moved:
Motion No. 9
That Bill C-2 be amended by adding after line 29, on page 28, the following:
“53.1 Notwithstanding any provision in this Act or any other Act, a provincial government is entitled to borrow funds from the assets managed by the Board at the lowest rate of interest available to the federal government.”
Madam Speaker, Group No. 4 has only one motion which I have moved. I want to spend a few moments on it this morning in the House.
Motion No. 9 reads as follows:
That Bill C-2 be amended by adding after line 29, on page 28, the following:
“53.1 Notwithstanding any provision in this Act or any other Act, a provincial government is entitled to borrow funds from the assets managed by the Board at the lowest rate of interest available to the federal government”.
I alluded to this motion when I was making some comments on Motion No. 8 in the previous grouping.
The interesting thing about the Canada pension fund today is that the two year reserve, which is around the $40 billion mark, can be borrowed by provincial governments at the federal government long term bond rate.
If we look at the last 30 years, the federal government's long term bond rate has been a pretty good deal for a number of provinces. Over the last while many of them have not had the same credit rating as the federal government because of economic difficulties or their sheer size.
I am joined in the House this morning by my friend from New Brunswick. Over the years New Brunswick has a rather high unemployment rate as a small province with a small population. Its credit rating has probably always been lower than the federal government's credit rating. Therefore it is more expensive for the province of New Brunswick to borrow money for its schools, hospitals and universities other than from the federal government.
One goal of the Canada pension plan was to set aside its reserve for about two years and to allow the provinces to borrow moneys from it at the federal government rate. That made it cheaper for the province of New Brunswick to build schools, hospitals and universities. It could borrow money from the fund at a lower interest rate than if the fund had not been there. The federal government bond rate was at a lower rate of interest than New Brunswick could borrow money elsewhere.
The same thing was true in my province of Saskatchewan. It has been very helpful in terms of the infrastructure we have built in our province over the years.
It was also true for the province of Manitoba, the Atlantic provinces, not just New Brunswick, but Newfoundland, Prince Edward Island and Nova Scotia too, as well as every other Canadian province. It is a good thing, a positive thing. I recall very well—I heard the debates in the 1960s—that it was in 1966 that this bill became reality in Canada. It was under the Liberal Prime Minister, Lester B. Pearson.
Liberal Prime Minister Lester Pearson, in a minority parliament in those days, supported particularly by the NDP, people like Tommy Douglas and David Lewis, brought the country the pension plan. One of its objectives was to provide the fund at lower interest rate to the provinces so they could build their infrastructures, become stronger provinces and build stronger economies.
Now that will disappear. That is one of the changes in the CPP legislation that I am personally very concerned about. Now every province will be on its own. That may not be a problem.
Alberta has a very strong and robust economy and a very good credit rating today. It will be a problem for Newfoundland that does not have a good credit rating. It will be more expensive for Newfoundland to go to the market for long term debt to build a university or to build the infrastructure than it will be for Ralph Klein in the province of Alberta.
If the government is worried about national unity, about building a strong federation and about doing some things at the federal level that help all Canadians regardless of where they live, surely to goodness this is one part of the bill that should be changed by the federal government across the way. If we are looking at equality for all our citizens and at equality of opportunity or condition for all our citizens, surely to goodness this is one of the changes the government should look at in terms of the Canada pension plan.
One of the reasons the governments of B.C. and Saskatchewan did not agree to the changes in the CPP was that it set up a balkanized Canada in terms of interest rates. It seems to be very bizarre that a so-called Liberal government would do this. Now provinces will be at the mercy of bond rating agencies like Moody's of New York. They will determine how much the taxpayers in Manitoba, New Brunswick or Newfoundland have to pay when they borrow money to build a project.
They will be at the mercy of Moody's or other bond rating agencies such as the Dominion Bond Rating Service. The bond rating agencies will fly into a province with their books and their own technocrats and sit down to determine at what rate of interest the provinces can borrow money. That decision is out of our hands as parliamentarians. It is out of our hands and in the hands of a few foreign bankers and bond raters. It does not matter what political party is in power, we are at the mercy of these people.
I know how important it was in Saskatchewan a few years ago when the province was in great debt and suffering from a humungous deficit. The bond rating companies had the province on the verge of bankruptcy. We are at the mercy of these New York bankers. They set the rates. What has happened in the last few years is that the province has recovered. It has a balanced budget, the debt is going down and the credit rating is going up.
How can a Liberal government put the provinces at the mercy of these speculators from New York and elsewhere? That is exactly what is happening in this bill.
Our amendment today is restoring to the Canada pension plan the same provisions that have existed since 1966 that will allow the provinces to borrow from the fund at the federal government's long term rate. The federal government's long term rate is a rate that is attractive because the federal government is large, it is credible, it has a good credit rating. It is the economy of the whole country that is supporting this credit rating.
It is only fair that the federal government accept this amendment. Accept the wisdom of a Lester Pearson, accept the wisdom of a Paul Martin, Sr. when they had a vision of trying to build a co-operative federalism where Canadians were equal and had equality of condition whether they lived in New Brunswick, Newfoundland, Quebec or Saskatchewan.
Where is that Liberal vision of old that wanted to offer this equal opportunity right across the country? Why is it the new Liberalism in this country has the vision of a Brian Mulroney or the Leader of the Opposition where it is dog eat dog? Why is that happening?
I do know there are many Liberal backbenchers who are very uncomfortable with this new very conservative model of Liberalism. In fact somebody said that we have probably the most conservative government now in the history of the country sitting across the way.
Brian Mulroney did not try to do this. Brian Mulroney did not try this when he was Prime Minister of this country. If he had, the Liberal Party would have been up in arms. The rat pack would have been up in arms in this House. It would have denounced that government as right wing extremists and sellouts, balkanizing the country, a supermarket of Canadians where Canadians are different classes in different parts of the country.
Now the Liberals are in power. Now the sons and daughters politically of the Liberals of old, of the Pearsons and the Martins and the Pickersgills of old are changing that Liberal vision that talked about equality of condition.
I think this is a fundamental amendment to a fundamental part of the bill. I wish we had the independence and the freedom in this country where parliamentarians on the government side could get up and speak their minds and vote freely and independently and accept some of the amendments being put forth by members of this House.
People are getting cynical of this whole process. They get cynical when they see this kind of thing happening. They get cynical when they see this kind of radical departure and change and not so much as a peep from the Liberal members sitting opposite. Not so much as a peep.
I know how concerned everybody is about national unity and keeping this country together and creating equality of condition. Equality of opportunity is supposed to be a great principle of Liberalism in Canada. Can the Liberals explain why they are going to treat a Newfoundlander different from an Albertan? Why they are going to treat an Ontarian different from somebody from New Brunswick? Why they will treat a Manitoban different from someone in British Columbia?
We are going to have the balkanization of this country in terms of lending rates. That is not fair. That is not just. That is not equality. That is not the kind of vision of a country I want to build.
In the province of Quebec with the Caisse de dépôt et placement du Québec there are not different lending rates for different regions. There is one lending rate right across the province of Quebec for their particular fund and their particular investment board and agency. This will not be the case now in the rest of the country. This will not be the case at all. That concerns me as a Canadian.
If I were Brian Tobin, the premier in Newfoundland, I would be up in arms denouncing the Minister of Finance and the minister of human resources for saddling him with a regime that will make it more expensive for him to borrow money for his schools and his hospitals than for Ralph Klein in the province of Alberta.