House of Commons Hansard #132 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was federal.


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12:55 p.m.


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

Madam Speaker, I have two questions for the Minister of Human Resources Development.

The first one is he mentioned that the federal government's program is flexible and adaptable to the provinces. If that is the case, why have both British Columbia and Alberta been fined for being flexible in their programs?

My second question is he referred to his government as modernizing the federation, a true partnership. My understanding is that the Liberal government since taking office has cut transfers to the provinces by 23%. True partnerships are 50:50. He has reneged on his commitment of that partnership. When is he going—

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12:55 p.m.

The Acting Speaker (Ms. Thibeault)

The Minister of Human Resources Development, a very short answer.

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12:55 p.m.


Pierre Pettigrew Liberal Papineau—Saint-Denis, QC

Madam Speaker, if the official opposition had voted for the legislation, it would have helped the House a great deal in proceeding the way that she wants to go. But that is typical of Reform.

The flexibility I have described is absolutely remarkable. It is absolutely the way we have applied it to every program that I talked about. Whether we are talking about the national child benefit or employment for disabled Canadians, these are national frameworks which are adapted to the realities of each province.

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12:55 p.m.


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

Madam Speaker, it has been interesting listening to the debate on the motion this morning. The motion is basically in support of the provincial premiers and the provincial governments that met in Saskatoon in drafting up the social union and then coming to an agreement.

The debate seems to have narrowed down to wanting more money for health care. I do not deny that is an important issue, however I feel this is far greater than just a debate on whether or not we get more money for health care. This is a debate on the future of our country and the relationship between the federal and provincial governments.

I suggest that the relationship we have had over the past 30 years has not worked very well. What we are looking for is a relationship between the federal government and the provincial governments that will be progressive, that will be futuristic and that will work in the 21st century.

It was interesting to listen to my colleague across the floor, the Minister for Human Resources Development talk about this government modernizing and being progressive. I suggest that just is not so. This government is dragging its feet. It is looking at the old way of doing things, the old way of domination. It is not looking at a new progressive partnership with the provinces. It is incumbent upon the government to listen to the debate today on how we are looking for a new progressive partnership with the provinces.

The Liberals are not showing leadership. They are not showing Canadians that they know what leadership is all about when they refuse to accept the premiers' outreach in changing the relationship between the federal and provincial governments so that it will work better in the future.

The Liberal government really should reconsider its opposition to what is being proposed by the premiers. I find it amusing that even the separatist party in the House of Commons, the Bloc, seems to be doing more for national unity than the Liberal government of the day.

I would like to introduce to the House some comments out of the new Canada act which the Reform Party presented to the House in the spring. This is an attempt by the Reform Party to deal with some issues to modernize our government so it will be ready for the 21st century. We suggested a few things and in Saskatoon the premiers seemed to agree with our intent.

We suggested that there should be limits on federal government spending power. The federal government should not just walk in and take over provincial jurisdiction because it has money to spend. We felt that the federal government should not be financing new programs unless there is support from the provinces. We used a figure of seven provinces having over 50% of the population. The premiers have agreed to a lesser mark than that. The premiers are being very generous in saying it just needs the majority of the provinces.

We feel that any province that chooses not to participate should receive a grant equal to the population of the province multiplied by the per capita spending of the federal government for that new program. The provinces have agreed to something even more controlling and more definitive than that. The provinces are being very generous in agreeing to this partnership with the federal government.

We go on to mention other things in this resolution. We mention a dispute resolution mechanism. We feel it is necessary to establish the parameters of how a disagreement is going to be handled up front before getting into that situation. Again we are far more stringent in our presentation than the premiers. The premiers have agreed to something that is more generous with the federal government.

I find it very interesting that the premiers seem to be reaching out. They seem to be willing to accommodate. The premiers are willing to be flexible, to use the minister's word. I find no flexibility in the federal government's approach. I find no flexibility in this old way of doing business with the provinces, this old concept that someone has to be in charge.

The government talks about partnerships. A partnership is when people work together on an equal basis, respect each other's authority under the constitution and respect each other's position at the bargaining table. That is missing from the federal government. It does not seem to be willing to be a true partner.

My colleagues have talked about the cuts to transfer payments and that is a fact. That is something the other side cannot argue. It is a fact that in the last four years this government cut 23% of transfers to the provinces.

I do not consider that to be a fair partnership. When the federal government originally got into the Canada Health Act, a fair partnership was an agreement of 50% funding. The federal government said to the provinces “We want you to do this; we agree to do this and we will fund you 50%”. Now the federal government is only funding 23%.

Where is the commitment to that partnership, to that relationship? I would suggest it does not exist. Because it does not exist, because the federal government is fronting less than a quarter, it has lost the moral right to place demands on the provinces. The federal government has lost the moral right to have the controls it insists on. The government has no moral authority to be taking the leadership position when it is only a minor shareholder in that partnership.

It is time for this government to take some leadership, to recognize the fact that 10 provincial premiers met and discussed this social union and lo and behold all 10 of them agreed. That must have been a very momentous occasion, something we do not see very often in this country. Ten premiers, 10 provinces agreeing to look at the fundamentals of an agreement.

Ten provinces have recognized the need to work together not for power or control, but because that is the best way they see of providing services to their people. Like all of us, they have to seek election, seek the support of their electorate. They are accountable to the electorate for their actions.

Ten premiers have reached a consensus and what do we have? A federal government holding out and saying it does not care what the 10 have agreed on. It is unbelievable what our Prime Minister has said. To quote the Prime Minister, he said “If they”—the premiers—“do not want to take what I am offering, they take nothing”. For somebody who is negotiating and trying to get a partnership working, that kind of an attitude does nothing for co-operation.

The government has to change its attitude. It has to be more willing to change the way it does business with the provinces. If the federal government wants to show leadership to keep this country together, in developing new meaningful partnerships with the provinces not only on the social union but in other things as well, it will have to have the attitude to make it work. If it will not let it work and if it is going to turn its back on something that 10 provinces have agreed to, I do not consider that to be a partnership at all.

I would like to caution the Bloc members. I think that they are using this as an attempt to show that Canadians will not support them when the government, hopefully does not, but it looks like it is not going to be co-operative. I caution the Bloc because what I see here with the 10 premiers coming up with a consensus is that the process does work within confederation.

The process of negotiating for the best for our citizens does work. The problem is the players. The problem is people like the Prime Minister and his cabinet and the people on that side of the House who refuse to modernize their thinking and change the way of doing things, of governing the country.

I would suggest to the Bloc that there is a process. Canadians can work these things out within confederation. We can be equal partners. We can respect each other's positions and it can happen within Canada. We need to make sure that we have a government on the other side that respects that position and is willing to work within it.

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1:05 p.m.


John Bryden Liberal Wentworth—Burlington, ON

Madam Speaker, the member spoke repeatedly about partnership and leadership. As I understand it what the 10 premiers agreed upon was that they would take no leadership from the federal government in the matter of how they would spend the social and health transfers.

I would suggest to the member that surely as we do live in a country that is an assemblage of provinces and territories we should expect leadership from the national government and the national government should demand to have representation in how the national government's money is spent. Otherwise how will we ever have high standards of health care that are universal across the country?

Would the member at least consider allowing that the Government of Canada should have a say in establishing standards of health care all across the country?

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1:05 p.m.


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

Madam Speaker, I think the member has it all wrong. That is not at all what the provinces are saying.

The provinces are saying that in a partnership there has to be a consensus as to where the money is going and that the federal government has no business buying its way into provincial jurisdictions. It has no business going into another social program, another health program, without the approval and the support of the majority of the provinces. That is a realistic thing to ask of the federal government.

The provinces are not saying they do not want the federal government involved and they will not let it determine where it is going to spend, but talk to the provinces and get some consensus at the provincial level so that they are on board. It is this dictatorial way of coming in, spending the money and telling the provinces where in their jurisdiction the money will be spent that is the problem. I will say that from my own experience, the provinces often have a better idea of where that money should be spent than somebody sitting here in Ottawa 3,000 miles away.

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1:10 p.m.


Reed Elley Reform Nanaimo—Cowichan, BC

Madam Speaker, I suspect what we are really discussing here is a matter of economics, that at some point, the federal government look—

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1:10 p.m.


Bill Blaikie NDP Winnipeg—Transcona, MB

Madam Speaker, I rise on a point of order. I sought to be recognized by the Chair. The tradition in the House with respect to questions and comments is that if a person from a party other than the member who has spoken—

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1:10 p.m.

The Acting Speaker (Ms. Thibeault)

I am afraid that is not a point of order. The hon. member for Nanaimo—Cowichan.

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1:10 p.m.


Reed Elley Reform Nanaimo—Cowichan, BC

Madam Speaker, the hon. member will realize that you win some and you lose some.

It seems to me that this is a case of sheer economics. At some point the federal government looked at its piggy bank and decided it did not have enough money to pass on to the provinces. Its own fiscal house was not in order. It was in serious trouble, in debt and its budgets were not balanced.

There was no other recourse for the provinces. They knew they had to get the money from some place. What the provinces then have to do is tax the people even more with all kinds of ingenious taxes, ones we have never heard of.

If this is a problem of economics and it is the federal government that has caused this problem with its own fiscal mismanagement, could my colleague make any suggestions how the federal government could have taken care of this problem without putting the burden on the provinces? Could the government here in Ottawa have done something to change that?

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1:10 p.m.


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

Madam Speaker, this is more than an economics problem. I appreciate what people are saying. Yes, the government could have found the money by more carefully spending it in other areas which took priority.

This is much more than an economics issue. This is a question of respecting the jurisdictions that were given to the provinces and the federal government under the British North America Act, our original constitution. It is about respecting the foresight of our Fathers of Confederation when they were trying to bring all these entities together as a country.

If we go back to respecting that issue, it is about money but it is about far more than money.

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1:10 p.m.


Bill Blaikie NDP Winnipeg—Transcona, MB

Madam Speaker, I would like to begin by saying that it is timely that we have the opportunity to debate the social union. A lot is happening. There is the Saskatoon consensus of the premiers. There are ongoing discussions between parties in this House with respect to how we might come together, particularly the opposition parties if it is possible to arrive at a working position that we can advance together.

We are all reacting to a reality that has been imposed on the Canadian public by the Liberal government. That is the massive cuts to federal transfer payments to health and post-secondary education which came in the form of the creation of the Canada health and social transfer, the cover under which the federal Liberals moved to do what they said they would never do and that is to massively undermine medicare.

This is a great irony in the sense that the Liberals often want to take credit for the creation of medicare. They do not tell us that they first promised it in their platform of 1919 and did not deliver it until 1966 when they were in a minority parliament under pressure from the NDP. It took them that long to bring medicare into being. It has only taken them a couple of years in government, five years, since 1993, to almost completely destroy medicare and create conditions in which the provinces now come together to advocate a radically different way of dealing with health care in this country with respect to the establishment of national standards.

Even though one is disinclined both individually and as a party toward this kind of so-called decentralization, one almost has to agree with them. As another member said, there is no moral high ground left on that side of the House when it comes to the federal authority to regulate health care. They have completely abandoned their share of financing our health care system. Yet they parade around like they are the great saviours of medicare and like they have the moral high ground when it comes to health care. They have no moral high ground at all. They are in the gutter when it comes to this.

They are the ones, contrary to everything they ever promised, contrary to everything they ever said, who have become the architects of medicare's demise if the country, other political parties, the provinces and all of us together cannot act in some way to wake up these people as to what is happening in our hospitals.

Across the country people are not getting the kinds of services they need. People are having to wait longer for surgery and for diagnostic services. There are all kinds of horror stories, anecdotal but nevertheless persuasive and convincing, because the federal government is not exactly funding a study to see how its cuts have affected health care and post-secondary education.

We certainly agree with that element of the motion which condemns the government for its cutbacks in transfer payments to the provinces. We condemn the Prime Minister for rejecting out of hand the work the premiers have done. He does not have to agree completely with the premiers, but he does not have to be so cryptic and so dismissive.

He could say yes, very interesting; some good ideas there; let us have a look at them. Instead we get the same kind of arrogance from across the way that we see with respect to APEC and numerous other examples that the Prime Minister has provided for us in recent years.

The motion also talks about support from a majority of provinces before new federal initiatives are introduced in areas of provincial jurisdiction. This is very general language. I have to say I am not completely comfortable with it in the sense that we would not have had medicare if we had to wait for a majority of provinces to agree because a majority of provinces did not agree.

I am very leery about this kind of language. I would like to know more about what it means before I would certainly agree either personally or on behalf of my party and caucus as the intergovernmental affairs critic. I will read from the motion:

the right for a province to opt out, with full compensation, of a new or modified Canada-wide federal government social program in areas of provincial jurisdiction when the province offers a program or introduces an initiative in the same field.

My concern is that this actually goes beyond Meech and beyond Charlottetown because it says “new or modified”. In Meech and Charlottetown it talked about new programs. My concern is about the introduction of the word “modified” Canada wide program. It seems to me that some people might want to argue that if any changes were made to the Canada Health Act or to medicare this would be a modified program and that this might create the conditions under which some provinces could argue that they would be able to opt out of medicare. I would certainly be against that. I am sure all my colleagues share my concerns about that.

There is some tricky language here. I am not sure exactly what it means, but it certainly goes beyond other proposals which have created a lot of concern in the country in the past. I think this language, new or modified programs, would certainly create those concerns again and perhaps in an even more significant way.

I am not surprised that my colleague from the Reform Party does not seem to be as worried about the language as I am. Frankly I think they would like to see medicare broken up into 10 different systems with very little, if any, national participation whatsoever. The motion continues:

new co-operation mechanisms in order to avoid conflicts or settle them equitably.

We would have been much happier with this aspect of the motion if it had intimated or, even better, said that we are talking about new ways to set and to enforce national standards.

Given the total lack of moral high ground on the other side and given the diminishing participation of the federal government, I would agree that there may be a case now for the provinces having more say, in conjunction with the federal government, in mutually defining what national standards would be when it came to health care, when it came to medicare, and how those are to be enforced. However that is not what this says. It may be that the hon. member for Témiscamingue was being deliberately general in this in order to have a more broadly based discussion. If that is the case then that was an admirable goal, but if it was a deliberate attempt not to talk about national standards then this would be a matter of concern for us.

As someone who has argued in the past for the ability of the federal government to set standards, to enforce the five principles of medicare and to punish provinces for not adhering to them, I find it very difficult in this context, not in theory, to continue to defend that position when the Liberals have cut so much from federal contributions to health care. It becomes a weaker and weaker argument every time they do that, and I regret that very much. I wish they regretted it and I wish they would put more money back into health care, recover the high ground and be able to say with some confidence and some authority that they want to have a strong voice in the setting of national standards.

Another concern that needs to be expressed in any debate about the social union is the ongoing concerns of the aboriginal community with respect to how the development of any social union might impinge upon its relationship with the federal government which it sees as having, and rightly so, a fiduciary responsibility or relationship that it feels would be undermined by a social union which did not take account of that in some particular way. I see nothing in the motion that reflects that particular concern either.

For all these reasons I think the debate should continue about the social union. I think there is opportunity here for Canadians to work together. The premiers have already demonstrated this. The opposition parties are working together on this to some degree. I think it is time for the federal government to realistically engage in this debate instead of just posturing as the great defenders of medicare and acting as if the rest of us are all just beyond the pale.

It is not so. These people are culpable in many respects for the current situation. They need to face up to that reality and to deal with all Canadians in answering the question of how we can improve our health care system and how we can maintain it in such a way that Canadians have access to the same quality of service no matter where they live in the country.

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1:20 p.m.


John Bryden Liberal Wentworth—Burlington, ON

Madam Speaker, the member for Winnipeg—Transcona is an experienced member of the House. He will remember, particularly during the Mulroney years, that the federal government transferred a large proportion of tax points to the provinces for social spending.

I would suggest to the hon. member that this has seriously eroded the ability of the federal government to intervene in the delivery of health care and social spending by the provinces. At the rate we are going with the transfer of actual tax points, the that federal government would have little to say in this entire debate would be quite academic.

Would the hon. member support a return of those tax points? If after due debate the House decided that we wanted to reverse the process of giving provinces absolute control over federal money, how they would spend it in social spending, and turn the calendar back so that the federal government had more power and could intervene in setting standards and play a more active role than appears to be the case now, would the member support that?

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1:20 p.m.


Bill Blaikie NDP Winnipeg—Transcona, MB

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

The fact is that tax points were part of the federal-provincial fiscal relationship long before the Mulroney government. It would be quite wrong to suggest that somehow this was a new development, something that developed after the Conservative government in 1984.

If the member wants to go back, maybe he should go back to the first unilateral cutback in federal transfer payments to the provinces which was done by a Liberal government under Allan MacEachen in 1982. That was the beginning of the problem we have now.

In 1977 we had an agreement that set up block funding which was different from the 50:50 arrangement that existed from the time of the creation of medicare. There were people who warned then, notably the NDP, that the creation of this block funding would eventually lead to the erosion of medicare and the erosion of the ability of federal government to maintain and enforce national standards.

The creation of the block funding led to a crisis in the late 1970s and early 1980s which led to the Canada Health Act. Tax points are part of the equation. Our position would be that there needs to be a strong and much more significant than we have now cash portion of the federal transfer payment, so much so that it would give the federal government the ability to speak with some moral authority when it came to the maintenance of national standards.

I am sorry but they just do not have it any more. They gave it away as a result of successive cutbacks to the CHST.

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1:25 p.m.


Pierre Brien Bloc Témiscamingue, QC

Madam Speaker, I thank the hon. member for sharing his concerns about the social union. I am sure we will have an opportunity in the coming weeks to address some of his concerns, particularly those regarding aboriginal peoples.

On the subject of compliance with the Canada Health Act, we will let the provinces speak for themselves. However, the provinces have been saying all along that they want to maintain a universal health care system, which should alleviate the member's concerns as to how the health system would be managed if they were to become more actively involved than they are now in its management.

I am sure we agree on the need to put new money into health care. I would like to know if the member thinks the priority to put new money into the health system is best met through the current Canada Health and Social Transfer or if he supports the federal government's plan to initiate new programs on its own. For instance, if $2 billion were to be invested in health care next year, should it go into the existing Canada Health and Social Transfer or into some new initiative unilaterally put in place by the federal government? I would like to hear him on how new money should be invested in health care.

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1:25 p.m.


Bill Blaikie NDP Winnipeg—Transcona, MB

Mr. Speaker, with respect to any decision by the federal government to inject new money into the health care, it should be done by restoring cuts. That by definition would be money that would go to the provinces.

Unless the government is to put billions and billions of dollars back into the system, I would not regard anything as new money. I would regard it as money that never should have been taken away that is being given back.

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1:25 p.m.

Progressive Conservative

André Bachand Progressive Conservative Richmond—Arthabaska, QC

Madam Speaker, I am pleased to rise today on an issue that members of the Progressive Conservative Party know well. We are talking about the social union, but we used to call it the Canadian pact. This, of course, was part of our 1997 election platform. If I have enough time, I will be pleased to indicate to the House the similarities that exist between the two.

Some members pointed out earlier the advantage for the provinces to have worked together and reached an agreement. That is the positive side. It was the same for the Calgary declaration. It was a small starting point. The provinces and territories are doing the work. Why? Because Liberals are not doing their job. The success achieved by the provinces in the social union is linked to a lack of leadership from the government. It is a causality link. Liberals are not doing their job, so the provinces are doing it for them. The Liberal government should show much more inclination and willingness to greet positively what is happening in the provinces.

The message that we want to send, both to Quebec and to the rest of the country, is that, if there are problems in federal-provincial relations, it is not necessarily because of the provinces. Perhaps we should look at the other side of the House, where the Liberals are sitting. But there is hope if the provinces are able to talk to each other. That is the interesting thing.

The other point I would like to make—and I did so earlier in a question I asked this morning—is that the social union is not only a health issue, but also an education and a social assistance issue. It is not only a money issue.

The idea behind social union is not only to say that we want six, seven or eight billion dollars more. It is a way of putting in place a new and effective system of federal-provincial relations. We must see beyond money and health issues, even though they are also very important. The health issue was raised this morning by my colleagues from the Bloc. I share their view. Education also is important.

So, what we are saying is that social union must go a little further, but, as I indicated, I will talk about that later.

I would like to talk to the motion put today by my colleague from Témiscamingue. Of course, it talks about money. The provincial ministers of finance proposed many solutions involving cash and tax points over three, four or five years. These are all very interesting solutions provided that the so-called team captain, in this case the Prime Minister, agrees to co-operate. But that co-operation is not there at the moment.

The deadline for the social union is December 31. Madam Speaker, I do not know the state of your personal finances, but if you have money, do not bet on that, unless the federal government decides to be more open. The social union project appears to be in jeopardy. Can we already talk about failure? No, because the very fact that the provinces and territories reached an agreement is a great success. But since the federal government is not there, that achievement seems likely to be turned into a failure, unfortunately.

Now, I would like to come back to the social issue, more specifically to the circumstances leading to the need for more money. But there is the principle of clarifying federal-provincial relations.

I would like to talk about the points made in the motion presented by my colleague from the Bloc. Restoring the level of contributions is a question of money, of course, and it is important. I agree with 98% of the Bloc's arguments, which says it is Ottawa's fault. In effect, Ottawa is the one behind it all. But I disagree—and I rate this at 2%—with its arguments because the Quebec government is doing to municipalities what the federal government is doing to the provinces. I know, I was a mayor long enough. So, it is sometimes neither black nor white, but grey.

What is interesting, though, is the support of a majority of provinces before initiating new federal incursions into sectors under provincial jurisdiction. It is fantastic. But what could first be clarified is what is neither under federal nor provincial jurisdiction. It is said that health care falls under provincial jurisdiction. That is all fine and good, but how many hundreds of millions of dollars in health research are funded by the federal government? The tens and hundreds of millions of dollars spent by the federal government in research seem to be accepted by Quebec and the other provinces. And what about the granting councils? Do they come under federal or provincial jurisdiction?

We must sit down and look at all areas of jurisdiction, and not necessarily make constitutional changes—we have not reached that point yet—but maybe establish correctly the different areas of jurisdiction and, after that, look at how we can manage them for the benefit of Quebeckers and Canadians.

So, it is important to clarify the areas of jurisdiction, because some people always consider our country as being upside down or the other way around. Maybe we should liken this country to a tree, with the roots meaning we are all working toward a common goal, and the leaves representing the whole population. Maybe that is how we should look at it. The federal government and the provinces alike want to be at the top of the pyramid, to have jurisdiction over it. But ultimately, the most important in all this is the population we are here to serve.

As I said earlier, there is also the provincial right to opt out with full compensation. I am not sure we really understand what it actually means. Opting out means you take your money and leave. But it seems now that it is not quite that simple. You take the money, but you somehow have to spend it in the same jurisdiction and to work toward the same goals.

This is not really opting out, except administratively. If we really want what the Progressive Conservative Party calls a Canadian pact and the provinces call social union, there cannot be any opting-out, because we have to agree on certain rules or standards.

My NDP colleague raised concerns about the national standards to be set by the federal government. That is not our position. We are suggesting instead a Canadian pact office with federal and provincial representatives who are going to first set and then implement the national standards.

When we have standards, if for some reason a province should decide to opt out, it should still abide by the standards of the Canadian pact or social union.

Some real progress has been made and I congratulate the people and premier of Quebec on this. This is not the same concept of opting out we had back in the 1970s or the 1980s. It is a right to opt out because some things, some programs have been put forward. This will be done in the same spirit, except that we might like to manage things. And why not, since the provinces have often shown they can manage things better than the federal government. I do not have a problem with that.

It must be well understood that we are saying that, if we agree on the rules, the standards, the basics relating to the Canadian pact or social union, we cannot have a right to opt out, pure and simple. Should it be an administrative opting out? Sure, why not, as long as we abide by the rules. It is nonetheless important.

It is so important that if we do not have that, we cannot have a dispute settlement mechanism. How can we have a dispute settlement mechanism without agreeing on the main points? What we are proposing is a Canadian pact office which, once it has decided how it should work, and decided of course on the funding, will set the rules so we can settle any potential problems. Of course we do not like conflicts. That is why we need well established rules.

If a province chooses to opt out, or if a province that opted in mismanages a program, there will be enforcement mechanisms with teeth—not only a slap on the wrist.

Some people seem to have a problem with that. I apologize for talking about Quebec in particular, but I feel it is important. Even though any analogy is lame, may I remind the House that, when the free trade agreements were negotiated, a dispute settlement mechanism was put in place. Everybody agrees on this.

If we have an agreement on social union, what we call a Canadian pact, it is normal to have a dispute settlement process inasmuch as we agree on the terms of this social union.

In conclusion, I would like to stress the fact that the provinces must persevere. If I am not mistaken, the next meeting will be held in Winnipeg two weeks from now. I hope the Minister of Justice will be more voluble. Of course, she had to understand what was going on at the provincial level. Perhaps this proves once again that there is a dichotomy between what goes on here in Ottawa and the reality.

I say to the provinces that they should persevere and resist temptation, and I ask the federal government to start showing more leadership.

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1:35 p.m.


Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Madam Speaker, the debate on the social union initiated this morning by the Bloc Quebecois is taking place against the backdrop of an economic downturn, which makes it all the more urgent to adopt a series of measures to reinvest in the economy the money accumulated at the expense of everyone but the Minister of Finance to stimulate economic growth.

We have suggested, and we are doing it again in this debate, that an increase in the social transfer could, in part, serve that purpose, particularly to finance social security, post-secondary education and, of course, health.

Since mid-August, the Bloc Quebecois has been warning the federal government that a major economic downturn and even a recession could be expected in the next few months. In August, we could already see some signs of this, since the growth in the GDP had been slowing down for three consecutive months, that is in April, May and June.

Last Thursday, Statistics Canada announced a decrease in the growth of the GDP for the fourth month in a row, which means that, according to the figures registered or estimated by Statistics Canada, the Canadian economy lost over $5 billion in the last four months, which means about $200 per person in Canada. In four months, due to negative growth, $200 from our pockets were completely squandered.

Two more months of economic downturn will usher in a full recession. Six months in a row of reduced growth of the GDP is the very definition of a recession.

Two major factors explain the downturn in the economy we have been seeing in the past four months. First, there is the Asian crisis which is exacerbated by the crisis in the former countries of the Soviet Union, mainly Russia. Those two crisis combined have resulted in an increase in uncertainty all over the world, in a decrease in the value of our exports of raw materials, especially to Southeast Asia, which in turn resulted in a decrease in the demand for the Canadian dollar and therefore a fall in the value of our currency.

In the face of this world uncertainty, speculators have turned to what are called safe havens, in particular the U.S. dollar which they have bought in large quantities. They shied away from the Canadian dollar, thus accentuating the downward pressure on our currency.

Everywhere, the consequences of this crisis have been enormous. The fall of the Canadian dollar may be profitable in the short term for the tourism industry, for example, but it is not profitable in the long run in the high tech sector, in particular in those sectors where inputs have to be bought in the United States, in those sectors where high tech electronic equipment must be bought at higher prices. Since Canadian business must pay more for this equipment, we become less competitive at a time where we are already facing an economic downturn not only nationally, not only in Quebec and in Canada, but also internationally.

The second factor responsible for the decrease in Canada's GDP is the federal government. For several years we have been telling the government that it cannot make deep cuts in social programs, such as health care, post-secondary education and welfare, and in transfers to the provinces in general, help itself to the employment insurance fund surplus and maintain artificially high taxes without causing an economic slowdown.

In four years of Liberal government, taxes going into the federal treasury increased by $37 billion. Individual taxpayers had to pay $20 billion more in federal taxes, and businesses had to pay $17 billion more. These $37 billion taken out of the economy inevitably contributed to the economic downturn.

The artificially high employment insurance premium rates are just another tax in disguise, adding to the tax burden of businesses. In a situation where the economy is slowing down and where the cost of buying foreign goods has increased because of our falling Canadian dollar, now is not the time to maintain premium rates at the current high level.

The government is responsible for the economic downturn because it has failed to substantially reduce EI premiums and because it has chosen to maintain high taxes. It is also responsible because of the billions of dollars it took away from the unemployed two years ago with its employment insurance reform.

The government cannot continue taking more money from taxpayers. It cannot maintain all kinds of taxes in disguise, such as EI premiums for employers, and think the economy will keep on going.

Moreover, the debt reduction policy is also partly responsible for the low Canadian dollar and for the harmful effects of its fall.

Taking a lot of money, billions and billions of dollars, to pay back part of the debt, can look good. That is what the Prime Minister bragged about last summer. In 15 months, the federal government used $20 billion, which amounts to the surplus found in the employment insurance fund, because the premium rates are too high, or to one and a half times the health budget. They used $20 billion to pay back part of the debt.

What impact did this $20 billion payment have on the Canadian and world markets? It flooded the money market with new Canadian dollars, which reduced the value of the loonie. That is what this federal policy did.

To understand the situation, one has to know who the Canadian debtholders are. In Canada, 25% of debt securities, bonds, etc. issued by the federal government are held by foreigners, almost half of whom are American. What did these people do when we bought back our securities, as the Minister of Finance did? What did they do? They exchanged their new Canadian dollars for US dollars, because they are Americans, and by doing so they flooded the Canadian money market with new Canadian dollars, which, in turn, decreased the value of the loonie.

The other debtholders are chartered banks, pension funds, insurance funds. These people were looking, especially last summer, for the best return possible and for less uncertainty. What did they do when the federal government bought back their securities in Canadian dollars? They took the money and either exchanged it for US dollars, which is a sure bet in these times of uncertainty and crisis in Asia, or bought shares in American companies or US bonds, which is a better investment in these turbulent times throughout the world.

The Minister of Finance, who asked the Bank of Canada to step in, especially in August, to support the Canadian dollar, was himself responsible for the precipitous drop of the Canadian dollar and for all its impacts on the competitiveness and on consumer confidence.

The monetary policy and the interest rate policy of the Bank of Canada are the third reason that makes the federal government responsible in part for the economic downturn and, indeed, for the recession that could happen next year if the data continue to show the same sluggishness observed during the first four months.

While we learned, last August, that the GDP had fallen for three months in a row and that other indicators hinted to a major economic slowdown, the Bank of Canada decided to raise its interest rates by 100 basis points or 1%. This 1% raise may seem insignificant, but when there is already an economic downturn, one can deal a death blow to the economy simply with a 1% shock on the monetary market, through an increase in the interest rates.

When the Bank of Canada did that, which was very stupid, the Minister of Finance said that he still trusted the governor of the Bank of Canada, even though the latter is stopping—and I would even say throttling—economic growth in Canada. Gordon Thiessen, the governor of the Bank of Canada, not only made a mistake when he raised the interest rates by 1%, but recently he also sent contradictory signals.

Last Thursday, when the US Federal Reserve Bank lowered its interest rates by 20 base points—it could do so because large economies like those of Germany and the United States must lower their interest rates—the Bank of Canada followed suit in exactly the same proportions. That was nonsense. The Bank of Canada should have done nothing.

That is precisely what is being asked of the governor of the Bank of Canada: to stay put and do nothing. He should lock himself in his office, and think up more intelligent measures than the ones he is taking to stimulate Canadian economic growth.

Why be stubborn, like the Minister of Finance and the Prime Minister who, all summer long, made light of the fall of the Canadian dollar, and even of the economic downturn?

On the contrary, he should admit there is a downturn, that all the experts now agree with the Bloc Quebecois who raised the alarm the very first week of the financial crisis. All the experts are now saying there is no sign that next month or the following one—I am still talking about economic statistics—things will pick up. As I mentioned before, we are talking about the first four months of the current fiscal year, or April, May, June, and July. In August and September, unless one is as short-sighted as the Minister of Finance, the economy did not do better.

In August, the Canadian dollar dived to an all-time low. Businesses were beginning to complain about the increasing costs of American equipment and high technology as a result of the decline in the value of the Canadian dollar. If there was an economic slowdown in April, May, June and July, we should expect the same in August and September. We will then have, according to the technical definition, a recession.

For the last month and a half, we have been asking the finance minister to use if not all, at least most of the actual surplus to promote economic growth instead of using the entire amount to repay part of the debt—we are not against repayment of the debt but it makes no sense in the current climate of economic uncertainty. We are not asking him to spend money recklessly as the Liberal government used to do in the old days.

I remind you that the current Prime Minister was once the Minister of Finance and that he was responsible for one of the largest deficits in Canada, back in the days when the federal government used to run deficits. We are not asking him to fall back into the same bad habits. Neither are we asking the Minister of Finance to repeat his Prime Minister's old mistakes. Since the budget surplus will reach between $12 billion and $15 billion by March 1999, we are simply asking him to take these funds and announce imminent tax reductions and measures that will boost the economy and restore the confidence of consumers, which is now badly eroded.

What is the greatest threat? It is that in a few months consumers, whose savings are unusually low right now, facing uncertainty, a falling dollar, and the do-nothing attitude of the Minister of Finance and the Prime Minister, will decide not to spend, to postpone all their purchases. As I said, with their unusually low savings, they are quite likely to postpone their purchases, and that will be the end. As early as 1999, we will be in a recession, and it will be because of the Prime Minister and the Minister of Finance, who did not take seriously the early signs of a major slowdown in the economy in the last four months. They did not listen to the Bloc Quebecois which, for a month and a half, has been mapping a plan for government action.

What could the government do to stimulate the economy? We are asking for three things. First, implement a series of fiscal measures within a special budget. These measures would include, among other things, a substantial tax break for middle income earners.

We are also advocating a reduction of EI premiums to help employers go through the economic slowdown and help middle income earners who are likely to spend the extra money made available through income tax cuts and premium reductions, thereby stimulating the economy.

And on the heels of the debate on the Canadian social union, we also ask for an immediate increase in social transfers to the provinces. Spending on social programs can also result in economic growth.

Then we are asking the government—this is our second demand—to ask the Bank of Canada to stop making erratic decisions and creating shock waves in the economy. Nobody knows where the Bank of Canada is going anymore. Gordon Thiessen told us “We are independent from the U.S. Federal Reserve Bank”. This does not hold true anymore. Last Thursday, when the Federal Reserve Bank lowered its basic rate by 25 basis points, Gordon Thiessen blindly followed suit, something he should not have done.

A better way to manage the monetary policy would have been to wait and see. His 1% rate increase at the end of August has hurt the economy, but what is hurting the economy even more is that we do not know where he is heading. He has put us in an uncertain situation. He is putting the financial markets in a situation where we expect the worst. Things may not be at their worst, but they could certainly be better. We in Canada are just keeping our heads above water.

Gordon Thiessen should keep quiet and lock himself up as I was saying earlier. Perhaps the Minister of Finance could reconsider Mr. Thiessen's future, for he is the one responsible for our greatly reduced options in terms of monetary policy and interest rate management policy.

Our third request to the government in this economic slowdown scenario is to hold a full public debate on the best way to spend the budget surpluses derived from employer and employee contributions to the employment insurance fund, from the substantial tax increases imposed on middle income Canadians in the last four years, and from cutbacks in transfers to the provinces.

There should be a public debate on these issues as well as on debt management. Why is it important to talk about debt management? Because the government is lying through its teeth. In the latest budget, at page 58, in table 1.13, we read:

We established a debt reduction plan for the next three years. We will use the contingency reserve.

This is a reserve to provide for the unforeseen. It amounts to $3 billion a year. What the Minister of Finance said in his budget is that if this reserve were not used in the three years, it would simply go to repay the debt.

If we calculate—and we are able to do calculations—$3 billion this year, $3 billion next year and $3 billion in two years add up to $9 billion in three years that the Minister of Finance had promised to apply to the debt.

He applied $20 billion in 15 months totally contrary to the promises in his budget and the electoral promises made, whereby 50% of the surplus would go to repay the debt and 50% to reducing taxes and increasing social transfers, especially to support health.

The government has yet again reneged on its promises, as it did with its shamefaced lies over the GST. This is why we have to have a public debate. There is nothing but a wad of lies between what they write, what they do and what they say.

TeachersStatements By Members

1:55 p.m.


Lynn Myers Liberal Waterloo—Wellington, ON

Mr. Speaker, today is world teachers day. Around the globe we are paying tribute to those who educate our children and who at one point educated us. I take this opportunity on behalf of all Canadians and especially my constituents of Waterloo—Wellington to thank the teachers of Canada and the world for their hard work and dedication. As a former high school teacher, I realize the profession is being constantly scrutinized by many people. I also realize it is becoming more and more difficult to do the job efficiently. It is for these reasons that I would like to thank the teachers for sticking by today's youth and I would like to commend them on their strength and courage in this area. Our youth is the future and it is with teachers' help that our young men and women will be able to continue in our footsteps and proceed beyond our accomplishments. Once again, I thank teachers everywhere in Canada.

Tour De RockStatements By Members

2 p.m.


Gary Lunn Reform Saanich—Gulf Islands, BC

Mr. Speaker, on Friday, October 2, the Tour de Rock was in Saanich—Gulf Islands as their long ride neared an end.

Tour de Rock was the 1998 Cops for Cancer Campaign. Fifteen Vancouver Island law enforcement officers undertook a 1,000 kilometre bike ride from Port Hardy to Victoria, raising awareness for childhood cancer research. Along the way more than $260,000 was raised in support of this worthy cause.

I applaud these individuals, who endured a gruelling physical test over the past two weeks, braving poor weather in the coastal mountains in pursuit of their goal.

Every day police officers put their lives on the line in the service of their communities. Often these efforts go unnoticed. Congratulations to the Tour de Rock as an example to us all. Their hard work is an inspiration in the fight against cancer.

World Teachers DayStatements By Members

October 5th, 1998 / 2 p.m.


Yvon Charbonneau Liberal Anjou—Rivière-Des-Prairies, QC

Mr. Speaker, UNESCO has designated October 5 World Teachers Day, in order to make people aware of the vital role played by teachers, who dedicate their lives to educating our children.

Throughout Canada, many organizations representing teachers, local associations and schools have planned specific activities to mark this special day.

Teachers today are confronted with some of the greatest challenges they have ever faced. In a world of rapid social and economic change brought about by new information technology and globalization, in a world of wealth for some and excruciating poverty for millions of others, education is our hope for the future.

As the vanguard of the education sector, teachers play a remarkable role in preparing and training future generations.

Education is an investment in the future of individuals and societies.

I wish to commend teachers for their valuable work.

Canada Savings BondsStatements By Members

2 p.m.


Roy Cullen Liberal Etobicoke North, ON

Mr. Speaker, over the years millions of Canadians have used Canada Savings Bonds to build a more secure future for themselves and their families. Today marks the first day of sales for the new Canada Savings Bonds.

Many Canadians are currently filling out application forms to buy the new Canada Savings Bonds. In so doing, they are joining the more than 7 million Canadians who already own such bonds.

This year's Canada premium bond offers a higher interest rate compared to the original Canada Savings Bond.

For the first time in over 50 years, Canadians will be allowed to buy Canada Savings Bonds and Canada premium bonds over a six-month period, from October 5, 1998 to April 1, 1999.

I invite all members of this House to follow my example and take this opportunity to invest not only in their future, but also in the future of our great country.

IrelandStatements By Members

2 p.m.


Pat O'Brien Liberal London—Fanshawe, ON

Mr. Speaker, as president of the Canada-Ireland Interparliamentary Friendship Group, it is my pleasure to welcome the President of Ireland, Mary McAleese, and Dr. Martin McAleese to Ottawa as they begin the first official state visit of an Irish president to Canada.

[Editor's Note: Member spoke in Gaelic]

During this 12 day tour President McAleese will visit all four Atlantic provinces, as well as Toronto, Montreal, Quebec City and Grosse Ile. In her meetings with MPs, senators and members of the Irish community she will discuss the many cultural and economic ties between our two countries.

President McAleese has expressed the deep gratitude of the Irish people for Canada's support of Ireland during the peace process. We hope that the peace we enjoy here will now be a reality in the ancestral land of so many Canadians.

Labrador Helicopter AccidentStatements By Members

2 p.m.


Chuck Strahl Reform Fraser Valley, BC

Mr. Speaker, it is difficult for words to describe the shock and horror Canadians felt upon hearing that six armed forces personnel died when the Labrador helicopter they were flying in crashed Friday in Quebec's Gaspé region.

The memory of that terrible incident tears at our hearts. It makes us ask why over and over again and finally leaves us with a deep feeling of sadness. It also gives us a great urge to reach out to the families and friends of the fallen in the hope that somehow, in some small way, we can share in their inconsolable grief and irreplaceable loss. We cannot say that we understand the pain that is theirs, but in our own way we do grieve with them.

To the spouses, parents, brothers, sisters, sons, daughters, friends, the armed forces personnel at CFB Greenwood and all those who supported these brave fallen crewmen who gave of their time, energy and their very selves in serving our country, our thoughts, our prayers and our deepest sympathies are with you all.

World Habitat DayStatements By Members

2:05 p.m.


Claudette Bradshaw Liberal Moncton, NB

Mr. Speaker, the United Nations has designated the first Monday in October as World Habitat Day, a day to reflect on our communities and their importance in our lives.

This year's theme is safer cities, a theme that offers an opportunity for people living in cities to consider the current state of their cities and to explore how existing problems can be overcome to make them more equitable and sustainable.

The conditions in which people live determine, to a large extent, their health, productivity and well-being. Our enviable position is largely due to the co-operation of organizations such as the Canada Mortgage and Housing Corporation and its various partners.

This morning a Habitat for Humanity Canada “blitz build” was started in Moncton. They will be building a duplex for two families to enjoy. I am a strong believer in the Maslow hierarchy of needs and I believe that housing is one of our basic needs.

Congratulations to everyone.