Madam Speaker, there is a really unpleasant aspect in the opposition motion presented today. It is something that is worse than the false claim that an injustice was done to Quebec when it harmonized its sales tax with the GST.
Once more, the Bloc is trying to convince Quebeckers that they are victims of Canadian federalism. But Quebeckers are neither victims, as the Bloc claims they are, nor fools.
Quebeckers established a dynamic and strong society within the Canadian federation. This explains why recent polls clearly show the failure of the separatists' strategy based on lies and fairy tales.
The truth is the country we built together is an incomparable success, as is evidenced by the United Nations' statistics that show, year after year, that Canada is the best country in the world to live in.
Even on the issue of the financial advantages of federalism, the Bloc is mistaken when it describes Quebec as a loser. The facts are clear.
Let us start with today's motion. This motion claims that Quebec is treated inequitably because it did not get billions of dollars as compensation for harmonizing its sales tax with the GST.
In this, the Bloc is echoing its provincial masters. It espouses the position of the Parti Quebecois government. But I would say to members of the Bloc that we are getting close to year 2000 and that in a couple, one member is no longer subject to the will of the other, nowadays.
The Quebec government referred to the assistance received by the harmonized Atlantic provinces, expressed in proportion to their populations, to justify its entitlement to adjustment assistance. This wrongly implies that federal programs are structured in such a way.
First of all, let us make one thing clear: the federal government still pays the province of Quebec for the administration of the GST. Quebec has received some $100 million a year since 1992-93.
However, as other speakers mentioned today, the fact remains that the only purpose of adjustment assistance is to compensate for part of the revenue shortfall experienced by some provinces after they agreed to participate in an harmonized sales tax system. Again, its only purpose is to compensate for part of the revenue shortfall, not for the revenue increase.
Federal government programs are designed to meet the specific needs of each province and to take into account their particular situation, but not to distribute benefits equally among provinces on the basis of population.
Thus, the equalization program is aimed at providing the provinces with a lower tax capacity with the resources they need to pay for high quality programs and services for their residents.
With this program, Quebec, which has less than 25% of the population, will receive this year 48% of total equalization payments, or $4 billion in federal transfers, when other provinces like Ontario, British Columbia and Alberta are not even eligible.
Equalization is not the only direct transfer to Quebec. The province also receive its fair share of the CHST, which will reach $6.8 billion this year.
In 1997-98, these two transfers to Quebec, that is to say, the GST and equalization, will amount to $10.4 billion, which is more than for any other province. This amount represents over 27% of Quebec's anticipated revenues and almost $1,400 per person, about 25% more than the national average.
When faced with a particularly acute cigarette smuggling problem, Quebec asked the federal government to reduce its tobacco tax. We agreed. We reduced the tax by $10 a carton, more than in any other province. Indeed, in giving Quebec what it wanted, the federal government lost revenues estimated at $300 million in all of Canada in 1994-95.
Quebec also receive other benefits from the federal government. I would like to enumerate a few. Companies established in Quebec receive about 40% of research and development tax credits. To date, 57% of the funds invested by the Canadian technological partnership program went to Quebec companies.
As for middle and long term financing, the Export Development Corporation spent 47% of its budget in Quebec, more than in any other province. That is strong strategic support for our exporting companies. Thirty-seven percent of the Business Development Bank of Canada investments are concentrated in Quebec. That is a significant contribution to the financing of small and medium size businesses in Quebec.
Under the Canadian infrastructure program, the federal government gave $683 million to Quebec as its 33% share of the cost of rehabilitating local infrastructure.
In closing, to go back to the issue of compensation for the harmonization of the GST, I will repeat that the adjustment assistance offered to the provinces, who needed it in their transition to a more effective sales tax system, was fair and equitable.
Quebec benefits greatly from several federal programs in areas where such assistance is needed. With regard to the adjustment assistance program put in place as part of the harmonized sales tax system, the need obviously does not exist. However, I remain convinced that Quebec's initiative to introduce a value added sales tax similar to the federal tax is legitimate and beneficial to both businesses and taxpayers.
As you can see, the facts in no way indicate that Quebec was treated unfairly. On the contrary. We have convincing proof that federal programs are based on equitable rules. When Quebec's needs and situation warrant federal assistance, such assistance is always provided and often exceeds the share that province should receive in proportion to its population.
