Debates of Oct. 21st, 1997

Supply

[Lynn Myers, Liberal, Waterloo—Wellington, ON]

Mr. Speaker, I listened with great interest to the hon. member for Cumberland—Colchester. It seems to me that the government has turned the corner with respect to what it has done over the past number of years in getting its fiscal house in order.

I would simply ask him to consider the evidence. Low interest rates and accelerating job opportunities. Housing starts and resales are up. Business investment is surging. Consumers are spending again and growth is taking off. Yes, while there have been sacrifices, we have now turned the corner and are on our way to an economic renewal which we have not seen since the 1950s and 1960s.

Will the hon. member agree that it was his government between 1984 and 1993 which caused the mess that our government has now had to clean up?

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

Mr. Speaker, on the contrary, I often think that in the Liberal caucus there must be a great big picture of Brian Mulroney. They must all come in and worship at the altar of Brian Mulroney every day because he is the one that brought in free trade which has allowed our economy to expand. It was Brian Mulroney's government that brought in free trade which the Liberals opposed vehemently all night and all day for a long time in this House. However as soon as they were in, not only did they embrace it but they enhanced it and expanded it.

It is the same with the GST. The Liberals opposed the GST hour after hour in this House. They vilified Brian Mulroney and his government for bringing in the GST but as soon as they were in, what did they do? They embraced it again and in our part of the country they enhanced it. They talked the provinces into turning the provincial sales tax into GST as well. Not only did the Liberals follow what Brian Mulroney and the Conservative government did but they enhanced it.

The low inflation policy was started by the Conservative government. That is a policy which was carried over. We started that and I am really proud of it.

There is no question that the success we are having today, and I am sure the Liberals know it, started with the foundation that was built by the Conservative Party from 1989 to 1993. The Liberals can say everything they like but actions speak louder than words. Their actions are screaming “We love Brian Mulroney's policy on free trade. We love Brian Mulroney's policy on GST. We love Brian Mulroney's policy on low inflation because we endorsed it, we enhanced it, we embraced it and we love it”.

[Michelle Dockrill, NDP, Bras D'Or, NS]

Mr. Speaker, I will be sharing my time today with the member for Churchill.

Today I rise in favour of the motion. I am proud of the initiative and leadership taken by my party with respect to this motion.

I am honoured today to stand in the House of Commons as the member of Parliament for Bras d'Or, a riding that takes in much of the island of Cape Breton. It sweeps from the coalfields of Glace Bay and Donkin where my father began as a coal miner and where I grew up, down past the historic site of Louisbourg, through the fishing communities to the south and then up again to Cheticamp and the beginning of the Cabot Trail.

My riding is diverse. French, English and aboriginal communities live side by side. There are families who came here from many of the world's nations to work underground or in our steel mills or on our oceans. These are the people of Bras d'Or.

One hundred years ago Glace Bay was the fastest growing town in the British empire. It was a magnet for people from around the world, for people who wanted to make a better life for themselves and their families.

We fought for decades to make conditions better for the workers in our communities. The miners went on strike to fight for a living wage, for safe working conditions. They had to fight tooth and nail for every scrap, for every little advantage that today we would take for granted.

So I come from a region where we are used to fighting, where we are used to having to work hard for everything we have. It has always been a tough place to live and our history is full of hardship and sacrifice.

Cape Breton helped build our country, feeding the people and industry as we expanded to the west. But somewhere over the decades as our success turned into Canada's success, we started to slip away from the centre of national life. The handful of rich men who owned our industries moved on to new ventures in new regions and we were left to cope as best we could.

And cope we did. Cape Bretoners are an industrious people who are used to hard work, who enjoy hard work, who are good at the task they set their minds to. One of the great tragedies of the last two decades has been to see these people deprived of the work they love.

While the rest of the country went through booms and busts, Cape Breton was on a slow decline. Even in the days of big government no thought was given to reviving our island. Instead we saw millions of dollars thrown away on megaprojects that made a few people, often strangely enough, friends of the government of the day, into millionaires and left the people where they had been, increasingly desperate, increasingly isolated. Many left.

Since I was elected in June, I have been amazed at the number of Cape Bretoners I have met across Canada. Nearly all of them left home to find work. Nearly all of them would love to go home again if work was there for them. Of course, there is no work in the late 1990s.

In his town hall meeting last December the Prime Minister told Canadians that people who lived in places like Cape Breton were basically out of luck. Just last week the finance minister spoke at great length about the Canadian economic miracle. But just a few months ago he said that any economic recovery in Canada would likely pass Cape Breton by.

We are not asking for special favours from the government. We do not want any more heavy water plants or other white elephants dreamed up by bureaucrats. All we want is help to get back on our feet, help so that we can do the things Cape Bretoners are best at: hard, honest work.

We have had many promises from the government. We were promised that the Donkin mine would open, a mine built at public expense. It still has not opened. We had a promise that education would be made a priority. Instead, we had the slash and burn budgets of the last three years, budgets that forced the provinces to accept fewer teachers, larger classes and lower standards.

We were promised a fair deal on taxes. Instead, the tax burden went up for working and middle class people, especially in Atlantic Canada where the federal government held hearings with its provincial counterparts and gave us the BST, a good name for a tax I must say.

We are paying more, getting less and the government has told us it is our fault. When offices are closed down, making it impossible for Cape Bretoners to access the services other Canadians take for granted, we are told that we are to blame.

We were promised accessible health care. Instead, we see transfer payments reduced and hospitals closed. We see patients dying because they cannot get access. That is not something I am saying to inflame the members of the government. That is a message straight from more than a dozen doctors in the town of Glace Bay who held a press conference this past May to say that approximately 40 deaths had been directly related to health care cuts. What a disgrace.

Every time I go home I hear about more cases, of patients turned away, of waiting lists, of doctors and nurses so overwhelmed with work and so fatigued that they cannot properly do their jobs, of Canadians dying because they live in Cape Breton. As the Prime Minister put it, I guess they are just not lucky.

This is the human side of the government's action. While the American bankers pat the Minister of Finance on the head and give him extra brownie points from the world finance candy store, my neighbours are sick and sometimes dying.

While the Prime Minister travels to Russia and speaks about the need for the country to reform so it can rise to our level, there is a community in my riding where raw sewage flows through the streets.

The Prime Minister and the Prime Minister in waiting can talk all they want about growth, and the government backbenchers can happily bleat the party line about unemployment. But tell those lines to the people of Birch Grove where the children cannot play outside because of the danger of contamination. Tell that to the man who lost his wife because the doctor did not have time to properly diagnose her.

Some towns and village in Bras d'Or have a real unemployment rate of over 50%. Half the people in the communities are out of work. Many people have given up, finally crushed by decades of struggle that seem to get them nowhere, by odd jobs and government work schemes that promise to lead them back to security but led them instead to their Prime Minister telling them that they had better move if they wanted to get ahead.

We in the New Democratic Party believe we need to improve health care and other social programs, not just because it is the right thing to do, but because it will also create good jobs and enable many more skilled and talented Canadians to participate in the workforce in every part of Canada. Money invested in health care produces three times as many jobs as the money being used for an income tax cut.

I call on the government to expand medicare, to cover home care and prescription drugs so community based and non-hospital care is available to all without an American style, two tier system. It would create meaningful jobs in Canada.

Enforce the principles of the Canada Health Act: universality, accessibility, portability, comprehensiveness and public administration. It would create meaningful jobs in Canada.

Promote a community based health system which is driven by the health care needs of the people rather than fee for service medicine. It would create meaningful jobs in Canada.

Establish a special funding for research and development and pilot projects in the health care field. It would create meaningful jobs in Canada.

Support the development of community based facilities for primary care, for health care and for health support services such as shelters for battered women and women's health centres. It would create meaningful jobs in Canada.

Establish an aboriginal health institute to support aboriginal communities in taking action to improve their health, broaden research, identify culturally relevant approaches to aboriginal health issues and increase advanced education for aboriginal students in the health profession. It would create meaningful jobs in Canada.

Support a national strategy for research treatment and prevention of AIDS. It would create meaningful jobs in Canada.

Canadians deserve a more balanced approach to getting people working. Reducing the deficit does not have to mean the old style slashing pushed by the Liberals, Tories and Reform. It could have been done without threatening health care for Canadians and education for our children.

What is it going to be? Is the government going to own up to its responsibilities in times when questions are tough or is it simply going to duck and weave, dodging blame and grabbing credit wherever it can and thinks it can get away with it?

[Deepak Obhrai, Reform, Calgary East, AB]

Madam Speaker, this is my first time speaking in the House and it is indeed a privilege.

I have listened to the motion of the NDP and to the response of the Liberal government. I represent a riding which is not very well off. A lot of people are looking for government assistance and are on government assistance.

The general thrust, as I listen to the members of the NDP and of the Liberals, is that with the spending that will take place, jobs will be created. However, the evidence is to the contrary. Yes, we do need to spend money on many of our social services but that is not going to create meaningful jobs. It is going to create jobs that are there but are not meaningful jobs.

What is important for the economy is to reduce the deficit. I have business experience. I am a small businessman and in the last 15 years the tax burden on my business has exceeded to the point where I have had to cut staff in order to balance my books. It is lower taxes and the proper environment that will create the investment and create meaningful jobs.

I have two daughters in university who will soon be going into the job market. They are looking for training in jobs that will be meaningful and help in our prosperity.

The economy is changing into an information age and moving into a global economy. That is where we will excel in the job training aspect by retraining our youth. It is not in spending money but in creating the environment for the business sector. We all know it is the business sector that will create the jobs, not the government sector. The government sector is always inefficient so we must create an environment for the businesses that will create the jobs.

I do not disagree with some of the points that she has made concerning spending money on training which will create jobs. Yes, it may create jobs but it will not create ever-lasting jobs.

All we hear from the NDP is that there are many unemployed and we should be spending money to create jobs. I differ on that. The spending of money is not going to create jobs.

Some of the proposals which were just mentioned may create jobs and may be necessary. It is not going to make a big dent in the unemployment rate. I share the view that we should bring the unemployment rate down. Our fundamental difference is that the NDP is asking for spending and we are not. We are asking for a climate to create jobs.

[Michelle Dockrill, NDP, Bras D'Or, NS]

Madam Speaker, it is ironic that my colleague does not feel that a nurse, a doctor and a teacher are relevant jobs and are not needed.

As I reiterated in my address to the motion, I come from a part of the country that has the highest rate of unemployment in the country. Over the last two years 700 individuals in the health care system have lost their jobs due to the cuts by the government. My colleague is saying that they are not important jobs. I invite him to come to Cape Breton and talk to the gentlemen who wishes he had that nurse to look after his wife. That is the problem.

The Reform are not making the government accountable for what it is doing to the country.

[Bev Desjarlais, NDP, Churchill, MB]

Madam Speaker, I speak in favour of the motion. I will focus on the crisis with aboriginal employment which we all know has historical roots.

The royal commission report on aboriginal people should have left no one questioning the cause of the crisis facing aboriginal people. Treaties were signed with aboriginal peoples, and the Government of Canada and the crown at the time of Confederation altered the treaty relationship, making aboriginal people and their lands the object of unilateral federal legislation.

In 1876 we had the first version of the Indian Act. These actions over time transformed independent, viable aboriginal nations into bands and individuals who were clients of a government department and wards of the state. This was not done with any consultation with the aboriginal peoples.

Canada's policy was intended to undermine aboriginal institutions and life patterns and to assimilate aboriginal people as individuals into mainstream society.

What I have just mentioned is almost word for word from the summary of the report of the Royal Commission on Aboriginal Peoples. Numerous actions were the instruments of the destruction: the Indian Act; the removal of jurisdiction from aboriginal governments; government control over who was recognized as an Indian; forced attendance by several generations of aboriginal children at residential schools; adoption of aboriginal children into non-aboriginal homes; the loss of two-thirds of the land set aside in treaty; the exclusion of aboriginal culture from processes related to education, justice, health and family services; and substitution of welfare for an effective economic base.

There are many people who believe that aboriginal people have had it easy and have no reason to complain. For those unbelievers let me read a few excerpts from a speech given by Father Hugonard on Saturday, May 27, 1916. Father Hugonard was with the Lebret Indian Industrial School.

The Indians are no longer lords of the Prairies.

Five tribes with different languages compose the Indian population.

The study of Indian languages is interesting and indicates their different characteristics.

They have no words to express metaphysical ideas of religion and such words had to be made.

Father Hugonard relayed the words of Chief Piapot.

The great spirit made berries for us and the white men have put fences around them. And told us: Do not go there: and those berries were made for us. The white people were using our wood, our hay and killing game. In order to be become sole masters of our land, they relegated us to small reservations as big as my hand, and made us promises as long as my arm; but the next year the promises were shorter and they are the length of my finger, and they keep only half of that.

Hugonard stated the mode of living on the reserve was widely different from what it had been on the prairies. Buffalo meat was replaced by bacon. They live in small houses without floors. Consequently their health was not as good as it was before when they lived in tepees, the site of which was often changed, and they decreased in number by about a half.

In 1882 the Parliament of Canada made an appropriation for the establishment of Indian schools.

At this point, Hugonard noted At first great difficulty was encountered in getting the parents to send their children to schools off reserve. Indians have a natural attachment for their children and like to have them around, more for their own gratification than for their own welfare.

It was this sick kind of belief that has resulted in the problems we have. Education was made compulsory because many aboriginals refused to send their children away.

Hugonard went on: “I believe the Indians of Canada have a useful and happy future”.

Father Hugonard concluded his address by saying:

A new problem in Indian matters may be arising; for a while, most Indians have been contributing splendidly to the Red Cross and Patriotic Funds, a great number of the ex-pupils of our Indian schools have enlisted and are now drilling or actually serving the Empire in France.

It is possible to predict what the effect of mingling with and being treated as equals of and knowing that they are in many cases the superiors of their white comrades will be upon these young soldiers when they return to their reserves. It will not be in their own interest or to the benefit of the country to allow them to leave their reserves and obtain the suffrage as no doubt some will demand; and while their ideas will have been broadened and the influence of the old generation of hunting Indians will be lessened—.

The policies of this government on aboriginal people are the cause of aboriginal dependence on government subsidies. They are the cause of poverty and the cause of unbelievably high crime rates and violence involving aboriginal people.

The department of Indian affairs acceptance of providing First Nations with substandard housing, education facilities and educational opportunities ensures that the proper infrastructure is in place in the way of roads and proper water and sewage systems equal to that of non-aboriginals and, dare I say, they were not treated with the same consideration of largely white communities.

The deplorable state of housing and living conditions on reserves saw in the last Parliament the government's having to be shamed into making even minimum moves. Not until New Democratic Party Manitoba MLAs Eric Robinson and Gerard Jennison brought media attention to conditions in Shamattawa where water was so high in methane that it would catch fire, not until then did the former Liberal member even attempt to act. Once the media died down, the promised improvements, less than half a finger, have never happened.

The royal commission report states aboriginal unemployment in the labour force rose from 15.4% in 1981 to 24.6% in 1991 despite advances in education. Aboriginal participation in the labour force is 57%, below that of all Canadians at 68%.

The cost to the economy in foregone income, $5.8 billion, plus the remedial expenditures lead to a loss of $7.5 billion annually. Some 300,000 new jobs will have to be created for aboriginal people in the next 20 years just to reach that liberal “it's okay to be there” 9% to 10% unemployment level.

Demographic pressures alone will increase the losses to the economy if the present trends continue to $11 billion in the year 2016.

In my riding aboriginal communities unemployment has always been unacceptably high, to some points 95%. Cuts to health and education saw decent paying positions cut in a number of communities. Hydro projects irreversibly altered ways of life and means of income to inland fishers and trappers.

Cuts to CN and VIA took jobs from many communities which were built up along the rail lines.

Seasonal workers are abundant in our communities. Cuts to EI have left proud people forced to go on welfare because they were short a few hours. Lack of government services and assistance by way of people with a voice, not a machine, has left many in a position of no assistance as they get frustrated trying to understand voice messages coming out of Brandon.

The understanding that was once available in northern offices is no longer there.

I listened to the member from Parkdale—High Park speak on her first day in the House. Her exuberance over her life in Canada was such that it reminded me of a cheerleader waving white and red pompoms. My life in Canada, as well as that of my family, grandparents and great-grandparents when they came from Ukraine and Sweden, has been great. That has not been the case for aboriginal people.

I was allowed to value and respect all my cultures. I was not denied access to my family as a result of wanting an education.

I have reflected on this part of Canadian history in the Royal Commission on Aboriginal Peoples report for two reasons. First, I am sick of Reformers spouting off about treating aboriginal people the same and equally. Aboriginal people were not treated fairly or equally since the first contact with the Canadian government. We must go beyond what is expected for everyone else to right that wrong and to improve the rate of employment for aboriginal people.

We must remove all the hindrances, poverty, poor housing. The first step which requires no cost is an apology to aboriginal people for a government policy that fully intended to lead to cultural genocide. At a time when the government has seen fit to attain its economic surplus by using unemployment, at a time when government policy has people working two to three jobs to make a living, the government must commit to all Canadians, aboriginal and non-aboriginal, to go beyond that half a little finger election promise and create jobs, decent, make a living jobs.

[Tony Valeri, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, let me start by saying that today's motion has more to do with some obsolete NDP theology than it does with any of today's economic realities. It seems to be almost an article of faith to the hon. member that our government is “blind to the human tragedy of 1.4 million unemployed Canadians” and the supposed proof of our sin is that we have succeeded in meeting our target for dramatic deficit reduction and consistent inflation control.

I remind the hon. member of an old saying that there are none so blind as those who will not see. It is very clear that this opposition party cannot see or understand some of the fundamental facts of life about jobs, about deficits, about inflation and about responsible government.

Members of the government and members in this House are concerned about the opportunity that Canadians have for employment. Another fact to put on the table is governments cannot create jobs for every Canadian in this country. It is only the marketplace that can do that through the work of the entrepreneurs and their companies creating the products and services that people need and can pay for.

Two of the worst barriers that government can put forward are to let deficits rise and inflation get out of control. High deficits and inflation are a guaranteed recipe for economic weakness and job loss and most Canadians understand that. They have seen destructive dynamics at work in the past and they are finally seeing government turning the corner and starting to see the reduction of deficit and low interest rates.

Deficits mean nothing more than higher taxes tomorrow to pay for the money the government has borrowed. It is the prospect of high inflation that pushes interest rates up.

It is not an ideology. This is a matter of hard economic reality. Letting deficits and inflation rise pushes up taxes and interest rates and puts conditions in place that drive down growth and job creation. That is irresponsible government.

The hon. member for Cumberland—Colchester went on about the success of the Mulroney government and how Canadians are bowing down to the great policies of that government. The past administration had no political will to reduce the deficit, to put conditions in place to encourage jobs and growth.

I would go as far as to say that the prior administration could not hit the side of a barn as a target. It proved that in all the years it was in office.

When we came to office the government committed itself to breaking the vicious cycle of deficits, debt and inflation. We knew that it was the best and surest way to spur the economic growth which produces jobs, good jobs, sustainable jobs. It was the best and surest way to make it possible for government to stop raising taxes and ultimately, as our finances improved, be in a position to reinvest in Canadian priorities.

The finance minister told Canadians in last week's economic and fiscal update that the plan is working. We have achieved a dramatic turnaround in our national deficit burden, with the lowest deficit in 20 years. With the commitment of the government and the Bank of Canada to firm targets, inflation is at its lowest sustained level in 30 years.

These are not abstract achievements. There is no plot by bankers and bureaucrats to oppress workers and worsen employment, as the hon. member's motion implies. The proof is clear and concrete.

In 1995 we began hitting and beating our deficit targets. As inflation remains stable, short term interest rates have dropped 5 percentage points. That means falling below and staying below U.S. rates.

More important, long term 10 year bond rates are down nearly 4 percentage points over the same period. They have been below U.S. rates since February. That is performance which is unprecedented in Canada's post-war history.

What makes this so important? It involves more of the facts which today's motion does not understand.

While the Bank of Canada has some influence on short term interest rates, it is the market and only the market that sets the long term rates. What the marketplace is saying about Canada's long term rates today is that our prospects for continued growth and stable inflation are among the best in the world.

Private sector economists are now saying that Canada's growth over the next two years will be at its strongest level in decades. In fact, they predict we will have the strongest back to back growth of any of the group of seven leading industrial economies, better than Japan, larger than Germany and stronger than America.

We are seeing some of the benefits of low interest rates being delivered now. Five year mortgage rates are at their lowest level in decades. Housing starts are up 24% over 1996 because of those interest rates. People are buying new houses. That means new jobs in construction and manufacturing.

Low rates have also helped to increase business investment. It has surged over 25% from last year. That means plants being built and people being hired.

Consumer confidence is the highest it has been in over eight years. Again, that means people buying cars and other goods, creating more jobs.

Since the beginning of this year 279,000 new jobs have been created. That is the economic plan at work.

I know that members have heard of this outstanding outlook before in the House, but I want to say that it will be repeated in the coming months. It will be repeated because these are the facts that the various opposition parties want Canadians to forget and ignore. They want to blind Canadians to these facts, or at least denigrate and downplay them. These facts prove that our balanced, consistent approach to growth and job creation is working.

Let me be specific about a couple of issues which are tied to today's motion. The hon. member goes on to condemn this government about being obsessed with future inflation. Inflation takes time to build a head of steam. The Bank of Canada eased off the gas pedal to avoid having to jam on the brakes later on. That is the best way to avoid the painful boom-bust cycle which Canadians saw in the 1970s and 1980s.

Hon. members talk about pain and suffering. What about the pain and suffering that Canadians felt when they came crashing down through these boom-bust cycles because the monetary policy was not flattening out those cycles and ensuring they stayed consistent so that Canadians would not suffer through them?

This week a Canadian auto workers union economist said that economic growth and lower interest rates alone would have allowed us to meet our deficit targets. In other words, we did not need to cut any government spending. In fact, just freezing it would have allowed us to meet our targets and that would have been good enough. There are some real problems with this myopic and partisan analysis.

The finance minister always made it clear that our deficit targets were never intended as the most we could do but were the least we could do. It is always hoped that we would do better. It is absurd to suggest that meeting deficit targets is good enough and that there is no benefit in doing better than that.

The minister announced an $8.9 billion deficit, down from the projected $24 billion. That means there is $15 billion less borrowing than we originally forecasted. That means that $15 billion is not being added to the debt and that $15 billion will not be costing taxpayers hundreds of millions of dollars of interest charges. That is a real bottom line benefit to beating our targets.

A private senior economist said earlier in the week that interest rates would not have fallen to 30 year lows had financial markets not been convinced the federal government truly had spending under its control.

We recognize that unemployment remains tragically high and that we have to do more. It is a commitment of the government. It was an important part of the finance minister's update last week.

We live in a dramatically evolving world economy, an environment where the foundations for employment are changing. It presents new challenges and responsibilities for government.

Let me close by saying that the government can make a difference in some key areas. First, a sound economic framework is essential for ensuring sustained prosperity that creates more and better jobs. Second, promoting knowledge and innovation in the economy is key to ensuring a more positive economic future. Third, the government has a responsibility to ensure that Canadians not only survive in an evolving economy but are well equipped to survive.

All Canadians need and deserve a government that is truly committed to economic progress, to growth that creates real jobs and generates new revenues which can help us preserve valued programs such as health care and to creating conditions for economic growth.

That is what we are committed to do. That is the road we are constructing. That is the destination we will help Canadians reach. As a result, more jobs will be created and there will be greater security for today's citizens and for our children.

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

Madam Speaker, my Liberal colleague from Ontario, the hon. member for Stoney Creek, is showing no compassion for the people of Canada, all Canadians, and low income earners in particular.

Witness his allusion to the Minister of Finance stating, in his economic statement last week, that a $10 billion shortfall was discovered. I can tell you where this missing money can be found: in the employment insurance surplus, a plan whose premium rates are clearly too high. Unemployed workers who show up at the EI office to claim what paying these high premiums entitles them to are often told they are short a few hours—since the new system counts hours—to qualify.

The benefit period for those who qualify was also reduced. In short, premium rates are sky high, there are fewer eligible claimants and benefits are paid over a shorter period. This is how we end up with the $12 billion projected surplus for the year ending March 31.

The Minister of Finance also lacks compassion. Here is further evidence: a millionaire, who registers his ships in countries described as tax havens to be able to hire crews that do not fall under Canadian jurisdiction and to pay them less as well as to avoid paying taxes here, in Canada, that is who we have as a Minister of Finance.

In my riding, in Black Lake to be specific, LAB Chrysotile is set to close down an asbestos mine, the BC mine, BC standing for British Canadian, in the next seven or eight days. This closure will result in the laying off of 300 mine workers, more than 200 of whom are over 50. That is tragic.

The Minister of Human Resources Development happens to be the one who, on April 1, slashed the Program for Older Worker Adjustment, or POWA. Over 200 workers would have been eligible under POWA. But the minister destroyed a program that worked well and served as a safety mechanism in many cases. The program was not perfect of course, but it was a safety mechanism.

People in the riding of Frontenac—Mégantic want to see the minister. Strangely enough, he is no longer available. Yet, between April 27 and June 2, he visited the region three times and twice came to the riding of Frontenac—Mégantic. But now, it is impossible to talk to him. He is silent as the grave. The minister shows no sign of compassion toward these workers.

Earlier, the member for Stoney Creek showed us, with his speech, that he does not know either what it is like for a family to live on an income of $25,000. He brags that the unemployment rate has gone down. He should visit the regions. He should get out of his riding. He should urge his human resources minister to show that in his chest is a real beating heart and not a stone.

[Tony Valeri, Liberal, Stoney Creek, ON]

Mr. Speaker, I thank the hon. member for the question. With reference to his comments about the EI fund, it is a question that has been asked over and over again in the House. I will repeat the answer for the benefit of the member. I hope I can be very clear.

Since 1986 the auditor general has made the request that the government include the EI fund in consolidated revenues. I am not sure where the member pulled his figures from when he talked about a $10 billion surplus. We do not have a surplus in any fund. Any changes in the EI program would deal with the bottom line of government.

Since we have taken office we have provided a cumulative reduction in employment insurance of $4 billion. The government recognizes that employment insurance premiums should not be going up but should be going down.

We have dealt with the issue of employment insurance and we will see a continued reduction in premium rates.

[Lynn Myers, Liberal, Waterloo—Wellington, ON]

Mr. Speaker, in speaking against the motion I note that the federal government has accomplished what many said could not be done. The federal government has transformed the economic, political and social reality and environment over the past four years.

The federal government with astonishing speed has taken the country from a $42 billion deficit in 1993 to a zero deficit in the next fiscal year. Something considered undoable has been done. Canadians understand and know that sacrifices had to be made to get our fiscal house in proper balance. Canadians were prepared for some pain to ensure long term viability and gain for future generations, and this has happened.

The strong economic foundation which has been laid and expanded upon is now paying off for Canadians. Canadians are seeing real economy advances not seen since the boom years of the 1950s and the 1960s. With this strong foundation comes a confidence needed by people to propel the economy into the 21st century. It is confidence built on hope and expectation. It is confidence built on solid performance and optimism.

Canadians have waited a long time. While we can and will continue to work hard to ensure prosperity for all sectors of the economy, especially for people who might otherwise be left behind, we have seen remarkable achievements over the past four years.

Let us consider the evidence. Interest rates are at their lowest in historic terms. Housing starts and resales have rebounded. Consumer goods enjoy strong sales throughout the land. Inflation remains low. Business investments are surging. Jobs are being created at an accelerating pace and growth as measured in gross domestic product is outstanding even by international standards. People are starting to feel good about the economy and what is happening in Canada.

The negative psychology of even a few years ago is dissipating. In short, our economy is in remarkable shape. That is why the international consulting firm of KPMG, which did a comparative study of the costs of doing business in Canada, the United States and Europe, found that Canada is on top. This means that Canada is not only the best place in the world to live, as the United Nations has so designated for a number of years, but Canada is one of the best places in the world in which to invest.

Canada is poised on the cusp of a prolonged economic expansion, all of which spells good news for the country and good news for Canadians. This enables the federal government as both a facilitator and provider to focus on what Canadians want and what they need.

The debate should go beyond what has been noted as a fiscal dividend formula, that being 50% for programs and the other 50% for debt reduction and tax reduction. The debate should be about national priorities. It should be about the vision for Canada in the next millennium. It should be about how best to build a strong, lasting economy and in the process a strong society which offers both opportunity and security. The debate must be about ensuring the quality and quantity of growth needed to contribute to the quality of life which Canadians deserve and rightfully expect.

Now more than ever Canadians expect the federal government to preserve, to enhance, to protect and to improve upon the valued programs which have made us the envy of the world.

Canadians care about a quality health care with a standard of health care second to none.

Canadians care about a good education system with lifelong learning, training and retraining opportunities.

Canadians care about an infrastructure which enables Canada to remain competitive both internally and internationally.

Canadians care about creating an environment which will enable Canada to remain highly productive and make Canada a leader in the global knowledge based economy.

Canadians care about ensuring that our young are well taken care of because they represent our investment in the future. We need to ensure they will have the best opportunities available.

Canada has such a huge potential, such a great future.

Canada is now poised to cash in on an unparalleled future, the likes of which we have not seen in a long time. Canadians with the help of the federal government will rise to this occasion and focus on the well-being of citizens able to get the job done.

Making good use of taxpayers' dollars, we will march confidently into the 21st century. Arm in arm we will move forward together. We will do so, not by leaving some behind but by all marching together forward into the new millennium.

[Werner Schmidt, Reform, Kelowna, BC]

Mr. Speaker, I found the address just delivered rather exciting and interesting. The vision of Canada the gentleman portrayed is a very good one.

I wondered for a moment whether he was president of the chamber of commerce and not a parliamentarian. I think he missed a couple of things through his discourse.

I would like to ask him a couple of questions having to do with a particular letter sent by the Minister of Transport. I am sure he knows the minister very well and supports him.

Would he explain exactly what the minister had in mind when he referred in a letter to the dedication of a certain percentage of the fuel taxes toward the infrastructure program, in particular the Trans-Canada Highway? I think we all agree that the infrastructure program is a very critical part of the economy and the Trans-Canada highway is one of the major components of that infrastructure program.

In this particular letter, the hon. Minister of Transport goes on to say that the 20% fuel tax fails to do a number of things. He makes quite a list here. He says, “I should note that the federal government collects the road fuel tax as part of the consolidated revenue fund and uses the proceeds to fund such areas as health, welfare, education, defence and transport.” Now comes the phrase that I would like the hon. member to pay particular attention to “as well as to help reduce the federal debt”.

Just last week the Minister of Finance indicated that there was an $8.9 billion deficit coming forward for the next fiscal year. I wonder if the hon. member could tell us and convince us somehow that an $8.9 billion deficit is in fact not an increase in the debt of Canada rather than a decrease. If over the years this 20% fuel tax has been collected to reduce the federal debt, then I would like to know where it was that this money was applied to the federal debt? As I look at the government's balance sheets I notice that each year the debt is climbing. Yet for some reason or another, the Minister of Transport says that part of the 20% fuel tax has gone to reduce the federal debt.

I would like the hon. member to please address that question.

[Lynn Myers, Liberal, Waterloo—Wellington, ON]

Mr. Speaker, I want to first thank the member opposite for the question. I found it of particular interest that he would make reference to the chamber of commerce. Certainly those people in the chamber of commerce in my area of Canada and indeed those members of the board of trade in various places across this great land have cheered the government in terms of what it has been able to do.

I am very glad that he would make that point on my behalf. I very much appreciate that because business, as members know, have been able to see the merits of what the federal government has been able to accomplish over these past numbers of years. In fact, they are very grateful for the kind of things that have been done to secure the kind of climate that is necessary for people to live and work and secure the quality of life that is necessary.

I was particularly interested in the question with respect to the infrastructure program. As a former mayor of a municipality in the region of Waterloo we very much value the infrastructure program that was put into place not only in 1993 but also in 1996-97. For example as a municipality we spent enormous amounts of money in partnership with the province and the federal government to ensure that sewage treatment plants were in place, to ensure that highways were built and roads were secure and in doing all kinds of things in the best interests of the people we represented.

For the hon. member to make reference to the infrastructure program I can certainly say that it was a wonderful program which benefited Canadians not only in my part of Ontario and Canada but people across this great land.

[Rob Anders, Reform, Calgary West, AB]

Mr. Speaker, I would like to split my time with the member for Kelowna.

Looking over this opposition motion by the member for Halifax, I notice that the NDP address some serious problems in the country but they have the wrong solutions. But it is not only the NDP that does not have the solutions, it is the Liberals across the way who are missing solutions as well.

The NDP have suggested that somehow by making an investment in culture they will ameliorate unemployment and will provide jobs. I do not know how flower power is going to put people back to work. The sixties are over. Buying million dollar paintings does not put people to work.

Farmers in Saskatchewan who voted for the NDP would not be in favour of buying million dollar paintings. Seniors in Kamloops or Burnaby would not be in favour of buying million dollar paintings. Unemployed fishers in Atlantic Canada would not be in favour of buying million dollar paintings, but the NDP is. The party that some of these people voted for is. I think some of those people have to question whether or not those members truly understand their needs. Then I look across to the Liberal benches. Once again I will lay out the problem and talk about the lack of solutions.

On the subject of unemployment, we are in our 84th month of unemployment at a rate of 9% or worse. What have they done in response? They have an employment insurance surplus which is now at about $15 billion, or will be by the end of the fiscal year. For every single average working Canadian in the country it means $700. The Liberal government is taking $700 from the average working Canadian for employment insurance and it says it is accountable and is looking after the situation of unemployment? News for them. Economics 101 is that payroll taxes kill jobs. Until the Liberals understand this they will not be able to rectify the problem.

They also talk about how they want to put $90 million toward youth unemployment. They talk about how they care, but they do not. They are talking about $90 million to hire some temporary bureaucrats for the summer to once again grow the size of government. If we look at this a little more closely, beyond the myopic Liberal view of the next election in trying to buy some votes, we realize it would take about 140 years for the Liberals to solve the youth unemployment problem by employing all the unemployed under the age of 30. They cannot rectify it that way. It is a joke as well.

The Liberals then talk about spending a billion dollars in handouts to students. What they do not tell Canadians is that for every dollar they pay, for every one person they claim to help, they hurt nine more. For every single person who will get some sort of benefit, nine more have a bigger debt to face. They have a higher deficit. They have higher taxes. That is what will kill their opportunities when they go into the job market. The government fundamentally misunderstands what it is doing.

Governments, whether it be the ministers or the prime minister in the front benches now or in the past, have always erred on the side of big government. The government has a theory and it is a wrong-headed theory because it does not hold up in reality. The theory is that the bigger government is, the more centralized it is and the more people it employs, this will somehow rectify the situation of unemployment in the country. The government supported then an unemployment insurance policy now an employment insurance policy that subsidizes people in seasonal work to be unemployed. It encourages the problem. It doubles the unemployment rate of our neighbours to the south, the United States, and the Liberals sit smug.

People who were unemployed voted for the Liberals. Farmers in Saskatchewan voted for the NDP. Seniors who are facing real crunches because of fixed incomes received from the government through pensions or other means voted for the NDP. Unemployed fishers in Atlantic Canada who once again gave the Liberals a chance despite the failed Atlantic groundfish strategy were willing to give the NDP a chance.

All those people have been failed because the socialists to the left of me, the NDP, talk about going ahead and spending money on million dollar paintings and funding artists. This will not help unemployed fishers. It will not help farmers in Saskatchewan and it will not help seniors.

The Liberals across the way say they want to help youth but go ahead and put taxes against them with the Canada pension plan. Shame on them. They go ahead and jump the CPP contribution rate to 10%, a $10 billion tax that will be levied against students and young people in the country so they can subsidize their MP pensions, and they gloat with pride.

The Minister of Finance has the gall to stand up in the House and brag about their accomplishments. How can they brag about 84 months of unemployment above 9%? How can they brag about a $10 billion tax?

How can the government brag about balancing the budget when it did it with 36 tax increases since 1993 and two more to boot in the first session in this House? The government has brought forward Bill C-2 which is a $10 billion tax hike. It has brought forward Bill C-10 which goes after seniors who receive social security benefits from the United States. How can it be proud of a record like that?

Only a Liberal could be proud of a record like that. Only Liberals could feign pride in this House and stand up to say that they support those measures, that they are doing it for the sake of tax fairness, that they are putting in a $10 billion tax for the sake of tax fairness, that they are taxing seniors on their social security benefits for tax fairness. Where is the fairness in that? I do not know.

When those people have a chance to examine those policies, when it comes time for re-election, they will look long and hard, and they certainly deserve to.

[Tony Valeri, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I could not sit by and let those last comments be made without clearing the record for Canadians. I will speak slowly so the hon. member will understand me.

The premiums that are paid by Canadians into the Canada pension plan do not flow to consolidated revenues of the Government of Canada. Taxes flow to consolidated revenues of the Government of Canada. CPP premiums flow to the Canada pension plan fund.

In fact after a year and a half of consultations with the provinces of this country, an agreement was signed to establish an investment fund which would provide Canadians a better rate of return on their retirement income. The easiest thing for us would have been to do nothing, which the prior administration decided to do. But we are doing this so there will be a Canada pension plan in this country, not to engage in the kind of political rhetoric we just heard. That is a point of clarification for Canadians.

[Rob Anders, Reform, Calgary West, AB]

Mr. Speaker, I am glad the member across the way has touched on the CPP tax hike fiasco because it gives me an opportunity to illuminate a little more on that subject.

When the government of the day first brought CPP in, it said that it would be a fund that would never rise above 5% of somebody's salary. Paul Martin Senior, the father of the current supporter of the plan, said that it would only cost a couple of hundred dollars a year. Now the government has the gall to go ahead and tax Canadians the thousands of dollars that it does, 10% of their income, double what it was initially said to be. The government members of the day made promises on the stumps back in 1966. They talked about how it would never rise above 5% and today we look at something that is double what it was and they say “trust us again”.

And the Liberals say that those funds flow to the CPP fund. Once again, can they not gloat with pride when they have a $500 billion unfunded liability? That is according to their own numbers. I do not like to trust government numbers very much because they often prove to be inaccurate. The Fraser Institute puts it at a trillion dollars. Split the difference somewhere in between or cut it down the middle. Seven hundred and fifty billion, five hundred billion, one trillion, it is a lot of money. For them to stand with pride today in the House and say that those funds only go toward the CPP fund with a $500 billion unfunded liability, shame.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Mr. Speaker, first of all, I would like to congratulate my colleague on his speech, and secondly, to ask him how he sees the situation of the surplus in the employment insurance fund. We know about the increasingly numerous and complex eligibility criteria that must be met by those who have the misfortune to lose their jobs.

Under the old scheme, up to 65% of those who lost their jobs could collect unemployment insurance benefits. Today, it seems this figure has dropped to about 35%, the obvious result being a surplus of around $10 to $12 billion in the unemployment, or, as it is now called, employment insurance fund.

I would like to hear my colleague's views on what should be done with this large amount of money, which comes solely from taxpayers and companies, and not from the government. If he were the Minister of Finance, how would he go about using this $10 to $12 billion to revitalize the economy?

[Rob Anders, Reform, Calgary West, AB]

Mr. Speaker, if only we had somebody on this side of the House who was the minister of finance.

Last year the surplus in the EI fund started off as $7 billion in the first year of its overpayment and overcontributions. By the end of this fiscal year it is expected to be about $15 billion. With all the projections in sight it will get bigger. They are not saving up a rainy day slush fund. It is a tax, pure and simple.

If they are bringing in billions of dollars, $700 more per average working Canadian than what they should, what should the government do? Liberals should open up their ears and pay attention. They should be telling this to the finance minister. They should be pleading with him on behalf of their constituents. They should be asking for a payroll tax cut. The Canadian Federation of Independent Business has talked about a 25% tax cut in the EI premiums because it creates jobs.

To quote their own finance department studies, when they increased EI premiums from a little over 3% to close to 5% it resulted in killing 26,000 jobs. It is expected by their own Department of Finance studies that this recent hike, these overcontributions, will kill 76,000 jobs.

[Werner Schmidt, Reform, Kelowna, BC]

Mr. Speaker, there is something in the NDP motion that I very much support. The motion demonstrates a deep concern about the shortcomings of the government.

Unemployment is at an unreasonably high level and it has been sustained. It is about the only thing that has been sustained by the Liberal government. Unemployment remains consistently high and the debt has consistently increased.

The unfortunate part of the motion is that it mixes up causes and effects. I will not defend the Liberal government in any way, shape or form but I will support the intent of the motion.

Its intent is to call to the attention of Canadians that the government has failed to create jobs, to make adequate investments in health and in education, and has not done what it should have done with the fiscal management of the affairs of Canadians.

The government has failed to recognize that people care about the unity of Canada, about the fiscal management of their affairs and want to have a standard of living of which they can be proud of and can pass on to their children. Hopefully their children will have a better standard of living than what they enjoy.

Under the current regime that is not likely to take place. The average family of four has $3,000 less to spend today because of the increase in taxes. Thirty-eight tax increases have now taken place.

We need to recognize that it is the skills and abilities of people that create the strength of a nation. It is not primarily the natural resources although they help. The use and the application of natural resources comes through the skill, abilities and hard work of people.

What is it then that the government ought to be concerned about? It ought to be concerned about creating jobs. There is ample evidence that by increasing taxes the government is doing the exact opposite. Increasing taxes, payroll taxes, property taxes, income taxes, surtaxes or excise taxes, has the impact of decreasing jobs and not increasing them.

Let me refer to a particular incident in the United States. There have been several instances of tax decreases but I want to pay particular attention to the Michigan experience. In 1991 John Engler took power in the state of Michigan. Since that time total employment has grown to 4.6 million people, a record high in just six years.

Over the same period the state unemployment rate was cut in half from a high of nearly 10%, which by the way is just about where it is in Canada, to a low of 4% in May of this year. That is something the government could be proud of.

How did he achieve that? Governor Engler states “Our strategy of cutting taxes, reducing regulations and balancing budgets is paying off in more jobs, higher pay and healthy growth”.

I would like the Secretary of State for International Financial Institutions to pay particular attention to what I am about to say. Since 1991 Engler has instituted 21 tax cuts. That is the exact opposite to what has happened in Canada. We have had 38 tax increases.

If the government really wants to increase job opportunities it should cut taxes, not increase them. There is ample evidence for that. This is only one example. There are many examples which I could cite at this time.

[An hon. member]

Isn't it beautiful to cut taxes?

[Werner Schmidt, Reform, Kelowna, BC]

“Isn't it beautiful to cut taxes?” The gentleman is already beginning to recognize that he could turn it into music.

Wouldn't all Canadians wish to sing a new song? They would love to sing the song “I have a job and I have less taxes to pay. I have more money for my children's education. I have more money for entertainment. I have more money to do the things I really want to do”. I am so glad the hon. member opposite recognizes there are countries in the world which know how to do that.

We need to recognize that it is very important for hon. members opposite to recognize what the role of government ought to be. I would like the previous parliamentary secretary to the minister of industry to listen very carefully. The role of government is to maintain a culture which rewards entrepreneurship, innovation and research, and ensures a level, competitive and honest marketplace.

How can that be done? It can be done by creating a change in attitude from dependence upon government handouts to one of independence, creativity, the ability to apply one's initiative and an attitude which will give us the incentive to produce, develop and become increasingly efficient.

That happens when taxes are reduced and when people are allowed to spend the money they have so carefully earned instead of the money being spent by a politician or a bureaucrat.

Individual people in Canada are far more capable than any member of the House of spending money in their best interest. They know where it ought to be spent. That ought to be our number one concern.

I sympathize with the NDP when it says that we ought to create employment. Its solution is to give more money to these people through taxes. That would be taking the taxes from one group of people, giving a bit to the bureaucrats and politicians, and giving a bit back to the people. It would create dependent people. It would not solve anything.

The money should be left in the hands of the people. They will spend it wisely. They will develop, produce and provide the kinds of services that will make the country better and make them richer. It would even make NDPers richer.

I want to show precisely how convinced even the Minister of Finance is that payroll taxes actually cut jobs. More than one official in his department has demonstrated clearly that payroll taxes cut jobs. He has ample evidence all around him to show that is the case.

The Canadian Federation of Independent Business surveyed over 19,000 small businesses. It found that over half, or 50.8% to be specific, would hire more individuals if payroll taxes were reduced. That is only one kind of tax, payroll tax.

If over half of them would do that it would increase the number of jobs rather dramatically. Only 10% of the businesses surveyed believed the government's infrastructure program—and I wish the hon. member who was just talking about the infrastructure program were here to listen—would encourage more hiring. Over half of them believed that if payroll taxes were reduced they would hire more people.

I have anecdotal evidence of my own. I know full well that as the payroll taxes go up the number of new hires goes down. If we want to get serious about creating jobs we will not increase payroll taxes; we will reduce them. That is what we will do.

A recent paper was delivered by Canadian economists Livio Di Matteo and Michael Shannon. They found that each percentage point increase in payroll taxes reduced employment by .32%. Based on current levels of employment, a one percentage point increase in payroll taxes will kill 44,000 jobs.

I want to put this into perspective. Just recently the Minister of Finance announced in the House and to all Canadians that CPP would be increased by more than 4%. That means four times 44,000 fewer people in the workforce. That is significant.

Are we to sit here and they to sit there saying that this is good for Canada? It is not good for Canada. Payroll taxes ought to be cut. That would be a solution to the unemployment problem.

If we really want to create a better environment for our children and our grandchildren we would cut taxes and let the people spend the money.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, I think that, in coming to Ottawa, everyone here has forgotten what the real situation is in our country. I think they have even forgotten that, in some areas of this country, there are people who do not have the money to put bread on the table so that their children can go to school.

I have trouble understanding our colleague from the Reform Party who is saying that, by lowering taxes, we will create employment. I am not interested in the statistics, the economic studies and the research papers. These figures are not right. We are interested in what is really going on. What is really going on is that government gave money to companies for technological change, which eliminated 600 or 800 jobs, and companies increased their profits without creating employment.

Canada's banks have made profits in the billions of dollars and they are letting people go, not creating jobs. I still have trouble believing that immediately lowering taxes will put an end to the employment problem in Canada.

Let us not forget that it is not the fault of ordinary people that there are no longer any fish. It is not the fault of Newfoundlanders, of the employees who used to work in fish plants. It is not their fault if they are not working. In a united country, as we are supposed to call it, we are supposed to look out for one another.

In the meantime, I will ask my colleague a question. If the Reform Party were in power, what would their short term solution be for those who have nothing in the house to eat, and who get $38 a week to feed their family? That is where the problem lies. In the short term, a solution must be found to help people in Canada and, in the long term, other solutions must be found to create real jobs that will give our workers some dignity.

I do not believe, and I will never agree, that the people in the Atlantic provinces are lazy. Let us, my friends and colleague, take a quick tour across Canada and look at what is happening in the regions represented by my colleagues.

There were eleven children in my own family. In 1972, not one of us was left in New Brunswick. We had all gone to northern Ontario, Prince George, B.C. or Oshawa, Ontario. We had to.

If we were to take a quick tour across Canada—Hearst, Kapuskasing, White River, Wawa, Marathon, Manitouwadge, Oshawa, Hamilton, St. Catherines, or go to Alberta and B.C.—we would find people from down home who have been forced to move away from their families. Perhaps the Reform Party members have never had to leave their relatives behind in the West, but the rest of us know what it is like not to know one's brothers and sisters. We know what that is all about.

When there is talk today of a united country, it is time for action, not just words. What would the result be, if the Reform Party were in power? We would be in a sorry mess.

[Werner Schmidt, Reform, Kelowna, BC]

Mr. Speaker, all Canadian citizens need money to put clothes on their backs, food on their tables and shelter around them. That is not limited to people in eastern Canada. That is not limited to people in western Canada. Every Canadian needs those things.

That is precisely what the Reform Party is all about. It is to create the situation where everybody has an opportunity to apply their initiative, their talents, develop their skills and abilities. That is what we are all about. We want to create the environment so that people will be able to perform.

The accusation that was made, the implication was that somebody in Canada believes somewhere along the line that Atlantic Canadians are somehow lazy. I have never said that. I have never intimated it. I have never even suggested that. The hon. member is grossly mistaken when he suggests that is the kind of thing that the Reform Party believes. That is absolutely false. Mr. Speaker, that ought to be made abundantly clear. He should take it back immediately. Nobody takes that position.

The position is that even people in Atlantic Canada, if he wants to take that position, will spend their money more wisely than a politician here in Ottawa. It has to be made abundantly clear that the people need to recognize that they must apply those skills and abilities that they do so well. Does that not mean that there are some temporary solutions that have to be made on an emergency basis? Absolutely and of course. Where there is a crisis that has to be addressed.

What we are talking about are the long term solutions as well. We need both, not just one. A cut in taxes will create long term solutions and will also allow enough money to deal with the crises that have to be dealt with.

We need a balanced approach. That is what Reform is all about, a common sense approach for the common people of Canada.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, I am sharing my time with the member for Thornhill.

In preparing for this debate I read very carefully the NDP motion. Central to the whole discussion is the words in the motion that the NDP is criticizing the government's policy and creating unemployment because of its pursuit of a monetary policy obsessed with future inflation and so on and so forth. The key words are “monetary policy” as opposed to fiscal policy.

If I may explain the difference, monetary policy has to do with interest rates, money supply, the manipulation of the exchange rates of currencies across borders. Fiscal policy, on the other hand, has to do with government spending; the government public accounts, the amount of revenue it gets in, the amount of money it spends and whether or not it runs a deficit as a result of these spending practices.

I realized as I looked at the motion that one of the reasons why the economies of the nation, of Canada and the provinces, have got into such tremendous trouble over the past two decades is because governments have been pursuing incorrect ideas with respect to the impact of monetary policy on the creation of employment.

The NDP or social democrats in general believe that we can arbitrarily influence employment levels by manipulating the money supply and manipulating inflation. It believes this is an absolute thing that can be done and that fiscal policy can be set aside.

Fiscal policy has to do with keeping accounts balanced. It is very clear that throughout the 1970s and the 1980s, the previous federal government, for example, took the lead of the NDP which was very strong in that Parliament. It set fiscal responsibility aside and pursued a policy that had to do with arbitrarily manipulating money supply or interest rates or thinking it could do so. But in the long run the government ran up a huge debt of over $500 million. At the time that government lost office it was running an annual deficit of around $43 billion or $44 billion a year.

It shows me that the New Democratic Party, the fourth party in the House, is still a dinosaur in its attitude toward the economies of nations and the economies of this nation. NDP members should be aware that the direct manipulation of economies through monetary policy has failed worldwide. This is why the Soviet Union collapsed. This is why the controlled economies of eastern Europe collapsed. The highfaluting theories of arbitrarily controlling the strings of the economy and expecting that would directly create jobs just does not work.

The vast majority of Canadians except for a few people in the NDP know it is quite simple. You do not spend more money than you receive. You have to keep your house in order. It makes no difference whether you are a federal government, the government of the United States or an ordinary household anywhere in Canada, in the maritimes or in western Canada, if you spend more than you take in you are going to get into a lot of trouble.

I had occasion to test the Canadian public's opinion on this issue. The fourth party members are fond of pretending they represent ordinary working people and the intelligence of ordinary working people. They certainly do not represent the intelligence of ordinary people, be they in cities or in rural areas.

Annually the Rockton fair is held in my riding. It is a fall fair. It is probably one of the biggest fall fairs in Ontario. Rockton is a little village community of 150 people. The fair has been going since 1853 and styles itself the Rockton World's Fair. It is among the top 10 fairs in Ontario. Over the four days of the Thanksgiving weekend it received 75,000 visitors. It draws people from all around the golden horseshoe area.

My riding is rural and suburban. I have country folk and fairly affluent suburban folk. Nearby is Hamilton which has principally urban people. An enormous mixture of people come to the Rockton fair.

I always have a booth at the Rockton fair so people can meet the MP. If they have complaints they can make them directly to me. The people at Rockton fair seemed extraordinarily satisfied with the performance of the Liberal government, but that is an entirely different story. They are aware that the government has conducted an excellent fiscal policy which has chiselled down the deficit from $40-odd billion to $8 billion in the last year. It expects to eliminate the deficit in the next year. By any other yardstick in the G-7 the deficit is already eliminated. The finance minister mentioned yesterday that we have actually begun to pay down the debt to the tune of $11 billion.

In anticipation of this good news, on Thanksgiving weekend I conducted my poll at the booth at Rockton fair. I placed four jars on the table in front of my booth. I had another tin that said surplus. On a big sign I said “If you were Paul Martin and you had a surplus, how would you spend it?” The four glass jars I had labelled tax cuts, reduce the debt, reduce the GST, restore social spending.

As each person came by the booth and expressed an interest—it is amazing how interested people were—I offered them four beans. I said “Pretend you are Paul Martin and this is $4 billion. You can put it in these jars however you like, in whatever order you like no matter what”.

It is amazing how enthusiastically people took those four beans and approached the jars and thought and considered carefully how they would spend that $4 billion surplus. They would hesitate here and there.

Five hundred and twenty-five people took part in my poll. They represented every walk of life. There were farmers. There were pensioners. There were young people. There were people from Hamilton because the Rockton fair pulls in people from Hamilton. There were people from all over the region. On Thanksgiving Day, it even brought in people from Toronto.

I had an excellent sampling of public opinion, and it cost a lot less than an Environics poll or any of these other very expensive polls that the government engages in. I would suggest that it was far more accurate than most of those polls because the sample was very large.

I would like to give the results of the poll. On the first two days 321 beans showed up for reducing the debt, 207 for increased social spending, 101 for reducing the GST and 121 for income tax cuts. The following day the numbers were similar: 341, 208, 160 and 126.

Approximately 42% of all the people who came by the booth felt that we should reduce the debt first. I wish both opposition parties would bear in mind that these are ordinary Canadians from all walks of life. They said that of course they would reduce the debt first because if that is done first, everything will follow.

I am glad of this opportunity to speak in the House today because I can say to the finance minister, to all my colleagues and everyone in the House that I feel, as a result of this experience, the correct course for government is sound fiscal policy first. Forget about monetary policy because that follows.

The correct course of government is to get the debt down. Then there will be more money to spend on social spending. What I hope will happen is that we will have more money to not cut income tax but to cut the GST. I think it is the worst tax imaginable.

I would like to see the finance minister use 50% of his surplus just as was suggested by the poll on reducing the debt and the rest divided equally between reducing the GST and improving social spending. We, as Liberals, have to be very concerned in maintaining the social safety net. This is where we differ so enormously from the Reform. We are not prepared to spend like blazes like the NDP in order to do it.

[Svend Robinson, NDP, Burnaby—Douglas, BC]

Mr. Speaker, we just had a classic lesson in Liberal voodoo economics that totally ignores the realities of this country. The member talks about the debt and the deficit. Let us look at how we got into this situation of a debt and a deficit.

There are three major causes. The first cause, of course, is devastatingly high levels of unemployment. If folks are not working, that increases the bill for unemployment insurance and other social programs.

The second is interest rates. Historically, interest rates have been far too high. It is only recently that finally the Bank of Canada has lowered those interest rates under tremendous pressure. Now Gordon Thiessen, the Governor of the Bank of Canada, is suggesting that we have to go back up which would be enormously destructive.

The final major cause is a tax system which has been historically completely skewed and unfair. That is the basic reason for the high levels of the debt and the deficit.

What do the Liberals have to say? They should heed the very thoughtful terms of this motion. Is this really revolutionary? If we can set targets for the deficit, if we can set targets for inflation rates, surely we owe it to the people of this country, particularly that 20% of young people who are desperately trying to find jobs and who are losing hope, to set targets. We must set some goals and objectives to reduce the obscene levels of unemployment. That is what this motion says.

The Liberal member says they have wrestled the deficit to the ground. The finance minister goes out and triumphantly says that the deficit is gone. Let us look at how we have arrived at this point.

Has it been through equal sacrifice? Has it been through a sharing of the burden? Absolutely not. We have arrived at this point today because the poor, the powerless in this country have paid a disproportionate amount to reduce the deficit.

Let us look at the casualties in the war against the deficit. They include the unemployed. A few years ago 90% of unemployed Canadians were eligible for employment insurance. Today approximately 40% are eligible.

What has happened to the other Canadians, desperate people looking for work? If employment insurance runs out those people are forced to turn to social assistance. What has happened to social assistance? The Liberal government has abolished the Canada assistance plan. It was the one national program which provided leadership in the fight against poverty. National standards are gone entirely.

Once again, poor people are casualties. Co-op and non-profit housing are gone under the Liberal government.

Foreign aid has been shamefully cut. Canada is now at number 11 instead of number 5 a few years ago.

With respect to child care, the government has abandoned any commitment whatsoever to our children.

Aboriginal programs have also been casualties. My colleague from Churchill spoke very eloquently earlier today on the price the aboriginal people are paying in the war against the deficit.

Students have been casualties. Sure, the deficit has been reduced, and at some point we may even start to reduce the debt, but we have transferred that debt burden to students. An average graduating student carries a burden of something like $25,000.

Research granting councils have been cut. Cultural programs have been devastated, the CBC, the Canada Council, the National Film Board. Environmental programs have been cut savagely.

How can the Liberal member stand in his place and suggest that it is programs which should be cut? Those programs have helped to at least minimize the devastating impact of the gap between rich and poor. He should accept the recommendation of our party which calls on us to set those targets. Is he seriously opposed to setting targets for reducing unemployment in the same way as we have set targets to reduce inflation and the deficit?

Why can he not demonstrate some humanity, some return to those old Liberal values and recognize that we should be setting those targets and making this the number one economic priority for the people of Canada?

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, if empty rhetoric could create jobs, then the NDP would create full employment very rapidly.

This is nonsense. If the member opposite had listened to me he would know that I would not reject renewed social spending when there is a surplus. This is certainly one government which has a heart and a conscience.

The reality is the previous Conservative government overspent. It strangled the economy. That created unemployment. The way to correct that, the way to create jobs, is to allow the economy to create jobs.

The member opposite would create jobs out of a vacuum. It does not work that way. It works by having people in Canada who are actively creating employment taking risks, creating business. Sorry, I said business. Good lord, we should not say business to the NDP.

Medium and small businesses in this country, not big unions, are the ones that are driving this economy. They are fueling the growth of this economy which is growing faster than any other economy in the G-7. As a result of that, I believe in the last six months or so we have created some 240,000 jobs in this country.

It just shows that we have our fiscal house in order, fiscal not monetary. Monetary has to do with funny money going across borders. Germany experimented with that in the 1930s. It printed money. Actually the Social Credit in the west had similarly crazy theories during the 1930s. Oddly enough it was the father of the Leader of the Opposition who was very much involved in some of these weird theories coming from the west. All weird monetary theories came from the west, whether it was the NDP or the Social Credit, it was the cradle of this kind of thing.

I do not want to suggest that Ontario, Quebec, the maritimes and B.C. have anything exceptional to contribute as opposed to other parts of the country, but I do believe that certainly Ontario and I think now in the maritimes, even though they did elect a few NDP members, will agree that good fiscal policy, getting your house in order is the way to create jobs.