Debates of Feb. 21st, 1997

The Budget

[Pierre Pettigrew, Liberal, Minister of Human Resources Development]

Mr. Speaker, the opposition is generous to give us an opportunity to set the record straight.

Once again, more money will be invested, including another $70 million in addition to what was set aside this year, for a total of $195 million since last year. We will be putting another $850 million into the child tax benefit in 1998. We are giving ourselves one year because we want to do this in partnership with the provinces.

[Some hon. members]

Oh, oh.

[Pierre Pettigrew, Liberal, Papineau—Saint-Michel, QC]

Rather than setting up the program unilaterally, the federal government wanted to set it up in partnership with the provinces, making sure that it meets their objectives as far as income support goes.

[Suzanne Tremblay, Bloc, Rimouski—Témiscouata, QC]

Mr. Speaker, if the government is giving itself an additional year, there is an election somewhere in between. What this government must be made to understand is the importance of having the flag appear not only on the hood, but on the cheque as well.

If the government truly had the interests of Canadian children living in poverty at heart, it would get out of this provincial area of jurisdiction.

Why does the government not transfer the tax points to the provinces which, like Quebec, have asked for them, so that they can administer a genuine family policy? Which does the government really want to help: poor children or its next election campaign?

[Marcel Massé, Liberal, President of the Treasury Board and Minister responsible for Infrastructure]

Mr. Speaker, the role of the Government of Canada is precisely to redistribute wealth throughout the country and to balance the ability of the

provinces to pay. In this particular case, it is a role that obviously cannot be played by a province and it is a role that the federal government is not only prepared to accept, but one that it is assuming.

When we come to the conclusion that, in order to help Canadian children living in poverty, there must be a transfer from better off regions or individuals, we are doing our duty and giving the provinces, with their agreement, the base that will then allow them to use their money to put together programs more suited to their particular needs.

This is one of the roles of the federal government, to redistribute wealth, a role that, once again, the provinces cannot play and that the federal government is going to assume fully and with complete justification.

Pensions

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, once upon a time the finance minister rightly called payroll taxes a cancer on job creation. His department called CPP premiums a payroll tax and every sane thinking economist in the country agrees with that.

The fact is CPP premiums are a payroll tax and the finance minister has just hiked them by 70 per cent.

How many jobs will the Liberals kill with this $10 billion tax grab? Is it 50,000? Is it 100,000? Is it 150,000? How many jobs do they plan on killing with this $10 billion tax hike?

[Marcel Massé, Liberal, President of the Treasury Board and Minister responsible for Infrastructure]

Mr. Speaker, the Canada pension plan is an investment fund that is there to ensure that older people will be able to get money after they are 65 in order to have a reasonable income for years to come. In order to fund this investment fund, we have to put premiums into it. What we did was ensure the sustainability of that fund. That is what the provinces wanted. It is what Canadians want.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, it seems that for some 30 years it has been a good investment or a bad investment. Now it seems to be a good investment. If it was such a good investment back then, why is it in so much trouble?

Here are the facts. Canadians used to pay around 5 per cent of their salary for a $9,000 annual pension. Now the Liberals are going to charge them double for less pension. That is Liberal economics.

If young Canadians invested their pension premiums into even the most conservative RRSP, they could retire with an annual pension salary of $45,000 a year. That is five times as much as the Liberals are offering.

How does the government have the audacity to ask young Canadians to pay more for less while their own MPs' feet are firmly planted at the MP pension trough?

[Marcel Massé, Liberal, President of the Treasury Board and Minister responsible for Infrastructure]

Mr. Speaker, I find it hard to understand why members of the Reform Party do not understand. After decades of ignoring the problem we finally had the audacity-the guts-to tackle it. We have tackled it in the right way. We have tackled it in partnership with the provinces, including Conservative provinces like Alberta and Ontario. We have tackled it in a way that will permit older people to be sure they will get their pensions. And we have tackled it when a number of analyses indicated that it would be empty by the year 2015.

The way we did it, we are ensuring that it is sustainable. Canadians can count on us.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, now we know that there has been a problem and that the Liberals have been ignoring it for decades.

Canadians can do the math. They know that 10 per cent of their salary for a $9,000 pension is a pathetic investment. Ten per cent can get them $45,000. Twelve per cent can get them $65,000. Fifteen per cent can get them $85,000.

Once again, how does the government have the audacity to force young Canadians to accept this incredibly bad investment when they can do five times better by investing on their own? How does it have the nerve to force young Canadians to accept that pathetic pension plan? How does it do it?

[Marcel Massé, Liberal, President of the Treasury Board and Minister responsible for Infrastructure]

Mr. Speaker, the Canada pension plan is run on a long actuarial basis, like most other pension funds.

What is important to remember is that mandatory RRSPs may be good for the rich, but they are not that good for every working Canadian. We are working for every Canadian, whether rich or poor. Our reform deals with the needs of Canadians.

The Budget

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

Mr. Speaker, what the official opposition feared has come to pass: the UI fund surplus accumulated over two years will reach $12 billion in 1998.

Instead of concrete assistance with job creation, the government is announcing only a ridiculous decrease in contributions, 10 cents,

10 months from now, thus continuing to pay off its deficit by taxing workers, employers and the unemployed.

My question is for the Minister of Human Resources Development. Does the minister realize that this scandalous way of diverting money from the unemployment insurance fund totally compromises job creation and that, in addition, it will be stealing bread from the mouths of those already suffering from the scourge of unemployment, because the reform will be taking $1 billion in benefits away from them this year?

[Marcel Massé, Liberal, President of the Treasury Board and Minister responsible for Infrastructure]

Mr. Speaker, the finance critic must realize that employment insurance is itself a fund in which there are deficits some years, which have to be balanced out by surpluses.

A few years ago, the unemployment insurance fund deficit was over $10 billion. Now we have to make sure that we will not be obliged to penalize Canadian workers and employers in a few years by again raising rates to where they were before.

The contribution rate will fall from $3.30 to $2.80 at the beginning of 1998. It is because we are taking into consideration the needs of workers and employers that we are administering this fund as what it is: an employment insurance fund.

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

Mr. Speaker, there are two inaccuracies in what we have just been told. First, the surplus accumulated in the unemployment insurance fund is not put aside for a rainy day, to help the growing ranks of the unemployed in a recession. Rather, it is being spent by the Minister of Finance to reduce his deficit. A bit of exaggeration is fine, but let us not get carried away here.

Second, the new employment insurance program in place since January will take $1 billion in benefits away from the unemployed. Is that what you call helping the unemployed through bad times? My foot. Normally, the response ought to come from the Minister of Human Resources Development. We can see, however, that they bring in a supposedly senior minister when there are real questions.

Since they are wasting the unemployment insurance surplus on deficit reduction, what exactly are they going to do to show the Minister of Finance in a good light? What are they going to do when there is a recession, and the number of unemployed workers is even higher than today? Are they going to increase the deficit? Are they going to dump responsibilities onto the provinces or increase-

[The Speaker]

I am sorry to interrupt the hon. member.

[Marcel Massé, Liberal, President of the Treasury Board and Minister responsible for Infrastructure]

Mr. Speaker, if the employment insurance fund is nothing but a source of revenue, why would the Conservative government have increased unemployment insurance contributions from $1.95 to $2.25 in 1990? Because the deficit at that time was $12 billion.

Even if the opposition critic were right, what would the unemployment insurance contributions be replaced with? With higher income tax? Is that what he is asking for? Does he want to raise the other taxes on Canadians?

Pensions

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, the government will not call it a tax. It insists on calling it an investment. But this CPP is the crappiest investment in the country.

[Some hon. members]

Oh, oh.

[An hon. member]

Sit down.

[Stan Keyes, Liberal, Hamilton West, ON]

There are children in the gallery.

[The Speaker]

I address myself to my colleague from Elk Island. I would ask him please to withdraw the word crappiest. Would he do that?

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I withdraw that word and I ask you substitute the worst adjective that is permissible for this pension plan.

This is double the premium for a smaller return. It is nothing but a job killing $10 billion tax grab to cover the gross miscalculations of the Liberal and Conservative governments of the past 30 years.

How can the minister justify foisting this tax grab on Canadian workers and businesses, killing jobs and putting tremendous economic hardship on Canadian families?

[Marcel Massé, Liberal, President of the Treasury Board and Minister responsible for Infrastructure]

Mr. Speaker, investing in seniors is never a bad investment. It is clear that we have reformed, together with the provinces, the Canada pension plan. In order to make it sustainable in the long run we have, together with the provinces, changed the benefits and changed the rates at which people contribute to the fund so that people in the future can count on it.

Our role as a government is not to help only the rich, but to help everybody in this society.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, no matter how the government tries to avoid the issue, the fact remains that this scheme will kill jobs and it will provide a lower rate of investment return than any other scheme in the country.

I invite the government and the finance officials to check it out with anybody selling RRSPs these days and they will find out the truth. The rule with this plan seems to be that the lowest return is the law.

Why should Canadians trust their retirement dollars to this Liberal government where the lowest return is the law, and not even any points?

[Marcel Massé, Liberal, President of the Treasury Board and Minister responsible for Infrastructure]

Mr. Speaker, since when does the creation of investment funds kill jobs? It is the contrary. Look at what the government has done. We have created the lowest interest rates in 35 years. Is there anything that creates more jobs than lowering interest rates, therefore helping investment, therefore creating jobs?

For 20 years we had short term rates that were two points more than they were in the United States. Now they are two and a quarter points below the United States. That is what we have done.