Debates of March 21st, 1997

The Budget

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, it appears that the spin doctors upstairs who are writing the speeches for the government side still have not got the message about the child poverty stuff they are throwing around.

I would like to ask the member for his definition of child poverty. He kept using that term in his speech. I would like him to explain to me what it actually means to him and his constituents.

[John Maloney, Liberal, Erie, ON]

Mr. Speaker, child poverty is a family who does not have the necessities of life. Each week that family lives from pay cheque to pay cheque which is very little. They wonder where the milk money will come from or extra money, perhaps, for a school lunch. This is child poverty.

[Maurice Dumas, Bloc, Argenteuil—Papineau, QC]

Mr. Speaker, Mr. Speaker, if I may, I will share my 20 minutes with my colleague, the hon. member for Shefford.

I am pleased to take part in the debate on the budget tabled February 18 by the Minister of Finance. This budget definitely does not help the unemployed or poor children. I agree with my Bloc Quebecois colleagues who have spoken recently on this budget, describing it as a lazy budget, an expression coined by our party's finance critic, the hon. member for Saint-Hyacinthe-Bagot.

Where is the minister's compassion for these unemployed people, these poor children? The $600 million announced for 1998-99 for the 1.5 million poor children makes a very poor showing next to the billions of dollars slashed from social transfers and pilfered from the employment insurance fund.

Where are the business and individual tax reforms the Bloc Quebecois has been demanding for so long? The Bloc Quebecois has pointed out, in fact, that the government could have freed up $3 billion yearly from corporate taxes to help companies create jobs. What this involved was a reworking of the corporate tax system to eliminate inefficiencies.

The government is trying to reduce its deficit at the expense of the provinces, mainly via a tax burden which has increased by $22 billion in four years.

What has the government done to stimulate employment? Bankruptcies have risen by 22 per cent in Canada, 20 per cent in Quebec, and 22 per cent in Ontario.

What is more, the number of bankruptcies in the National Capital Region has increased even more than in the other regions. The government has at least created one category of jobs, the pawnbrokers, whose business is booming. The Minister of Finance continues to promote family trusts and to promise job creation.

In September 1996, the federal government launched an unprecedented attack on the auditor general in order to try to stifle the scandal on the tax-free transfer of family trusts to the U.S. The government was, and is still, using all the means at its disposal to protect the coffers of the Liberal Party. Canada's rich families continue to enjoy these tax havens, and this budget continues to protect them.

It is not a budget that creates jobs, but purely an election budget. All the government's new initiatives are in the exclusive jurisdiction of the provinces, and taxpayers are the victims of the overlap and duplication.

The federal government did however find the funds necessary for the minister of propaganda's flag campaign on the eve of the election.

The government is also helping artists, by subsidizing those who advocate federalism. We must not forget that over 49 per cent of the cuts to the $16.5 billion in program expenditures between 1994 and 1999 come from cuts to transfers to other levels of government, primarily the provinces.

What has the government done for the rural regions? Nothing new yet. In my riding of Argenteuil-Papineau, we have a number of farmers facing major problems. The government is spending only $25 million this year on job search. This means less than $1 per Canadian and less than $20 per unemployed individual.

Since we are talking about overlap and duplication, I would like to point out that the federal government announced in its budget the establishment of an opportunities fund of $30 million a year over three years to give persons with disabilities greater financial independence.

The fund will contribute to supporting innovative projects developed in partnership with groups of individuals with disabilities, the private sector and provincial governments. However, the provinces have always been involved in this area, and here comes the federal government once again to appropriate their clientele.

I have spoken on a number of occasions before this House to underscore my interest in persons with disabilities. In December, I expressed my interest and that of the Government of Quebec in marking the Quebec week of disabled persons, by saying, and I quote: "The Quebec week of disabled persons focuses on integrating these people into the work place. Presided over jointly by Clément Godbout, president of the FTQ, and Ghislain Dufour, of the Conseil du Patronat, this week is a first of its sort in Quebec and takes place in a spirit of fairness and solidarity".

I told of the work done by Cécile-Hélène Wojas, a paraplegic teacher in Lachute whose dynamism and courage have advanced the cause of the disabled, not just in her workplace, but also in the Lachute area, which is part of my riding.

I also paid tribute last February to parents of sick children, and particularly to the courage of one family in my riding of Argenteuil-Papineau. The Séguin family of Saint-André d'Argenteuil, two of whose children, Sylvie and Patrick have muscular dystrophy, is a model of love, courage and devotion.

In addition, what has the federal government done to help students? Their debt load has increased in recent years.

In 1994-95, the total amount owed by students under the Canada Student Loans Program and Quebec's loans and bursaries program was over $7 million.

In 1994-95, over 625,000 Quebecers and Canadians paid interest on loans taken out to pursue their education. In my riding of Argenteuil-Papineau, students must often leave home and move to larger urban centres, thus adding to what it costs them to get an education.

Tax assistance for students certainly helps with their tax burden, but these measures were put in place when the economic situation of students was different.

This budget certainly does not create jobs for taxpayers. And what can we say about the mistakes made by the federal government with respect to the Montreal airports, which will mean the loss of thousands of jobs for many, including people in the Lower Laurentians.

I spoke about this scandal this week. I mentioned that the Bloc Quebecois was severely critical of the federal government for its inconsistent decisions and its mistakes, as former minister André Ouellet called them, in the matter of the Montreal airports.

I also referred to the comments made by Senator Pietro Rizzuto, who confirmed that, for two years now, the federal government has failed to assume its responsibilities in looking for a viable solution to ensure the future of air transport in Quebec, hence the current confusion and the mess we are in.

I also said that the Bloc Quebecois condemned the Liberals for trying, once again, to take the people of the Lower Laurentians hostage on this issue by making all sorts of promises on the eve of an election for purely partisan purposes.

In conclusion, with an election in the offing, I urge the federal government to do a better job and to be more honest, because the public will not be fooled. It can read between the lines and sees this lazy budget for what it really is.

[Jean H. Leroux, Bloc, Shefford, QC]

Mr. Speaker, I rise in the House today to participate in the debate on the Minister of Finance's budget. A great many things could be said, but I shall restrict myself to analyzing certain parts of the budget which I feel are unacceptable to the population.

First of all: employment insurance and the future consequences of this budget. An announcement has been made of a 10 cent cut in contributions, 10 cents less per $100. This proposed measure will not have much of an effect, since the reduction could have been50 cents per $100, which might have led to job creation.

At the moment, the jobs that are being created are precarious, poorly paid and short-lived. According to the experts, in the past six years there have been so many cuts in unemployment insurance-renamed employment insurance, which is a hoax, since insurance must insure us when we lose work and are unemployed-that there is a $2 billion annual shortfall in the fund.

This means that, had we maintained the 1989 criteria, we would have had a $3 billion surplus in the fund. What did the Liberal government do? Cut benefits to the least well-off. You will agree with me that people who are unemployed are not considered to be our society's most well-off.

What is sad today in Canada is that there are people who worry about what colour their next Mercedes will be, while others worry about whether there will be anything to put on the table tomorrow. There are fathers and mothers who are constantly worrying whether they will have anything to feed their families with, whether there will be anything to put in their children's lunch boxes. That measure is unacceptable.

I would also like to talk about child poverty. When the Liberal Party was in opposition and debating poverty, there were one million children living in poverty in Canada. The Liberals rose in this House to criticize the fact. Four years later, there are 1.5 million young people and children who lack what is needed to grow up in Canada.

And what did the Minister of Finance do? What provision is there in the budget? An increase of some $30 per child to fix the situation. That is shameful. It is shameful to spend an additional $70 million to help poor children.

We will recall that unemployment insurance was cut by some $2 billion a year. The poor lose $2 billion, and the $5 billion surplus goes to deficit reduction-those worst off pay for this too-and $30 a year more goes to filling lunch boxes. It is a scandal.

I would like to talk as well about the Canada Foundation for Innovation. This foundation will receive $800 million. By chance, transfers to the provinces were cut by $800 million, and here they are going to create a fund.

But, careful, a fund is not spent. The money in a fund is invested, and the interest is spent. So the government will be spending another $180 million a year-on what? It will spend it on education, research and hospitals, all of which come under provincial jurisdiction. Once again, federal Liberals, who specialize in invading areas of provincial jurisdiction, are going to butt in as they always do. This is unacceptable, it must be said.

Members will recall that the red book contained a proposal to create new day care spaces in Canada. The government promised to invest $720 million in day care. They broke their promise. Now there is a plan to invest $600 million of new money in children. As I said earlier, the budget provides for expenditres of only $70 million. Knowing the way Liberals are, we have be wary of what they promise as well as of the promises they keep.

Another point in this budget I did not like at all is the fact the minister refused to compensate us for harmonizing the GST. Members will recall that Quebec was the first province in Canada to harmonize its sales tax. When it did, it received no compensation. And what is the finance minister telling us now? He is saying that, thanks to harmonization, Quebec is making a profit.

Simply by looking at the tax in one province, and in other provinces, how can you say whether or not that province is making a profit? The minister forgot to say that the tax system in Quebec is different from Ontario's and the maritimes'. If the maritime provinces opted for a 10 or 11 per cent tax, it is their choice, but taxpayers there pay lower income taxes, higher sales taxes, but lower income taxes. In Quebec, we pay lower sales taxes, but a higher income tax than anywhere else in the country.

Therefore I think that when the finance minister is telling us in this House that with his new tax, Quebec is making a profit, he is not being honest. He ought to look at the tax system overall, and see how much Quebec has lost. The Quebec Minister of Finance is demanding $1.9 billion in compensation to be on an equal footing with the maritimes, who will be receiving close to $1 billion. I believe that this is important. It is a question of equity with Quebec, and the minister is continually brushing it off as trivial.

Once again, the Liberals are demonstrating that they are sympathetic, that they are willing, but when the time comes to act, they do not. The means were there this year, however, because the annual debt will be lower this year as a result of the lower interest rates, so the minister had the means of doing it, yet he has decided not to. What he is doing is sprinkling a little largesse here and there, a few goodies, just peanuts. What people would like to see, as the official opposition has proposed, is a complete reorganization of the personal and corporate income tax systems. This government has been asleep at the switch for four years, and has done absolutely nothing to improve the situation.

In closing, I wish to state that this is terrible, because there is talk everywhere of sharing, of equity. In Canada at the present time, it is the poor who are getting it in the neck, the poor who are being cut off, in this peculiar view of what equity toward them should be. The poor are bearing the brunt more and more, and receiving less and less. This is totally unacceptable, and I trust that this minister will think things over again, and return with a far more meaningful budget, for this one is a do-nothing budget, with nothing innovative about it. There is nothing innovative in this budget, and the entire population of Canada and of Quebec are bearing the brunt of this.

When the bishops of Quebec speak of poverty, of the role of a member of Parliament, the role of representing the least advantaged members of society, I think that everyone here in this House

has missed the boat here. We are not doing what we were elected to do, and the main responsibility lies with the Minister of Finance.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I see that no Liberal member, on the other side, dares respond to the eloquent arguments made by the hon. member for Shefford. I want to commend him, not only for his speech, but also for the concerns that he is always showing in the House and during the discussions we have about the victims of the federal budget, that is, the poor and, particularly, the unemployment.

I know that he did not have time to say everything. I would like him to remind us of what he thinks when he hears the finance minister bragging about reaching, and even exceeding, his budget objectives, when we know that the main reason why he exceeded his objectives is that he cut assistance to the unemployed.

We remember the famous bill on employment insurance, which is essentially similar to unemployment insurance. This legislation reduced the eligibility period and the benefits. It is now more difficult for young people and for women to get back into the work force. A person will now have to work 910 hours to be eligible for employment insurance. Yet, people pay premiums from the first hour and not the 15th hour, as was the case before.

I would like the member for Shefford to tell me what he thinks about these employment insurance cuts. Does he think, as I do, that it is shameful to see the finance minister boasting about his success, when he is achieving it mainly on the backs of the unemployed and with cuts in transfers to the provinces?

[Jean H. Leroux, Bloc, Shefford, QC]

Mr. Speaker, I would like to thank my hon. colleague from Lévis. He also works very hard on these issues. We have only 10 minutes to talk about the budget, and of course, we cannot say much in 10 minutes. But the Liberals will get their comeuppance. There will be an election soon and then we will have our say. We will talk about their achievements, about what they have done, but mostly about what they have not done and how they went about it. They picked on the poor, the disadvantaged in our society, those who need to feel that we are here to help them. But not the Liberals, they are hiding from these people.

I remember listening to the Minister of Finance talk about poor children. What has he done for poor children? He merely injected $70 million. Now, $70 million may look like a lot of money. Mr. Speaker, you and I would feel like rich men if we were to win such a huge amount. It may look like a lot money, but it is peanuts in a country like ours, it only amounts to $30 per child every year. It is a shame. When the Liberals took office, there were 1 million kids living in poverty, now that figure is up to 1.5 million, that is 500,000 more poor children since the Liberals took office.

To resolve this issue, we need to get rid of the Liberals and to replace them by something else. By what exactly, I do not know. But one thing is sure. Historically, the Liberal Party has cared about the disadvantaged, but now they are worse than the Conservatives. The decisions they make are worse. The friends of these two parties are often rich people, contributors, people with money to support them. The poor do not have any money. However, they want to improve their lot. Their children are in an even worse situation. They have rights too.

In our society, we have parents who do not know if they will have a slice of bread the next morning to put into their kids' lunchbox, and that is unacceptable. It is unacceptable and shameful. There is no word strong enough to describe that whole situation.

As official opposition, we will continue to work hard. We will continue to criticize the people opposite. They are not all the same, but they are very much alike. We have to make the decision makers and the ministers aware of the measures that need to be taken in our society and that cannot wait any longer.

[Andrew Telegdi, Liberal, Waterloo, ON]

Mr. Speaker, back in my university days I had some experience with Maoist economics. I just heard some of that come at me from the previous speaker. I understand that is where their leader is coming from in terms of protocol ideology.

Nevertheless I am pleased and privileged to have the opportunity to speak on the fourth budget of the government. My maiden speech to the House was on the occasion of the government's first budget. I vividly recall the challenges we were facing as a new government and as a people.

The previous Conservative government during its nine years in office mismanaged the Canadian economy, gave Canadians record deficits and the debt grew from $208 billion to $508 billion. We were facing a fiscal crisis whereby over one-third of our revenues went to finance the debt.

The challenge for us as a government and the challenge for us as Canadians was to bring the country back to fiscal health and to regain our fiscal sovereignty. As a government we knew that if we failed at this task we would fail at everything else we tried to do.

We have met our deficit targets. We have restored Canada's fiscal integrity. We have united the country in the determination to guard the new fiscal sovereignty we have won.

The proof of our fiscal success is the reality of having the lowest interest rates in 40 years. The Canadian prime rate is at 4.75 per

cent and the U.S. prime rate is at 8.25 per cent. Our prime rate is 3.5 per cent lower than the U.S. prime rate. The U.S. prime rate is 74 per cent higher than the Canadian prime rate. On a loan of $100,000 this represents a saving of $3,500 in annual interest charges.

Because we have our fiscal house in order Canada is viewed abroad as a good place to invest, a good partner to trade with and a great place to live. Everyone is optimistic about Canada's future both in the short term and in the long term. The rest of the community is forecasting improvements and rightly so.

The budget has its priorities in balance. This is truly a Liberal budget for it makes provision for those who need the assistance of their fellow Canadians within the framework of the economic realities. Because of the government's policies which have been reiterated in the budget we the people of Canada are once again maîtres chez nous.

We are investing in ourselves by facilitating the full participation in society of those with disabilities. We are investing in ourselves by taking steps to maintain and strengthen our health care system. We are investing in ourselves by not yielding to the temptation to buy votes with our tax cut. That would be a fool's bargain. That would be throwing away our future, our children's future and Canada's future.

Therefore we have chosen to invest in our future. We are proposing the new national child benefit system to give the children of low income families a better start in life and to fight poverty.

Without a job the ordinary Canadian has no future whether we are speaking of today's adults or today's children when they grow up. Creating a favourable climate for a growing economy has been and continues to be a goal of the government.

The government has taken positive actions to create more jobs for Canadians now and in the future. That is how we will maintain and improve our standard of living and increase government revenues, not by borrowing more money to cut taxes.

The Minister of Finance and the Prime Minister are to be applauded for their leadership in involving the Liberal caucus in drafting the budget. They involved members of the Liberal caucus through caucus committees. The budget is a result of our collective efforts. Along with my colleague from Kitchener I helped establish the eight-member post-secondary caucus, of which we are both members. We see the fruits of our three years of work in the budget.

Canada's bright future depends on our continuing ability to produce the goods and services the world needs. To produce those goods and services we need to invest in ourselves.

My constituency is blessed with two universities and a community college campus with a combined student enrolment of over 40,000. Wilfrid Laurier University, the University of Waterloo and Conestoga College are integral parts of the identity of my riding. I applaud the wisdom of the finance minister in arranging to help students pay for their education. There are three ways in which the budget will benefit those paying tuition for higher education.

The increased tax assistance makes it possible to dedicate more of a person's income to education costs, thus holding down the debts incurred in meeting those costs.

In the past it has been common for students to graduate and find themselves faced with having to pay off their student loans before they could get established in a job. The maximum deferral period will be increased to three years to help them get on their feet.

James Downey, president of the University of Waterloo, and Lorna Marsden, president of Wilfrid Laurier University, have expressed to me their enthusiastic approval and support of the higher education provisions of the budget.

Canadian universities and their presidents have all reacted positively to the budget which identifies investment in university research, university infrastructure and students as key priorities.

The idea for improved student financing was started at the University of Waterloo last spring by two economic students, Chris Lowe and Paul Skipper. Through Kelly Foley, vice-president of education of the Federation of Students, they worked with the Canadian Alliance of Student Associations to lobby the government through the post-secondary education caucus.

As a former president of the Federation of Students, a member of the senate at the University of Waterloo and a former board of governors member of Wilfrid Laurier University, I thank Kelly Foley and all members of the post-secondary education community for their help. We did this together. You made a difference. Your lobby worked and I and my colleague from Kitchener look forward to working together with you to ensure the excellence of our post-secondary educational institutions in Canada. This budget is a big step in that process.

It is because of my deep belief in post-secondary education that I support financially all the post-secondary educational institutions in my community and I urge all post-secondary graduates to do the same. The education community supports us in this because it knows the value of education. Like the students and their parents, it does not want to see our young people robbed of their opportunities for higher education because of fiscal barriers. All the people of Canada do not want to see the nation deprived of the talents of the next generation.

I am very happy that the budget is investing in future jobs in Canada for Canadians by setting up the foundation for innovation. This is a very important strategic move to keep Canada in the technological forefront in several keys areas, science, engineering, health and the environment. The dividends of this investment will be huge. By putting funding into education and research and development we are building the bridge to the next millennium. We need jobs and this is where the jobs of the future are.

The key to a person's success in the world is education. Statistics show that the more education you have, the less likely you are to be unemployed. So there is no question that the more of us who obtain a higher education, the better off we will be as individuals and as Canadians.

Where will these graduates work? As I said, here in Canada. I can give a good example on how it works for my riding. There are probably similar situations right across Canada. The University of Waterloo, Wilfred Laurier University and Conestoga College have spun off more than 200 companies because of their programs in engineering and computers, environmental technology and business. These companies are located in Canada's technology triangle and in other Canadian centres. They are doing well because they are dealing in the goods and services that are needed.

Because of the constant output of new graduates from universities and because of university research our local high tech sector is going to boom in the immediate future especially in the area of information technology.

Right now Canada has a shortage of 20,000 positions in the software sector that are not being filled. This is clearly hurting our economy. It is hurting us economically as a nation. Clearly there are many places these young people can be trained. Resources spent in our post-secondary institutions will ensure those jobs are filled.

With the notable exception I just stated, we have through our education system a critical mass of skilled labour together with the capability of ongoing research in partnership with the educational sector. Thanks to the new budget the federal government is fostering the growth of both industry and education to the benefit of all Canada. With a new high tech industrial park in place, it is now in the initial stages. There will be less of a tendency for graduates and companies to move south. The facilities for development will be here in the Waterloo region, in Canada's technology triangle.

In the new economy it is an imperative that industry, educational institutions and governments at all levels work together in the fashion of Team Canada. We are doing that in my riding.

I mentioned that we have a high tech sector in the Waterloo area. Students are graduating from the computer engineering program at the University of Waterloo. The biggest recruiter of our students is Microsoft in the United States. Clearly that does not make any sense.

We are spending tax dollars to educate our young people. We get them to the point where they can compete in the world. In too many cases the brain drain goes to the United States.

[An hon. member]

Why is that happening?

[Andrew Telegdi, Liberal, Waterloo, ON]

My Reform colleague opposite asked why this is happening.

In this new economy we need a Team Canada approach. When I say a Team Canada approach, we need educational institutions, industry and governments at all levels to work together to solve these problems. Not one sector alone has the solutions for these problems. In my riding too many graduates are going south of the border.

We are defining the problems, but opportunities are lacking for software industries to expand in our country.

Let me tell the House about a problem. This has to do with government policy overall and how governments involve themselves in the Team Canada approach.

A number of years ago one of the companies in my riding was going public. The technology it produces is Internet communications technology. Its initial development was funded by government research dollars. Its technical expertise was found at the University of Waterloo.

About a year ago, when that company went public, it found it easier to list on the NASDAQ exchange in the United States than to list in Canada. In the United States companies can get listed with a big exchange and cover all their fiscal needs.

Furthermore, not only do we have securities commissions in each province, we have the ridiculous situation that companies have to file with all of them if they want to trade across Canada.

When this company went public and issued warrants, it found it much more difficult to sell in Canada than to sell its warrants in the United States.

Once this company went public it needed to expand very quickly. The American market provided the financing. Two hundred and fifteen of the new employees hired are now in the United States. It still has 100 employees in Waterloo.

Infrastructure funding is of critical importance. We do not have in the Waterloo area is a high tech park which would allow these companies to develop so we can be one of the best software centres in Canada. Not only would we produce graduates from the University of Waterloo, we would keep them in Canada.

This is an exploding sector in terms of opportunity. The projections are that over the next couple of decades, in the Waterloo region, we could add 25,000 new jobs to this sector. That is an enormous payoff for the dollars we have spent on our educational system.

In the new economy it is imperative that industry, educational institutions and governments at all levels work together in the fashion of Team Canada. We are doing that in my riding.

The Prime Minister stated in February 1997: "I know for someone without a job statistics may not be much comfort. However, I want all Canadians to understand what we are doing to combat unemployment and how I believe our actions will create a stronger economy and more jobs for all Canadians".

It is important to bear in mind that restoring Canada's fiscal sovereignty is not an end in itself but a means to an end, a job for every Canadian who wants one. Our economy is poised for expansion because interest rates are low, our operating deficit is under control and we are in a position to cope with the national debt.

It is all due to sound management on the part of this government and the support of Canadians from coast to coast.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, it is customary in this House to point out that a member expresses the concerns and interests of his constituents.

In this regard, I think the hon. member for Waterloo deserves praise for expressing the concerns of his region. There is certainly nothing wrong with this. The member also talked about financial sovereignty. Again, we are rarely opposed to anyone seeking greater autonomy.

The member talked about the financial sovereignty of the people in his region, compared to the United States. In stating his concerns, he mentioned that a number of people trained and educated in his province are moving to the United States. This is certainly a serious concern for him and others, since he would like these people to stay. Indeed, when the government puts money into education, it wants to see the benefits of that investment remain in this country. Therefore, the hon. member must be congratulated for his concern.

This is the positive note, the flower-who knows, it might bring spring along. However, when the member mentioned that the government was about to invest $800 million in the Canada Foundation for Innovation, he should have pointed out that this amount will not all be invested this year. In fact, it is believed that only $150 million will be invested in the near future.

The member then said that the Minister of Finance promised to invest in higher or post-secondary education. It is true that $137 million has been set aside for education and $7 million for literacy. While this may seems interesting at first because it looks like more money, we must remember that this same government and its Minister of Finance have cut $800 million more in transfer payments to the provinces for health and education. The hon. member says it is great that a foundation will be created with a $800 million budget. It looks like it adds up, but in fact only $150 million will be invested in the foundation.

In itself, saying $800 million will be invested while the actual amount is $150 million, does not matter that much. What does matter, however, is the fact that this is basically a provincial jurisdiction. The member comes from Ontario, so he must surely be aware of what is going on in Ontario-reaction to the cuts made by the Harris government, a Conservative government-and must know why these cuts are being made. They are the result of the federal government's cuts across the board. Since its election, this government has cut no less than $4.5 billion in those transfer payments referred to by the hon. member.

On the eve of an election, having made all these cuts, the federal government wants to be seen as generous and be able to say it has done something for post-secondary education. It would have been much better for the government not to make such drastic cuts in transfer payments for education and health in the first place, but rather to have let the provinces look after it; then, the provinces would not have been left holding the bag and been forced, as they are now, to make their own cuts. The same thing is happening in Quebec.

A matter of current interest in Quebec concerns the renegotiation of collectives agreements by the government and the major union federations representing health and education workers. It is tough, even fierce. Why? Because the federal government has cut transfer payments back and Quebec has been hit especially hard by the cuts.

I find it incredible that, after having cut transfer payments, the government now forces the provinces to clean up its mess, while it hands out crumbs to hide all the cuts and cover everything up. That is unacceptable. I would like to hear his comments on this.

[Andrew Telegdi, Liberal, Waterloo, ON]

Mr. Speaker, the member posed a lot of questions that I will try to answer.

When I talk about my region vis-à-vis the United States I am talking about my country. The Waterloo region is a part of Canada and part of the province of Ontario. Let me also say that Quebec is a part of Canada. It is a part of my country.

When we get to be 50 years of age we begin to reflect on the past. It was 40 years ago that my family crossed the Austrian frontier.

To get there we had to go through minefields. We were fleeing the repression of the Hungarian revolution. I was 10 years old at the time. I remember my parents, my older brother and my sister having to leave. We had all sorts of fears and concerns about what the future would hold but we believed the future would be better.

Canada is the best country in the world. I can say that from all my years of experience. I will do everything in my power to make sure it stays together. Part of the way that can be done is by establishing the financial sovereignty of the country.

When the government took office it was on the verge of hitting the debt wall. It was on the verge of economic doom. We have to recall those times and the 1993 election. We have to recall how some folk thought we should follow the experience of New Zealand. The government chose not to do that.

I reiterate that we as a government knew the finances of the country had to be stabilized. We cut transfer payments. Let me speak to that for a minute because transfer payment cuts have had personal impacts on my life and on people around me.

My wife used to work in the health care sector. A number of years ago because of cuts to the hospital where she was working she had to go back to university and get some additional training. The fact she was a nurse helps her in her new jobs but essentially she is in a new field.

We cut transfer payments. In the case of the province of Ontario we cut to the tune of $1.2 billion. We in Ontario know that a 30 per cent tax cut at the provincial level to give a tax break to the people of Ontario devastated the health care sector and many community organizations that have worked with victims.

I used to be employed by an organization called Youth in Conflict with the Law involved in community corrections. It is slated to end at the end of the month. Twelve programs across the province of Ontario which were a cost effective and humane way to provide protection to communities will be lost. Community resource centres were closed down by the Harris government because they were driven by a right wing ideology that tax cuts are the way to restore the economy.

That was tried by Ronald Reagan. He took the United States of America from being the biggest lending nation in the world to the biggest indebted nation in eight years. He lost more sovereignty for the United States of America than any other previous president.

That is exactly what the previous Conservative government wanted to do. That is exactly what the leader of the Ontario Conservative government wants to do. That is exactly what the leader of the Reform Party and the Reform Party want to do. They want to slash and burn and follow the American model.

The people of Ontario have had the experience of the Harris government. They have seen that right wing approach and they have seen this government's balanced approach. They will respond positively in the next election by supporting our government, not because we are perfect, not because we have a God given right to be here, but because the choices we have made are in the best interest of the country and of Canadians.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, the member who spoke just before me on the Liberal side of the House mentioned in his speech on the budget that graduates from his area were going south and jobs were going south. That disturbed him quite a lot. He speculated on the reasons that is happening. It is very obvious why it is happening. There are more jobs in the United States and the taxes are lower. Those things are linked together. Where the taxes are lower, the jobs appear.

In my riding of North Vancouver, which is close to the border with the United States, a whole slew of businesses, thousands of small businesses, have moved across the border into the Bellingham area to operate in the United States where there is a lower tax regime.

Canadian businesses have produced jobs in the United States for U.S. citizens. It happens because of lower taxes. Even when we take into account paying for medical care it is still cheaper to work in Washington State than it is in the province of B.C. It is very clear that is the main reason graduates are going south.

The member also mentioned interest rates, which is something a lot of other Liberals mentioned today. He claimed credit for low interest rates. They must think that the people of Canada have no long term memory at all. Prior to the last election the Liberal Party opposed the policies of the Bank of Canada and the federal reserve in the United States which have led to the low interest rate situation.

Because of the need to beat inflation, which was destroying our economy, the federal reserve and the Bank of Canada took the position they did. The Liberals spoke out strongly against the Bank of Canada. They did not approve the policy at all.

It is just amazing. They did not want NAFTA, which has now produced tremendous export markets for Canada. They did not want the interest rates scenario of the Bank of Canada. Suddenly the Liberals want to take credit for all the things that have been beneficial. It is absolutely amazing.

It is Liberal, Tory, same old story. They really have always been in bed together. They still are. Nothing would suit them better than to have the Tories back in the House because everything would tick

along quite nicely. They would pass the same legislation together. They would have a great time.

During question period today one of our members rose to question the finance minister. He could not even rise to answer questions. We must be getting to them if the finance minister is perhaps incapable of rising and answering questions about the figures and about why government departments have not met the targets set in the budget. Departmental spending has been exceeded by the various departments.

I realize I cannot use props but I will describe an example I have with me today. It is quite a large package of papers about 1.5 times the size of a package of copy paper used for copying machines. About 650 pages of material arrived on my desk.

[Werner Schmidt, Reform, Okanagan Centre, BC]

I thought that was your speech.

[Ted White, Reform, North Vancouver, BC]

Luckily it is not. On the top there is a computer disk which contains the material in electronic form.

What are these 650 pages of material about? They are about the western economic diversification fund. It is a big propaganda package that is supposed to convince me that the Liberal propaganda machine is something worthwhile having.

There are summaries of press releases from Alberta, Saskatchewan and Manitoba. Half of it is being sent to western MPs in French as well. About the only piece of frugal work in the whole package is the letter from the deputy minister which is actually double sided instead of using two sheets. Everything else is a complete and utter waste of taxpayers' money. There are brochures in French going to MPs in the western ridings.

As soon as I am done my speech today this package is going straight back to the minister. What a waste of money. It is a good example of why the government is over budget on departmental spending.

I can give another example. Yesterday there was a meeting of the heritage committee. One of the matters to be discussed in camera was a new trip around the country, a junket for the people on the heritage committee. What were they to do on this junket? They were to study Canadian culture and try to define it. They were to go to Vancouver, Calgary and Montreal. They were to define Canadian culture. That is like trying to define love or why a cat is a cat. What a ridiculous, stupid exercise.

How much was it to cost? If that had been discussed and passed yesterday, $214,000 of taxpayers' money would have gone down the tubes. If we really need to define Canadian culture, ask people to write us some letters and tell us. We do not need to spend $214,000. No wonder the budget estimates are over budget.

Another example is a letter I received from a constituent. He mentions that according to the attached news report last year Bombardier made a profit of $313 million. In its current fiscal year the Liberal government has made Bombardier a grant of $97 million. That figure is from page 878 of Hansard . This constituent reads Hansard religiously so he has all his ducks in a row.

Adding the $313 million profit and the $97 million grant gives us a $410 million figure. This year ending January 31 Bombardier reported a profit of $406.2 million. Is that not a coincidence? Most of the additional profit came in the form of a grant. Should it be taxable or non-taxable? It is another propaganda give away from the Minister of Industry and a good example of why departmental spending is over budget.

I have another example. The Liberals have been saying how wonderful their budget is and that everybody is falling over themselves with praise for what they have done, conveniently forgetting as I mentioned earlier in the day the $600 billion debt which at the moment costs us about $50 billion a year in interest. If the interest rate went up 1 per cent it would add $6 billion more to that figure; 2 per cent would add $12 billion; and 3 per cent would $18 billion. If we had a 5 per cent jump the whole thing would be totally out of control. We would have the crisis the member before me mentioned we were close to in 1993.

We are not out of the woods yet. If this government had adopted the zero in three plan which Reform promoted in the last election we would be running surpluses today. We would be arguing in this House what to do with the surplus money, like Alberta is doing today, instead of discussing a $19 billion deficit.

Only Liberals would think that a $19 billion deficit is something to be celebrated. When we have a $19 billion surplus we can have a party. However, a $19 billion deficit, give me a break.

Another of my constituents wrote me a letter: "Last October, I was lucky enough to receive a $300 per month raise in pay. My wife and I considered ourselves fortunate and looked forward to being able to remodel the kitchen. When my end of January pay arrived, there did not seem to be any extra money in there".

We are not surprised at that because, when my constituent analyzed his paycheque, he found that from the original $300 raise, $162.60 went to income tax and $129.96 went to increased CPP and UI deductions. He ended up with $7.44.

A Liberal answer to that would be borrow the money because interest rates are low. We have these wonderful interest rates. That is typical Liberal speak, Liberal think. There is a benefit in borrowing money.

Does that sound familiar? They started it in the 1970s. Look at the hole they dug for us, the debt hole they dug for us by taking the attitude that borrowing money was good, that there would be a benefit by borrowing money. Absolute rubbish.

If the people of Canada had a surplus running today through their government we could be giving them tax breaks so that they did not have to borrow money to get a break. It would be in their pay packet every week, a meaningful tax reduction.

In July 1996 the New Zealand government gave every average worker $200 a week more in their pockets. It was a tax break for everyone. They do not have to borrow money to get the benefit.

On March 19, one of the talk show hosts in Vancouver, Mr. Bill Good on CKNW, did a poll about the reduction of taxes. He asked people whether they thought reducing taxes would be a good idea. It coincided with the release of the Tory election platform. He took calls for an hour. There was unanimous support. Every single call to that program was in support of Reform's tax cut proposals and the comments that were made, to summarize generally, were do not trust the PCs because it is just more of the same Liberal-Tory, same old story.

[Andrew Telegdi, Liberal, Waterloo, ON]

Mr. Speaker, since the Reform member referred to some of my comments, I should respond.

One of the reasons we have for students going south is that the opportunity for expansion was not there to the extent that it should have been in the Waterloo region. That is what you get when you invest in infrastructure and that is exactly what we are doing now.

In the past in my community there were so many good things happening that Canadians did not need the co-ordination between government, industry and the educational sector to the extent that it is needed now. That is important to understand.

I am a little distressed when the member keeps referring to Bombardier because all sorts of money went out under the Canada technology partnership fund. That is a perfect example of a critical investment in research and development in this country which in terms of our new policies is not a giveaway. It is money that we will get back with interest.

The member from the Reform Party talks about having gone to zero deficit in three years. If that plan ever had a chance of happening, it would be worse than what Mike Harris is doing. It would devastate this country. Since Mike Harris began his plan of tax cuts there has been a net loss in jobs in the province of Ontario. It has actually been a drag on overall Canadian job creation.

It is necessary for Reform to understand that by destroying an economy you do not get more tax revenues. You get less. When you destroy an economy you have less tax revenue. I know Reform Party members do not like good news but I recommend that they read the report in the business section of the Globe and Mail because there is good news there every day. The Canadian prime rate, 4.75 per cent; U.S. prime rate, 8.25 per cent; on $100,000 borrowed in Canada, the consumers, the small businesses, save $3,500.

I can also refer them to another happy story. The headline is "Economy on a Tear. Consumer spending, exports, business investments produce outstandingly strong numbers. Canada's private sector appears to be firing in all cylinders".

The government's policy was set up to create the climate for the private sector to start creating jobs, and it is happening. In spite of all the cuts governments have made across the country, which have cost overall about 100,000 jobs, because they have had the right climate, private businesses have created 800,000 jobs. So over 700,000 jobs have been created since this government came to office. It all rested on the integrity of our fiscal policies, on the integrity of the finance minister whereby we met our financial targets time after time. It is unparalleled in budget forecasting. That is why the economy is doing that well.

So I suggest to Reform members-

[The Deputy Speaker]

The hon. member for North Vancouver has a minute to reply.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, he asked so many questions. It is ridiculous for the member to say that a company like Bombardier which makes $406 million profit needs any money. It does not need a single cent and it is an outrage that this member has been brainwashed, I would have to say, by the spin doctors upstairs who have convinced him that company that makes $406 million should be given $97 million of taxpayer money.

He also made the comment that if we give tax cuts there will be less taxes coming in. Of course there will. The member does not get it yet. Canadians are asking for smaller government. Smaller government does not need as much tax. That is the whole idea and that is why people are so supportive of the Harris government, of the Klein government. They are doing what people want. They are making government smaller and any opportunities that are coming in Ontario are a direct result of the Harris government actions. They are not a result of this government's actions.

When he talks about students going south because there are no expansion opportunities in Waterloo, that again is related to taxes. Companies are moving out of his area. They are taking jobs away

from that area because the taxes are too high. The member should go back to his riding, listen to his constituents and look at the facts. Taxes in Canada are too high. It is a job killer.

[Val Meredith, Reform, Surrey—White Rock—South Langley, BC]

Mr. Speaker, I am delighted to have this opportunity to speak in the budget debate today. I am delighted to have the opportunity to shed some light on one of the most deceptive documents I have ever seen. Watching the Minister of Finance perform in this house is like watching one of the greatest illusionists since Merlin the magician.

There are claims of no tax increases when the finance minister has introduced 35 tax increases, taking an additional $25 billion out of the hands of Canadians. Imagine what would have happened if that $25 billion had been left in the hands of consumers. Imagine all the spending Canadians would have done with that $25 billion. Imagine all the jobs that would have been created with that $25 billion. For some reason this Liberal government does not want Canadians to spend their own money. Instead the Liberals want to spend Canadians' money.

A movie about a sports agent, "Jerry Maguire", contains the line: "Show me the money. Show me the money". The finance minister and the Liberal government have adopted a slightly different version of the line. The government's version is "Give me your money. Give me your money".

Another example of the minister's smoke and mirrors is how he arrived at the $19 billion deficit.

Let us take a look at the Department of Citizenship and Immigration. In the main estimates which were tabled after the budget the department's spending decreased by $40 million. However, less than two weeks later, the department tabled its supplementary estimates. Instead of a $40 million decrease there was an $88 million increase. It is no wonder the finance minister can claim fiscal responsibility when government departments show their spending has been cut by 7 per cent the week of the budget and then increased by 15 per cent two weeks later.

The finance minister's greatest sleight of hand involves the Canada pension plan. I will go through this really slowly so government members, if they are around to listen, will be able to follow.

With the recently announced increase in CPP premiums, in six years Canadians will see 9.9 per cent of their salary going into the plan. For someone paying the maximum amount, that will mean the individual will pay $1,635, with the employer paying a matching amount.

Let us imagine that we have someone under the age of 30 paying the maximum amount for the next 35 years. That person and their employer will pay about $110,000 in premiums. I have heard that the average length of collecting CPP is 19 years. That means, in today's dollars, that individual would collect $165,000.

Is $165,000 a good return on an investment of $110,000 over 35 years? I would suggest that 99 per cent of Canadians would laugh at the idea that it is a good investment.

It gets worse. Under the provisions of the seniors' benefit which the Liberal government introduced last year, the first $12,500 of income over and above the seniors' benefit will be taxed at the rate of 50 per cent. That is right, 50 per cent. This poor soul who paid $110,000 into the Canada pension plan will not get that cheque for $724 a month; rather they will only receive $362 a month.

If this poor soul lives to collect his pension of $362 a month for 19 years, he will collect a grand total of $82,500. That is an $82,500 return on an investment of $110,000. I do not know what kind of mathematics it takes to show that is not a good investment. Only a member of the Liberal government would think it is a good deal.

Actually under this government's pension policies, it is a good plan for Liberal and Tory MPs. The Liberals have ensured that they will not have to worry about little things like the CPP. No, they do not have to worry about the Canada pension plan when they have their own gold plated pension.

While the average Canadian in the future will be struggling on their skimpy seniors' benefit and half of their CPP, these Liberal MPs will be basking in the glory of the richest pension plan in the country, so rich that it is illegal for any other Canadian to have a similar plan.

The finance minister has made sure that he and his fellow Liberals will enjoy most of their obscene pension.

One may ask, why is that? Under the provisions of the seniors benefit, that 50 per cent tax on pension income only covers the first $12,500. The next $12,500 is taxed at the rate of zero. That is right, there is no income tax on the next $12,500. That means it will completely cover the benefit that someone will receive from the Canada pension plan, but it will only touch a small portion of additional pension income, like the members of Parliament pension plan.

This means that the Deputy Prime Minister will be able to collect her full pension of over $50,000 a year when she reaches the age of 55, a full 10 years earlier than the average Canadian. When she turns 65 her CPP payments will be taxed at 50 per cent. However, that will be just a pittance to her because $12,500 of her gold plated pension plan will be tax free and the rest is only going to be taxed at a rate of about 20 per cent.

So while the average Canadian will have his or her CPP taxed at 50 per cent, these Liberal MPs will be laughing while paying less than 20 per cent tax on that outrageous pension. No wonder the Liberals think that this is a really great budget. For them it is.

No wonder the finance minister has refused to answer the Reform Party's tough questions about the budget. Instead, he uses a typical Liberal tactic of attacking Reform, of diverting people's attention from the real issue, his sham of a budget. Instead of paying his people to come up with a decent budget, he has them all working scouring everything the Reform Party has ever said about finances and then figuring a way to distort them.

Here is something that is not in Reform Party policy that I think I could get my colleagues to approve. While we normally are not in favour of tax increases, we would be prepared to support a very heavy tax increase on Canadian shipping magnates who register their ships in Panama so they can avoid paying Canadian taxes. We would be more than happy to tax these Canadians who export jobs out of Canada and would rather pay taxes in Panama than in Canada.

Perhaps it is time for the finance minister to lead by example. Perhaps it is time for the finance minister and his fellow Liberals to put their hands in their own pockets instead of the pockets of Canadians.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, I thought it was worth mentioning again a part of the speech that the hon. member brought to our attention. It is something that is so easy to forget: that members of the Reform Party made a commitment that they would not take the gold plated pension plan that members of the government side took for themselves.

I would like to ask the member if she could cover a little bit of that ground once again to remind the Canadian public of that commitment, we are not in this place for our long term pensions. We are here because we truly believe that what Reform stands for can make this a better country.

[Val Meredith, Reform, Surrey—White Rock—South Langley, BC]

Mr. Speaker, I thank my colleague for the opportunity to share with Canadians that he is right, 51 out of 52 Reformers did opt out of the pension plan for members of Parliament. It was not easy as a single parent without any pension to walk away from it. However, I felt was not right and because it was not in the same vein as pension plans for the average Canadian in the private sector, I could not in good conscience remain in that plan. Yes, at great sacrifice to myself and my colleagues, we opted out when the opportunity was there. We will not be ripping off Canadians down the road as far as the pension is concerned.

It shows the leadership and the vision we have for the country. I hope that when the voters go to the poll in the very near future they will consider that as an indication of what kind of government we will provide after the next election.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, I am very pleased to take part in the budget debate that is drawing to a close. We have to wonder about what we should have found in this budget and what was not there.

We have learned to expect some quite original, but not always positive, moves by the Minister of Finance to cut expenditures, reduce transfer payments to the provinces, use the UI fund surplus as public revenues to hide the deficit. This year, however, he could have come up with more original initiatives to deal with our number one problem, the employment situation.

The budget contains no original employment measure on jobs. In my speech, I will point out some initiatives that should have been brought forward, but that were not, which goes to show that the government does not really want to deal with the unemployment problem we are facing in Quebec and throughout Canada.

First, I would like to give you an example of how public expenditures could have been better controlled. It would have been interesting to cut the Senate's budget. All the Senate has done this last year is to reject the Pearson Airport bill.

Because this measure was rejected, the federal government had to go to court and will probably have to pay up to $600 million of taxpayers' money in compensation because of the Pearson airport mess. Perhaps the Senate deserves that we cut its expenses and that we look more closely at what it is doing with our money.

The main issue is that the government has not set an employment target. It has not established specific objectives, as it did for deficit reduction. It has not made a commitment to reduce unemployment by a certain percentage over the next year or over the next two years.

That is what the Quebec government has done. It said that it would meet its job creation target as soon as possible and eliminate the gap between Quebec and the average for Canada. The federal government has not made such a commitment. The Prime Minister is constantly telling us that we must create the proper conditions for job creation, which means keeping an eye on interest rates and other such things. That is good for a certain number of jobs. However, in today's society, I think there are two realities with regard to employment.

There are those people concerned with the new economy, those who just got out of university or college and for whom we must implement new technologies, open markets, increase exports, etc. It is true that we must act on that front, but there is also a segment

of the population that has been abandoned, that is not being taken care of in the present budget as I think it should have been.

There are the solutions I heard about in a workshop held during the Bloc Quebecois convention on the issue of employment. A number of solutions were suggested. One is to turn over management of the UI fund, now known as the EI fund, to those paying into it, that is employers, employees and the unemployed. Chambers of Commerce, the Bloc Quebecois and even the Conservative Party of Canada called very clearly for a significant reduction in UI premiums. This would free up money that could be put back into the economy, thus helping to create jobs.

The federal government made a very timid move in this direction, but without any real results. The 5 cent reduction decided on by the federal government will not have a real effect on employment. It could have been a much larger reduction, something like 40 cents for every $100 in earnings, so as to put a significant amount back into the economy and actually produce jobs.

The most productive money is not the money we invest in the system of government, in the bureaucracies. It would perhaps be more helpful in terms of job creation to invest money directly in the private sector, in the economy.

Another point is that this UI fund should be turned over to those who ultimately fund it. Until then, the emphasis could be on short-term projects. I know there is one in the Lower St. Lawrence to enable forestry workers to have more weeks of work from year to year and less need of employment insurance.

This project was put to the minister long ago. We are waiting to hear from him. Perhaps we will have good news soon. This claim has been pending a long time. It was supported by the Bloc Quebecois. It was regularly part of our arguments against employment insurance. The surplus must serve the community more. It must target a specific clientele, like seasonal workers, people who do not necessarily have specialized training, so as to ensure that they are properly trained to respond to market conditions.

This is another possible use that must be advocated, developed in a proactive approach. The surplus money must be used to provide in-house training and thus prevent people who lost their job from ending up on EI, and provide them instead with the opportunity to upgrade their skills while they are still employed, in order to fill the new positions created by the new economy.

There is a third solution I would have liked to see in the budget, namely stopping the cuts to transfer payments and, if possible, increasing them. The finance minister's documents brush a very revealing employment picture. They show that since 1976 employment has increased in the private sector, but decreased in the public sector. At the end of the day, people who lost their job in the public sector may not have found another job in the private sector, and they may not have found a job with the same conditions. This situation has created insecurity.

This year, if, instead of hiding the lower deficit from us, in order to be able to throw out some election goodies, the federal government had instead decided to inject the money back into transfer payments, the provinces would not be experiencing the difficulties they are at present with their health and education budgets, and would have been able to maintain employment on a more meaningful and more significant basis, while maintaining services at a still more worth while level.

These are, therefore, three approaches to the employment question that are not included in the budget. The reason they are not there is that the government has made no commitment to really tackle this problem of unemployment. This is rather strange since the government was elected on a platform promising "jobs, jobs, jobs". Yet, after three years, when the Liberal candidates face their constituents, they will be asked: "Yes, it is true, you fought the deficit, there were cuts in transfer payments, there were tremendous pressures on the unemployment insurance fund, but what did you do to provide us with jobs? Did you provide a climate favourable to job creation? Yes, interest rates are low, but that did not give me a job".

The lowering of interest rates is very often good for the introduction of new technologies, but if we do not want that the victim be the person who loses his or her job, we have to find ways to give that person another job, we have to be proactive. This is an element you will not find in the budget.

The workshop participants, Bloc members, people who take this issue at heart, who are aware of the what is really going on around them, also suggested to me other solutions that they thought should be in the budget to help the employment issue.

First, the dramatic reduction of paperwork required from small and medium size businesses. Today, a small business owner who is just starting or is already an owner must go through endless red tape when he wants to create an extra job. He must get employer's numbers, approach health and safety organizations, the human resources development department, as well as many other organizations. This has a demoralizing effect on the business owner, who will tend to ask his employees to work extra hours or try to find other similar solutions, but all this does not allow for a better sharing of jobs.

Therefore, paperwork reduction is a specific point that could have been put forward, but this budget does not consider this as crucial.

The establishment of a progressive retirement plan could have been another interesting point.

It is crucial to follow up on small and medium size businesses during the first three years, the critical years for them. They are now offered interesting start-up programs, but they often have a high rate of failure because there is no adequate follow-up. Is there anything specific to help these businesses? I have not seen anything about that in the budget and I find this deplorable. This would be important, because it is small and medium size businesses that create more than 80 per cent of new jobs in Canada.

Another thing would be to see how we could make retirement plans and mutual funds beneficial to those who invest in Quebec or Canadian businesses. In this regard, as in others, the budget lacks initiative and innovation.

The government could also have found ways to make overtime less appealing for employers and workers, so as to lead them to provide work for more people. A fundamental change is taking place in our society in this area.

There are also other avenues to explore concerning employment that were left out of the budget. We need a well focused strategy for people who do not necessarily have very extensive training, such as literacy programs. Incidentally, this is literacy week. Our society would greatly benefit from investing in that sector, and ensuring that people with reading disabilities have access to all the tools they need to learn and to overcome their difficulties. Thus, they would increase their chances of finding a new job.

Today, most jobs require better reading and mental skills. We must allow those who did not get the chance to develop these skills to do so. A lot of money could have been invested in literacy, but the budget makes no provision in this regard.

The budget also seeks to stabilize the monetary policy. More could have been done in this area. The government realized that it contributed to the recession by being too restrictive in the past. There should be an inflation target range. There must also be some security inthis regard. We do not find these conditions in this budget, and I deplore it.

The minister lacked originality, and therefore the budget is not very interesting. It is rather dull. One of the financial experts invited to comment on the budget before a chamber of commerce said: "I must tell you that I had prepared myself to give you a lot of information, but this is a non-budget". Aside from a few crumbs, there are not really any interesting new items in this budget.

There is a matter that is particularly close to my heart. More specifically, it is the issue of rural development. Why do we not find in this budget measures to help build senior citizens residences in small municipalities? Our rural communities are in dire need of that. The population of rural communities is aging. There is a need for 10 to 15 room residences. Seniors could stay in the community where they have lived all their life. It would be easier for their children to visit. The regional economy would get a boost while seniors would have a better quality of life. But there is nothing in the budget about that.

People at CMHC do what they can, but their mandate is to ensure viability in strictly economical terms. The government should have undertaken to build senior citizens homes in towns and villages and contribute that way to keep these communities vibrant. But it shirked these responsibilities. This kind of development would have been quite interesting.

American pensions is another humanitarian issue I have been talking about quite often, and I am disappointed the government did not suggest any solution to that. For more that a year now, the minister has known that the new fiscal convention between Canada and the United States would penalize low income earners. For example, a person who gets an $8,000 pension from the United States had to declare half of this anount in his income thax return at the end of the year. That person only had to declare $4,000 and could get back a portion of the tax he paid because his income was so low. The tax refund gave him a break.

The new fiscal convention signed by the government-and the fincnace minister has already admitted it is unfair-will result in that tax being deducted at source. So the person who gets $8,000 from the American government will now see his cheque reduced by 25 per cent at source. There is no way he can get this money back. Therefore, instead of receiving $8,000, this person only gets $6,000, $2,000 being paid directly to the American Treasury. There is no way for the person to recover that money.

We are not talking here about high income people. In my own riding, some people between 55 and 60 have these pension benefits as their only income. That is all they have to pay their rent and their food. They have been reduced to utter poverty.

The finance minister has acknowledged that problem months ago. I know Canada and the U.S. have a tax convention, and it is very hard to change that. It can take months or years, but, in the meantime, we could have come up with temporary solutions.

When calculating the income supplement, for example, we could allow such a pensioner to report only the real amount he or she is getting from the U.S. But no, the government refused to be flexible, refused to change the legislation in the budget so that only

the net amount would be considered. So, we still have to use the gross amount.

This is sheer nonsense. In theory, an individual who receives $8,000 in revenue from the Americans must report $8,000 as revenue for the calculation of his supplement, even if he is only getting $6,000. This is unacceptable, especially since, to correct this injustice, we only needed a small change, not a major one, for which the government would have got the consent of the opposition, but it was not meant to be.

Other alternatives could have been considered to ensure that the people who receive a small pension are not penalized. Why could we not find a way to reimburse them until the tax treaty with the United States can be amended? Maybe that is why people are more frustrated with the current situation. The government is not acting fast enough to remedy human tragedies like these.

There always has to be political pressure or media coverage, when logic alone should be enough to bring the government to act. But it did not in this case. I think the government should have acted faster and worked harder to remedy the situation.

Thus, this budget does not aim at reducing unemployment. It does not have a clear and definite goal. Neither the finance minister nor the Prime Minister stood to say: "From now on, our main target will be the unemployment. From now on, we will have targeted strategies to be able to solve our problems. In our capacity as an employer, we, the federal government will introduce measures that will lead to a reduction in overtime and an increase in time sharing. For private employers, not only will we create favourable conditions such as lower interest rates, but we will also introduce measures that will help our young people find a job and build a career. We will also see to it that businesses that have been in existence for a year or two can get adequate management advice to help them through this critical phase".

We do not find any of these things in the budget, and I think the Liberal government will be judged on the way it has not fulfilled its main mandate. There are still 1.5 million unemployed in Canada. The Liberals condemned this situation in 1993 but nothing has changed.

Is it that the people opposite are not doing their job effectively? I do not think so. I think there is a problem with the system as well, because it is highly complex: there are two labour codes and there are two governments involved in various matters to do with employment. It is very complex. I think all these should be returned to a single level of government to permit effective action.

In the meantime, the federal government has skirted the objective that Quebecers and Canadians wanted it to target: to reduce unemployment. There is no such objective, and for all these reasons, I think we will have to vote against the budget to make

sure people understand clearly who decided what and how the federal government failed to meet its responsibilities in the matter of unemployment.

[The Deputy Speaker]

Are there any questions or comments?

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, I rise on a point of order. I would seek the unanimous consent of the House to move the following motion:

That no vote be taken on the budget so long as the matter of the unfairness created by American pensions has not been resolved by the federal government, at least temporarily, until a new convention is signed.

[The Deputy Speaker]

Is there unanimous consent of the House for the hon. member to move the motion?

[Some hon. members]

No.