Debates of Oct. 5th, 1998

Supply

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

Mr. Speaker, I am very happy to speak today to the opposition motion of the Bloc Quebecois, because it is directly linked to the mission of the Bloc Quebecois in this parliament, namely to, first, defend the interests of Quebec and, second, promote the sovereignty and autonomy of Quebec.

Our motion reads:

That this House recognize the very harmful effect of federal cuts to the Canada Social Transfer, particularly on health services in Canada, and that it support the consensus achieved by the provincial Premiers in Saskatoon on a project for social union.

First, I would like to talk about the value of the social union agreement that was signed in Saskatoon. Members will recall that in Quebec and Canada, there has been for many years a major debate as to whether the Canadian Constitution gives Quebec sufficient authority to administer its own social policies.

In the past, there have been interesting examples proving that Quebec is capable of administering its social programs. Let us take, for example, the student loans and bursaries program. It is the best in Canada. Moreover, it is the only one that includes scholarships in the basic funding for studies. There is also the Régime des rentes du Québec, which was taken as an example by the federal government last year for correcting the Canada pension plan. So, there are some interesting examples to show that Quebec has the means and the capacity to manage social programs in an appropriate fashion.

What is interesting in the motion is that, in a sense, there was an evolution from 1971 to 1998. In 1971, Quebec was not able to accept a constitutional amendment because Canada was not ready to give it the necessary leeway. The federal government is still not ready to do that and the statements from the Prime Minister on that subject are not very reassuring. He finally said that it was necessary for the federal government to continue to administer its money, to assume these responsibilities and that it was not ready to let the provinces administer these programs on their own.

But this time, he is facing a coalition resulting from the goodwill of the provincial premiers, including the Premier of Quebec, who have finally said that we should have the right for a province to opt out, with full compensation, of a new or modified Canada-wide federal government social program in areas under provincial jurisdiction, when the province offers a program or introduces an initiative in the same field.

Let us take an example, not in the social area, but in the area of education.

Had such a model been applied, we would not be stuck today with the millennium scholarships. In this case, the model used was the Prime Minister's model, which says “I have an idea and I am right; everybody else may disagree, but I will do it my way anyway”.

As a result, we end up with two parallel systems: the Quebec loans and bursaries system and the millennium scholarships. There will be two administration systems. This is the typical federal program duplicating something that already exists at the provincial level.

We do not want this kind of action. We want the right to opt out with full compensation. This way, the Government of Quebec could implement its own programs where necessary, and it is prepared to undertake to do so in areas where the federal government intends to invest.

Take the home care program for example. If it went ahead with its plan to develop a home care program without co-ordinating its action with the provinces, the federal government could end up putting in place a program that totally fails to meet the needs of one province or another, a program that does not meet the needs of Quebec, while Quebec would receive its share of the federal funding if the Saskatoon agreement were applied. The Quebec government would undertake to invest in health but would have the necessary leeway to ensure its needs are met. It is this leeway the provincial premiers agreed on in Saskatoon.

Last weekend, the premiers met with the federal spokesperson. We are waiting to see what will come out of these discussions.

Today, the motion before us basically says that a step could be made in the direction of allowing Quebec to defends its interests and move toward greater autonomy while respecting the right the rest of Canada to act differently. Positive results could be achieved if the federal government showed a willingness to move in this direction.

One thing this would mean is that when there is “support from a majority of provinces before new federal initiatives are introduced in areas of provincial jurisdiction”, Canada's nine provinces could take action, because Quebec would have the right to opt out with full compensation. It would no longer hold everything up.

It would be interesting to adopt this approach, which would provide a way out of the difficult situations that now arise and the systematic opposition between the federal government and the provincial governments, particularly Quebec, because the federal government has always been more interested in achieving the desired visibility than in coming up with the best possible program. The best proof of this is the millennium scholarships I mentioned earlier.

It was the same with child care. Election after election, the federal political parties promised a universal child care system. The stumbling block each time was the wide diversity of situations in the various provinces. There is no one solution.

Quebec has done something about the problem in recent years. It has introduced $5 day care. This is very attractive. Now, people can send their child to day care for $5 a day. This program has been tremendously successful. It is now available for all three and four year olds. This will make good day care available.

An attempt to find one program for all of Canada will produce solutions that will not work for Quebec, but there is no way around this because provinces may not, at the moment, opt out with full compensation, as provided for in the Saskatoon consensus.

The consensus contains a number of dynamic, forward-looking components. This parliament could make a valuable contribution by requiring the federal government to add its support so that an agreement can be worked out as quickly as possible. This is important.

There are four main components in our motion on the project for social union. I mentioned the right to opt out will full compensation. There was also agreement that a program could be implemented with support from a majority of provinces, and that there should be “new co-operation mechanisms in order to avoid conflicts or settle them equitably”.

This is a fundamental issue. We are asking federal players to get down off their pedestal, to get down to the same level as the provinces and find mechanisms so that we will no longer see unilateral decisions as in the past; instead decisions would be taken by all parties concerned ensuring in the long run that the choices made are in keeping with the wishes of Canadians and Quebeckers.

This is a far cry from the federal government saying it knows best, and others should just listen. Essentially, it amounts to challenging the federal government's view of the provinces as mere branch plants. As a result of the Saskatoon agreement, everyone would be sitting on the board. There would be decision making mechanisms to ensure that decisions are arrived at properly.

Quebeckers will be able to assess the federal government's good will, the ability of the Canadian parliament to suggest solutions and of the Canadian government to follow through with them while respecting the provinces' wishes.

It has often been said “As long as there is a sovereignist government in Quebec, we will get nowhere”. The Quebec government has shown its good faith saying “Yes, we are willing to be part of the social union as long as we have the right to opt out with full compensation; we are going to take a step forward by promising to spend this money in the area it is intended for”.

This is what cemented the consensus. The only thing missing now is the federal government. We brought this motion forward today because we believe it is very important for the Canadian parliament to be aware of this issue and clearly indicate its willingness to accept a solution giving Quebec greater autonomy with regard to the management of social programs.

It is very clear in our minds. It is the goal we are pursuing. Quebeckers are seeking complete autonomy to be able to make all the decisions concerning their future. They will do it globally when they opt for sovereignty. In the meantime they are seeking greater autonomy in order to provide their fellow citizens with the best programs possible. It is in such a context that provincial premiers put this constructive proposal on the table.

In the past, the Canadian social union had co-operative mechanisms to avoid or settle conflicts. Things did not work out quite that way in the last few years, especially as far as health care is concerned. The federal government, and especially the present government, decided unilaterally to make drastic cuts in health care. For each dollar that has been cut in health and education in Quebec, 75 cents were due to cuts in federal transfers to the provinces.

It means that when hard decisions had to be made in Rimouski, La Pocatière, St-Pascal, and Rivière-du-Loup, where significant cuts were made in health care because changes were unavoidable, basic budgetary constraints were one consideration, but there was also that constant and terrible threat of federal cuts in transfer payments. Billions of dollars have been cut, and each and every province had to fully absorb those cuts.

As far as health care is concerned, we should examine more carefully what that means. Everywhere in Quebec and Canada, the problem of financing health care is not a provincial problem made in Quebec, in Ontario, in Manitoba or any of the other individual provinces. The problem is the same throughout Canada.

Certain decisions were made in order to fight the deficit. One of the easiest decisions they came up with was to collect all the money they could through the employment insurance system and then to tell us today that was not why they collected it. The other decision was to cut transfer payments. This was the easiest way to do it: to offload the problem on the provinces who would have to make do with what they got. This is a very bad example of how our country should work for those who believe it should be a federation. We have tests for these things.

When Quebeckers wonder whether tostay within the Canadian system or not, obviously these are some of the issues they seriously consider, especially when they see their taxes going to Ottawa and coming back in ways they do not appreciate.

For the first time ever, the province of Quebec is faced with a $475 million shortfall on cash from the EI fund. In 1997, Quebeckers got $475 million less in EI benefits and administration fees than what they paid in premiums. This EI program is a bad choice for the future. The federal government collected a surplus of $6 billion on the backs of each of the provinces.

[Robert Bertrand, Liberal, Pontiac—Gatineau—Labelle, QC]

Those are your figures. That is awful.

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

Madam Speaker, would you ask the member opposite to listen while I speak?

[Some hon. members]

Oh, oh.

[The Acting Speaker (Ms. Thibeault)]

Order, please. I would ask members to pay attention to the hon. member's speech.

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

Madam Speaker, if there is one region where the employment insurance problem exists it is in the Pontiac region, where people are having problems qualifying for it, where they did not three or four years ago. They are now running into this problem. It is a problem particular to all the resource regions of Canada, but it is present in the Pontiac region as it is in all the other regions of Canada.

Therefore, the Bloc motion focuses particularly on showing its good faith and that of the other parties in this House by pointing out clearly that the social union is an attractive route to the future. It would permit sufficient autonomy, both for a province wishing to withdraw from a program and for another with an original idea wishing to implement it, so long as the majority of provinces were in agreement. I think the federal government would do well to listen to this program and arrive at results that would enable Quebec to assume greater autonomy.

If we want to achieve other successes in the future such as we did with the loans and bursaries system and the Régime des rentes du Québec, I think we have to develop some mutual trust. The federal government would be taking a positive step by saying “Yes, we think that, with a social union, we could achieve results if those with unique needs or problems are allowed to set up individual programs in these same areas”.

It is not a foregone conclusion that health care problems in Quebec are to be managed the same way as those in Ontario. Each province may have its own needs and priorities. One province may decide to put the accent on prevention and the other on cure. These situations occur. If the House were to adopt a motion such as the one proposed by the Bloc Quebecois today, it would solve any future problems associated with federal duplication of existing Quebec programs.

In conclusion, there are two issues here. First, the actions of the federal government in recent years should be strongly condemned, including the way it has slashed health care, thus depriving the provinces of funds that were sorely needed. Second, the provincial premiers have extended a hand, in that they collectively put on the table a proposal on which they agreed in Saskatoon, and which will allow each and every province to find what they need to implement the programs they feel are appropriate.

In Canada, we have been looking for a long time for a formula that would allow, for example, the nine predominantly English-speaking provinces to adopt a specific type of program, and let Quebec implement another one, while having the necessary flexibility for all these initiatives to be legal, wanted and justified. We are now in the last month of the period during which it would be possible to achieve this.

We urge the federal government to forget the inflammatory remarks the Prime Minister may have made a few months ago and to admit that there are some interesting ideas in the Saskatoon proposal.

That concludes my speech. I urge the Liberal majority in particular to pay attention. Quebec could develop its own social programs, with full compensation, and the rest of Canada could do as it saw fit, implement the programs it wanted, without the battles we have seen for the last 40 years.

Let us remember that, in Victoria in 1971, Robert Bourassa, as Quebec's representative, rejected the constitutional amendments because this issue had not been resolved. We have an opportunity to move forward, and I hope that Parliament will approve the Bloc Quebecois' recommendation.

[Anne McLellan, Liberal, Minister of Justice and Attorney General of Canada]

Madam Speaker, I will be splitting my time with the hon. member for Oak Ridges.

I am thankful for the opportunity to address the motion of my colleague on the subject of the social union. The truth of matter is that Canada is the envy of the world. We have consistently been rated among the top countries in the world for our standard of living and quality of life. Canada stands number one among the nations of the world in this year's United Nations human development index. We are respected worldwide for the country we have built by working together.

What are the reasons for this envy and respect? There are several, but I would like to take this opportunity to point out two in particular.

The first is the exceptional quality of our social programs. We need only look around us to realize how fortunate we are to have the social system that we do.

Health care is one of the main subjects of the motion before us today. Let us take a minute just to get back to basics. Through the combined efforts of federal and provincial governments all Canadians have access to health care insurance that enables them to seek timely and high quality medical care anywhere in the country without worrying that each minute of a doctor's time or each step of a particular procedure is costing them their savings. It sounds so simple.

We can compare that brief description with the situation faced by our close neighbours to the south. The United States is a wealthy and powerful country and still many people, particularly low income families, live without access to medical care even for routine check-ups and much less serious interventions because they cannot afford medical insurance.

This is not to say that there is not always room for improvement even in a system as good as Canada's health care system. Nor is it to deny that there have been some challenging times over the last few years while all governments, the provincial governments as well as the federal government, have fought to bring our deficits under control. That fight was necessary to ensure a solid future for Canada and for Canadians. It was necessary to ensure the future stability of our social programs including health care.

Canadians are not interested in seeing their governments finger pointing or hurling recriminations or fighting over their roles and responsibilities. Canadians want their governments to work together co-operatively to make improvements in health care as well as in all other areas that form the fabric of Canada's social union.

It is for that reason the Prime Minister agreed with his provincial and territorial colleagues that the moment was now for discussions on how all governments might collaborate to make the social union work better for Canadians. I stress that I have been speaking about all governments and about collaboration and co-operation.

This brings me to the second source of the envy and respect that Canada garners throughout the world, our success in co-operative federalism.

Canada is a federation. And it is true that the purpose of federalism is to protect and encourage the development of the diversity of Canada's regions and provinces. In particular, federalism makes it possible for Quebeckers to enjoy greater protection for their language, their culture and their civil law system than would be possible in a unitary state.

However, it must not be forgotten that Confederation was not about creating a customs union or a free trade zone among provinces. Confederation was about creating a new country, Canada, for a group of people with a shared identity as Canadians. The creation of a Government of Canada that would be elected to represent all Canadians was a critical part of the design of the new country. The federal government continues to play a pivotal role in the federation and part of that role is to ensure in co-operation with the provinces that there is a strong social union that works in the interests of all Canadians.

As the government elected to represent Canadians everywhere in the country, the Government of Canada has a responsibility to represent the national interest of Canadians in the negotiations on the social union. This means working together with all the provinces to come up with a proposal that is in the best interest of all Canadians.

It is for this reason that as Minister of Justice I have been given the responsibility of negotiating for the federal government on the social union and I continue to negotiate with all my provincial colleagues. It is also for this reason that the federal government is trying, one step at a time, to ensure that Canadian federalism works as well as it possibly can by taking care that each level of government undertakes its constitutional responsibilities in the most efficient fashion.

For example, this government has entered into agreements with the provinces concerning labour market developments to ensure the best service possible to Canadians who require assistance during transitions in their working lives.

At a more general level the federal government has made a commitment that it will not undertake any new national shared cost programs in the areas of exclusive provincial jurisdiction without the consent of the majority of the provinces. That same commitment includes a right to reasonable compensation to provinces that choose not to participate in the national program.

The importance of co-operative federalism cannot be overstated. This government has always said that constitutional reform is not necessary in order to achieve the common goals of all Canadians. The federal and provincial governments may together take an approach to the exercise of their constitutional powers that respects what the Supreme Court of Canada recently described in the reference on Quebec secession as the federalism principle.

A good example of the success that has already been achieved through co-operative federalism in recent years is the national child benefit system. This system was the result of negotiations between the provincial and federal governments and has two main elements: increased federal benefits for families with low incomes through the Canada child tax benefit, and provincial and territorial reinvestments in services and benefits for children in low income families.

Between the two levels of government, each working in a collaborative fashion in their areas of jurisdiction, we have devised a program that will help to combat child poverty in Canada.

In conclusion, I can do no better than to quote the words of the governor general in the Speech from the Throne in September of last year:

As we look forward to the beginning of a new millennium with new challenges and new opportunities, we can look back at the last century of Canadian history and state with certainty that Canada is rightly regarded, the world over, as an extraordinary success. Canada represents a triumph of the human spirit, bringing together the best of what people can do.

The future is ours if only we continue to exemplify the spirit of co-operation that has already brought us so far.

I look forward to seeing the results of the meaningful negotiations between the federal and provincial governments on Canada's social union because I am sure that together those governments will arrive at a plan for strengthening the social union that puts Canadians first, both at home and in the world.

[Jean-Guy Chrétien, Bloc, Frontenac—Mégantic, QC]

Madam Speaker, I want to take part in today's debate on the Bloc Quebecois' motion concerning a project for social union, following the remarks made by the Minister of Justice.

When the government wants to right a wrong, very often it will change a name. Unemployment insurance quickly became employment insurance. When protesters shout too loud in front of the Prime Minister, he does not hesitate to grab them by the throat, to throttle them, to throw them to the ground and to let his bodyguards break their teeth. You will agree with me that such behaviour certainly helps drive his point home.

In this social union where the Minister of Justice talks about equity and social justice, I wonder what kind of justice she sees in the employment insurance program. The fact is that the government has accumulated a $20 billion surplus in the employment insurance fund over the last four years, mainly on the backs of the unemployed since they pay EI premiums, and yet, when they lose their jobs, 58% of them are not even eligible for benefits.

It is just as if 58 out of 100 people paying car insurance found out, after a car accident, that they were not covered. I find this totally unfair.

Premiums are much too high at $2.70 for every $100 of insurable earnings, especially since a reputable actuary said last week that $1.81 would be enough. I would like to know the opinion of the Minister of Justice on this.

[Anne McLellan, Liberal, Edmonton West, AB]

Madam Speaker, I am not sure there was actually a question contained in that statement.

As everyone in the House knows, the Minister of Finance and the Minister of Human Resources Development have begun a discussion with Canadians and have held consultations with Canadians in relation to employment insurance.

Let me remind the hon. member that employment insurance is one part of the social union framework in this country that makes our nation the envy of the world.

Having said that, let me remind the hon. member that he and other members of the House, as well as all Canadians, will have an opportunity to participate, and I urge them to participate, in the debate on employment insurance in this country. It is an important debate. None of us would deny that. It is a debate on which many Canadians, many of my constituents, have views which they want to express.

I would ask the hon. member not to forget that employment insurance is part of the social framework in this country that provides all of us and our families with a needed sense of security.

Therefore, I simply conclude by encouraging the hon. member to partake in this debate.

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

Madam Speaker, I listened with great interest to the erudite and very articulate presentation of the minister. I would like to ask her a very specific question.

With respect, she did not seem to give a lot of substance regarding the social contract itself. I am asking about a dispute resolution mechanism or anything to do with clarifying the rules of intergovernmental co-operation, or specifically the issue of tax transfer points as contemplated by Mr. Charest's platform in the Canadian covenant.

[Anne McLellan, Liberal, Edmonton West, AB]

Madam Speaker, let me reassure the hon. member that as the federal negotiator for the social union framework, my provincial and territorial colleagues and myself have had a number of very promising meetings. We had another meeting last Friday.

Let me assure the hon. member that those discussions are going very well. Flexibility is being displayed by all levels of government and by all ministers around the table. I was heartened by the discussion on Friday.

Indeed, let me reassure this House that provincial, territorial and federal ministers around the social union framework table are working with one common objective. Everybody needs to remember what that objective is. It is to develop, to maintain, to enhance and to build upon our social programs in this country for the benefit of all Canadians.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Madam Speaker, I appreciate having the opportunity to speak to the opposition motion. In particular, I would like to clear up some apparent misconceptions regarding how spending on social programs has fared under the Canada health and social transfer.

The federal government's actions in the area of transfers to the provinces clearly demonstrate that social programs are a top priority. This is fact, not partisan rhetoric.

Under the previous longstanding system of transfer payments to the provinces, support for social programs came in two forms. The first was a cash component. In other words, direct funding. There was a tax point component, where the federal government let provinces step in to collect a share of taxes that would normally have been levied by Ottawa.

This is not an abstract issue. Under the formula agreed to, as the economy grew it meant that the value of these provincial tax points would grow. That meant that the amount of direct cash funding could shrink because the total value of that funding would remain constant.

However, this previous approach spelled a problem for the provinces because the cash portion was scheduled to gradually decline. In fact, the cash portion was on track to dry up completely and there was nothing to prevent it from doing so until this government acted in the 1995 budget.

In that budget we replaced the Canada assistance plan and established programs financing with the CHST. In spite of enormous fiscal constraints that we faced at that time, we saw to it that this new transfer system would include a five year guaranteed cash floor of $11 billion in addition to tax points. In other words, the cash floor is the minimum amount of cash that the provinces receive for health, education and other social programs.

We did more than guarantee sizeable and certain cash transfers to substantial social programs such as health care. At the earliest possible opportunity, as soon as we got our fiscal house in order, we increased this cash flow to $12.5 billion per year. This measure, announced in 1997, means that the provinces will receive an extra $7 billion over six years.

The interesting thing about this increase is that we brought it into effect one year earlier than we originally planned. We were able to increase our commitment to assisting the provinces in vital social programs because this government's progress in deficit fighting has given us some leeway to allocate more money toward new health initiatives.

For example, the 1997 budget provided $150 million to the health transition fund and $50 million to the Canada health information system over a three year period. Our budget of 1996 set aside $65 million for the health services research fund and our most recent budget increased funding for the Medical Research Council by $65 million.

None of this would have been possible without drastic spending reductions during the early years of the government's mandate, cuts which we made sure were deeper for the federal government than for our provincial transfers.

The most severe cuts were in the area of direct program spending, which included the operating costs of government departments, business subsidies, department transfers and appropriations to crown corporations.

The federal government also made cuts in transfers to the provinces. When the government has an annual deficit in excess of $40 billion and an accumulated debt of over $500 billion, and when 20% of spending is on transfers to other orders of government, that is to say $1 out of every $5 spent, the choices are limited. There is not the option of cutting transfers to the provinces.

There are those who would argue very different numbers because they refuse to recognize the value of federal tax points in their calculations. They ignore the fact that this is a contribution to provincial revenues that keeps growing year after year.

Has one provincial spokesman suggested a willingness to give the tax points back? This issue is not often debated but it is extremely important one.

Canadians owe it to themselves in our national policy debates to understand the issues involved. Over the years as federal-provincial social programs were developed the federal government contribution has taken two forms. One is the commitment of direct contribution, but as of 1977 we also have to provide the provinces with tax points.

What is a tax point transfer? It simply means that the provinces can collect a portion of taxes that would otherwise go to the federal government. In other words, provincial tax revenues increase, federal revenues decrease and the national taxpayer still pays the same rate.

There are good reasons for provinces to accept these tax points because as the economy grows so does the value of these points. While there have been economic ups and downs, each of these tax points is worth much more today than the programs we funded when they were introduced.

Let us consider for a moment the tax points transfer to the provinces in 1977 to support health and social programs. In 1977 these tax points amounted to about $3 billion in revenues. Today they are worth about $12 billion. In other words, if the federal government did not transfer these tax points it would have some $12 billion more in its coffers to spend on health and social programs.

When we hear calls for the federal government to hand over billions more for health and social programs, we must remember that this ignores the fact that provinces enjoy significant additional revenues from tax points they have already collected in previous years. That is why we continue to calculate the value of tax points in the final calculation of our transfers to the provinces.

This being said, I would not deny that we asked the provinces to share the fiscal sacrifices that governments had to make. Nor would it be fair for me to belittle or to understate the burden of restraint that was imposed by necessity on these governments and indeed on all Canadians.

The opposition must also be fair that the motion we are debating today fails the test of fairness in two areas. First, it fails to acknowledge the sheer lack of choice that we faced earlier in our mandate, and I have already elaborated on that. Second is the point I would like to address further. The motion suggests that the funding policies of the federal government have single-handedly imposed harmful consequences for health care and other social programs.

Quite simply the opposition motion does not tell the whole story. I would like to put it in some perspective. Earlier in my remarks I demonstrated that health and social programs were a top priority of the government. What are the priorities of provincial governments?

Looking at the province of Ontario as an example, in the current fiscal year the CHST is $850 million less than in 1993-94. Yet Ontario has brought in a tax cut amounting to $4.5 billion. If Ontario can afford a $4.5 billion tax cut then it can afford to cover the $850 million it is missing in transfers.

I realize that what the provinces do with their money is beyond the scope of this debate, but nevertheless to have a fair, meaningful and informed debate about how social programs have been affected by savings under the CHST we must remain mindful of what we are doing as a government, what we can and what we cannot do.

Can we as a federal government balance the federal budget? The answer is yes. In fact we have already done that. By restoring order to our finances can we as a federal government do our part to ensure that the provinces have more money for health and social programs? Clearly the answer is yes, and we have already done that. We raised the CHST cash floor to $12.5 billion and we did it a full year ahead of schedule.

As a federal government are we in a position to increase direct funding to key health initiatives? The answer is yes. As I have already indicated our last three budgets have allocated more money toward the health transition fund and other programs.

Can we as a federal government force the provinces to balance their budgets? The answer is no. It is up to them. Some have and some have not.

Can we as a federal government demand that provinces use any budgetary surplus for spending on health care? The answer is no. Again that is up to them.

Can we as a federal government insist that the provinces treat health care rather than tax cuts as a top spending priority? The answer is no.

The answer to these questions are quite revealing. For one thing they reveal that even though spending on social programs may be the top priority in Ottawa, it does not necessarily follow that spending on social programs is the top priority of the provinces.

The mark of leadership is the ability to accept responsibility for decisions, even unpopular ones. The record of the federal government speaks for itself. We have no problem accepting responsibility for the tough spending decisions we have made. The wisdom of these decisions has been borne out by the dramatic turnaround in the fiscal health of our nation.

We cannot accept blame for weakening the social safety net through our restraint measures. In fact the opposite is true. As a government that is once again in control of financial destiny we have been able to put in place a sound financial foundation. Our fiscal turnaround has meant significantly lower interest rates for all governments. That helps business growth and tax revenues. Together this means lower costs for governments themselves and that we are better placed than ever before to enhance the quality of life and security of individuals.

The policies I have outlined clearly demonstrate the government's commitment to sustaining and improving social programs.

[Libby Davies, NDP, Vancouver East, BC]

Madam Speaker, there is one comment the hon. member across the way made that I agree with. He said that the record of the federal government speaks for itself. In reality the record is very different from the record the hon. member has described.

While we hear on the one hand that the transfer of tax points to the provinces over the years has somehow been something that has mitigated the damage done by the federal government, let us be clear that the situation we are in today in terms of the provinces now proposing radical changes to the social union is a direct result of the $6 billion cut by the federal government from the Canada health and social transfer. It is a direct result of the abandonment of the Canada assistance program that laid out the entitlements and rights to Canadians in social programs. That is what the Liberal government has abandoned.

My question is for the hon. member who gave the same line as the hon. government member before him, that somehow Canada is the envy of the world. If that is true then why is it that the UN committee studying the economic, cultural and social covenant to which Canada is a signatory is asking Canada why we have the second worst incidence of child poverty in industrial nations? Why is it that we have increasing homelessness that now constitutes a national emergency?

Those questions are coming from the UN and are being directed to the Canadian government. I think they speak to the true record of the government in terms of abandonment of social programs.

What will the hon. member say to the 1.4 million children who live in poverty or the 5 million Canadians who live in poverty and do not get any of the benefits that he speaks about today?

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Madam Speaker, Canada is a federation and therefore there is power sharing among other orders of government.

I certainly am not pleased to see that we have a homeless situation, that we have people who go to bed hungry. However that is why the government has been working with other orders of government in the country to improve the living standards of all Canadians.

There is no question that the responsibility is at the ground level but Ottawa can only do so much. As I pointed out in my comments, moneys are transferred to the provinces. What the provinces in some cases are doing with those dollars is open for debate.

We still have the most liveable cities not only in North America but probably in the world. I would point out to the hon. member across the way that the government is committed to working with our counterparts across the country. We are committed to improving the standard of living of all Canadians. We have demonstrated that. Certainly the comments I made show that we are putting our dollars to work in conjunction with our counterparts.

In order to renew the federation, rather than pointing fingers we are trying to get all provinces to work with us to improve the state the hon. member talked about just a few moments ago.

[Pierre De Savoye, Bloc, Portneuf, QC]

I cannot believe it, Madam Speaker. People must know that, in the 1970s, when the federal government and the provinces entered into an agreement providing for equalization payments for health, the federal government unilaterally cut transfer payments to the provinces.

These transfers, per capita, were drastically cut year after year. More recently, billions of dollars were cut from transfer payments for health.

While the federal government kept the money paid by taxpayers in Quebec and the provinces, this money was not available to the provinces to provide health care and post-secondary education. That is a fact. And the consequences can now be seen from coast to coast.

Does the hon. member opposite not agree that the federal government abdicated its responsibility, diverted public funds and brought the provinces to their knees? It is time for a change.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Madam Speaker, I would not agree. The provinces were not brought to their knees. The national child benefit system is an example of redirecting resources toward new programs to assist low income families.

Obviously this promotes the fact that we are not hearing that message from the other side of the House. When we work together that message does not come from the other side. Only the sovereignists, the separatists, continue to say that they want the money, they will take the money, but we will not have any say in terms of how those dollars are spent.

[Gurmant Grewal, Reform, Surrey Central, BC]

Madam Speaker, I will be sharing my time in this pressing debate with the hon. member for Edmonton—Strathcona.

I rise on behalf of the people of Surrey Central to address the motion of the Bloc Quebecois. Briefly the motion talks about the House recognizing the disastrous impact federal cuts to social transfer payments have had, particularly on health services in Canada, and that the House support the consensus reached by the provincial ministers in Saskatoon on the social union project.

The four principles mentioned in the motion are: to reinstate federal health transfers, to require support of the majority of provinces for new federal initiatives, to provide an opt out option for the provinces, and to provide new mechanisms of co-operation to avoid conflict.

Last week federal-provincial discussions took place to change the way social programs are developed and delivered. Our new Canada act introduced these concepts earlier this year. This indicates that the federal government and the provincial governments are somehow getting their ideas from the official opposition.

The new Canada act unveiled by the official opposition in May 1998 is a proposed blueprint for building a stronger federation in the 21st century. That act incorporates some of the Reform Party's best ideas on strengthening the federation and puts them into a new legislative format. It works on two of the main founding principles of the Reform Party of Canada: reform of the federation and democratic accountability.

The new Canada act outlines how our federation can be transformed into a true partnership between the provinces and the federal government. It balances existing powers, strengthening the federal and provincial governments in several key areas.

The present Liberal government has shown no leadership on one of the most important issues facing the country. When it comes to strengthening our federation, the Liberals have been unable to reach beyond the status quo. Our leader has said that it is our duty as the official opposition to fill this leadership vacuum.

The social union discussion on the weekend was the first where Quebec was a participant and not just an observer. It makes me proud that the new Canada act introduced by our worthy leader with a true vision of Canada is an alternative that federalists as well as separatists will embrace. Therefore I will be voting to support this motion.

I remind the House that the Liberal government has been making massive cuts to transfer payments to the provinces, amounting to about $6 billion or 23%. This has completely destabilized the social safety net. As a result it has placed greater pressure on provincial governments. It has forced cuts in hospitals, medical staff and pharmacare programs. All the while the Prime Minister and the finance minister, the prime minister wannabe, shed crocodile tears and pose as the champions of medicare. Our health care is suffering. Just yesterday the old Calgary General Hospital building was demolished.

Cuts to health care by this Liberal government have affected the delivery of health services in Surrey Memorial Hospital in my constituency. Patients have even died due to lack of adequate equipment and services. All schools, hospitals and medical or health care facilities across Canada have been hurt by the government's efforts to balance the federal budget.

The Liberals have not reduced or eliminated waste and duplication in government spending. Immediately upon balancing the federal budget, the government announced new spending initiatives.

It is important to emphasize that the Liberals balanced the budget by raising taxes. They did it on the backs of Canadian taxpayers. They did it by giving Canadians the highest tax burden in the G-7 countries. Nothing is sacred. The Liberal finance minister is eagerly and desperately searching for a way to take and spend the $20 billion employment insurance surplus. I warn the Liberals that Canadians will not stand for that.

Surrey Memorial Hospital is supposed to be providing hospital services for our community. Many people in Surrey Central tell me about the long waiting time, sometimes one to five hours, in the emergency ward. The situation is so bad that many of the people I talk to say they will go to a hospital in Vancouver if they need emergency medical attention.

Surrey is probably the fastest growing city in Canada. Our hospital services have not kept pace with our growth but the cold-hearted finance minister, the legal-talking lawyer health minister and the know nothing Prime Minister do not care about that.

We do not have a health care system in Canada. We have a sickness care system. The system does not help you stay healthy or get healthy; the system only serves you if you are already sick.

Turning to the question of the House supporting the consensus on a social union project reached by the provincial ministers in Saskatoon, we know that the only stumbling block to support for the project is the Prime Minister. The provinces want to limit the federal government's power to launch new programs in areas of provincial jurisdiction, such as health and education, without their support. They want better collaboration in launching new social programs and rules established in the event that collaboration fails.

This desire to establish rules is magnified because of concerns about remarks made by our Prime Minister last month. His willingness to give up some control over social programs was not made clear. His remarks in an interview claimed that “if the premiers do not want to take what I am offering, they take nothing”. This is completely unacceptable. The Prime Minister prefers fighting the old battles and maintaining divisions rather than bringing people together. No one is free to disagree with the Prime Minister. If you do, you will get fired or pepper sprayed.

Reinstating federal health transfers has been a Reform Party policy for at least as long as the Liberals have been cutting the transfers. In our fresh start platform we promised $4 billion more for health and education. We would have gone through our federal government's expenditures department by department, program by program, and if necessary, desk by desk to reduce and eliminate wasteful spending and duplication of work. On the contrary, Liberals preferred to fund the old pork barrel programs and sometimes invent new ones like the millennium scholarship fund. As the government we could find taxpayers' money to redirect to health and education.

Again, requiring the support of the majority of the provinces before starting new federal initiatives that are under provincial jurisdiction is a proposal found in the new Canada Act. Why would we want our federal government to implement a program that six of the provinces did not want? The new Canada Act calls for the federal government to have the support of seven provinces and 50% of the population before foisting a program on all of us and forcing taxpayers to finance it.

The Bloc motion also asks the House to support providing an opt out option for provinces with full compensation from new or modified federal social programs in the provinces' jurisdiction when that province offers a program or initiates a project in the same field of activity. The new Canada Act that the Reform Party is promoting offers an unconditional opt out clause.

The Bloc asks us to support providing new mechanisms of co-operation to avoid conflicts to deal with them fairly. No room for pepper spray here. I presume the Prime Minister will not be able to support this one. This is a well-known legal tool used to reduce levels of conflict. The goal is to replace the adversarial system of conflict and dispute resolution with a more co-operative system. Arbitration can protect both sides in a dispute.

I will be happy to support this motion. As hon. members know, the Liberals have been sneakily recycling our ideas and the other opposition parties have been learning from us as well. Now the Bloc has shown some interest in us.

I am proud of my leader and Canadians will be proud when he is the next Prime Minister of Canada.

[Werner Schmidt, Reform, Kelowna, BC]

Madam Speaker, I would like to congratulate my colleague on the comments that he has made. I encourage him to continue in that direction.

There are a couple of issues I think we should explore a little further. There have been accusations made by other members of the House. They suggested that what we really want to put together is a potpourri of the social service programs so that each province has its own special little program which is different from any other, so there will be no continuity of programs and everything will really be chaos and there will be no standards.

One of the references in the new Canada Act says very clearly the establishment of national standards with regard to social programs and things of this type. It seems to me that we need to be very careful how we do this. There seems to be a borrowing of ideas by the Liberal Party in particular. It seems that the Liberals forget completely to study the concept and to understand what we are really trying to do.

I am wondering if my hon. colleague could help the Liberals understand what we are really trying to do so that they are not taking things on the surface and forgetting totally what this is really all about.

[Gurmant Grewal, Reform, Surrey Central, BC]

Madam Speaker, I thank the hon. member for the wonderful question.

The new Canada act is a draft. It is there for public consultation. It is so good that everyone is embracing it and we are getting very positive responses from every corner in the country.

On the other hand the remarks of the Prime Minister who is supposed to lead this country are very arrogant. Can anyone believe the Prime Minister of Canada making these remarks when he says that if the premiers do not want to take what he is offering, they take nothing. I do not expect that from the Prime Minister of Canada. Probably the prime minister of Indonesia could make that kind of comment. It is very arrogant and is not acceptable in our society.

The new Canada Act which we introduced in the early part of this year is working and we are getting responses from every corner. I am sure that the other parties are getting these ideas and I am very happy and proud that they are learning from the Reform Party.

[Murray Calder, Liberal, Dufferin—Peel—Wellington—Grey, ON]

Madam Speaker, I listened to the hon. member across the way recite Reform dogma. I am wondering if he really understands what tax credits to the provinces mean because that was part of his speech.

We have watched the economy grow because we have the deficit down to a zero balance and we have the government budget under control. The rest of the countries in the world see that we are serious about fiscal restraint. We have had economic growth of 4% in the last few years and this year looks like it will be around 3%. That means to say that the provinces have got 4% more and 3% more. Interest rates are at a 30-year low which means the servicing on their debt is lower. Does the member really understand all this?

[Gurmant Grewal, Reform, Surrey Central, BC]

Madam Speaker, the question speaks for itself as to how the Liberal Party understands the important issues in the House.

The transfer payments to the provinces were cut by the huge amount of 23% which is more than $6 billion. It affects health care and education in our provinces. The provincial governments and the municipal governments are under pressure.

I invite the hon. member to come to my constituency and talk to the people who are not offered emergency services. How long is the waiting period? How many hospital beds are closing? I ask the member to wake up and listen to Canadians to understand the situation in the country.

The member talked about balancing the budget and eliminating the deficit. Anyone can balance the budget. They could have balanced the budget 29 years ago if it was to be balanced on the backs of the Canadian taxpayers. We are paying 28% higher taxes than the average of the G-8 countries. We are paying higher taxes than the Americans south of the border. Look at the effect on the Canadian dollar. The Canadian dollar is diving. The hon. member needs to understand all these things before he asks that kind of question.

[Rahim Jaffer, Reform, Edmonton Strathcona, AB]

Madam Speaker, I am pleased to rise in the House to speak to the Bloc Quebecois motion on the social union.

I have had the opportunity to work with the hon. member for Témiscamingue and I admire his passion for politics, his political smarts and his dedication to his constituents. I think this motion clearly shows the failure of the status quo and how this failure hinders the delivery of social programs in Canada.

At a discussion forum in Quebec City and a similar meeting in my riding of Edmonton—Strathcona, everyone realized that the hon. member for Témiscamingue and I were proposing a slightly different approach to resolving the national unity problem. But we both understand that this problem is mainly the result of federal mismanagement of constitutional affairs and social policy.

The federal government has overstepped its jurisdiction and has entered into areas that rightfully belong in the domain of the provinces. This federal intervention is seen as a kind of insulting paternalism in Quebec, Alberta and the rest of Canada.

As is being discussed today, the federal intervention has also led to the deterioration of Canada's social programs. The federal government promised a centrally planned and administered solution to our social needs. It has not been able to live up to that promise.

With all due respect, I would like to remind my colleagues in the Bloc Quebecois, whom we should congratulate on their motion, that we can build a new partnership within Confederation if we keep trying to break the federal government's monopoly. We must bring about changes that will ensure every province has the level of autonomy it demands.

This motion addresses among other things the very serious problem of underfunding of our national health care. When the federal government established the Canada Health Act there was an understanding that it would pay 50% of the costs. In exchange the federal government was able to implement the nationwide health care program that legally bound the provinces to implement health care according to dictates of Ottawa. Many Canadians viewed this as a fair exchange. The provinces lost some autonomy but Canadians saw the benefits of a nationwide comprehensive health care system.

This system is no longer working the way it was supposed to. Since 1994 cuts to health care and social transfers have reached 23%. The federal government does not even meet half the commitment to the provinces it said it would commit under the Canada Health Act. The same federal Liberal politicians who claim to care about health care are starving the provinces of health care dollars.

The irony in this is that premiers Ralph Klein, Mike Harris and others have received criticism for trying to work creatively within a cash strapped health care environment. This has meant some tough choices but the Canadian people should remember that it is the federal government that has broken its health care promise to the people and not our premiers. The Prime Minister has let us down and the premiers are working to fix the problem.

The Prime Minister has not only broken his promise to the people of Canada, he has ignored the legal opinion of the supreme court which over the summer stated that the federal government has a duty to enter into good faith negotiations with any provinces dissatisfied with the status quo. When the first ministers get together defers to old style political bullying. The Prime Minister wants to call the shots without making a fair contribution.

There is a new reality in Canadian politics that the Liberals are going to have to understand. There is now widespread support for the rebalancing of powers and widespread dissatisfaction with overcentralized, out of touch Liberal style federalism.

My colleague from the Bloc has brought attention to an issue Reformers have campaigned on for some time, the need to reinvest in health care. Reformer has proposed a $4 billion reinvestment that would come from cuts to programs we believe are not core government services. Any politician who does not believe there is at least $4 billion of waste in the federal government is either dishonest or asleep.

The problem is not finding the waste. The problem is convincing Liberal politicians to stop playing politics with the paycheques of average Canadians and to start spending taxpayer money on programs taxpayers actually support. Why is the Liberal government spending money on the millennium fund when health care remains underfunded? Why has it once again interfered with provincial jurisdiction?

Another important aspect of the social union is the suggestion that the federal government should actually have to work to gain the support of 50% of the provinces before pursuing a new program. Imagine a system where the federal government has to find support for federal programs before moving ahead with them. This would be truly revolutionary in Canadian politics.

The Reform Party has outlined in the new Canada act a provision that seven provinces must give their support before a federal initiative can be implemented. But the provision in front of us today calling for six provinces to commit to a program is definitely a good place to begin. If the federal government goes ahead with the program after six provinces have signed on, those provinces that are not supportive of the federal initiative can pursue their own programs with full compensation. This is very important. For too long the federal government has used its powers of taxation to ignore constitutionally protected jurisdiction.

If the federal government is interested in seeing quality programs implemented it should not be concerned if they are being implemented at the provincial level or the federal level. It should be argued that programs administered locally better meet the needs of the people.

The motion also suggests some form of conflict resolution strategy should be created in cases where the federal government and the province or provinces disagree as to what qualifies as an equivalent provincial program. I have looked into a prospect of a national standards tribunal, a proposal that goes beyond what is mentioned in the new Canada act and what is being offered today by my hon. colleague from Témiscamingue. It is a project I will continue to work on, as I believe there is clearly a dilemma between the rebalancing of powers and the establishment of national standards.

Canadians are not prepared to accept extreme regional disparity. Nor are they prepared to accept poor federal mismanagement of social programs. Therefore some dispute mechanism must be created that addresses the question of jurisdiction in the context of national standards.

I say this not to qualify my commitment to the realignment of powers and the return of many powers to the provinces but to reaffirm my commitment and to find a way to remove the obstacles currently standing in the way of the success of the new Canada act and the proposal put together by the premiers in Saskatchewan.

The Liberal failure to understand that Canadians want to see fundamental changes to the administration of Canadian social programs will very likely become the single most united force in the united alternative effort. Status quo federalism is a failure that Liberals continue to hang on to, despite the damage it is doing to national unity and despite the damage it is doing to the Canadian social fabric. It is a shame that Canadians have to suffer, but I am optimistic that this issue will unify Canadians in opposition against an arrogant, out of control Liberal government that refuses to listen to the people, the provinces, the courts or anyone else who disagrees with it.

[Murray Calder, Liberal, Dufferin—Peel—Wellington—Grey, ON]

Madam Speaker, as my hon. colleague said, this is really a speech that we have to take with a grain of salt from what I have heard.

Reform's 1995 taxpayers' budget, which Reformers have cited so many times, called for $3 billion worth of cuts in transfers to the provinces for health, education and welfare. Their plan also called for a further $3.6 billion to cuts in other transfers, including equalization payments. On top of that, the $7.4 billion that the Reform wanted to slash from programs was funded directly by the federal government such as seniors pensions, employment insurance and an additional $1 billion worth of cuts to social security spending. That is $15 billion worth of cuts in social programs. I think the member is talking through his hat.

[Rahim Jaffer, Reform, Edmonton Strathcona, AB]

Madam Speaker, obviously the hon. member needs some clarification because he is probably reading those statistics upside down, as Liberals normally do.

If I can take a moment to clarify our position. The Reform Party has always campaigned that there should be more money made available especially for health care and education. That is in all our campaign material from the last election and we continue to say it is possible.

The reason we say that is we all know, as I mentioned in my speech, this government fails to see what exactly it needs to priorize when it comes to spending. If we would sit down and put partisan politics aside, as we continue to hear from that corner of the House, and say what is best for Canadians perhaps we could find the solutions that the Reform Party has put forward when it comes to putting more money in areas of health care and education.

I will not get into the specifics, but we have outlined areas where we see enormous amounts of waste in the way the federal government spends its money. I would take the time with the hon. member any time to show him that waste and hopefully we can come to the conclusion that the Reform Party has the answer.

We want to work with the provinces, unlike the heavy handed way of central government we have seen from the Liberals. We want to work with the provinces to actually achieve their goals in the best possible way.

I encourage the member to take a close look at those figures and look at himself and see that the Liberals have done more to hurt the social union in Canada than the Reform has ever done in its history.

[Monte Solberg, Reform, Medicine Hat, AB]

Madam Speaker, to the member, is it not true the Liberal government slashed transfers to the provinces by about $7 billion in the last two years, 35%, and closed more hospitals than all the provinces combined?

Given that, does it not make sense to try to work with the provinces as we proposed in the new Canada act?