Debates of Feb. 17th, 1997

Poverty

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, first of all, we have to look at what the government has done since it took office. For example, last year we announced the doubling of the income supplement for the children of the working poor. We raised this from $500 to $1000. This is money from the federal government to assist our country's families.

In Quebec alone, we inject $11 billion in federal funds yearly. Looking at the assistance to the aeronautical industry, the pharmaceutical industry, the way the federal government is striving relentlessly to assist Quebec small and medium size businesses, I believe the hon. member ought to be thanking us.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, the reality is that the Minister of Finance has cut $4.5 billion from social programs. There are 500,000 more poor children since he became finance minister. That is the reality.

How can he claim not to have money to give to the provinces through established social programs aimed at combatting poverty, and then announce tomorrow some stopgap measures, some campaign goodies?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, what is the question?

[An hon. member]

He had so much to say.

[Paul Martin, Liberal, LaSalle—Émard, QC]

We will let him ask the question.

[Some hon. members]

Oh, oh!

[The Speaker]

It is a question about campaign goodies.

[Paul Martin, Liberal, LaSalle—Émard, QC]

In that case, Mr. Speaker, the answer is very easy. There are no campaign goodies on our side, only excellent government.

[Some hon. members]

Hear, hear.

Canada Pension Plan

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, on Friday the finance minister announced one of the biggest single tax grabs in Canadian history, a 70 per cent hike in CPP premiums, payroll taxes with no increase in benefits.

Under the old system Canadians paid 5.8 per cent of their paycheques for a $9,000 pension at the end of the day. Under the

new system they will now have to pay 9.9 per cent of their paycheques to receive the same $9,000.

Is this the government's primary response to the pension crisis: a $10 billion tax grab that will penalize young Canadians and kill jobs? No wonder we need a fresh start on pension reform.

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, the position of members of the Reform Party as far as the Canada pension plan is concerned is very clear. They want to blow it up. They want to see it destroyed. Under those circumstances it is perhaps understandable that the leader of the Reform Party deliberately misinterprets what has been done. Let me simply set him straight.

Number one, this is not a tax grab; in fact, it is not a tax. Contributions to the Canada pension plan are akin to the contributions to a private pension plan. They are an investment in the future retirement needs of Canadians.

If the member wants to know what a tax grab is, then perhaps he ought to look at what the premier of British Columbia suggested, which was to increase the premiums but provide no value. That would have been a tax grab. What we have done here is we have increased the premiums and we have given value.

If the leader of the Reform Party does not want to accept my word for it, perhaps he is prepared to go into the election in Alberta and tell Grant Mitchell and Ralph Klein that what they have participated in is a tax grab. Let him tell Ralph Klein that he is overtaxing Albertans.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, the hypocrisy of the minister's reply is not only an insult to every Reformer, but it is an insult to every senior citizen in the country.

Here is a well to do finance minister who himself qualifies for a fat MP pension and what does he do? He is clawing back old age security from thousands of seniors every month; he is gouging CPP contributors to the tune of a 70 per cent premium hike and he has his covetous eye on the RRSP savings as well. Then he has the nerve to stand in the House and pretend that he is taking care of seniors.

Will the minister not admit that the Canada pension plan is in trouble because of decades of Liberal and Tory mismanagement? If the minister had been the manager of a private pension plan and it had been mismanaged like the CPP has been, he and his colleagues would be making licence plates in some penitentiary instead of sitting in the House.

[The Speaker]

My colleagues, I would urge you to be very judicious in your choice of words. They sometimes give the wrong impression.

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, the government has stated on a number of occasions that if over the course of the last decade the previous federal government and provincial governments had taken the bull by the horns the way this government has done, then there would not have been a need for reform.

Let us understand what the hon. member is saying. He is not only saying the federal government is wrong, he is saying that his pal Ralph Klein is wrong, that his pal Mike Harris is wrong. He is saying that the eight out of ten provinces that had the courage to do what other provincial governments did not and the federal government which had the courage to do what other federal governments had to do were wrong. Well, we were not wrong. We were right. We saved the Canada pension plan.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, when it comes to pensions, the government has a complete double standard.

Under the Canada pension plan Canadians will pay premiums of 9.9 per cent for a maximum pension of $9,000 a year. Under the Liberals' MP pension plan the premiums are roughly the same, around 9 per cent, but the returns are much, much greater. For his 9 per cent the leader of the federal Tories will receive $53,000 a year and for her 9 per cent, the Deputy Prime Minister will pocket $49,000 a year. That is a far cry from $9,000.

My question is one we are going to ask in every riding in the country: How can this government ask Canadians to pay 70 per cent more for a paltry pension of $9,000 a year when Liberal members opposite continue to qualify for an obscenely wealthy MP pension?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, if the government had not taken the action that was taken, the premiums would have risen not to 9.9 per cent and then been stable, but they would have gone to 14 per cent. As a result of our action, the premiums are down substantially.

I will tell you what question we will be asking throughout the election campaign. Hon. members opposite have stood up and they have said that the increase from 5.8 per cent to 9.9 per cent is a tax grab. If the Reform Party put into effect what it has talked about, which is its super RRSP coupled with some kind of funding for the Canada pension plan, the premiums would have been substantially higher. Why do Reformers not tell Canadians that what they want to do is a massive tax grab but they do not have the guts to give Canadians the calculations.

[The Speaker]

I am sure no one's courage is being called into question in the House.

Public Finances

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, the Prime Minister and his cabinet can make all the scientific analyses they want and be as generous as they like in their speeches, especially to the neediest in our society, but the fact remains that they do not practise what they preach.

My question is directed to the Prime Minister. Is this government's real strategy not the one revealed by a senior Canadian official when he told us what the Prime Minister said to French president Jacques Chirac? He explained his strategy: in Canada, it was easy to cut health services because it was the federal government that made the decisions unilaterally, while the provinces had to make the cuts and pay the political price.

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, if we consider the situation in Quebec, the transfer payments the Canadian government made to the province of Quebec in 1966 totalled more than $11 billion, exactly the same amount that was transferred in 1993, when we formed the government.

When transfers for certain programs were cut, the slack was taken up by equalization payments for provinces that do not have the same per capita income as other provinces. The fact remains that during the past three years, the amounts transferred by the federal government to the provincial treasury in Quebec exceeded $11 billion, and they have not gone below that level.

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, the figures show that $1.3 billion was cut in transfer payments, and that there was a $40 million increase in equalization. Is the Prime Minister saying we are lucky to get more unemployment insurance? Maybe he should realize this is because there is more unemployment, and it shows his complete contempt for the situation. If there is more unemployment, the federal government's policies are to blame. Reality proves the government is wrong.

I want to ask the Prime Minister whether he will finally understand that he should no longer intervene in provincial jurisdictions such as health, education and youth training and that he should withdraw from these sectors, give the money to the provinces and let them deal with the needs of their citizens instead of making propaganda at the expense of the needy.

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, I think the Canadian government has a duty to ensure that the neediest in this country receive sufficient compensation to give them an adequate standard of living.

This government is certainly not going to apologize for having done what the provinces jointly asked us to do. After the meeting in June with the provincial premiers, it was said we would have to work on the problem of child poverty. All the provinces agreed, and I hope the Minister of Finance will be able to do something about child poverty tomorrow in his budget.

Canada Pension Plan

[Ian McClelland, Reform, Edmonton Southwest, AB]

Mr. Speaker, Canada pension plan premiums are payroll taxes. They are set by the federal government and the provincial governments and employees and employers have no control whatsoever. They are taxes pure and simple. This $1,300 increase in Canada pension plan premiums as announced by the Liberal government will result in a massive payroll tax increase for every working Canadian.

On May 3, 1994 the finance minister said right here in this House: "Payroll taxes are a cancer on job creation". Does the Minister of Finance believe today that payroll taxes are a cancer on job creation?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, just because the Reform Party wants to destroy the Canada pension plan is no reason for the Reform Party to continue to misinterpret what Canada pension plan premiums are.

The fact is that workers compensation premiums are taxed. There are other forms of taxes at the provincial level, health levies and those kinds of things.

The hon. member, who is normally a fair person, knows full well that the Canada pension plan premiums are akin to contributions to private pension plans. They are an investment in the retirement of Canadians and should not be characterized in any other way.

It is really not incumbent upon the hon. member to scare Canadians or to mislead them. What he should be doing is explaining it to them. If he has a difference of opinion let him have it, but let us not misinterpret what is going on here.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Mr. Speaker, no matter how you dress it up, this is a pig. You can put any face you want on it but it is always going to be a tax. It is going to be an unfair tax and will be particularly onerous on younger Canadians at the expense of older Canadians. That is the way it is. It is going to be a particularly expensive and onerous tax on young Canadians.

The increase in payroll taxes paid by every employer and employee will be about the combined monthly car and mortgage payment or about half the tuition fee for someone in university. It

will suck $10 billion out of the paycheques of Canadians every year.

How many permanent jobs will be lost by taking this $10 billion out of the economy every single year?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, it is quite the opposite. There are going to be thousands of jobs created as a result of the confidence Canadians are going to have now that the Canada pension plan will be there for them. Not only that, but when the new investment fund is set up under independent management and is able to operate and invest in the enterprises of Canadians, it will be a very large player in creating jobs within this country.

The hon. member has said that we have preferred one generation to another. Is the hon. member saying that we should have cut the old age pensions currently? Is he saying that we should deindex the old age pensions? Is he saying we should engage in discriminatory action against senior Canadians? Let me tell this House that we will not do it.