happening in B.C. where the NDP government there was the beneficiary of enormous amounts of inflowing foreign investment for a few years and it disguised its inability to get control of the spending, but now those pigeons are coming home to roost and we are starting to get into a much more difficult situation in B.C.

Also, if government spending on job creation could create jobs, we already have a $600 billion debt in Canada, enormous deficits that have been run up starting with the Liberal government in the late seventies; enormous debt that has been incurred in the lifetime of the average 20-year old who is out working right now. With that huge terrible debt of $600 billion, if government spending created jobs we would all have three by now because that is an enormous amount of money.

What we see is that the government pours money into programs that create short term temporary jobs that really go nowhere such as heavy water plants that produce a product for which there is no market, grants and subsidies to steel mills or coal mines that cannot market competitive productss, airports which are beautiful facilities that have no flights coming in.

There is a famous company in my area of the country. Ballard Technologies, which everyone is in love with at the moment, has received huge infusions of government money. It is disguising what the truth is about fuel cells. Nobody ever asks where the hydrogen comes from to run all these fuel cells. When we ask that question we discover it comes from the decomposition of natural gas, from fractional distillation of air, from hydrolysis or some other process that uses enormous amounts of energy to create the hydrogen in the first place. It is very convenient to ignore the fact that pollution is being created somewhere else to make all this hydrogen to run a fuel cell so that somebody can say this is a nice little non-polluting fuel cell. It is only half the story.

If we really look at the whole process we find that it is completely uneconomical. It is cheaper, more efficient and cleaner to run a bus on a natural gas engine than it is to generate hydrogen somewhere and run it on a fuel cell.

Yet no one asks the question. The government blindly runs in huge grants to this company, ploughing money into it, buoying up its reputation. Now its shares have shot up to something $85 a week or two ago and yet I still do not think people are asking the right questions before they put government money into a company that has never made a profit and has no hope of doing so for a long time, maybe never.

These are the sorts of ways the government wastes money, claiming to create jobs when all it is doing is giving certain companies unfair advantages in the marketplace and moving jobs from one place to another.

Another flaw in the motion is that it trivializes the negative consequences of the monetary policy we have with regard to inflation. It was not long ago that Canadians were facing mortgage interest rates of 16% or more because we had run up such huge government debt. In 1993 when the Reform party was trying to get governments to start controlling their spending, and we should take a lot of credit for moving the Liberal government in that direction, 80% of the new money we were borrowing was coming from overseas. Those lenders were demanding high interest rates because of the huge debt that had been built up by the government.

You can't have your cake and eat it too. You have to get to a low inflation and low interest rates by controlling government spending. It ends up creating jobs.

A couple of speakers from the NDP mentioned that banks should be forced to plough more money into the community. Credit unions in British Columbia do exactly that and I assume that credit unions in other parts of the country would do the same thing. Surely we do not need to change the rules. We just need to encourage people to switch from a bank to a credit union. I think the credit unions are already trying to do that. Instead of having more government interference, we should let the marketplace make that change.

I have a huge amount of material here on health care and things we could do to create new jobs. For example, the U.K., New Zealand and Sweden have all allowed some choice in health care. They have managed to increase the number of jobs in health care tremendously. We could certainly benefit from the experiences of those countries.

I realize my time has expired. It is unfortunate that we do not have more time to spend on this. I look forward to perhaps being part of questions and comments later in the day.

[Lorne Nystrom, NDP, Qu'Appelle, SK]

I think the member is having his cake and eating it as well. A few moments ago the Reform party member for Souris—Moose Mountain got up. He is a former Conservative MLA in Saskatchewan under the administration of premier Grant Devine which, according to one of his former speech writers, was the most corrupt government in the history of this country.

The member for Souris—Moose Mountain was complaining about the lack of money going into health care and highways. The Devine government in its nine short years ran up the biggest per capita deficit of any provincial government in this country and the second largest per capita debt, second only to Newfoundland, of any government in this country.

The Devine government was a soulmate of the Reform party. It spoke one way before an election about fiscal responsibility and after the election was the most irresponsible spender in the history of this country, almost bankrupting my province. That is one reason why we do not have the flexibility today we would want to have in terms of the programs the people of the province require.

I ask the member how he can get up in this House and talk about fiscal responsibility when his soulmate in Saskatchewan, Grant Devine, leader of the most corrupt government in the history of this country, was the biggest spender we have ever seen in terms of driving up the debt and deficit and burdening the people for generations to come. That is sheer hypocrisy.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, I thank the member for his question.

The Devine government made promises about fiscal responsibility and when it became government it was irresponsible. We saw the same thing happen with the Mulroney government. There is no doubt that these traditional old line governments like we have on the Liberal side of the House make these promises and they feel quite happy to break them.

That is the reason the Reform party is here. In 1983 when westerners voted for the Mulroney government it made a promise that it would get the deficit and spending under control. The Tories promised us they would do it and they did not. They got into government. They lost their nerve and went on the usual tax and spend. Liberal-Tory, same old story. They were all the same. That is one of the reasons the Reform party came into being. We were the ones who made it fashionable to get government spending under control.

Nobody can deny that in 1988 and 1993 in the election campaign material we had information on digging the debt hole, everything was focused on making governments become responsible. Reform needs to take all the credit for what has happened from coast to coast across this country.

I hear the Liberal members across praising what the government has achieved. Those same members a decade ago were saying exactly the opposite. We have managed to convince everybody in this country, every level of government, that we cannot have good social programs, prosperity, good employment levels and low taxes unless we have government spending under control.

We will say one thing for the Liberals. It is well known that they always follow the trend and Reform managed to push them into some fiscal responsibility.

In answer to the member, like him, I condemn the Devine government for what it did. I condemn the Mulroney government for what it did and that is why Reform came into being.

[John McKay, Liberal, Scarborough East, ON]

Mr. Speaker, it will come as no great surprise to you that I will be voting against the motion of the members opposite.

The issue here is the setting of realistic deficit targets, realistic debt targets and then going on to set employment targets. When one has revenue coming in one knows what the revenues are. When one knows one's expenses one knows how to set realistic targets. That in my view is the central thesis of the fatal flaw of the NDP's position, namely that to set an unemployment target is simply an exercise in futility and something with which the government cannot possibly cope.

I ask the members opposite how, without entering into massive deficit spending, increasing debt and entering into programs that are utterly useless, will they be able to set realistic targets and achieve that.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, I am not sure if the member thought he was asking a question of the NDP, but it was my speaking time and my chance to respond.

I agree with him that the NDP fatal flaw is that it thinks that we have to increase spending by massive amounts to create jobs when all the evidence is that type of spending does not create long term jobs. It creates unemployment instead.

I agree with the member's observation that massive spending is not the way to prosperity or to lower unemployment levels. On the other hand, I see no harm and I think Reform sees no harm in setting a general wish to move the unemployment levels down, not a specific target I agree. We cannot pick a number out of the air like 3% but we want to move it down. We have seen other jurisdictions get below 4% and 5% where they have these low tax, low deficit or surplus regimes and we should be aiming for the same sorts of achievements.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I am very pleased to speak today on this motion by the New Democratic Party.

While not agreeing with all of its details, this is nevertheless a motion which points out that the battle of the deficit, in which the government is proudly proclaiming great victories, has been won at the expense of the workers, the employers, all those who have paid into the employment insurance fund and who have generated the surpluses we have today.

Today, the surplus is $12 billion. In the NDP motion, when they refer to the imbalance between the battle against the deficit and the way the unemployment issue is being addressed, I feel a clear message is indeed being sent to the government, that it must readjust its sights and correct the way it is expending its energies, whether the energy it is focussing on unemployment is sufficient, and whether it is taking the right approach. I believe, in this connection, this will be a worthwhile motion.

It is also important to see that the battle of the deficit, as the motion states, has been waged by cutting transfer payments. In this connection, when the NDP states that it condemns the federal government for:

—its failure to make adequate investments in health care, education, training, culture and the environment—

So, in the view of the New Democratic Party, the federal government should perhaps bypass the provinces to invest in these areas, a bit like the Liberals tend to want to do now that they have financial manoeuvring room.

However, the solution is much more to open the tap and allow transfer payments to find an adequate level of equilibrium. On this subject, they might say: “You sovereignists are always going to oppose the federal government's investing money in the provinces, because you want to withdraw”. However, the effect of the cuts in transfer payments is not felt just in Quebec. The same situation is also hurting Ontario, given all the changes in the health and education sectors. As we can see these days, there is even the threat of general strike of Ontario teachers. The same sort of criticism has been made by the other provincial premiers.

Thus, as far as the motion is concerned, we can agree with the fact that, when there are budget surpluses, the federal government's secret for remaining in control of its budget is to ensure that the additional money that could be invested in these areas is invested through transfer payments, that is, the provinces should be given the necessary sums the equalization system may generate and allowed to manage them and use them as they see fit, since they are the experts in these various sectors.

The third sector contributing to the deficit is the cuts in the federal bureaucracy. However, as luck would have it, this is the sector where objectives were not met. Contributions by employers, employees and the unemployed to the employment insurance fund exceeded the objective. They were asked for more, and more was contributed than was asked for initially. In the matter of transfer payments, screws were tightened to the hilt, and the provinces were forced to live with the constraints. However as far as the contribution by the federal government machinery is concerned, the objectives were not met.

I think, in fact, a deeper look is needed, and I think the government's current prebudget consultations will reveal that people want tighter management in direct government program expenditures. For too long the bureaucracy in the national capital region, that is to say the Ottawa area, has been growing, somewhat at the expense of other regions in Canada, and I think that no one in Canada or around here wants this model to spread. Efforts will have to made to ensure that, thanks to the room for maneuver being created, the money will be used in federal areas of jurisdiction or, through transfer payments, that the provinces have the necessary room to maneuver, fiscally speaking.

The NDP motion also deals with a very important issue: the economic choice that always has to be made between inflation and unemployment. Whether we like it or not, a balance has to be struck there and, looking back on the past as an indication of what might lie ahead, the Bank of Canada's tight money policy in recent years has slowed down the economy, leading to the economic crisis of the early 1990s under the Conservatives. Even now, we must ensure that the government will maintain a positive attitude.

For instance, how high can the rate of inflation be allowed to rise so that, on the other hand, the rate of unemployment can be reduced to a more reasonable level? The current rate of unemployment in Canada is not acceptable. The effects of the squandering of human resources will be felt for decades because the 20, 30 or 40-year olds whose jobs do not match their skills today are not gaining the experience required to contribute to society adequately in the future and build an interesting future for themselves.

There are several unanswered questions which, I think, should be brought to the attention of the government and it would certainly be in the interest of the government to decide whether to change course or to stay the course. The Speech from the Throne was rather significant in this respect.

The first thing the Liberals did when they realized they would have some room to maneuver was to pour money into projects that are in areas under provincial jurisdiction. This is what I call not learning from past mistakes. The government cannot see that it is once again setting in motion the same big machine that generated the deficits of the nineties and that formed the basis of the Trudeau government's philosophy, which was to try to get involved in every sector, because the federal government was the one that could find solutions for people. However, we came to realize that this philosophy did not work at all.

In our debates, we can do a critical review of the past—I think it is important to do so—but we must also learn for the future. It is true that if we have budget surpluses, we will have to ensure that we slowly reduce the debt, that we allow the pressure on interest rates to remain low and even to diminish, so that economic activity can regain momentum.

However, we should also think about rewarding those who helped reduce the deficit. For example, since those who contribute to the employment insurance fund generated a $12 billion surplus and since nowadays 30% to 35% of those who contribute are eligible for benefits, compared to 60% in the early nineties, this so-called employment insurance program, which in fact is meant to provide an income for those who are between jobs, no longer meets its objectives, because the government applied too much pressure to ensure that the surplus of that fund went to reduce the national deficit.

Since employers and employees made a tremendous effort, it would now be in order to reduce employment insurance contributions. It would also be important to improve the living conditions both of seasonal workers and of new arrivals on the job market. Right now, it is discouraging for young people, particularly in seasonal sectors, to be required to work 910 hours, the equivalent of 26 35-hour weeks, to be eligible. The risk is that the young person will ultimately be unable to accumulate enough hours to qualify for employment insurance. He will have paid premiums, but will not be entitled to reimbursement, which is completely unacceptable.

In order to compensate those who have helped to lower the deficit, the federal government must, over the coming years, stick to the areas over which it has jurisdiction, managing them as well as it can and not opting for certain measures just because of their possible impact on a future election. When it comes to the areas of health and education, the provinces are the experts. The government's contribution must take the form of transfer payments.

In this sense, the government will have to learn from the past so that, in five or ten years, we do not find ourselves back in a debate like the one we have been mired in for the past five years, with those members of our society who were not the most well off having to play a disproportionately large role in lowering the deficit.

I hope that the government is listening to this motion.

[Jean-Guy Chrétien, Bloc, Frontenac—Mégantic, QC]

Mr. Speaker, thank you for recognizing me so quickly.

I am pleased to put a question to my distinguished colleague, the member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, since his riding is similar in every respect to that of Frontenac—Mégantic.

I would like to tell him about an encounter I had last week in my riding. Last week was a week set aside for members who wanted to touch base with people in their ridings. That is what I did during the seven days available to us to meet with our constituents.

In Lac-Mégantic, at the Sears store, I met a saleswoman who told me a rather sad tale about her daughter. Her daughter had left university and worked hard to find a job. Unfortunately, three weeks ago, she received notice that she was being let go.

Naturally, because she had to live, she left home. She had to pay for rent and for food. She had to make payments on her furniture and her television. She had to pay for cable, the telephone and so on. So she went to the employment insurance office. The good Government of Canada had played with the terms so it is no longer unemployment insurance, but employment insurance. As she was short some ten hours in order to be eligible, she will have to turn to social assistance.

When the government says that the rate of unemployment has dropped since it came to power on October 25, 1993, it is not telling the truth, it is playing with the figures. Accordingly, when a person is not actually receiving employment insurance or actively looking for a job but living off social assistance, they are not counted. The same head cannot be counted twice. You can only count one person once.

I would ask my distinguished colleague from Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, since I managed to remember the very complex name of his riding, to tell us whether I am mistaken or whether I am right and whether in his riding, which is identical to Frontenac—Mégantic, unfortunate situations like the one I described keep occurring.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I am grateful for the question from my colleague from Frontenac—Mégantic. In fact, his is a clear example of the unacceptable disparity.

Prior to the employment insurance reform, a person entering the labour market for the first time worked 15 hours a week for 20 weeks for a total of 300 hours of work and could then receive benefits. Now the requirement is 910 hours. The difference between the two is 610 hours. That means that the number of hours required for eligibility has been increased by 600%.

You gave a specific example. The young person you were speaking about will have made contributions but will never be entitled to them. At the end of the year, the counter returns to zero, and so hours worked in the first year do not count in the second year. This is one example of an area in which the Government of Canada ought to show some humanity and ought to remedy the situation, ought to ensure that we have in this House, as soon as possible, a bill to change the unacceptable aspects of employment insurance reform. We are not saying that the reform should be done away with completely, just that errors need to be corrected.

In his address, the hon. member made me think of my meeting yesterday with some women who are involved in community kitchens, who prepare meals together because they have very limited means. That was the reason they set the kitchens up. Now they are faced with a situation where the regional health authority, which sets the budgets, is being forced to make cuts, thus obliging them to regroup and adopt a less efficient way of operating. When it comes down to the bottom line, the fundamental cause of this situation is that each of the organizations, each of the regional health authorities in Quebec, gets its budget from the Government of Quebec. Part of that Quebec budget comes from federal transfer payments.

It is not easy for someone on welfare, someone trying to get off welfare, to see all these long term effects happening, and to realize that they originate far away from them. I think, however, that it is important to know this, and it is important to be able to judge what actions the government will be taking in future years, whether a very significant portion of the $42 billion that have been cut in transfer to the provinces since the early 1990s will be reinstated.

[Bill Casey, Progressive Conservative, Cumberland—Colchester, NS]

Mr. Speaker, I am certainly pleased to speak on this issue.

I have a unique perspective from most members in this House in that I served here for five years from 1988 to 1993. I was defeated in 1993 and was resurrected again in 1997. It is kind of like a time machine. I was out for four years but all of a sudden I have been thrown right back in.

I have a perspective where I can see the effect of the changes perhaps more dramatically than others. Others who have served here have seen the incremental changes resulting from the government policies over the years. I see a dramatic change. I see a very dramatic change in almost every social program, every issue that deals with people who need the most help, every area that needs the most help.

It has impressed me a great deal that even in our jobs as members of Parliament we are much more active and much busier trying to help people through the system. When I was here before, people who had reasonable requests received reasonable reception and it took a reasonable time to get through the system. Now it seems to take forever to get through anything, whether it is employment insurance, job training, health care, education, or any aspect.

It is interesting that a few minutes ago the hon. minister for foreign trade said in his speech that we made these cuts and we made these changes with the support of Canadians. He said that Atlantic Canada was one of the cheap beneficiaries of these policy changes. We ran out of time but I wanted to ask him if Canadians supported him, how could he possibly interpret what happened in Nova Scotia as support.

In May there were 11 MPs in Nova Scotia and every single one was a Liberal. In the 1997 election every single Liberal member of Parliament was defeated. I do not know how that is interpreted as support but I am sure the hon. minister could come up with an interpretation that 100% defeat is support. I am not sure how to do it but I am sure he can do it. As he spoke I thought he must have the map turned upside down because certainly the people in Atlantic Canada sent a strong message that we do not support the cuts to all the social programs and all the things that help the people most in need.

All social aspects were hit. My area has one of the highest unemployment rates in Nova Scotia. Our unemployment rate falls between 15% and 40%. There is no program. There is no strategy. There is no job training of any consistency to help people. This coincides with and certainly supports the NDP motion in that regard.

It is not only unemployment but there are cuts to health care. Our health care system is in chaos. Doctors are leaving faster than we can replace them. We have band-aid solutions. We kind of bribe doctors to come in and set up in our area but it is just a band-aid solution and the problem again is cuts to our social fabric and the social programs. It seems to me to be totally contradictory to the Liberal philosophy of helping people which was always there but seems to have completely disappeared.

In education the government has come up with this new idea of public-private partnerships to build and replace schools that are now dilapidated and deteriorated beyond repair and really need to be replaced. They have started a few of these public-private projects to try to save money to keep the province and the feds from borrowing money because the transfers to the province were reduced. All of a sudden they are packing up. They are not working. There are all kinds of problems with them. They have bypassed the tendering system. There is patronage and favouritism. There is false economy wherein the government may save borrowing a few million dollars but the obligation to the people of Nova Scotia is incredible.

On the issue of highways, my area has one of the most dangerous highways in Canada. Forty people have died on that highway. It is in drastic need of replacement so the government says “Well, we do not want to replace that dangerous highway. We will propose a toll highway”. Even in a report submitted by a group of lawyers who worked on this project they say “One is immediately struck with the realization that this region of Nova Scotia is not one which should be conducive to a successful toll road. Highway 104 is anticipated to handle only 6,000 vehicles a day in a rural and economically challenged region of the country.” In effect they say that it should not be a toll road, that the government should pay for it.

It then goes on to say that if we can control the tolls totally and put them up whenever we want to, if we can direct traffic, prevent people from taking other roads and force them to take this toll road, we may be able to make this economically depressed region of Nova Scotia work. It says that if we can relax construction standards, make narrower asphalt, no shoulders and all these sorts of things, maybe we can ram it through and maybe it will work. Well, I do not think it is going to work.

I believe it is false economy. In order to save $60 million on that road the government is obligating the people of Nova Scotia and Newfoundland to 30 years of paying tolls that will total $538 million. They are going to cause the people of Nova Scotia and Newfoundland to spend $538 million while pretending that it will save $60 million. It will create an interprovincial trade barrier. It is in every way just false economy to obligate the people to spend $538 million to save $60 million.

In my region all employment is done by small business. There are no large employers, no giant international corporations. It is all done by small business. The overcharge on employment insurance is costing jobs. There is also the fact that there is no money being put into retraining, nor is there any consistent policy which would help to address the tremendous unemployment problem. In certain pockets of my riding as I said before it is as high as 40%.

Basically the small business employers in my riding are being fined by being overcharged on employment insurance premiums. There is still no plan, no consistent retraining programs and no strategy.

As I said before, I was away for four years and now I have come back. The thing that hits me the hardest is what is happening to our Canada pension plan and to the people who need disability benefits. When I left, if a doctor said a person was disabled, within a reasonable length of time if the person qualified for CPP disability, if they had paid the premiums, they could get disability benefits. Now I do not know how disabled a person has to be to get disability insurance. It is incredible. I have a couple of examples which reflect on the impact the policy changes have on the people who need help the most.

Mrs. Marjorie Newman of Oxford Junction, Nova Scotia applied for Canada pension disability benefits in March 1995. Through 1996 and all the way through 1997 she has been stalled and given excuses. There have been all sorts of delays. Now she is told that she will not have a hearing until late 1998. She applied in March 1995. We cannot imagine the stress on this poor woman. We cannot imagine the frustration and the fear which this lady has. This just should not be.

The doctor's report said “Marjorie Newman is totally disabled and unable to work”. Mrs. Newman is clearly disabled and unable to work at any job and it puzzles me how her application for Canada pension disability has been refused. It started in 1995 and now she is looking at late 1998.

Here is another example which I find shocking. I do not understand how people can be expected to pay into the Canada pension plan and then have this happen. This case concerns Archie Black. He lives in a place called Shenimecas in my riding. I have known him all my life. He comes from a long line of dedicated, hard working people. He can no longer work. He wants to work. His doctor said “Mr. Black is completely disabled from any form of employment”.

He applied in September 1994 for Canada pension disability. Through 1995, 1996 and 1997 they kept asking him for more information. We cannot imagine the mental anguish and stress which have been placed on this man. Now he is fearful of losing his home. I do not understand how this can be allowed to happen. A disabled person has to wait three or even four years for an answer as to whether they qualify for Canada pension disability benefits.

It is incredible. All of these things indicate the philosophy of the Liberal government. It does not matter whether it is unemployment, education, health care, the Canada pension plan or even killer highways. The present Liberal approach hits the poorest regions the hardest and it hits the people who need help the most the hardest.

I will support this motion today because it reflects on the overall policy of the government. I agree with deficit reduction, but I do not agree that it should be achieved on the backs of the people who cannot help themselves and who need help the most.