Mr. Speaker, it is as pleasure for me to speak today to the motion moved by the member for Shefford, which states:
That, in the opinion of the House, the government should review the level at which the child benefit is indexed.
One can question the brevity of this motion, the strength of its wording or the message to be conveyed, but the fact remains that it is interesting to be able to debate this issue.
This is rather ironic. Members will recall that the present partial indexation was introduced by the Tory government of the day. This partial indexation works as follows. It was decided that as long as the inflation rate did not reach 3%, there would be no indexation. This means that, since 1992, there has been no indexation whatsoever. Therefore, families have been systematically losing money at a higher rate than the real inflation rate, because if the real inflation rate had been taken into account, the child benefit would have been increased accordingly. Right now, there is no indexation. For the families involved this represent a shortfall of $850 million.
What is even more ironic is that the Liberals have been pursuing the same policy.
But in 1992, the current Deputy Prime Minister stated “The government talks about this new child benefit program it has come up with, but let us look at this program. In fact, a family with a $40,000 annual income will only receive $44 more each year. Within three years, this benefit will be reduced by 10% and, in ten years, most families will no longer be receiving any assistance because this benefit is not indexed for inflation”. That is what the current Deputy Prime Minister said in February 1992.
When the Liberals came to power, they picked up where the Conservative government left off. They chose not to change this situation. According to the Caledon Institute, which conducts quality social analyses, the child tax benefit is infected by the partial deindexation virus.
It is a losing proposition for all families. Those that were entitled to benefits lose out on full deindexation, but low income families are much harder hit. In their case, whatever amount is not indexed represents money they cannot depend on for their daily requirements. This is a correction the Liberals failed to make and should have made when they came to office again in 1993. Today, they are being reminded of that fact the motion put forward by the Conservative member.
It will also be remembered that, before 1984, the family policy included family allowance payments, child tax credits and exemptions for dependent children. In 1984, some $6.7 billion was paid out under this family policy.
With the changes introduced in 1997, this amount had gone down to $5.1 billion, which means a $1.6 billion cut in payments made to families over 13 years. So, the $850 million that the human resources development minister said would be put back into the system will only partly offset the cuts made since 1993. That is why we may feel it is very relevant to take a good look at the child benefit indexation rate.
I take this opportunity to remind you of the somewhat prophetic words of Benoît Tremblay, who said in 1992—he was the member for Rosemont at the time—that it was tantamount to giving up on having a real family policy. We are moving away from a family-based policy toward a policy designed to fight poverty, but we are no longer doing so by using an integrated approach that would allow families in Quebec and Canada to enjoy adequate benefits.
Mr. Tremblay said “The perverse effects will be felt gradually”. These perverse effects have indeed become reality. What the Deputy Prime Minister said in 1992 did happen, and now we are facing a situation where, from year to year—because we are not about to see a 3% rate of inflation in the coming years—the same thing will systematically occur.
This means that, at the rate things are going, the $850 million shortfall generated between 1992 and 1997 may well exceed $1 billion by the year 2000. It also means that over an equivalent period in the future, let us say until the year 2002, the shortfall for families will total $1.5 billion.
It is therefore urgent to look at the situation and to make up for this shortfall generated by a decision which was made by the Conservatives and maintained by the Liberals, and which now has a major negative impact on all families in Quebec and Canada.
The hon. member for Shefford is right in saying that the government should review the level at which the child benefit is indexed.
She is right, but I think we should do more than to review the level at which the child benefit is indexed. We should actually look at the possibility of fully indexing the child benefit. The government would then realize that, as far as this House is concerned, full indexation is the solution.
It must be remembered that the 3% rule came into effect following years during which the inflation rate had stood at 10%, 12%, 8%, 6% and 5%. Three per cent seemed very reasonable then. It was truly felt that automatic indexation would take place year after year. But this was not the case.
We have seen inflation rates of 2.%, 2.5% and 2.8%, but it is the general inflation rate that counts. It can happen in a given year that the cost of living for daily necessities increases by more than 3%, but there is no indexing because the general cost of living index is less than 3%. So year after year, families have been absorbing this.
When we ask why there is an increasing number of poor children, why there is an increasing number of families who cannot make ends meet and why we are in the process of building a split society, the answer I would say is that we have been slowly undermining the middle class by eliminating a benefit that allowed people to have an adequate standard of living and reamin above the poverty line.
Therefore, we can say because of all this that we have a policy that discourages families with children, that the family policy has been replaced by the fight against poverty, but this does nothing to further the objective of a true family policy.
The government likes to say that it cares for children and that it wants to fight child poverty, but the $850 million that it is promising to invest will only partially remedy the shortfall. An amount of $1.5 billion was mentioned earlier. So there will still be a lot of room for improvement.
To achieve this, to ensure that the motion by the member for Shefford can be more effective, I will propose an amendment. I move:
That the motion be amended by deleting all of the words after the word “review” and substituting the following: “the possibility of fully indexing the child benefit.”
So the final version of the motion would read:
That in the opinion of this House, the government should review the level at which child benefit is indexed.
Therefore, in this period of prebudgetary consultations, the government will be able to determine the figures and make the assessments necessary to ensure fairness once again, to give our families a chance, and to send the message that we want families to take their rightful place and to have the financial means to provide an adequate education for their children. We have to restore full indexation and thus prevent a recurrence of the unfairness we have today, when inflation rates of 1.2%, 2% or 2.5% are depriving families of these benefits.
I will end with this and I would like to submit my amendment.