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House of Commons Hansard #153 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was income.

Topics

Presence In The GalleryOral Question Period

3 p.m.

Some hon. members

Hear, hear.

Presence In The GalleryOral Question Period

3 p.m.

The Speaker

I would also like to draw to your attention the presence in the gallery of the Hon. Liu Zhongde, Minister of Culture of the People's Republic of China.

Presence In The GalleryOral Question Period

3 p.m.

Some hon. members

Hear, hear.

Presence In The GalleryOral Question Period

3 p.m.

The Speaker

I would also like to draw your attention to the presence in the gallery of Her Excellency Néziha Zarrouk, the minister responsible to the Prime Minister of Tunisia for family and women's affairs.

Business Of The HouseOral Question Period

3 p.m.

Bloc

Michel Bellehumeur Bloc Berthier—Montcalm, QC

Mr. Speaker, I want to ask the leader of the government in the House what is on the legislative agenda for the coming week.

Business Of The HouseOral Question Period

3 p.m.

Windsor West Ontario

Liberal

Herb Gray LiberalLeader of the Government in the House of Commons and Solicitor General of Canada

Mr. Speaker, we will continue today with the budget bills, which will be followed by Bill C-82, the financial institutions legislation. Tomorrow we will take up the business from where we finish today and will proceed in the same way next week.

When we complete the finance bills we will resume debate on the justice bills, Bill C-17, Bill C-27 and Bill C-55. They will be followed by the ports legislation, Bill C-44.

I also understand that there are conversations under way concerning Bill C-5, the bankruptcy legislation, as well as with regard to the other bills outlined in the business statement I gave on March 20.

We will make further plans on the basis of these discussions.

Points Of OrderOral Question Period

3 p.m.

Reform

Ken Epp Reform Elk Island, AB

Mr. Speaker, today in answer to a question the Minister of Justice referred to a letter which he received from CAVEAT, from Priscilla de Villiers. Pursuant to citation 495 of Beauchesne, we request that the letter be tabled.

Points Of OrderOral Question Period

3 p.m.

The Speaker

Like yourself, I heard the hon. minister referring to a letter. However, I do not know if the letter was here. I wonder if the hon. member would permit me to get more information. Perhaps he could bring up the same point of order when the minister is here.

Points Of OrderOral Question Period

3 p.m.

Reform

Ken Epp Reform Elk Island, AB

Mr. Speaker, I stood and I was not noticed. However, I did send you notice that I had a point of order. The minister was here and he escaped us. I would like-

Points Of OrderOral Question Period

3 p.m.

The Speaker

I do not know if I would use the word "escaped". I will make a commitment to try to get more information. The point of order has been made and we will get an answer for the hon. member. We will get back to the House.

The House resumed consideration of the motion.

Budget Implementation Act, 1997Government Orders

3:05 p.m.

St. Paul's Ontario

Liberal

Barry Campbell LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I welcome the chance to launch this debate and to encourage all hon. members to support the motion to refer Bill C-93 to committee before second reading.

This legislation will implement a wide range of measures proposed in February's 1997 budget. Some of these measures are technical, but other proposals relating to support for children, to small businesses' ability to create new jobs and to Canada's ability to innovate and respond to Canadian needs and social interests, fully deserve the speediest possible consideration.

We are not talking here about partisan politics, but about national interests and progress. This is why I think this bill should be referred to a committee at the earliest opportunity, so that the House can, as quickly as possible, implement the constructive measures put forward in the budget.

I do not believe it is necessary today to discuss at length the measures proposed in the 1997 budget, let alone the important achievements that it reflects. In the last two months, I have mentioned on numerous occasions our government's achievements and objectives.

However, I would like once again to stress a vital issue. The 1997 budget is not just a means to put our fiscal house in order, it also a means to promote new investments that are essential for job creation, both in the short term and in the long term.

It includes measures designed to alleviate the terrible burden of poverty on the most vulnerable among us, namely our children. These measures reflect a philosophy which had guided our government in each of its four budgets.

Fiscal recovery is not an end in itself. Rather, it is an essential tool that allows a government to fulfil an ongoing responsibility, which is to build a stronger society, a society that can maintain and enhance the well-being of its citizens.

This takes me directly to the legislation involved in this motion. We all live in a world where scientific knowledge and industrial innovation and the products of research become the driving engines for national growth and economic opportunity. Our long term future as an advanced industrial nation, able to compete abroad and create jobs at home, will depend on our success in this area. That is why C-93 will establish the Canada foundation for innovation. It will provide financial support for modernizing research facilities and equipment at Canadian post-secondary education institutions and research hospitals in the areas of science, engineering, health and environment.

Through an up front investment by the federal government of $800 million, the foundation will be able to provide about $180 million annually for research infrastructure over five years.

However, this investment will go further through partnerships with public research institutions, the business community, the voluntary sector, individuals and, we hope, provinces. The foundation has a potential to trigger about $2 billion for research infrastructure across Canada.

I do not believe that any hon. member has substantive doubts about this initiative. As the Globe and Mail stated in an editorial just days ago: ``The Canadian Foundation for Innovation shows the hallmarks of a forward looking and responsive policy''.

Therefore, it will be to the credit of us all if we move promptly to get the foundation off the drawing boards and into reality so that it can begin its task of enhancing Canada's research facilities.

In the 1997 budget, we did not just propose ways to promote long term growth and improve job opportunities. Our government knows very well that for too many Canadians the prospect of better jobs in the future is not enough. What they want, and what they need, is jobs right now.

Here again, Bill C-93 proposes concrete measures. Last November, our government announced the program to hire new workers, the creation of which was confirmed in the 1997 budget.

This program provides for reduced EI premiums for small businesses that create jobs this year and in 1998.

Under this bill eligible firms, those with less than $60,000 in EI premiums in 1996, will pay virtually no employer premiums for new employees hired this year. They will benefit from a 25 per cent reduction in premiums for new employees in the year to come. This action will help some 900,000 eligible small businesses make the

transition to the new EI system and provide a bottom line incentive for them to create jobs.

An economic analysis suggests that this new hires program, as it is called, combined with the general 1997 EI premium rate reductions, could generate as many as 20,000 new jobs. Again, there is clearly firm and fair reason to implement this proposal as speedily as possible. The price of unnecessary delay is one that Canadians should not accept.

I have focused on measures in Bill C-93 that deal with creating opportunities for meaningful work, a foundation for individual well-being. But the ultimate foundation for nations and for individuals lies in the conditions of childhood. For too many Canadian children whose families lack the means that so many of us take for granted, that foundation is at risk. That is why the federal, provincial and territorial governments have been examining ways to improve assistance to children in low income families.

In the 1997 budget, we propose a national child benefit system under which the federal government would introduce an improved Canadian child tax benefit. For their part, the provinces and territories could reassign part of their resources to improve the services and benefits available to low income families.

The 1997 budget proposes a two stage improvement in the present $5.1 million Canadian child tax benefit so as to create a new child tax benefit of $6 billion by July 1998.

Bill C-93 represents a key component of this program. It will mean that effective this July the working income supplement will be enriched by $195 million, which is $70 million more than was proposed last year. Benefits will be provided for each child instead of per family. The maximum working income supplement will be increased from $500 per family to $605 for the first child, $405 for the second and $330 for each subsequent child. The benefits will be phased in on family earned income over $3,750 and will be reduced as family income exceeds $20,920.

The second step will occur in July 1998 when the working income supplement will be combined with an enriched child tax benefit to form the Canada child tax benefit. The maximum benefit for low income families will be $1,625 to one child families, $3,050 to two child families, increasing by $1,425 for each additional child.

Overall more than 1.4 million Canadian families with2.5 million children will see an increase in federal child benefits by July 1998. Again I find it hard to believe that any hon. member will have substantive objections to such an initiative. Let us make sure it is passed as quickly as possible.

I have highlighted the elements of this legislation that combine wide reaching effects and the need for timely action. Bill C-93 also includes a range of other measures and each has constituencies or stakeholders who would also argue in favour of timely action. Let me summarize these very quickly.

At the request of the Cowichan Tribes of Indians and the Westbank First Nation the legislation includes provisions to enable them to impose sales taxes on tobacco products. This initiative will enable these First Nations to achieve a greater degree of self-reliance and self-government. It will also provide a tangible example of the government's commitment to reaching practical taxation agreements with First Nations that indicate an interest in exercising taxation powers. I should add that the costs of this initiative are minimal, probably less than $200,000 a year in foregone revenue.

There is another part of this legislation that also deals with tobacco. Bill C-93 proposes amendments that implement changes announced last November and December. These changes include an increased excise tax rate for tobacco products, an extension of the surtax on tobacco manufacturers, changes to the excise tax on exported tobacco products and reductions in amounts of tobacco products that may be brought into Canada on a duty and tax free basis.

I realize the tax increases involved are more modest than some might favour, but we believe disciplined, gradual increases undertaken in conjunction with the provinces is the most appropriate method of restoring tobacco tax rates while minimizing the risk of renewed contraband activity.

Bill C-93 would also implement the government's proposal to rebate excise tax paid on aviation fuel, a measure available to airlines that is conditional on the companies involved giving up the right to use some accumulated tax losses.

Also the legislation proposes a further fuel related measure. Currently the Excise Tax Act does not stipulate the method used to measure the volume of fuel for the purpose of accounting for excise tax. The legislation will clear that up.

Finally, Bill C-93 will formalize the procedures for the government's participation in bridge loans, those co-ordinated by the BIS or Bank for International Settlements to countries receiving assistance from the IMF and the World Bank.

Let me emphasize that the amendment will in no way alter the efforts made to ensure that such loans are quickly repaid from the IMF or World Bank through its disbursements to the borrowing country.

The time for this debate is short and I had to cover considerable ground in just a few moments. I have explained the reason for moving quickly to implement these important changes. I feel the summary indicates that the House should proceed immediately with-

Budget Implementation Act, 1997Government Orders

3:15 p.m.

The Deputy Speaker

I am sorry but the parliamentary secretary's time has expired.

Budget Implementation Act, 1997Government Orders

3:15 p.m.

Bloc

Roger Pomerleau Bloc Anjou—Rivière-Des-Prairies, QC

Mr. Speaker, I will pick it up from there. The main thing the last budget tells us is that the deficit has been reduced, and the government is to be congratulated for that. But it is overdoing it a bit for the government to claim that it has reduced the deficit by cleaning up public finances. We know very well that the government has not attained its objective, in terms of cutting its expenditures.

In fact, where it has indeed reduced the deficit by reducing certain expenditures is in two very specific areas. First of all, by cutting $4.5 billion, or $4,500 million, in transfer payments to the provinces, which will affect health, education and welfare in particular, or in other words areas which affect the most disadvantaged members of society. So, it took $4.5 billion from transfer payments to the provinces. Yet we remember the Prime Minister's commitments. We have them here in English. He stated this before the 1993 election, and I am quoting the Prime Minister here:

"What we said in our platform is we don't intend to reduce the transfer payments. What I said in the program, and I intend to keep my word, is we don't intend to cut further".

A few months later, in April 1994, the Minister of Finance set the record straight after the election, and I quote him, again in English:

"The next federal budget will include massive cuts in aid to the provinces for such things as health, welfare and education", according to the Toronto Star in April 1994.

So we can see that election promises are not worth much. They promised to make no cuts to the provinces, yet half of the deficit they are now claiming to have reduced comes from a $4.5 billion cut in transfer payments to the provinces.

Then, as well, $5 billion or $5,000 million, were taken from the unemployment insurance fund. Not the employment insurance fund, for there is no such thing as employment insurance, it is unemployment insurance. They laid their hands on $5 billion belonging strictly to the workers of this country. The government did a kind of collective garnishment of wages, and decided to reduce its deficit with that money.

So then, the Canadian government's deficit was not cut by a massive reduction in state spending, but by massive cuts in transfer payments to the provinces which in turn, be it Ontario, BC or Quebec, have been forced to make dramatic cuts to hospital services and health care. As my colleague from the Reform Party was saying this morning, this government is the one government in the history of Canada that has closed the greatest number of hospitals in the least amount of time, because all hospital closures are the direct result of the cuts to transfer payments to provinces made in the last budget.

I believe that some here do not understand how finances work.

An in-house report of the Department of Human Resources Development has revealed that today, 55 per cent of the unemployed no longer receive unemployment insurance benefits. Fifty-five per cent of the people who deserve to get these benefits no longer do, compared with 33 per cent when the Liberals came to power. I know some people will say we are making this up, but this is from a press release of the Canadian Labour Congress, dated January 23, 1997.

The CLC estimates that by the end of 1997-in other words, right after the election-when we will be able to see the impact of the Liberal reform, the proportion of unemployed who are not eligible for unemployment insurance benefits will easily exceed60 per cent, in other words, 60 per cent of those who expect to get unemployment insurance at the end of 1997, when all other measures have been put in place, will realize after the election that there is no unemployment insurance for them.

The Minister of Human Resources Development is nevertheless trying to sell this reform by claiming that 500,000 more people-they will say just about anything-will be covered by the employment insurance plan. At least, that is what he says. Now, about employment insurance. What the minister means is that 500,000 more people will pay unemployment insurance premiums.

However, an in-house study by the Department of Human Resources Development was published in 1996, and my colleague can check this, on employment insurance and the impact of reform. This comes straight from the minister. What the minister means and what this study claims is that more than 75 per cent of the new people who are supposedly covered-the 500,000 people referred to by the minister-will have their premiums refunded at the end of

the year because they did not earn more than $2,000; they will probably never get unemployment insurance.

Always according to the same study, only 18,000 more people in Quebec will be eligible for benefits, while at the same time, 31,000 current beneficiaries will be completely excluded from the plan as a result of the Liberal reform. This still according to the same information provided by the department.

Unfortunately, that is not the end of it. All persons who earn more than $2,000 annually but do not work the minimum number of hours required to qualify, which varies between 420 and 910 hours, will pay premiums which will not be refunded because they earned more than $2,000 during the year, and meanwhile they are not eligible for unemployment insurance if they lose their job.

This is easy to understand. There are people, for instance in universities, who teach about two or three hours per week. However, they are relatively well paid on an hourly basis because it is felt that they have a lot of course preparation to do. By the end of the year, they have earned more than $2,000, they have paid unemployment insurance premiums but did not work the total number of hours required, so they are not eligible for unemployment insurance. There are thousands of people in this position.

With the massive cuts in transfers to the provinces and the wholesale garnishment of wages, so to speak, to benefit the unemployment insurance fund, the government has deliberately created a network of poverty in this country. We have 500,000 more children living in poverty. Not three, four or one but 500,000 more than there were three and a half years ago. This government even has the nerve to tell us it has done a good job. I think the public will be in a position to judge in the next election.

I have a short quote taken from page 19 of the red book, before it disappears and they do everything they can to make it sink into oblivion, because they did not keep any of the major commitments they made in the book. So here is the quote:

A number of government programs and tax expenditures-some of which have been identified by the auditor general-are inefficient, poorly managed or driven for purely political reasons. We will clean up.

That is what it says on page 19 of the red book. What does cleaning up mean? There were the family trusts, which transferred $2 billion to the United States without paying a cent in taxes. They are most likely talking about the $400 million or $500 million in unpaid taxes. All that went on behind the scenes. There was no paper trail. The so-called ministers knew nothing, nobody wanted to investigate, the knuckles of the auditor general were rapped. He said, and I quote: "We fear that Revenue Canada, in making these decisions, has harmed the tax base by giving up its right to collect these amounts".

I remind you, Mr. Speaker, that $500 million, and I will close on this as I see my time is up, is what the Minister of Finance, his voice quavering, is trying to tell us he is going to give over five or six years to the poor children of Canada, who number 500,000 more than they did three and a half years ago.

All this time, however, the minister raises not a pinkie to stop someone who probably contributes to Liberal party coffers from leaving Canada with $500 million in unpaid taxes, which the children will have to pay some day. I am acutely chagrined by the fact that the minister continues to try to tell us that they reduced the deficit through proper management and improvement of public finances, because it is simply not true.

Budget Implementation Act, 1997Government Orders

3:25 p.m.

Reform

Jim Silye Reform Calgary Centre, AB

Mr. Speaker, we are now moving along with the budget bills, and this one is Bill C-93. Since I did not quite finish the comments I wanted to make on Bill C-92 I will continue along, finish my earlier speech and touch on a few things I feel are important for the Canadian public to know about the fourth budget of the Liberal government.

The government spent $1.3 billion in the budget on infrastructure type programs. We all know the last infrastructure program created about 10,000 permanent jobs with a $6 billion expenditure. By that criteria this $1.3 billion will create about 1,300 permanent jobs.

Had the federal and provincial governments agreed to cut taxes by $6 billion, they probably could have created 162,000 jobs by the year 2000. Over the next couple of years it is obvious that spending cuts and balanced budgets would mean a lot more to job creation than infrastructure programs.

As I said earlier, infrastructure money is a battle of budgets: the federal budget, provincial budget and municipal budget. There is only one taxpayer that feeds that three levels of government. If we take from one and give to the other and play games at this level, the taxpayer will still have to pay more taxes at one level or the other. It is just a fight about who will look better.

If the budget is so good, why do Canadians not feel better? Why are they not jumping up and praising the government? Unemployment is still at the same level with 1.4 million to 1.5 million unemployed. Bankruptcies are up. People get a raise and end up paying more in taxes. Why would they not get to keep more money?

No less an expert than the deputy minister, Mr. David Dodge, agrees with me on the following point. It is called the bracket creep. The finance minister will not acknowledge this point.

Mr. Dodge once wrote in The Canadian Tax Journal , Volume 22:

There are two fundamental sources of higher taxes as a consequence of inflation. Bracket creep and the erosion of the value of unindexed amounts in the system such as the basic personal credit and married credits. It is essential that the adjustment process offset both of these.

Apparently his political bosses do not agree.

People get a raise in pay that puts them in a higher tax bracket, but because the personal exemption stays at the 1993 level they are paying higher taxes than they were before. That is bracket creep. Another thing that is wrong with the budget is that it has not kept up with inflation or bracket creep. It has also entrenched the GST forever.

It is another example of why people are losing respect for politicians. In opposition as we are now and in government as the Liberals are now platforms are presented stating what will be done. The Liberals did in their red book. We did it in our fresh start platform. Everyone is beginning to do it. Are we not morally and ethically bound to deliver on the promises we made?

Why is it that we can promise one thing when on this side of the House and do the exact opposite when elected? Why is it that they can promise to renegotiate a treaty and they do not? They should be held accountable for promising to get rid of the GST and then not doing it. I guess the people will have a chance either in June or in the fall to hold the government accountable.

The Liberals were elected by going door to door saying they would get rid of the GST, especially in Toronto. They went door to door saying: "Over my dead body will we get a third runway at this airport". This was the same type of thing the justice minister and the environment minister said. Now they have changed their minds. I read where the Minister of the Environment said that they have found ways to reduce noise and to reduce the pollution. She concludes that she was not very smart then but is smarter now and the third runway is needed in Toronto.

I hope the Canadian public holds politicians accountable. They should be elected to deliver the promises they make. If I believe in something on this side of the House, I should implement that zero in three program on the other side. I should make those cuts that I promised. I should lower government spending. I should be held accountable if I do not. I should not flip flop. Canadians for too many years are letting politicians get away with it. It is time it stopped. This might be a good election in which to do that.

Every one of the key cabinet ministers, the finance minister, the current minister of defence and even the minister of national revenue and the Prime Minister, has said various comments to the effect that they have to get rid of the GST. The finance minister has said that if the GST is harmonized with a provincial sales tax it is entrenched forever. Those were his words. That is what he has done with the budget.

Shame on him. Shame on him for flip flopping. Shame on him for being a political opportunist and just trying to raise money in any way, shape or form he can. Shame on him for trying to impose this horrible HST on the Canadian public. It is poor politics and poor business. That prepayment to the provinces is costing taxpayers a ton of tax dollars.

What would the Reform Party do? If we were ever elected to form the government we would make government smaller. We would not expand to 301 members like the government is doing. We would reduce it. We would have lower taxes thereby creating more and better jobs. We would take 1.2 million of low income people off the payrolls because we would increase personal exemptions, give immediate tax relief to everybody at the low end of the scale who is paying income tax. That is a good way to help people to get more money in their pockets to pay for their daily expenses. We have an overall comprehensive plan to stop overspending, to attack the national debt and to overhaul government with jobs as the bottom line.

We believe that lower taxes is the key to prosperity. We believe that smaller government is the key to prosperity. The only way we can get there is by making government smaller and getting it off our back and out of our pocket.

The government believes it has now turned the corner on the deficit. It believes it now has the opportunity to spend money. It will not face and address the big problem. It brags in its budget about the fact that it has lowered the deficit by $23 billion, $42 billion to $19 billion. Tax revenues are up by $30 billion. It says that is just growth in the economy. None of it is due to the 35 tax increases in terms of tinkering in exemptions and deductions, et cetera. Let us accept those numbers because they are accurate. That is a $55 billion improvement in the source and application of funds.

What does the budget not dwell on? At the same time the government has lowered the deficit and increased tax revenues, what has it not talked about? What does the government not tell the Canadian public that the Reform Party will tell them at every town hall meeting and in front of every Liberal? The Liberals have added $111 billion to the national debt. That takes us over $600 billion.

Who wants to come back here as a member of Parliament three, four or five years from now when the debt is over $700 billion or $750 billion? The separatists who want to break away will have a $200 billion, $300 billion or $400 billion debt. Who will pay the interest? How will we sustain the interest payment?

There is only so much that can be cut. There is room to cut another $10 billion or $12 billion over the next couple of years, but after that there will be nothing left to cut. We need about $94 billion to $95 billion to run the country, along with all the exemptions and deductions that currently exist in the tax system. How are we to service the debt on $700 billion? I want the brains on the other side to figure that out.

They will raise taxes. That is what the Liberal government will do in the next mandate. It will promise to lower taxes. I have already read some speeches made by the finance minister. What will his choice be when the debt hits $700 billion? We are talking about increased taxes. They have no other choice because they will not be able to cut any more.

Your programs will be threatened. The only way you will sustain them is by increased taxes.

Budget Implementation Act, 1997Government Orders

3:35 p.m.

The Deputy Speaker

I ask the hon. member to put his remarks through the Chair.

Budget Implementation Act, 1997Government Orders

3:35 p.m.

Reform

Jim Silye Reform Calgary Centre, AB

Mr. Speaker, I apologize. I will do that. What bothers me is that the finance minister and the government have missed the problem. They are doing a half job. They could do a good job if they addressed the debt.

We have to get to a balanced budget. There is no commitment to do so. We have to create a surplus so we can service the debt and start repaying the debt in terms of a mortgage over 30 or 40 years. We need a long term plan. We do not have to pay it off all at once but we have to stop adding to it. Even if we add $9 billion to it, that is not breaking the back of the deficit. That is not solving the problem. We are still adding to the problem.

If people on diets who are overweight keep eating, they add to the problem. Even if they cut back on what they are eating but are still eating more calories than they burn off, even if it is less than it was the week before, they will still gain weight. They are adding to the problem. They are getting fatter.

The debt is getting bigger. The government is adding to the problem. It is not solving the problem. That scares me. Every Canadian should be afraid.

In the next election Canadians should be looking at which party is offering sound fiscal management. Which one is saying it will make government smaller, lower the overhead, offer tax relief, and put more money in the pockets of Canadians so that they will have more money to spend? It would mean less for government but it could get on with servicing the debt with a surplus. Those are the kinds of people to vote for, the ones who will stick to what they say they will do.

The Reform Party as a third party had the opportunity to keep only one promise. It walked away from the fat cat MP pension plan, which members opposite did not walk away from. Some 51 Reformers opted out of the pension plan. They will never qualify for a pension plan here. The finance minister and the Prime Minister made sure of that. Reformers did it gladly, to set an example.

I hope Canadians will remember that. Leadership starts at the top. This is the first group of politicians that ever put their money where the mouth is. They want to do what is right for Canada. It shows they are sincere. It shows where their hearts are. It shows where their pocketbooks are. They care about Canadians. They want to make the country better for Canadians. They do not want to throw out money on flags and TV programs and be loved by everybody. They are prepared to pay the price, sacrifice and do what is right for Canadians.

The finance minister made an $800 million commitment to the Canada Foundation for Innovation, which was very worth while. I believe it is a good program. Over the next five years it will provide many dividends for Canada and for Canadians. The finance minister chose to charge off the $800 million to last year's budget.

I accuse the finance minister of going against generally accepted accounting principles. It is a bad precedent. Cabinet ministers should be paying attention. The issue is not whether he is doing a good job. The issue is whether they are allowing a precedent to be set by a finance minister who might not be here the next time around. Another finance minister could abuse that power, based on precedent, and we could be in real trouble.

The Liberals should pay attention. They are the government. They have the responsibility-

Budget Implementation Act, 1997Government Orders

3:40 p.m.

The Deputy Speaker

The member's time has expired.

Budget Implementation Act, 1997Government Orders

3:40 p.m.

Liberal

Alex Shepherd Liberal Durham, ON

Mr. Speaker, it gives me great pleasure to enter the debate on the budget implementation legislation.

I cannot help but respond to some of the comments made by my colleague from Calgary Centre. Members talk about originality. I went door to door in the last federal election. We had a phrase in my organization that we took some time to study as people do when they enter into a campaign. Our phraseology was a fresh start. We had that on our brochures. We promoted it because it was very much a fresh start for Canada and for the people Durham.

Canada had its fresh start back in 1993. It always gives me great delight when I hear the Reform Party saying me too another four years later. That tells us a lot about its policies. Basically it is mired in the past.

It has taken us a long time to get to where we are today in our fiscal responsibilities. Past governments of all political stripes for a variety of reasons created deficits and debts which we have had the responsibility in this administration to deal with. I say responsibility because we have not shirked our responsibilities. Looking back

to when I first wanted to enter this place, it was basically to improve the finances of the country.

I am proud to be part of a government that took that commitment seriously, that started off with a $45 billion a year deficit and dropped it to $35 billion. In the last budget it is down to $17 billion. We can see that we are going in the right direction.

The hon. member talks about a long term plan. Presumably he means that somehow we are going to make it go away tomorrow. We are not. We have a long term plan. The long term plan is toward fiscal responsibility, getting the deficit and debt down.

The hon. member wanted to intervene about taxation. Reformers talk about the lower income groups they will drop off the tax roll. There may well be some merit in that but that kind of policy creates a tax wall. It creates a wall so that people cannot get away from the lower income. They are lower income people and as soon as they jump over the wall they are hit with 20, 30 or 40 per cent taxes. That is the kind of regime the Reform Party would have us enter into.

They spend very little time talking about the other side of the issue. They want to give their buddies and friends, the rich of the country, a reduction in taxes. Who picks up the bill for that? It is the middle income earners, the people in my riding, people with $50,000 or $60,000 worth of income. They are the ones who will pick up the bill for the so-called Reform agenda.

I agree with another aspect the member mentioned. I do not want to dwell a long time on Reformers. On the infrastructure spending program they went on and on about comparing infrastructure dollars to jobs created. Nowhere did we ever say that the prime motivation of the infrastructure spending program was to create long term jobs. We always said it created short term jobs. It gave people hope.

It gave people hope. I remember back in 1993 when people had no hope at all. Once that infrastructure spending program came into play, people saw things were happening. More important, the infrastructure spending is not directly impacting jobs per se. It is creating the infrastructure or the environment where governments and small business people can create wealth. They have better roads and better sewer systems. They can create business opportunities.

The Reform Party seems to have entirely missed this point. It is mired in the past. It keeps studying history.

One thing my colleague said, to lead me into the main part of my dissertation, was that Canadians for some reason do not feel good. They feel a queasy uncertainty. It is that uncertainty with which the budget deals. What is that uncertainty and what drives it?

Basically, what drives it is that we live today in a period of change that is no different from the industrial revolution. Things are changing because the country is moving to a different type of economy. The Reform Party does not seem to understand what that change is all about and how it impacts people.

The people are concerned about jobs. Clearly, if someone is unemployed they are concerned about jobs. However, the people who are concerned about jobs today are the people who have them. People are worried that they are going to lose them for some very specific reasons. They see how technology has impacted their lives and it gives them fear and concern. I would like to discuss that concern relative to this budget and relative to my riding. In some ways, it is a microcosm of what the problem is.

In Durham, we have General Motors. The General Motors plants are in the riding south of mine, in Oshawa, but a lot of the workers live in my riding. More important, the person who started General Motors in our area, Sam McLaughlin, had a carriage factory. That is part of my riding.

In those days, Sam McLaughlin was building carriages so that horses could trot people around for their transportation. When General Motors came to Canada, it needed a framework to develop an automobile industry. That is very important. Most of the growth in this economy has been in the automotive sector. Basically an engine was put on a carriage that horses would pull. Think of that. We are talking about the 1800s. Think of what that meant to the people who lived there at that time.

They were people who were working on carriages for horses or people who raised horses. It must have been very disconcerting to them to see suddenly these cars going around and their business and agriculture threatened. They must have worried at night about whether they were going to maintain some kind of livelihood with this new engine of change that was enveloping them in Durham.

What happened, of course, is that this new engine created new change. It created the need for gasoline. It created the need for better roads. We were talking about infrastructure only a few minutes ago. It created the need for those kinds of infrastructures. It created the need for auto mechanics.

Generally speaking, most people will agree that if they actually study the people who got new employment from using a car, in fact, they got better jobs. They got higher paying jobs than they would have had if they were in the agricultural sector.

That is change that is really upon us. A lot of people have uncertainty. They feel uncertainty about that change. The opposi-

tion parties, whether Reform or Conservative, breed on this uncertainty. They try to say it is the government's fault that we are living in a period of change. Nothing could be further from the truth. What people need is the courage and conviction to go forward into the 21st century.

When I look at Durham today, in some ways we are very much married to that industrial economy. I have some interesting statistics here. The industrial economy allowed for a relatively modest degree of human capital to resolve into a fairly good return on people's labour. People talk about the new society which is upon us as the new knowledge based society, which requires considerably more human capital to get that higher return.

In Durham, this is something I have been very concerned about. Of course, Durham, General Motors and the automotive sector are very close together. It has created a problem for us to break out of that and to start realizing the potential benefits that science and technology can deliver. What do I mean by that? It can mean prosperity in the lives of people for better jobs, better lives, better health care, et cetera.

Over 25,000 people in my riding of Durham have post-secondary education. The education of over 18,000 of those people is science related. Durham has a population of approximately 250,000 people. That is not a lot when that aspect is considered. Another aspect to be considered is why people are not educating themselves in the area of science and technology.

Of the 18,000 people who have those degrees, only 8,000 have jobs in the field of science. In reality, there is a deficit in Durham of over 10,000 people who cannot work in Durham because no jobs are available in their field. They have to go away. A lot of our youth also go away to be educated.

The government's program, the Canada Foundation for Innovation, is just one way to equalize that and for our educational institutions to utilize the $850 million. We talk about the importance of frugality in spending, but we have found a way to spend money in these very important-

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The Deputy Speaker

I am sorry. The hon. member's time has expired.

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Bloc

Stéphane Bergeron Bloc Verchères, QC

Mr. Speaker, I am pleased to participate in this debate on Bill C-93, an act to implement certain provisions of the budget tabled in Parliament on February 18, 1997.

I would like to focus on a new measure introduced in this budget and dealing with the establishment of the Canada Foundation for Innovation.

First of all, I would like to read-and this will come as a surprise to you-a number of rather eloquent statements, which I would go as far as to describe as most honourable, made by some of our colleagues opposite. The first one states, and I quote:

We are working to ensure that Canada and Canadians are winners in this new global economy, an economy which above all focuses on knowledge and our knowledge capacity. That means helping our universities modernize and enhance their science capacity. It means helping our teaching hospitals improve their research capacity. It means increasing our investments in new technologies, research and development.

This is what the Prime Minister said on February 13. Three days later, the Minister of Finance announced in his budget speech the establishment of the Canada Foundation for Innovation. This is the explanation he gave for it at the time, and I quote:

We must broaden our notion of infrastructure. We must take it beyond its traditional meaning to include the components of future economic success, post-secondary education, knowledge, innovation. These are the building blocks of the new wealth of nations. It is in this infrastructure as well that government must invest, for if we fail to do so we will fail the country of tomorrow. We will short change the next generation.

He went on to say:

Research facilities provide the tools needed to develop leading edge skills, skills that our students have to acquire if they want to succeed and we want to remain competitive in a world growing more competitive by the day.

He stated further: "The fact is that much of our current research infrastructure is literally unable to handle the kind of pressures required to keep Canada in the front ranks of the new economy. Innovation does not just happen. It requires investment".

And he concluded with these words: "The Canada Foundation for Innovation is about looking forward. It is about our children. It is about education. In short, it is about investing in the future growth of our economy, making a down payment today for a much greater reward tomorrow".

I was listening to all this and I was just stunned to see this new awareness, on the part of the Liberal government, of the importance of research and development. For close to a year, we had been condemning the cuts to the research program on nuclear fusion in Canada, which were to put an end to the tokamak project in Varennes. We condemned these cuts for a year, and now we are told that the future of Canada, the future of the Canadian economy, is based on research in the advanced technology sector.

However, to justify its decision to cut its modest contribution of $7.2 million to the tokamak project in Varennes, the government

was saying that it had set other priorities. Its top priority was the research, development, marketing and sale of CANDU reactors.

As you know, the traditional process of nuclear fission is a dangerous, highly polluting and ultimately obsolete technique, while nuclear fusion is a promising, clean and safe method of producing energy in high volumes. Of course, we are told that nuclear fusion will not yield results for another 20 to 50 years, at least. Granted, but if we give up now, we will never benefit from that technique, at least not in Canada.

The tokamak project in Varennes, in which the federal government invested a modest $7.2 million, is currently the most important research and development project on energy in Quebec. It is particularly insulting and unacceptable to see that the federal government wants to withdraw its annual $7.2 million subsidy, considering that Quebec receives barely 17 per cent of federal investment in research and development.

Regardless of the process, research on nuclear fusion allows us to develop new skills and technologies that will be of use in much more that just the nuclear fusion industry. Indeed, the research program on nuclear fusion generates economic spinoffs amounting to millions of dollars, mainly for the Montérégie.

This decision by the federal government is all the more astonishing given that the European Union is now investing US$550 million annually on nuclear fusion, and it plans on increasing its budgets by 10 to 25 per cent over the next five years; not a cut, but a 10 to 25 per cent increase on the base figure of US$550 million.

For its part, Japan is investing US$600 million annually in nuclear fusion research. The United States has levelled off its investment in nuclear fusion research at close to $225 million annually and, over the last five years, South Korea, the People's Republic of China and India have also become involved in nuclear fusion research.

Can it be that the federal government is completely cut off from the reality of today's technology? Is it completely unaware of what the future holds with respect to energy production? It seems so. The decision is all the more incomprehensible because the modest $7.2 million invested by the federal government in nuclear fusion research means that Canada is investing only 1 per cent of the amounts spent in this sector internationally.

But by investing a mere 1 per cent of the amounts spent internationally on nuclear fusion research, Canada receives all the technological spinoffs from this research. If we now decide to cut our nuclear fusion funding or research program, Canada will have missed the boat when this form of energy starts to be used. It is important that we continue our investments in nuclear fusion research.

It must also be understood that if the federal government withdraws its modest contribution of C$7.2 million, it will be the only G7 country no longer investing a cent in nuclear fusion research.

In closing, I would like to put this announcement of $800 million for a Canada Foundation for Innovation in perspective. First of all, it must be understood that the government is initially investing only $180 million. The $800 million is in the long term, and we shall see how much it actually invests in the end. But what has to be understood is that it is essentially making this investment with the money it cut in transfers to the provinces.

The 1996 budget forecast that provincial transfer payments would be $20.6 billion. In actual fact, when we look at this year's budget, we see that this amount has dropped to $19.8 billion, or $800 million less, exactly the amount announced for the Canada Foundation for Innovation.

Mr. Speaker, you are indicating that my time is up. I shall now conclude by saying that Quebecers will not be taken in by the tricks and duplicity of this government. We will find a way to make this clear in a few weeks.

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Liberal

Paul Steckle Liberal Huron—Bruce, ON

Mr. Speaker, I am very pleased to take part in the debate this afternoon on Bill C-93, a measure regarding the government's fourth budget and one which acknowledges the three main goals of our agenda since it was elected: job creation, economic growth and deficit reduction.

First, I would like to take the opportunity to commend the Minister of Finance for soliciting and considering the views that were expressed by many Canadians during the process leading up to the budget. I believe the budget addresses positively the issues that were brought forward by the people of Canada. The budget also proves that the government is keeping its promise to put Canada's fiscal house in order. The government has remained committed to reducing the deficit.

In 1993-94 the deficit had risen to $42 billion, approximately6 per cent of GDP. The 1996-97 deficit is the lowest in 15 years at under $19 billion. Canada has every reason to be proud of its fiscal recovery. Other countries in the G7 are reportedly impressed by our fiscal turnaround and if the projections for the future are correct, by 1998-99 Canada will have the lowest deficit in the G7 with a record low of $9 billion. That projected record low will also end the need for Canada to borrow money from outside of the country.

The government has met its deficit targets in the past and I firmly believe that the projected targets for the future will also be met.

Since the government took office in 1993 more than 700,000 jobs have been created. In the last four months alone 85,000 Canadians found employment, the vast majority of them in full time jobs.

The government is also working hard to create the opportunities that are so desperately required to keep improving the fiscal health of Canada and to restore confidence. The announcements that I am particularly pleased about are those measures introduced to assist small and medium sized businesses. The survival of many small communities across Canada rely on the building, strengthening and continued success of small and medium sized business.

My riding of Huron-Bruce is a rural riding. The people of Huron-Bruce depend on small business for employment. Without the existence of small business in ridings like mine, people would not be able to put food on their tables or clothes on the backs of their children. Unemployment has a direct effect on the local economy. Without businesses and employment stimulation in small communities, small communities may cease to exist.

The 1997 budget announced very encouraging provisions to provide Canadians with job opportunities. Improving employment prospects is a team effort between different levels of government and the private sector. For example, the new hires program is an initiative to encourage small businesses to create jobs by offering employment insurance premium relief to 900,000 eligible businesses that hire new workers.

Another measure to assist small businesses is the step to reduce the paperwork burden of payroll taxes which the government imposes by allowing businesses with less than $1,000 monthly payroll deductions to file on a quarterly basis. One model partnership is the Canada infrastructure works program. An additional $425 million in federal support for infrastructure will have many positive influences on communities. Not only does the investment in the Canada infrastructure works program produce short term and long term jobs, but by upgrading local infrastructure it allows communities to stay competitive and viable in attracting business and commerce.

Technology is the way of the future. It is a science that changes rapidly from day to day. The technology partnerships Canada investment fund provides up to $250 million annually to work with businesses and to keep the development, marketing and production of new technology in Canada.

The industrial research assistance program offers financial support and/or technical advice to numerous Canadian companies to assist them in taking full advantage of the latest technology to increase their competitiveness internationally, while at the same time creating jobs locally.

On a more personal, riding related level, I am very happy to see that the government continues to recognize and acknowledge the important role that rural Canada plays in our society. Nearly one-quarter of all Canadians live in the rural sector. I feel that the rural development measures outlined in the budget reflect the changing needs of rural Canadians.

The Farm Credit Corporation is an invaluable financial instrument for rural Canada. This budget provides an additional $50 million in capital to the Farm Credit Corporation to expand its ability to support growth and diversification.

The budget also introduces the community access program for rural Canada. It is important that the people of rural Canada experience the same technological opportunities that urban Canada does. The world wide web is an amazing communication and information instrument which links people together around the world. This budget provides an extra $30 million over three years to connect 5,000 small communities, with populations between 400 and 50,000, to the information highway via Internet sites. Young and old alike will greatly benefit from this access.

The challenges that face our youth are clear. Last spring the government created a youth task force to solicit and consider the concerns of young people. Knowledge and training are key factors behind employment. However, rising tuition costs are making it difficult for students and parents to afford post-secondary education. The budget responds to struggling students and families by doubling the already established education credit.

The budget also provides assistance to students who have had to borrow money from the government. The government realizes that it is difficult to find employment on graduation. Due to the hardships that many graduates are facing, students will be allowed to defer their loan payments for up to 30 months during the period between post-secondary graduation and employment.

Also, for high school students seeking employment in order to save for post-secondary education, the budget has consolidated $2 billion in a new youth employment strategy for work experience and employment related programs and services for youth.

As well, the existing youth internship and summer student employment programs will enable 140,000 more young Canadians to gain the experience they require in order to enter the workplace.

Child poverty has been an ongoing concern across the nation. Many families live at a low income level and are often unable to provide their children with basic necessities, such as food and clothing. If children do not receive the start they need at a young age, how can we possibly expect them to become healthy, educated and productive adults, the same adults that will run the country in the future?

The 1997 responds to the hungry cries of low income families by introducing a new cross Canada child benefit system. The measures introduced in this budget complement the child support reform announced in the 1996 budget. The government announced that federal spending on children will increase from $5.1 million to $6 million. The new Canada child tax benefit will go to all eligible families, those who are employed and those who require social assistance.

The changes that the government is imposing will also initiate the process of dismantling the welfare trap, a trap that so many have fallen into.

Canada will certainly be better off if the government can help to prevent and reduce the overwhelming numbers of children living in poverty.

Our national health care system is one of our proudest achievements. It is a system that many other countries envy. However, it has been under much duress and scrutiny. Last year the budget introduced the Canada health and social transfer, a measure that provided the provinces with predictable and assured funding. To demonstrate the federal government's commitment to the health system, a cash floor of $11 billion in cash transfers has been guaranteed over the next five years and then will grow accordingly to ensure that funding will not be jeopardized.

The National Forum on Health which was originally established by the Prime Minister to allow Canadians to express their visions of a more effective and efficient health care future recently brought forward its recommendations. The forum concluded that the health care system is fundamentally sound and adequately funded. However, it did note that its usefulness in various areas could be improved.

In response to the forum and its findings, the 1997 budget allocates an additional $300 million over the next three years for health initiatives. To break down the moneys that have been rationed, $50 million will go toward the creation of a new Canada health information system to provide Canadians with the best medical information and the latest developments regarding medical treatments; $150 million has also been specified for a health transition fund to assist the provinces to launch pilot projects to investigate new and better approaches to health care. These funds will be awarded to the provinces and territories on an equal per capita basis, with expenditure discussions to take place among Canada's ministers of health.

There are already two active programs to help prevent health problems from developing: the community action program for children and the Canada prenatal nutrition program. The community action program for children provides services to address the developmental needs of young children who are at risk.

The Canada prenatal nutrition program addresses the problem of low birth weight babies among high risk groups such as pregnant

adolescents and women who have used alcohol and drugs. This budget increases the funding to these existing programs by $100 million over the next three years.

Canadians with disabilities face many obstacles in everyday life. Last year the budget doubled the assistance provided to persons with disabilities to a tax credit for those who provide in-home care for family members.

The 1996 budget promised to review measures and opportunities for people with disabilities. In response to that promise, the task force on disabilities was created and chaired by the member for Fredericton-York-Sunbury. It is the government's desire to create a better society for all Canadians.

Not only is the list of expenses eligible for the medical expense tax credit been broadened, but a new opportunities fund has been set up to help a significant number of Canadians with disabilities to help prepare, find or keep either part time or full time jobs. Every Canadian has the right to contribute to the economy.

The opportunities fund will help to integrate disabled Canadians into the economic life of their community as well as increase their independence.

In closing, may I say that in a country as vast and diverse as ours, it is a privilege to be able to be part of the team that outlines priorities and goals and achieves them. We have made some significant changes. I am confident that by maintaining our practice we will continue to face and meet the challenges that lie ahead of us.

It is with these sentiments that I fully intend to vote in favour of Bill C-93, an act to implement certain provisions of the 1997 budget.

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Bloc

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

Mr. Speaker, I am pleased to speak to the budget implementation bill.

We had a very clear picture this past week-

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The Deputy Speaker

Pardon me, but I believe, since we are taking turns, that it is now the turn of the Reform Party.

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Reform

Jim Silye Reform Calgary Centre, AB

Mr. Speaker, I rise on a point of order. Our member would like to speak.