Debates of Feb. 2nd, 1998

Income Tax Amendments Act, 1997

[Nick Discepola, Liberal, Vaudreuil—Soulanges, QC]

Mr. Speaker, when we talk about the social transfer it includes the provinces and the territories. I may not in my speech have mentioned particularly the word territories. For that I apologize, but I believe if the member checks the law she will see that it includes transfers to all provinces and the territories.

Notwithstanding, we had to cut back in the transfers to the provinces when we had to make our difficult decisions almost four years ago. On the first occasion the government has had after having addressed the serious problem of deficit we have taken $1.5 billion and put it into our first priority as a government, that is helping the provinces cope with education and health.

In this case not only will the provinces benefit through five years of stable funding but the territories will also. I hope the member realizes that. I understand the high unemployment rate in her native region but right now the bill that we are addressing is for social transfers. It give them stable funding for five years, as I mentioned. This is very important for provinces and territories that in the past were reliant upon the mercy of the federal government, not knowing that the funding would come some time within a year or so and having to establish their priorities.

The stable funding for five years reassures the provinces and the territories that they have recourse to this funding for five years to come.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, the hon. member has spoken about the need for stable funding and federal transfers to the provinces to maintain the now new Canada health and social transfer, formerly known as the EPF funding programs.

Could the hon. member comment on the kind of stable funding the government has provided to the provinces over the past four years, stable funding which has resulted in a 35% cut in absolute cash transfers to the provinces, to the two highest priority programs delivered by government, namely health care and education?

I would like him to respond to that record of instability in those transfers in light of the fact the federal government has only cut its own program spending by 9.3% in the same period of time.

Perhaps the hon. member could illuminate the House and Canadians as to why his government felt that program spending by the federal government like the handout programs of the Minister of Canadian Heritage to special interest groups and free flag giveaways and the Minister of Industry's billions of dollars in handouts to corporations, businesses and regional development programs were a higher priority than health transfers to the provinces which rank consistently among Canadians top priorities?

Why are we to believe the government's commitment today to maintain stable funding for these programs when it made a similar promise, in fact the same promise, for stable funding in the 1993 election and broke that promise?

[Nick Discepola, Liberal, Vaudreuil—Soulanges, QC]

Mr. Speaker, hindsight is 20:20. It would have been great four years ago to have had a crystal ball to project what could have happened.

We had to make those decisions in 1994-95 with serious repercussions for all Canadians. When it came to transfers to the provinces there is no way they could have escaped any cutbacks. It represents roughly 20% of our budget. We cut back only 3%, and I say that with respect. It was 3% of total revenues for the provinces.

If somebody said that they were going to cut back my own personal budget by 3%, I could handle that quite easily. If somebody said they were going to cut me back 20% some serious decisions would have to made.

We made difficult decisions. We went to the provinces upon their request and gave them stable funding. Today in this bill we are almost reinstating the $1.5 billion in that promise that we made three years ago.

The hon. member may say that we are only giving them back $1.5 billion in less cuts but still the provinces have $12 billion. When it comes to stable funding I do not know what law the member referred to. I presume he might be talking about stable funding for CBC, but in this legislation there is the five year commitment.

He referred to the fact that the federal government cut and cut on the backs of provinces. In my speech I indicated how some of the provinces and indeed all Canadians benefited from the difficult decisions that we had to make. I gave a concrete example in my home province. Because of its heavy debt financing it was able to save $645 million in its debt service alone.

The member's home province is Alberta. When members from Alberta come to me and say that the feds cut back in education and social transfers and that it is their fault hospitals had to be closed I do not buy that argument. Alberta finds itself today with a balanced budget, a billion dollar surplus, and is well on its way to eliminating its debt.

Was it a federal decision to close the hospitals or schools, or was it a provincial decision by Mr. Klein and company that may have gone a little too quickly?

Those were individual decisions the provinces had to make. Our commitment is to give them the money and to give it on a five year basis so that they can plan their fiscal needs and priorities. When it comes to cutbacks the priorities of individual provinces are established. Those provinces acted prudently, so much so that almost seven provinces have balanced budgets. They have benefited. To come back four years later and say maybe we should not have cut back, hindsight is 20:20.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, I have a question for my colleague. There is talk of cuts and transfers to the provinces. Personally, I wonder where these transfers are.

Since the cuts to employment insurance, hundreds of people no longer qualify for benefits. In New Brunswick, Minister Marcelle Mersereau said she had been forced to allow welfare recipients to participate in special programs so they could accumulate enough hours to become eligible for employment insurance. So there were a number of transfers that did not really help.

If we look at what is happening in hospitals, at the health care situation, we have trouble keeping doctors. In the hospitals, we find our parents parked in corridors. That kind of thing would never have happened in the past, but it is now a common occurrence.

I can even give you an example. In the Bathurst area, in my riding, hospitals are forced to charge for parking, which used to be free, so they can afford to buy new equipment. That proves the transfers are not there. In 1979, the federal government paid 50% of hospital or health care expenditures; this figure is now down to about 15%. You have a long way to go before you can make transfer payments that could help support people in the health care field.

The question I would like to ask my colleague concerns the banks. Why is the government not making a decision today, particularly since the Minister of Finance clearly expressed his surprise at the announcement that the Royal Bank and the Bank of Montreal would merge? When he unexpectedly found out about it, he said, as I understand it, that he would give his approval only if the banks looked after the interests of Canadians and if no one lost their job. The banks said that they could not give such a guarantee, that some employees would lose their jobs.

How can a government like this one, which has some responsibility, allow such a merger and not take a stand right away instead of waiting until September? Is the country run by the Minister of Finance alone or by all 158 democratically elected Liberal members? Have they nothing to say on the matter, because I am sure there are people in their regions who are concerned about all these big mergers that will hurt Canadians?

It is not up to the Royal Bank and the Bank of Montreal to run this country. It is up to the government to do the job and to assume its responsibilities.

[Nick Discepola, Liberal, Vaudreuil—Soulanges, QC]

Mr. Speaker, since I have very little time, I will respond very briefly to the two questions concerning the bill.

On the subject of the banks, I think the Minister of Finance gave a good answer during Question Period, when the member was present.

As regards employment insurance, I think we took appropriate measures when the country's finances allowed us to. Last December, the Minister of Finance announced a $1.4 million reduction in employment insurance premiums. This benefits all workers.

Likewise, as regards transfers to his own province, I would like to point something out to the hon. member. He comes from New Brunswick, and for his province, if we include equalization payments, this represents $2,017 per capita. New Brunswick is the fourth biggest beneficiary of these programs.

I have to conclude from his comments that he supports Bill C-28, because we are going to put in an additional $1.5 billion. His province will also draw extra benefits as a result.

[John Reynolds, Reform, West Vancouver—Sunshine Coast, BC]

Mr. Speaker, it is a pleasure to speak to Bill C-28 and to listen to the different approaches taken by the parties in the House.

I am very pleased to be a member of a party that has talked about cutting taxes and reducing deficit over the last number of years. Certainly because of the pressure of the Reform Party the Minister of Finance has his deficit where he wants it today. I am sure he is pleased that we are here giving him that support because there are many members in his own party who do not give him that support. They just want to spend, spend, spend. Now there is real pressure on the minister to spend.

This bill is a band-aid approach when radical surgery is needed. The Minister of Finance is going to tell the country what he is going to do about taxation in the budget in the next few weeks. We have to really keep the pressure on him to give what the Canadian people want.

It is interesting to listen to my colleague, the member for Kamloops, in the NDP. He said we have to reform our tax system. It is nice to hear him use the word reform. I guess he is surrounded by so many of them in Kamloops now that he is starting to think the Reform way, although I know his party policy is to nationalize the banks. Of course that has been a policy of theirs for a very long time. I cannot wait until they get on to the next issue which will probably be corporate welfare bums which is another old issue that the NDP stands for. There is no real encouragement to industry or to the banks to progress and improve, the old standard socialism.

I found it quite interesting when the member for Charlotte in the Conservative Party was discussing this issue. He talked about the structural changes made in the economy during the PC government. If it had made the structural changes that Canadians wanted which would be reducing taxes instead of increasing the debt the Conservative Party would not be where it is today, the fifth party in this House of Commons. He said that Canadians need tax cuts now. We all agree with that. Why was he not saying that when his party was in power instead of increasing taxes and increasing the debt of this country?

In 1965 Canadians paid 27.7% of their income in taxes. Would Canadians not love to see that amount of tax coming off their pay cheques? In 1996, 43% of every Canadian's taxes are going toward the government.

We have all had a break in this House since December. We have all been in our constituencies. some have been in other people's constituencies. I am sure everyone has heard our constituents talking about what is wrong in Canada today. It is that our taxes are too high. It is incumbent on us as members of this House of Commons to make sure the Minister of Finance lowers taxes in Canada.

He does not have to look that far. It is not very many miles from Ottawa to Alberta or Ottawa to British Columbia. We always say when we come here that it is 3,000 miles from British Columbia to Ottawa, but old Premier W.A.C. Bennett used to say it is 35,000 miles on the return trip.

If the Minister of Finance were to look to the west, he would see Alberta which has the lowest taxes in Canada by far. It is not even close. In fact, residents of British Columbia have been moving to Alberta so they can pay their taxes there and save money on their tax bill in Canada. Is that not a sad situation, that in a country as great as this people will move from one province to another because they can reduce their taxes by that much?

Is it surprising to anyone, and maybe it is to some people, that in Alberta we have the best economy in all of Canada? The province with the lowest taxes in all of Canada has by far the best economy. Should that shock anyone? It seems to shock whoever the minister of finance is in the government, whether it is this government or the Tory government before. We would have thought the Tories would have known better. I think they had every seat in Alberta at one time. The Tories in Alberta did not listen to their people and that is why they are not here.

We can look to British Columbia, my home province, which had in 1992 one of the best economies in all of Canada. It has taken the NDP just six years to ruin that economy. What is the NDP government doing in British Columbia now to give us a better economy? It is lowering taxes. There are big headlines saying that Premier Clark is going to reduce corporate taxes, personal taxes to improve the economy. He is a little late. We are losing jobs by the hundreds every day in our province of British Columbia because the government there has increased taxes and chased people away. Entrepreneurs are moving to Alberta because it is a better place to live. The premier has not reduced taxes quick enough.

The Minister of Finance should look to that far away place in western Canada, Alberta and British Columbia, where the reduction of taxes helps the economy. If this Minister of Finance were to reduce taxes we could be on a roll in Canada like we have never seen before.

The average family pays $6,000 a year as its share of the interest on our debt. It is great for us to stand in this House and cheer because the deficit is down and we are going to have a surplus. That is wonderful. Every Canadian would agree with that. But every Canadian also knows that we have a major debt in this country and $6,000 per family to pay for it.

Every person earning $32,000 in this country knows that they are paying $3,000 in tax and they are not living in a very affluent way.

Even worse, a person earning $15,000 in this country is paying $1,300 in federal tax. We should be ashamed of ourselves that we are collecting tax from anybody in this country earning that small amount of money. They earn a little over $1,000 a month and we are making them pay tax on it.

There are people coming in here as refugees and signing up at the welfare office who are doing better than Canadians who have lived here all their lives and are paying taxes on $15,000 a year. We should be concerned about that.

I have a lot of seniors in my riding I visited in the last little while. They are very worried about what is happening because they are still paying this tax on such a small amount of money. That is not fair to these people in our country.

A single parent of two children of whom there are many in this country who earns $25,000 pays under this Liberal government $3,015 in tax. A single parent with two children at the level of $20,000 pays an income tax of $2,189.

Everybody in this House knows what they make. A lot of members of this House have two children. They know how difficult it is to live on their salaries if they have two children in school and two houses to maintain. How would they like to be a single parent in this country earning $20,000 and having to pay $2,189 of that to their government?

A single parent with an income of $15,000 pays $3,164. A single parent with an income of $10,000 pays $538 in taxes to the government, as they did to the Tory government before it. That is not right.

Anybody who wants to look at fairness in this country asks that we revamp our tax system. My party has a plan to revamp the tax system. We talked a lot about it.

Under our fresh start program, a single parent earning $25,000 would pay $1,300 which is over $2,000 less. The people at $15,000 and $10,000 would not pay any taxes at all. That is a fair system which allows people at that lower level to have that income, helps them to participate in society. They will spend that money in their communities and create jobs for other people and that will help our country.

What is our tax rate doing to Canadians? We argue in this House about whether it should be higher or lower. We hear the Minister of Finance in question period. He has been at it for a lot of years. He can give some good answers. They look very good on the 30 second clip during the news hour.

In reality, where are we with our tax system in Canada? Where have we gone? In 1975 in the world ranking of income per person Canada was number three. In 1990 we were still number three. Then the high taxation systems of the Tories, the increasing of debt. By 1991 we were in fifth place in the world. We had dropped two places on income per person.

The Liberals got in and in 1993 we went to seventh place. In 1994 we went to tenth place in the world in income and in 1995 we went to twelfth place in the world. When are our governments in this country going to learn that we cannot have a thriving country if there are high taxes, high debt and high deficits?

It is time that we lowered taxes for all Canadians and got back to the number three place in this world where we rightfully belong.

Look at unemployment rates versus the United States. In 1980 Canada had 7.5% while the United States had 7.1%. In 1991 Canada was at 10.4%, the United States at 6.7%. In 1995 Canada was at 9.6%, the United States at 5.6%. In 1996 Canada was at 9.3%, the United States at 4.9%.

What is the difference between Canada and the United States? It has lower taxes. When there are lower taxes there are more jobs and that is the difference.

NDP members are commenting from the other end but they are so far away I cannot hear them. That is where they will be for a lot of years.

The NDP member asked me if I switched parties. I did not switch any party at all. My party left me. I am in a free enterprise party in this House, a party that represents what the people out there are thinking. That is why it is the fastest growing political party in all of Canada. Next time we will take a few of your seats away and a few of theirs and be the Government of Canada.

These old line parties just do not understand. They do not understand the comparison of low taxes, jobs and enthusiasm. One only has to look at a lot of the members here who went across the line, even with that 68 cent to 69 cent dollar. I know this by the tans everybody has when I look around here. They can see the thriving economies in the cities across the border from us. Why is that?

As we just heard the leader in the Congress say the other day, they are putting a bill before the Congress to reduce income taxes to 19%. That is what the government spends and it should not tax the people any more than it spends. That was a very refreshing thing to hear especially for someone in this country where 19% is just pocket change for the government on that side and the excess is taxes from Canadians. It is time we all got very serious in this House and made sure that this government reduces taxes.

When the Liberal member who spoke before I was asked a question by my colleague from Calgary, he said hindsight is 20:20. One does not need hindsight to look around the world and see that we have dropped from third place to twelfth place. We have to look at why this government is in trouble. It is not hindsight when we look at the money it has spent in the last number of years. Regional development programs that do not work, $1.1 billion. That is what this government has done. It does not take hindsight to know that what it did in those areas was bad. There was the flag giveaway program, $24 million. There are a lot of seniors in this country who would have liked a share of that $24 million. There are a lot of young people going to college and university who would have liked that $24 million.

Golf courses and ski resorts, $2.8 million. Is that a high priority for a government that is not lowering taxes? Helicopter cancellation penalties, $478 million. Today we hear about the new helicopters this government has bought. It cancelled an order to try to make the Tories look bad and then buys the same airplanes and spends more money for them. Only a Liberal government could do that type of spending. That is what concerns the members on this side of the House.

Yes, we have the deficit down, but where are we going from here? Are we going to really attack that debt? Are we going to lower taxes for Canadians or are we going to keep on wasting taxpayer dollars?

The other question that should be asked is how many jobs is that helicopter deal going to bring to Canadians or is it going to bring jobs to people outside of Canada.

The bungled Pearson airport deal, $216 million. Why did the government not leave that airport alone? The British Columbia airport is operating separately and is making money. I understand last year it sent over $40 million to this government from the new program it instituted to run the Vancouver international airport. We are sending the government $40 million and it is giving out $260 million in Toronto for a bungled airport deal.

On the Mulroney Airbus payout, the government could have solved that problem a lot quicker if it had just apologized for attacking a former prime minister. If it had left the politics out of it it would have saved the Canadian taxpayers a lot of money.

People on the other side might ask what would we do on this side. There are a lot of things the Reform Party would do. We will give members some examples of where savings could be achieved. We would eliminate the regional development savings, $1.1 billion. We would end funding of wasteful and patronage regional development programs. We would cut the Department of Canadian Heritage by 33% or $800 million. The Deputy Prime Minister would not like that very much but it is about time she stopped giving away flags and the other things she is giving away to buy votes for the Liberal Party.

We would end subsidies to CBC television while preserving Newsworld and CBC radio. The rest would be saved by ending other wasteful programs and no cuts to national parks or amateur sports.

We would cut Indian affairs by 21% or $920 million. We would give the funds directly to natives, not to band councils, bureaucrats and lawyers. I come from a province with a lot of ongoing negotiations. The people who are making the money are the bureaucrats and the lawyers. It is not doing a darned bit of good for the native people of British Columbia or any other British Columbian. It is time we ended this nonsense and solved the problem.

We would cut employment insurance by 21%, which would amount to $2.8 billion. Currently there is a surplus of $8 billion per annum. EI should be returned to its original function of insuring against temporary job loss. Every employer and employee in a small business knows that EI has to be cut. It is costing jobs in the country and it is time we made major changes.

We would cut equalization payments by 12%, which would amount to $1 billion. Something is wrong when three provinces support seven in a country as wealthy as Canada. I come from one of those wealthy provinces, or at least it has been. The way it is going right now there may be two provinces supporting eight.

We could save this money while ensuring more equalization funds for the poorest provinces in Canada that really need the money.

We would cut the Canadian International Development Agency, better known as CIDA, by 31% or $520 million. Let us get our own fiscal house in order first. We would reduce foreign aid and end government to government grants.

We would cut general government services by $600 million. Government efficiency still has a long way to go in every department.

We would make cuts to other government programs by up to $1.2 billion.

We have the highest income taxes in the world. We are number one in the G-7. It is time that we lowered taxes in Canada to get Canada moving again in a positive way and to get jobs for all our young people.

Most members of the House have children. I have seven. I now have six grandchildren. I worry about their future in Canada.

During the election campaign I heard the leader of the Conservative Party say that he wanted a Canada for his children like he had when he was growing up. I want a Canada for my children better than what I have. I want a Canada with lower taxes. I want a Canada in which my children want to stay because it is the best place in the world to live. I want a Canada where they can find a job. I want a Canada where my children do not have to go to the United States or other countries to get a job. They should be working right here in this wonderful country which has a very large land mass.

I understand the frustration of the hon. member for Yukon when she asked my Liberal colleague why Yukon was not mentioned. Why were the Northwest Territories not mentioned? What about British Columbia and Alberta? We in the west feel alienated from Canada. We are creating some of the best pockets of jobs in the country. Some of the best taxation is in the province of Alberta. Yet eastern Canada is not paying attention. Central Canada is not paying attention.

Western voters are frustrated. I get the feeling from travelling around Ontario that Ontarians are also becoming frustrated. Their taxes are too high. They read in the papers that their friends across the border are paying much lower taxes. Americans earning $80,000 a year have an extra couple of thousand dollars more in their pockets than Canadians earning the same amount. It is not fair.

[Joe McGuire, Liberal, Egmont, PE]

You had better not get sick.

[John Reynolds, Reform, West Vancouver—Sunshine Coast, BC]

An hon. member opposite says “You had better not get sick”. I can tell him about that.

I had the privilege of living in the United States for four years. I was doing a project. I had good medical care while I was there. Because of Liberal government programs, $5 billion went out of this country last year into the United States. Canadians are going to the U.S. for medical care. At least they can get in the door. They do not find themselves in long line-ups when they have major heart problems or cancer. Do not tell me how good it is in Canada. We have one of the best systems in the world, but it is underfunded and a lot of that is because of the cutbacks by this federal government.

We have to look into our medical programs in a major way. Do not talk about not getting sick somewhere where the taxes are lower. The standard of living in Canada has gone from number 3 in the world to number 12. Members opposite must understand that.

[Rey D. Pagtakhan, Liberal, Parliamentary Secretary to Prime Minister]

Mr Speaker, I was intrigued by the comments of the member who just spoke. He indicated the difference between the United States and Canada. In the United States there is no universal medicare. We have an excellent old age security system, the Canada pension plan, at which all the Reform Party is laughing precisely because it does not believe in these programs.

A Reform member of Parliament complained about the medicare system and at the same time indicated he would cut the equalization payment by 1.5%. If I may remind the member, transfer of money from the federal government to the provinces includes the equalization payments in addition to cash transfers for health care.

May I inform the member who has just spoken that the Liberal Party equally believes in reducing taxes but not at the expense of medicare, of the security of Canada pension, of education, of research and development.

[Jason Kenney, Reform, Calgary Southeast, AB]

You cut medicare by 35%.

[Rey D. Pagtakhan, Liberal, Winnipeg North—St. Paul, MB]

If the member would be polite and listen to some gems of wisdom, maybe he would learn a few things.

I ask the member who has just spoken whether he is prepared to indicate that he will completely cut the transfer for medicare. Will he cut completely the transfer for equalization payments if in fact it means that the income tax rate for Canadians is zero? Is that what he is trying to tell us?

Here is a party that believes in so-called referendums. Survey after survey in Canada has told us that Canadians would like half of a surplus to be spent for necessary spending on social programs including education and health. Why is the member neglecting or ignoring the cry of Canadians?

[John Reynolds, Reform, West Vancouver—Sunshine Coast, BC]

Mr Speaker, I am not ignoring the crying of Canadians. I am listening to the crying about their taxes.

The Reform Party tax program will yield fairness and simplicity like the parliamentary secretary has never seen before. If he would read it he might understand it.

The parliamentary secretary talks about universal medicare, pension plans and old age security. In Canada, 65% of our medical money goes in the public sector to look after people. In the United States it is 53%. Every senior citizen in the United States has medicare. Maybe the parliamentary secretary did not know that. Every senior citizen in the United States has medicare.

The government should not try to scare seniors about how the Reform Party will hurt them. I am not that far away from being a senior citizen. I will make sure seniors are well protected and will speak on their behalf, but the government should not use that old Liberal tactic of scaring people that the Reform Party will take something away from them.

The Reform Party will lower taxes. The Reform Party has offered to increase the transfer payments on medicare. Members opposite have not read our brochure. We have also agreed to increase payments to education, areas that increases in payments are needed in. We fought about those during the election. We will talk about them now. We will look after senior citizens with a much fairer taxation program.

The Liberal Party still taxes senior citizens. A senior citizen making $15,000 with no other income will pay $1,300 in tax to the government. Does the member think that is fair, even if their medicare is free? They could have free medicare across the line also. Seniors are looked after in the United States.

Someone living in the United States could buy a medical program. It costs so much a month to be covered under medicare. Anyone on welfare is covered under medicare. Fifty-three per cent of the dollar goes to medicare in the United States. It does not have a national program and we do. We have the best program but it has to be well funded, looked after and fair.

Hon. members must get calls from people. I get them. Maybe they get them more in provincial government offices. People with health problems, with heart problems, tell us they have to wait four months to get tests done. They may die of a heart attack before they get in there. If they have cancer, a brain tumour, they may have to wait three weeks to get an MRI. This is what is happening in some places in this country. It is not right. That is why $5 billion went out of the country and across the border. Those people were not prepared to wait to get something done here. That is one of the problems.

I do not know why the member would try to scare senior citizens about old age security. He should read the Reform platform. It is fair. We look after seniors in our program. I ask him to read it and to have some compassion.

Where is that Liberal compassion we all hear about? There is no compassion in charging $1,300 in tax on $15,000 in income. It may be more than that with the seniors benefit. There is no Liberal compassion there.

When I was a young man all my family were Liberals. I was always taught that Liberals had compassion. That is why one was a Liberal. It seems to have changed.

Those who are wealthy do not mind paying taxes or giving to the Liberal Party, but we want to be fair. We want to make sure that single parents do not have to pay the abusive taxes they are paying right now. We want to make sure that seniors who are on their own—and there are many of them—do not have to pay the unfair taxes that are there now. That is what we are talking about. We are talking about lowering taxes, about lowering taxes for young people who are just starting to work.

They get jobs that pay them $24,000 to $30,000 a year and suddenly the government starts grabbing a third of that. That is not fair. They should be given a chance to get going. Taxes should be lowered for people who earn under $30,000.

The Reform Party would eliminate taxes for people under that level. That would get the country going and that would create enthusiasm. It would create private enterprise. It would get away from the socialist attitude we are getting from the Liberals and the New Democrats.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, the member said that his family was Liberal. After that he was a Conservative. Now he is a Reformer. Maybe he will see the light one day and become an NDP.

I went around the country and I went around the States too. I saw line-ups in the States where people were waiting six months. Those who were waiting for six months were not the rich. They were not those who had money and who could pay $10,000 for an operation. Those with all that money were not waiting six months. The poor people were waiting in the line-ups for six months because they could not afford American health care.

My colleague in the Reform Party is suggesting that we should cut taxes, that Canadians cannot pay the taxes. Reformers want us to give the poor a health care program that will be paid for from their pockets and they cannot afford to pay it. What does my colleague answer to that?

[John Reynolds, Reform, West Vancouver—Sunshine Coast, BC]

Mr. Speaker, I advise my hon. friend that unless I have a lobotomy I will never join the NDP. He is absolutely correct that poor people in the United States are waiting six months. I am not defending that program. He also has to know that in Canada poor people and rich people are waiting six months. That is what is wrong with our medicare program. We have to make some changes to it.

I do not disagree with his party. Medicare needs more funding in Canada. My party said all during the election that medicare needed $2 billion more. We still say that, just as we say it for education. To try to compare Canada and the U.S. in that area, we are waiting as long as they are. There is no question that the wealthier people in the United States, those who pay for medicare, do not have to wait very long and poor people do, but that is not a comparison. In this country we all wait six months no matter what our status.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, I listened to the hon. member's speech. I welcomed the defence of former Prime Minister Brian Mulroney. It has certainly been a long time coming. At some point it is at least good to see that people give credit where credit is due.

When he spoke of a heart condition I cannot understand his firsthand experience because I do not think there are a lot of them in that caucus, hearts I mean. He talked about needing a lobotomy to join the New Democratic Party. Perhaps if he had a heart transplant he could become a Conservative again.

A lot of economic revisionism goes on in the House.

[The Deputy Speaker]

Order, please. I warned the hon. member that he had a short time to put his question. While I am sure the House finds his comments helpful, it might be more helpful if he got straight to his question.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, the economic revisionism that pervades this House sometimes is really astounding. The fact is that between 1989 and 1993 it was the Conservatives that started a trend of reduction in income taxes as a per cent of GDP from 14% of GDP to 13% of GDP by the time our party was asked politely to leave in 1993. However between 1993 and now, the Liberal Party has increased taxes as a per cent of GDP from 13% back up to 14% and the trend is aiming higher. It is very important that we recognize the trend toward tax reduction and income tax reduction was started under a Conservative government and in four years it will be continued under a Conservative government.

[John Reynolds, Reform, West Vancouver—Sunshine Coast, BC]

Mr. Speaker, I know the time must be up but I do not have to say very much. The people who are listening out there will understand from the comments just made by the Conservative Party as to why it went from the biggest majority in Canada down to two seats.

[Steve Mahoney, Liberal, Mississauga West, ON]

Mr. Speaker, I am pleased to rise in support of this bill, a bill that the government feels must be put through early in this session so that we can address many of the concerns which we are hearing about today with regard to the transfer payments to the provinces and the condition of our health care and education systems.

First I would like to make a couple of brief remarks about some of the comments made this morning. It is nice to see the member for Kings—Hants here. I am having my office courier the dozen or so copies of

Hansard

containing the previous speeches I have made. That was not my maiden voyage in this place earlier today.

His remarks when he talked about revisionism and the viewpoint on the economic things which have happened in this country since 1993 are quite remarkable.

The people sent a clear message, as has been pointed out, to the Conservative Party in 1993. That message did not change a lot in the last election, even though it did add a few members from eastern Canada. Some may be delighted to see them here and others perhaps not so much.

One of the things which is interesting is that we have heard about people's viewpoints from different parts of the country. I conducted a session in my riding. I invited people to come in as part of a budget consultation process to decide whether or not we really should stick to the election promise which was that 50% of whatever surplus would go toward two issues; 50% would go toward debt reduction and certain tax reductions and the other 50% would go toward program spending, most notably toward issues like health care and education.

Rather than just assume because we were elected with that as a major plank in our platform that everyone agreed that is how we should carry on, I thought it was important to poll people from the communities of Mississauga and Brampton. Some of the municipal leaders, educational folks, business people, the boards of trade, local business people, interested citizens of both the cities of Brampton and Mississauga came and we discussed that particular issue.

We hear calls from all sides. The NDP says we should spend more. The Reform Party says we should cut more. The Conservatives are simply saying we should reduce taxes. Without the balance which is needed in this place, I thought it was important to go to the people and find out if they still supported the general thrust and direction that the government was following. We came up with a number of very interesting facts and statements.

If members saw the list of participants in the round table discussion that we had, they would know that many of them were people who perhaps would be classified as more right wing than left. Perhaps some of the people from the educational side would be concerned more about social issues. If members knew the community I represented, they would understand that the majority of people in the room would be more business oriented and in my view they would be more concerned about reduced taxes, less government, all of those issues.

We simply reported the facts. My colleague from Mississauga South and I were there to listen to what the people had to say about the 50:50 plan. Let me share some of the results.

In the area of general impressions there was a clear consensus that the government had made excellent progress in putting its fiscal house in order and had achieved it in a fair and balanced fashion.

Once we did this and compiled the data, we shared this with the participants. We were delighted to find that they agreed that we had indeed recorded that consensus accurately.

It was felt that the approach we were taking would provide sufficient latitude to meet the need to reduce the debt and to make targeted tax cuts to restore some social spending and to make stimulative investments in programs.

Let us talk about restoring some of the funding, the restoration of the floor as it is referred to in the case of the CHST, the Canada health and social transfer which replaces the CAP, the Canada assistance plan to a level of $12.5 billion. I believe it was the member for Kamloops who said that it was somewhat deceitful, that it was trickery. It is not at all.

We clearly announced in the election campaign that those transfer payments had been reduced to $11 billion due primarily to the fact that we had inherited a $42 billion deficit, an overdraft of $42 billion. Canadians would understand that. Often there is confusion and discussion about what is a deficit and what is a debt. A deficit is an overdraft and a debt is a mortgage. We had a $42 billion overdraft that the Conservative Party under Mr. Mulroney left as its legacy to the Canadian people.

We simply had to make changes. I will admit that the transfer payments were indeed reduced to $11 billion. However, as progress was made due to the leadership, due to the financial strength that this government was showing, due to a commitment to stick to the guns, to follow the policies led by the Prime Minister and the Minister of Finance, due to the improvement in our financial situation and nothing else, we were able to restore the funding levels and put back the floor in the transfer payments to $12.5 billion.

Perhaps more significantly, we have made a commitment. It is a five year commitment which says that the level of transfer payments will not fall below $12.5 billion. I would hope that all future governments would be able to live up to that kind of a commitment. One of the things I have found in my 20 years or so in elected office is that the most difficult thing to do for any government be it municipal, provincial or federal, is to plan properly and far enough in advance so that the hiccups and bumps that occur when certain crises occur can be avoided.

As a federal government we must be the leaders. We must say to our provincial partners who in turn work with their partners in health care and education and at the municipal level. We want to be able to say to them “Here is something to count on. You can be assured that the CHST transfers will never fall below the floor of $12.5 billion”. The ability that then gives the provinces in knowing what their per capita share might be or what their total revenue pot might be in my view gives them a better opportunity to plan. I think that is an obligation we have as a federal government and is something I am pleased to see we are doing.

Somebody else also made reference to the fact that there would be some damage that would occur in certain parts of the country because of changes in the amount of money that was transferred to certain provinces or territories based on a per capita formula. Someone said that it was unfair. We talk about representation in this place. We talk about equality in this place. We talk about providing services for all Canadians. With a mind to certain adjustments that may need to take place due to certain geographical problems, transportation problems and other issues of concern such as climate or problems in the economy, what could be more fair in determining a floor, a base, a guaranteed amount than doing it on a per capita basis?

The province of Ontario of course represents the largest area in terms of population. The grant formula will provide $9.1 billion to the province of Ontario. The second largest population area being the province of Quebec it comes in at $6.8 billion and British Columbia at $3.1 billion and so on.

The point is that the provinces, under the somewhat difficult arrangement we have in the federation of Canada, deliver the services. They are on the front lines in making sure that health care is delivered to the Canadian people. Therefore it is our responsibility to set standards and to provide the funding based on the fact that we collect tax revenue from all Canadians.

By and large the system works reasonably well. Where we run into problems I would submit is when we get into the one-upmanship of partisan politics where somebody decides that because they want a headline, they want to look better or they want to win an election, they are going to dangle something like a tax cut out front.

The people clearly want to see tax relief. I believe they will see tax relief in the Minister of Finance's budget. We have said we are committed to reducing taxes in this country. I happen to represent a community that is a prime example and provides the proof of how it should never be done. It should never be done across the board and it should never be done on a flat percentage.

People understand that the Conservative proposal of a 10% tax cut across the board will clearly benefit people who earn in the six figure range dramatically more than it will the people who earn $15,000, $20,000 or $30,000, the examples that the so-called compassionate right, the Reform, is throwing out on the table. It is trying to pretend to the Canadian people that it is concerned about people earning $15,000 a year and whether or not they should pay taxes. This is a born again political vision that we are seeing in this place and is really quite remarkable.

The Reform Party would support an across the board cut. All we hear about are the cuts instead of being responsible and standing up and saying that we have to ensure that the strength of our health care system is maintained. I would suggest that comparing our way of life, in listening to the member opposite almost acting like a cheerleader for the United States way of life, frankly worries me.

It worries me when I hear elected representatives telling the Canadian people that life is so much better in the U.S.A. I am not an American basher. I happen to think it is a wonderful nation but it is fraught with economic problems and its debt. I do not know anybody who could even figure out how many zeros there are in trillions, and that is its debt we are talking about here. We are talking about trillions. They have more serious problems and yet we hear members of the Reform Party saying that all the solutions are there.

A young man 28 years ago, who was the best man at my wedding, moved to the United States with his wife. His wife was diagnosed with cancer. His wife is fine today. The cancer has been beaten back, but it cost that family a quarter of a million dollars to deal with that health care crisis.

I heckled and yelled don't get sick in the States and it is true. Yes, people can buy health care plans, but the operative word is buy.

What we have here is the envy of the world. Are there problems? Yes, there are problems. There are problems in the province of Ontario because the current government has decided it is more important to deliver a 30% tax cut than it is to provide fair and equitable health care treatment.

We have the five pillars of medicare in this country, accessibility, portability, universality, public administration and public funding. I have a bit of a concern about whether we need to expand those pillars. We continue to provide a base floor and a level of grant structure for the provincial governments to deliver health care. However, if they in turn take the money and simply cut other areas while delivering the health care dollars to the point where they can deliver a tax cut, and they take money out of the mental health treatment programs in Ontario, I want to say to Mr. Harris and Ms. Witmer, for whom I have a lot of respect, that they are on a very dangerous slippery slope. They are closing 2,000 beds in psychiatric care facilities, most of them in the greater Toronto area.

What is the result? We can see it. We wonder why there are 7,000 people living on the street in the city of Toronto. We should ask ourselves are those people healthy. Who would live on the street in February in Canada?

We have to recognize that those people are sick. They need help. They need community resources. Elected representatives at all levels must be prepared to take a stand to provide the kind of care they need, but we cannot do that.

Minister Witmer has said they will study the situation as a result of a seven part series done by the Toronto

Star

. They are going to study it, but they are going to go ahead with the bed closures anyway. It is scary, frankly, when we think about society's most vulnerable people.

I have colleagues in this place who also served in the Ontario legislature, as did I, who would tell us that it is absolutely mind boggling what the Tories are doing in Ontario in the area of health care and they are blaming it on cuts to transfer payments. However, we know it is a result of their desire to pass on a tax cut.

In the session we had we talked about tax cuts. Someone earlier referred to the brain drain. Let me share the message which I got from those people. This is exactly what I heard from that group. Concern was expressed about the issue of brain drain and the inadequacy of incentives for our best researchers to remain in Canada. A strong case was made to restore funding for our social humanities and medical research granting agencies.

How do we do that? Do we do that by cutting taxes? Do we do that by reducing the revenue that is available to the federal treasury while on the other hand increasing our commitments to research? You cannot have it both ways. This government, like any government, if it is responsible, should find ways to trim the fat. I think we have done that. The results are there. The job is not nearly over.

It is my hope that when the finance minister comes out with his budget we will see a plan that clearly outlines—I am confident—a commitment to repaying that $600 billion debt which, when the provincial debt is added, is $800 billion. That is unacceptable. It is too high. We have to attack it and we will.

I hope we will see a plan to provide some tax relief to hardworking Canadians but not abandon this Liberal Party's traditional commitment to better education and better quality health care for all Canadians. That is very much what Bill C-28 is about, restoring the level of funding and in putting forward other programs to help our charities and our young people to build a stronger economy.

[The Acting Speaker (Mr. McClelland)]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for West Vancouver—Sunshine Coast, Immigration Appeal Board.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, as a former Liberal, I am used to Liberal rhetorical tricks and the Liberal approach to the truth. It is a very creative approach.

I must say that I was really quite astounded by this last speech by the hon. member who blamed the Ontario government for all the negative impact on the health care system there as a result of health care cuts.

Let us get a couple of facts absolutely straight here. This federal government, the government of that member, has cut health care transfers to the provinces by 35%, by several billion dollars, after promising and committing not to cut them but to increase them in the 1993 election. That government lied and now it is trying to pass the buck. It does not even have the integrity to admit that it made a mistake.

The hon. member claims that the Ontario government has cut health care spending. He knows, as a former member of the provincial legislature, that just ain't so. The total health care spending in Ontario has remained constant and is now projected to increase. It has not cut $1 from the universal health care budget of the province of Ontario.

He says that people are getting less quality care. Perhaps they are, because the Ontario government has had to absorb the transfer cuts from this government but not because of less revenue as a result of the tax cuts in Ontario. The Mike Harris tax cuts that have led to tens of thousands of new jobs have also led to an increase in revenues. Liberals do not understand that lower taxes mean more revenues. That is what has happened in the treasury of the Ontario government.

This member, being from Ontario, ought to apologize to his constituents for misleading them. The Ontario government has more revenues than it did—

[Steve Mahoney, Liberal, Mississauga West, ON]

Mr. Speaker, talk about verbal gymnastics, I think he just called me a liar and I pretty much take exception to that.

If the hon. member knew the first thing about my great province of Ontario, I might have a bit of respect for his comments. He does not.

Let me say what has happened in the province of Ontario. If they do not think there is a problem, ask the people at Women's College hospital. Ask the people at the Queen Street mental health unit. Ask the people who live on the streets of the city of Toronto. Ask the new mayor of Toronto why he found it necessary to unilaterally ask Anne Golden to head up a commission to study the problems around housing in the city of Toronto. There has been without a doubt an unequivocal abandonment of the people who are the most vulnerable in our province by a government that is bound, determined and bent on doing one thing, and that is delivering a 30% tax decrease.

[The Acting Speaker (Mr. McClelland)]

I want to assure the hon. member for Mississauga West that the hon. member for Calgary Southeast did not call him specifically a liar. That would not have happened with me in the chair. I would ask everyone to be really careful how closely they dance around that one.

We will go to another question by the hon. member for Winnipeg North Centre.

[Judy Wasylycia-Leis, NDP, Winnipeg North Centre, MB]

Mr. Speaker, it is true that the speeches today by Liberal members raise more questions than answers about the stability of our health care system, but I must say the same holds true for the comments made by Reform members in the House today. There is an incredible amount of inconsistency and lack of clarity around this whole issue. But time does not permit me at this point to pursue that.

There is another issue around Bill C-28 which deals with the finances of this country for which there is a deafening silence on the part of both Liberals and Reformers and that has to do with this proposed merger between the Royal Bank and the Bank of Montreal.

My question for the hon. member in the Liberal Party is to get some clarity on this issue. Why is this member so silent on this issue and the seriousness of this monster merger? What is the policy of this Liberal government for today? Why are we waiting for a report from a committee when in fact this government knew all along about the problems growing with respect to the power of the banks and the international agreements?

[Steve Mahoney, Liberal, Mississauga West, ON]

Mr. Speaker, I will be brief. First, there would not be much point in setting up a commission and going to all the trouble that this government has to study that very specific issue and then simply ignoring it in a knee-jerk reaction.

We have heard the Prime Minister and the Minister of Finance say there will be no merger approval and we want to see that report before any discussion about whether or not such an activity will take place.

I heard the NDP member for Kamloops say he supported the increase in the RESP contribution from $2,000 for $4,000. He thought that was good. He supported a number of other issues in Bill C-28. Yet at the same time I could not quite believe that he went on to denigrate the economy. He said that our economy is not strong. He referred to the hon. parliamentary secretary as referring to some other country in his imagination when he talked about a country with a strong economy.

Our economy is strong and it can get stronger and it will get stronger by all of us working together.