Debates of Feb. 25th, 1998

The Budget

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I am pleased to speak on the finance minister's fifth budget, but I am not too pleased with it.

First of all, I would like to congratulate the real architects of the battle against the deficit reduction, of the initiative to put public finances in order. I would like to congratulate Lucien Bouchard and his finance minister, Bernard Landry; Ontario finance minister Ernie Eves; New Brunswick finance minister Edmond Blanchard and the other finance ministers in the maritimes. I would like to congratulate Alberta finance minister Day Strockwell; Manitoba finance minister Eric Stefanson; British Columbia finance minister MacPhail and the finance minister of Saskatchewan too. Together, they had to withstand 52% of the spending cuts made by the Minister of Finance.

My congratulations to the unemployed, and to employers and employees. In the past three years, the Minister of Finance has taken between $6 billion and $7 billion from annual surpluses that belonged to them to put his fiscal house in order.

I would like to congratulate the taxpayers in Quebec and Canada because they too were instrumental in restoring the health of public finances.

During the four years he has been Minister of Finance and the Liberal government has run the country, the taxpayers of Quebec and Canada have been hit with $30 billion in new taxes by the Minister of Finance.

Therefore, the benefits to be found in this budget are few and far between. This is why the congratulations stop here.

The Minister of Finance definitely does not deserve to be congratulated for putting our fiscal house in order. Let us just make a quick calculation; it is easy to do with the successive budgets of the minister.

The minister's own efforts only account for 12% of the money, which really comes from the provinces, the employment insurance fund and the taxpayers' pockets. We have no congratulations for the minister, who said this morning that our fiscal house has been put in order, a zero deficit has been achieved, and a surplus now exists. The minister was right in using the impersonal form instead of “we”, because he is not the one who did all this.

I am also very disappointed by the way the minister is going about putting our fiscal house in order; he is keeping practically all the resulting dividends, even though he deserves no credit at all.

The minister is keeping over 50% of these dividends. What is he doing with that money? He is taking all sorts of initiatives, even in areas where he asked the provinces, the unemployed, the welfare recipients and the sick to make sacrifices. He is taking all sorts of initiatives for students, in the area of education.

After cutting $12 billion in social assistance, post-secondary education and health care, after having already cut billions in the past three years, not to mention that he is about to cut another $30 billion—as part of the budget cuts included in his 1995 budget—the Minister of Finance is taking all sorts of initiatives, such as the $2.5 billion millennium fund.

Before getting to the issue of provincial jurisdiction, let me say something about the somewhat secretive nature of the minister's initiatives.

As we know, the millennium scholarship fund will start giving out scholarships only in two years. However, in his budget, the Minister of Finance eliminated any sign of a real surplus for this year, by including the whole amount of $2.5 billion, even though he will start giving out that money to students only in five years.

This resulted in almost unanimous agreement—all analysts zeroed in on this ploy—that the Minister of Finance was overstepping the bounds, that he was not behaving in the most transparent manner in showing where public finances were headed, and that he was sometimes using somewhat dubious methods, such as concealing the real surplus for this year and for the next two years, by including in the 1998-99 budget an amount of $2.5 billion that will actually be spent two years from now.

This is not the first time the Minister of Finance has done this sort of thing. I cannot recall a single time in the first four budgets where the Minister of Finance gave us figures that made sense, that corresponded to the reality of public finances. It is very important in democracy to show things as they really are, and it is even more important to do so when it comes to putting one's fiscal house in order, even if we were not talking about the Minister of Finance, who is asking the most disadvantaged Quebeckers and Canadians in particular to make tremendous sacrifices. These people are entitled to transparency.

[The Deputy Speaker]

Order, please. The hon. member for Mississauga South on a point of order.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, with respect, the statements of the member attributing something to the finance minister which he says is not the truth I believe are unparliamentary. I would ask the member if—

[The Deputy Speaker]

I have been listening quite attentively to the hon. member for Saint-Hyacinthe—Bagot.

I think that everything the hon. member said was parliamentary. He did not suggest that the minister had been dishonest. His remarks are in order. This is a point of debate and not a point of order.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I thank you for your kindness and understanding. As I was saying, this is not the first time a budget contains figures that are cautious and fail to reflect the reality of changes in public finances.

Barely a few months ago, I was in Vancouver with the Minister of Finance, who was giving us information on the economy and the financial situation. It was then he announced the good news that the 1996-97 deficit for fiscal year ending March 31, 1997 would be somewhere around $8.9 billion.

Six months earlier, we were telling him in this House that the deficit would be below $10 billion. He said the members of the Bloc Quebecois, the opposition, was bandying figures about. Six months later, he said the forecast was out by 63%. If he were working for a firm of economic consultants, he would be out on the street now for having made an error of 63% in six months.

I was rather disappointed to see the Minister of Finance hiding things. Over the next three years, he says, the budget surplus will be zero, zero, zero. Do you know what the real figures are? I will give them out.

We have become forecasting specialists. We decided that, if, in the past four years, the Minister of Finance has been incapable of putting the right figures in the budget, we would tell him the right ones. He says there will be no surplus in 1998-99 and marked a zero on page 12 of his budget plan. The real surplus amounts to at least $7 billion and starts this budget year.

For 1999-2000 the figure given is 0.0. That is tantamount to laughing in people's faces. It is an affront to the public, which expects the right information from their elected representatives. A surplus of $14 billion is what we expect, and he writes zero in the budget.

I went further, up to 2000-01. I say there will be a surplus of at least $19 billion. He does not want to go that far in his forecasts. I can understand that. If I were out by 63% over six months, I would not even make a two week prediction.

On the millennium fund, I said earlier that, in his budget plan of 1995, the Minister of Finance was sly, rather sneaky. Sometimes that can be a good thing, but as far as I am concerned, it can also be a fault. In this case, it is a major failing.

In 1995, he said there would be a plan for budget cuts in order to fund social assistance given out by the provinces to the most disadvantaged, university education—under provincial jurisdiction—and health.

He said “I am going to cut and cut, until 2003, in order to attain my objective of a balanced budget” and so on. Cut so much that, if all of the cuts until 2003 are added together, the Minister of Finance will have cut $42 billion, a good part of that $42 billion in university education. Another $30 billion is to be cut before 2003, and the minister announced nothing about this yesterday.

Oh, he did announce one thing: the cuts initially forecast at $48 billion will be reduced to $42 billion, and he would have to be applauded for continuing to cut at the $30 billion level until 2003. Now he is telling us “I have put our fiscal house in order”, and he gloats over it. He toots his own horn. We will be coming back to that later.

He toots his own horn, and then he says “Now that I have this surplus, I am announcing that I am going to put $2.5 billion into education”. He cuts education, health and social assistance to the tune of $42 billion and now he is telling us: “We are going to put $2.5 billion into education. Look, we have some extraordinary initiatives in the area of education”. The provinces meanwhile continue to cut. But it is he who is cutting.

The public must know this. And as for getting into an area of jurisdiction as exclusive as education, so what if this has been a prerogative jealously guarded for the past 50 years by any and all Quebec premiers, whether federalist or sovereignist. Quebec will never accept the federal government's encroachment on this sector.

The Prime Minister said: “We are not getting into education, we are simply helping students with debts”. First of all, it is they who caused those debts by making savage cuts in recent years and, second, the Minister of Finance pronounced the word “education” in connection with the millennium fund no less than 12 times during his budget speech. That is a rather serious problem.

On top of that, they claim that they have an interest in student debt loads. Give me a break. What the government is really interested in is its visibility. In the scrum yesterday, the Minister of Human Resources Development made no bones about it. He said in English—he did not dare repeat it in French, because I think he realized he had made a blunder—that this was the best way of increasing the federal government's visibility.

So much for the federal government's wonderful philosophy of student assistance: relieve them of their money by annually reducing the amounts available for university education, a job foisted off on the provincial governments, and then turn up to put a partial band-aid on the wound they themselves inflicted by interfering in an area reserved for the provinces. This move may well provoke an unprecedented confrontation between the federal government and the Government of Quebec.

The federal government, through its finance minister, also kept us from seeing the real extent of its leeway. Why? Because, in his wisdom, in his concern for his image, in his desire to make a dramatic gesture as well and to break records never before broken in the history of Canadian taxation, the Minister of Finance decided that what he valued most was not a balanced budget, not visionary policies, not improved conditions for the most disadvantaged in society, not the elimination of child poverty.

Furthermore, in this regard, the forecast increases in the child tax benefit have been put off for two years. That is the priority they give to the fight against poverty. That is not what motivates this government. That is not what motivates the Minister of Finance. Nor is he motivated by the fate of the unemployed. Once again, by not using the government's overall gains to create an independent EI fund, he has just given us the message that, in the years ahead, all surpluses from employers' and employees' premiums will go into his pocket.

So he is not interested in helping unemployed workers either. Since January 1997, the benefits available for those unfortunate enough to lose their jobs have steadily decreased. They now receive almost half of their most recent wages.

They are thus denied EI by restrictive measures. The unemployed and what becomes of them are not what motivates the government.

Furthermore, this was the unanimous view of analysts, people from the private sector, and representatives of the business community. Yesterday, I listened to the executive director of the Canadian Federation of Independent Business, who had this to say: “This budget did not contain any significant measure and no strategic plan for creating employment in any consistent and lasting way”. That was what Mr. Cléroux had to say outside the House.

So, jobs and unemployment are not what concern the Minister of Finance. What concerns him is going down in history as the one who not only put the country's fiscal house in order but who broke the record for surpluses. His concern is making it into the Guinness Book of Records. That is what is on his mind.

The proof lies in the fact that he is not letting us in on the real surpluses. The proof is that, if the present trend continues, if the federal government continues with its initiatives and continues to aim at very conservative economic growth—we have done the math—the surplus will perhaps top $30 billion by 2003.

This is not a sign of good public management. It is a sign that somewhere people are paying too much in taxes and the Minister of Finance could care less. People are paying too much in taxes, while the Minister of Finance is breaking surplus records and calling himself a good manager. He calls himself a great manager.

Surpluses that go up year after year—the Minister of Finance is so ashamed that he does not even give the figures in his budget; he puts zeros everywhere—point to bad management. This is someone who is more interested in popularity, because of some agenda, perhaps that of becoming the next prime minister, you never know, but it is not necessarily someone interested in efficiency and the general well-being of the public. If he were, he would have tried to achieve a balance.

A reserve of $2 to $3 billion is fine, but we would not accumulate large surpluses, which are a sign that the tax burden of average taxpayers, which is not significantly reduced in this budget, is too high, that people are paying too much in taxes, and that other people are also contributing too much as well. I am thinking of the unemployed, those on welfare, the ill, and students, who are still suffering from the cuts in the 1995 budget.

What I found yesterday in the budget is that the Minister of Finance was in far less of a hurry to remedy misery and to lighten the burden of taxpayers who have been crushed by $30 billion in additional taxes of all kinds he himself has imposed over the past four years, and also by the non-indexation of tax tables.

He was in far less of a hurry to help the sick, to help students, except with one program aimed solely at raising the federal profile, at getting that maple leaf out in a prominent place. The Minister of Finance was much more interested in drafting custom-made bills serving the interests of his foreign shipping holdings than in looking after the general well-being of the people of Quebec and Canada and in being a good manager.

People will understand that, while this Minister of Finance has not made significant reductions in their tax burden, he is continuing to take money from the most disadvantaged and to make it more difficult for the provinces, particularly Quebec, to balance their budgets. The people sitting down to do their federal tax returns are well aware that while the minister is taking money from their pockets, he is also getting bills passed that are tailor-made to save him tax money in the coming years. They know he is in apparent conflict of interest, that this government is refusing to cast any light on that apparent conflict of interest, and that the integrity of the Minister of Finance is open to question.

That is hard to take. We have sounded people out. All of my Bloc Quebecois colleagues have asked the people in their ridings what they think of this budget, and of this nebulous business.

I can tell you that people remember Bill C-28. People want an accounting because they see that the Minister of Finance is not only unconcerned about their welfare, but appears concerned only about his own and that of his buddies.

I would like to table an amendment to the amendment to the budget proposed by the Reform Party. I move:

That the amendment be amended by striking all words following the words “Minister of Finance” and replacing them with the following:

“because he has, by creating the Canada Millennium Scholarship Foundation, broken his promise to respect provincial jurisdiction over education, he has provided nothing to stimulate job creation, he has not provided for adequate income-tax reductions for middle-class families, he has continued to appropriate the huge employment insurance fund surplus, he has obstinately refused to table anti-deficit legislation and he has not returned to the provinces the money he cut from their transfer payments, while pursuing his planned cuts up to the year 2003.”

I table this subamendment in this House and thank you for your attention in the hope that taxpayers will now know they have to keep an eye on him.

[The Acting Speaker (Ms. Thibeault)]

For the time being we will take the text submitted by the hon. member under advisement. We will get back to you in a few minutes.

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 Calgary Southeast, Taxation; the hon. member for Regina—Lumsden—Lake Centre, Banking; the hon. member for Lévis, Spirit of Columbus Platform; and the hon. member for Waterloo—Wellington, Construction Industry.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, I want to start by saying how disappointed and upset I am at the comments made by the hon. member who just spoke in his reference to an hon. colleague, the finance minister, using this opportunity for his own personal image, to try to gain a spot in the history books and to increase his own popularity. He is not working for the welfare of Canadians. He is in a conflict of interest and his integrity is in question.

When I became a member of Parliament comments like this used to bother me. Some would say they were politically motivated. However, having been here before and seen this member and the way sometimes things play in this House, I believe those statements tell me more about this hon. member than they do about the finance minister.

I would like to comment and ask a question of this member with regard to the elements of his speech. He indicated that he was not interested whatsoever in the fishiness and fuzziness of numbers. However, there is no question that in 1993 when this government took office there was a deficit of some $42 billion. That deficit is now gone as a result of another balanced budget with a balanced approach.

The member may be right that the government has broken some promises, but the promises we have broken are things like the promise we made to balance the budget in five years and it has now been balanced in four. We promised to reduce the deficit to 3% of GDP and it is now down to zero. That is a broken promise. The member does not give credit where credit is due in terms of setting the priorities.

The member somehow thinks this is the only budget that will be brought down in this mandate. The undertaking of the government was to balance the budget, and the finance minister has delivered.

The member did not want to talk about the tax break for low income Canadians. He did not want to talk about the surtax cut for middle income Canadians. He did not want to talk about the child tax benefit increase for families or the child care expense deduction or the other tax measures.

The member did not give credit for those but rather decided to launch a personal attack against the Prime Minister. I think at this point I would pose a question to the member.

First of all, I ask him to rise in his place and apologize to the House and to the finance minister for his personal attack.

Second, with regard to the upcoming fiscal period, with regard to the numbers presented, exactly which numbers, which he generally referred to as fishy, is he saying he does not understand so that we can explain it to him in plain English?

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, I was beginning to despair at the length of the question, its preamble in particular.

I will never apologize, because what I said was the truth, accurate and verifiable. Over the past four years, the Minister of Finance has cut everywhere except there. Fifty-two per cent of the cuts he imposed have been made by the provinces in such areas as social assistance, post-secondary education, and health.

If he is capable of doing the math—and I have my doubts—let him look at the budgets since 1995 and he will realize these are the right figures.

The other source for getting public finances back onto an even keel: tax increases, and the employment insurance surplus made up of employer and employee contributions, 37% of the sacrifices and efforts to get our fiscal house in order. Now we are up to nearly 90%; 90% of the recovery has been from the most disadvantaged provinces, the poorest provinces, the average taxpayer. The percentage that is really connected to the Minister of Finance's cleaning up his own act is 10%. Ten per cent! And I should apologize for saying that he is not the one responsible?

Another point: I will never apologize to the Minister of Finance, because I am not the one who introduced Bill C-28. He is the one who did. Out of 464 pages, two paragraphs dealt with, deal with, a change to the Income Tax Act affecting international shipping companies and international shipping holding companies, like his. I should apologize?

I should apologize for having discovered that loophole in Bill C-28, an omnibus bill? Two paragraphs out of 464 pages, and I should apologize for the fact that the Prime Minister and the Deputy Prime Minister have been rising in this House for the past month to tell us that there is perhaps a doubt, an apparent conflict of interest. Mr. Wilson, the ethics counsellor, has said so. But there will be no light cast on this matter. They will even refuse requests from the four opposition parties calling for a special subcommittee of the Finance Committee to get to the bottom of this. And I should apologize for the lack of transparency? No way.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, my question is for the backbench Liberals who wish to applaud this northern Ontario style budget.

The member mentioned there is something fishy about this budget. We have a major crisis in this country on all three coasts, the west, the north and the east coasts. There was not one single word, not even one attention for the people who are facing a major crisis in their lives. We are talking about hundreds of thousands of people in hundreds of communities on all coasts in the fisheries. There was not one single word in there about the crisis in the fisheries.

My question for the government of the day is why was that omitted from this budget.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, if I understood my colleague's comments correctly, he was talking to the Liberal members.

[Michel Gauthier, Bloc, Roberval, QC]

He will never get an answer from the Liberals.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

No, he will not, but I would love to give him my own answers.

It is obvious that many people have been overlooked in this budget. Particularly overlooked were those whose sacrifices were responsible for this result, which is a good result, but this was not the way to go about it. What I really cannot sit still for is the Minister of Finance parading around telling anyone who will listen that it was his doing. And none of my colleagues in the Bloc Quebecois will sit still for it either.

He overlooked the most disadvantaged members of society, who are already affected by the scourge of poverty and unemployment. These are the people whose doing it was. There are the provinces too. They have also been overlooked. There was unanimity on that yesterday. All Canadian provinces, particularly the finance minister, and Mr. Galganov—

[An hon. member]

Mr. Romanow.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Romanow, not Galganov. Let us forget him; he is history. Nobody mentions him any more.

Mr. Romanow, who even claimed to be speaking for the premiers of all Canadian provinces, said they felt they had been taken for a ride, because they were the ones who did the work, who made the cuts, by order of the federal finance minister, and who are seeing the finance minister pocket the dividends rather than distribute them to the provinces. It is hard to take.

When someone asks others to do his dirty work, when manages to make a profit somewhere and the dividends do not even show up in the budget out of a concern for non-transparency, when there are the surpluses, and not a moment's thought is even given to redistributing them to those who actually made them possible, that is hard to take, even for one's friends.

[The Acting Speaker (Ms. Thibeault)]

It is my duty to inform the House that the amendment to the amendment moved by the member for Saint-Hyacinthe—Bagot is in order.

Debate will now be on the amendment to the amendment.

[Alexa McDonough, NDP, Halifax, NS]

Madam Speaker, I rise on behalf of many disappointed Canadians across this country to register disbelief in the priorities of this government as reflected in its budget and the priorities in particular of the Minister of Finance.

In yesterday's budget the Minister of Finance talked about building a Canada for the 21st century. That is what he chose to title his budget. But he shows no sign of recognizing that cutting and slashing over the past four years in health, in education, in vital social services, in environmental protections have weakened Canada's foundation and the very fabric of the nation. The finance minister may make a great interior decorator but Canada needs a first rate general contractor. We need someone who knows the difference between rebuilding and redecorating.

It is unbelievable that this budget is silent on jobs. This budget is silent on health care transfers and it barely mumbles about poverty.

The government thinks that a scrap of wallpaper here and a splash of paint there will be sufficient to disguise the truth that Canada's foundation is not as solid as it needs to be.

When Canadians balanced the budget through health care cuts, through increased poverty and through lower incomes the finance minister and the Liberal government lost their last excuse to ignore the pressing needs of Canadians, the excuse of the deficit.

Earlier in the week we were heartened, we were actually encouraged, when the finance minister emerged from the G-7 meetings and proclaimed that this budget would address growing inequality in this country and that it would address unemployment.

What do we get in this budget? No targets for reducing unemployment; not for reducing unemployment by 1% a year or by any other target. There is no target for reducing poverty; not by one half, not by one third and not by any other target.

What targets do we have in the budget? We have the target to keep inflation in the same 1% to 3% band where it has been since 1991. The last time I checked inflation it was below 1%.

What is the level of employment? It is still hovering around 9%.

And what about our children? In this great country with its wealth of natural resources that claims to be progressive, 21% of our children live in poverty.

I want to give the Minister of Finance credit on one count and that is for targeting tax breaks to low and middle income Canadians. But he could have made better choices. He could have made more cost effective choices.

Across this country the GST is a burden on every single Canadian. The Minister of Finance could have introduced increases in the GST tax credit to provide some important and immediate relief. He could have exempted some basic necessities like home heating oil, children's clothing and school supplies. Not only would that have provided important tax relief, but accepted economic analyses make it clear that GST cuts would create more jobs than any other form of tax cut.

It is absolutely unbelievable, and I believe to the vast majority of Canadians unacceptable, that there is not one single new dollar in this budget for health care transfers. Let me say to colleagues opposite, no matter what this government may try to tell them, cancelling a cut in spending is not a spending increase.

Canadians have said on many occasions that the greatest priorities for allocating the budget surplus were health care, education and jobs.

I want to remind this government of its own solemn red book promise that 50% of any budget surplus would be spent on vital programs and services and the other 50% would be spent on debt reduction and tax reduction.

The fiscal dividend in this budget is $6.5 billion, and 70% of that amount has gone to debt reduction and tax reduction. If this government had simply kept its promise, if this government had simply done what the Prime Minister said during the election campaign it would do and what the finance minister said again and again the government would do, then it would have invested another $1.5 billion in health and other social transfers. That is the real priority for Canadians.

Do you know what else, Madam Speaker, is an absolute tragedy? If this government had kept its commitment to allocate 50% of the surplus for health and social spending, in the process it would have generated a great many jobs. We know how many jobs have been wiped out in this country over the last three years by the excessive slashing and cutting in health, education and other vital public programs. The government did not choose to do that.

I know the Tories and the Reformers are rejoicing at the Liberal acceptance of their priorities. But there are a great many Canadians who feel very badly betrayed by the decision of this government not to reinvest 50% of the surplus in health care and education.

I want to tell members of the House briefly about a letter I received recently from a young woman in New Brunswick. It is a woman I do not know. It is a woman with whom I spoke on the phone the evening before the budget. I wanted to call and talk with her about what would be in that budget, if it was to provide some kind of relief to her circumstances, to the situation in which she finds herself.

This is a woman with six years of university education. This is a woman with two post-secondary degrees. Like a lot of students, she has $40,000 in student debt. In fact, like 600,000 young people under the age of 30 in this country today, she still does not have a job despite how hard she has worked, despite how much she has sacrificed.

As this woman reminded me in her letter, she did exactly what she was encouraged to do which was to work hard, to go into debt and then she would be sure to get a good job. Today that young woman is living with her parents, like a lot of others in her age category. Because she is living with her parents she is not eligible for social assistance. She is not eligible either for employment insurance. She is in default on her student loan.

I will quote directly from that woman's letter:

I have spent my life much like most people, searching for happiness. How is it possible if I cannot be proud? How is it possible if I cry myself to sleep every night and through most days? I am ashamed. I cry tears of shame. All I want is to be a person.

No matter what direction I look in, I do not see a light. I am no longer in the tunnel, I am at the bottom of a pit and there is someone piling on the dirt.

You know, if I was given that Senator's job—the one who never shows up for work—if I had his job, I would show up every day. I know what it is like to need work. I know how important a job can be in the role of feeding one's soul.

This budget ignores this young woman and this budget ignores a great many other young men and young women like her. Is there a job for these young people? Is there any commitment to relieve the poverty she is experiencing? Because she is earning no money none of the tax benefits introduced in this budget is of any benefit to her whatsoever. No millennium fund will help her in her current situation. The premium reduction for employees will not help her either because she is over 25 years of age.

This government refused to set any targets and timetables to help ensure that people like her would get back to work.

Disgracefully, the only real job initiative, the reduction of the employer EI premium on young people hired over the next two years, will only help to employ one half of one per cent of the 400,000 young people unemployed in this country today. The government's commitment to youth employment is window dressing at best.

Last week this government announced no new money for summer youth employment programs. There are 48,000 fewer young people working today than there were two years ago.

To recap, what do we have in this budget? No meaningful job creation; nothing new for children living in poverty; a millennium fund that will not start for two years and at its best will help only 7% of Canadian students, leaving 93% of those students without any help from that millennium fund; not a single new dollar for our health care system or for our education institutions.

This budget sets out the battle lines for the fight for a better world. Unlike this government, the Reformers and the Tories, our party believes that better world begins by investing in the institutions that give us a civil society.

This finance minister had the chance to make investments to fight social inequality and promote job creation as he promised. This government chose another way. It chose not to offer hope but to dash expectations. It chose to ignore the crisis of poverty and the growing gap between the super rich and everyone else in this country. It chose to paper over the problems in our society, the cracks in the very foundation of our nation. It made a mistake for which Canadians like my young friend in New Brunswick will pay the price.

Shame on this government. Shame on a government that can gleefully pat itself on the back for ignoring the problems at the very foundation of our civil society.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, you had not recognized me, but I am glad you did. Better late than never, as they say.

I was very moved by the words of the hon. leader of the NDP, especially when mentioned the young woman in New Brunswick. What her story tells us is that hope has to take root somewhere. People must be given hope that jobs will be created and poverty will be fought.

I congratulate the NDP on its decades old tradition of fighting for social justice, as was mentioned by my colleague from Kamloops regarding David Lewis.

I would like my colleague to elaborate on two of the interesting ideas she put forward, although there were many. She mentioned targets and setting targets in the fight against poverty and unemployment. I wonder if she would expand a bit on these ideas, which are extremely valuable in my opinion, and could become a real policy on job creation and the fight against poverty.

[Alexa McDonough, NDP, Halifax, NS]

Madam Speaker, nobody kids themselves into thinking that by just setting targets and timetables for unemployment the problem is solved, that the work is done.

Surely this is a government that understands the concept of targets and timetables. The very manner in which this government went about tackling the problem of the deficit was to set clear targets, to set timetables, then develop a plan on how it would reduce the deficit and then measure progress toward those targets and timetables. Heaven knows we heard lots of self-congratulation when the finance minister was able to stand yesterday and announce that this year they were bringing in a balanced budget.

All we asked was that the government approach the problem of joblessness, the continuing problem of chronically high unemployment, with the same kind of determination that it has tackled the problem of the deficit. That requires that it set realistic targets, that it set a realistic timetable.

We are not trying to suggest that we have the formula that is guaranteed to succeed. What would be wrong with the government saying that it commits every bit of its might and muscle, all the resources at its disposal, to bringing down unemployment by 1% a year over the duration of its mandate? In other words it would commit to reducing unemployment to 5% by the end of its mandate.

There are some who will say that is overly ambitious. Do we have any way to achieve that? If we look south of the border unemployment in the United States is below 5%. If we look across the ocean at the U.K. it has an unemployment rate below 5%.

We certainly will not see progress in reducing unemployment if the government persists in bringing in budgets without any acknowledgement of the severity and the magnitude of the problem of unemployment and without setting any targets whatsoever for reduction of unemployment.

Most Canadians will be shocked when they learn, as they will, that the government is quite content with the projections for unemployment to remain above 8% until the new millennium. That is not what Canadians have in mind when they want a government that will participate in the rebuilding of Canada.

[Bob Speller, Liberal, Haldimand—Norfolk—Brant, ON]

Madam Speaker, I listened with interest to the hon. member's criticism of the government's budget. She criticized us for not spending money here, there and everywhere. However she must admit that even Tommy Douglas and Bob Rae understood that in order to get the bankers off our back we needed to deal dramatically with the deficit and the debt, as has been pointed out in the House.

The hon. member also must admit that through the last couple of budgets the government specifically centred money and tax breaks on families and students wanting to get an education. It is recognized that those who have post-secondary education have a better chance of getting a job.

The government simply cannot throw money out there and hope that it will create jobs. It just does not work that way. We need Canadians with an education in jobs in the high tech area. The best way for us to help with this terrible situation is to help families and to help students get an education.

Is the hon. member aware of that? What is her answer to getting rid of the close to $600 billion debt we now have?

[Alexa McDonough, NDP, Halifax, NS]

Madam Speaker, one of the frustrations about the procedures of this assembly is that we do not get to ask questions back. One thing I would love to be able to ask this hon. member is what happened between June 2, the day of the federal election, and the introduction of yesterday's budget that totally changed the commitment his government made to the people of Canada during the election campaign.

If it is so irresponsible for me as leader of the New Democratic Party to stand in my place and say that 50% of the budget surplus should have been reinvested in health, education and other vital services, why is it not irresponsible for the Minister of Finance and the Prime Minister and every Liberal member to prance around the country during the recent federal election campaign making exactly the same promise? They cannot have it both ways.

[Bob Speller, Liberal, Haldimand—Norfolk—Brant, ON]

Madam Speaker, I rise on a point of order. Certainly the hon. member knows that when that commitment was made it said over the course of a mandate.

[Alexa McDonough, NDP, Halifax, NS]

That just reflects how little he, his colleagues, the Minister of Finance and the Prime Minister understand the real priority and pressing needs of Canadians.

There is one heck of a lot of people who want to understand how the government could have turned its back on this commitment in this year when we have people lined up and trying to get into surgery when they need it. We have people on stretchers in hospital corridors. We have people who desperately need home care and cannot get it. We have people who desperately need prescription drugs and cannot get them. Why? Because the government rips away $7 billion every year.

When some people hear those figures they think that $7 billion is a lot of money but they guess the government had to do it. This is a government that is doing it year after year after year. It is literally killing people.

How could the government say it will do that later, that later it will reinvest some of the surplus dollars, but in the meantime decide to take up the cause of the Reform Party that says we should not worry if we end up with a deteriorating health care system and in fact we should not worry if we have to introduce a two tier health care system because somehow or other people will just get by.

This is a government that has a lot to answer for. One of the questions that it has to be prepared to answer is why it is prepared to turn its back on the priorities of Canadians. Why is it prepared to betray a promise it made during the campaign that 50% of the budget surplus would go to health care?

[Jean Charest, Progressive Conservative, Sherbrooke, QC]

Madam Speaker, I join in the debate knowing that we are marking a very important moment financially for the country and for the economy. I want to speak to that right off the bat. I want to speak to the balanced budget and what it means. I want to use the opportunity to speak very clearly on what it is exactly that we are dealing with.

I join with all of those who look at the balanced budget and say bravo. Bravo, it is a good thing for the country to have a balanced budget. There is not a member in the House who would not agree with that.

However, I also want to make very clear why we have a balanced budget and recognize the soldiers on the front lines, Canadian citizens: low income citizens, those on a fixed incomes who have no choice but to pay heavily in income taxes. I also recognize the contribution of other levels of government.

If the federal Minister of Finance was in a room with the ministers of finance from the provincial governments, I doubt he would be patting himself on the back in the same way without having a very red face when saying to the provincial ministers of finance “I have balanced the budget”. I think the answer that would come across the table would be “You what? No, no, no. I do not think you balanced the budget. Canadians did but you did it on our backs by cutting in health care and education”. That is what happened here. As they do that they would also recognize that we have done our share.

This has been an almost 15 year effort. The government I was part of started that effort. This government has benefited a great deal from a lot of these policies. History may record that the current Prime Minister leads the Liberal Party of Canada, but he certainly embraced the policies of the Progressive Conservative Party.

I look at this result and say bravo. How we got there is another issue, and I want to talk about that. I also want to say that there is some disappointment. One thing the Minister of Finance could have done yesterday is send a message of growth for the economy and hope for Canadians. I thought he would have done that by delivering broad based tax cuts.

We now have the answer. The path is set. Broad based tax relief is off the table and spending is back.

This is a budget of death bed repentances. Government members were forced to reverse a number of its key policy initiatives of the first mandate. This is a budget with no economic plan. There is no plan for growth, no targets for employment, no targets for job creation, no targets for tax reduction, no targets for debt reduction.

There is a target, though. I thought it was actually an ironic target. The only one they put out was a news release for the Bank of Canada yesterday. Guess what target they were able to agree on.

Was it one of their targets? No. I will read the press release. The second paragraph says that targets for reducing inflation were adopted in February 1991 by the previous government and in December 1993 the government and the Bank of Canada agreed to extend the targets. Of course history will record that the Liberal Party of the day criticized loudly the government of the day for having set that target.

Then they go on to say how low inflation is such a great thing. What else is new?

That target has been set, but there is no target in terms of debt. There are no targets in terms of employment. In fact, the government abandoned the practice of actually projecting what unemployment rates would be. I do not think it has the courage to tell the truth and to live up to that test.

This has to be the first government on record, by the way, record that I know of that is in a mad rush in the first year of its mandate to spend money. Most governments in the first year make the tough decisions on reducing spending and then try to ease them toward an election campaign with a little less pressure on the purse.

In that caucus, to give an indication of the mindset, they are in a mad rush to spend money right away. Quite appropriately today is Ash Wednesday and yesterday we were treated to a Mardi Gras of spending in the budget.

The budget has lost sight of a number of the fundamental needs of Canadians. The government likes to talk about the fundamentals in the economy and to say that the fundamentals are right.

Let me share some of the fundamentals on Main Street Canada; some of the fundamentals of Amherst, Nova Scotia; some of the fundamentals that my colleague from St. John's hears about in Saint John, New Brunswick, or in Brandon, Manitoba; and some of the fundamentals in Markham, Ontario, or in Granby, Quebec.

These are some of the fundamentals that we hear about. Canada has the highest personal income taxes among the G-7 nations. The disposable income of Canadians has dropped 1.3% since 1993 but the federal government's revenues for personal income taxes have increased 23% in the same period. The real personal per capita income is more than $4,400 higher in the United States than in Canada.

I hesitate to say that in the presence of the young page who is here. He is probably planning to move to the United States as he hears that.

Personal and business bankruptcies have reached record levels under the Liberals. Unemployment in Canada is double that of the United States. That is one of the fundamentals of the Liberal government.

We have the continuing tragedy of high unemployment for young Canadians with 400,000 young Canadians out of work. These are the fundamentals that we do not hear about, not in this place, not by this government. We only hear about them every day in Asbestos, Quebec. We hear about them in Pictou County but we do not hear about them here.

It is a government that also continued to waste a billion dollars to buy out a GST deal with Liberal governments in Atlantic Canada, a billion dollars to save face. It spent almost a billion dollars on Pearson airport, and $500 million on a helicopter deal was wasted, down the drain. All this was to save face politically. It is a government of deathbed repentances that is now trying to fill in the holes it has dug for itself.

In the last Parliament it cut transfers to the provinces by 40%. Colleagues from the other parties will remember that as the Prime Minister looked the electorate in the whites of their eyes, his government suddenly discovered that it should back up a bit and cut the transfers to 35% instead. The cost of that was dramatic. By the way did it cut Ottawa? No. Spending in Ottawa has been cut by less than 2%. As the government reacquainted itself with the electorate, the cuts nonetheless go on.

Today in the House of Commons we talked about health care. The bottom line and the truth about health care are reflected in the numbers from the Department of Finance on cash transfers for health, education and social assistance. Let me quote the numbers from the Department of Finance.

What does this budget mean for the province of Nova Scotia in particular? In fiscal year 1997-98 Nova Scotia will receive $427 million in cash transfers; the next year in 1998-99, $425 million; in 1999-2000, $422 million; in 2000-01, $418 million, in 2001-02, $415 million; 2002-03, $411 million in cash transfers.

I can only imagine that people in Nova Scotia must have been bewildered yesterday when they heard the Liberal premier, Russell MacLellan say that this was the best budget in 20 years. Surely he must have sounded a little funny because the Liberal minister of finance in New Brunswick actually denounced the budget. The Liberal minister of finance in Newfoundland and Labrador denounced the budget. The minister of finance in P.E.I. denounced the budget. The minister of finance in Ontario did the same, as did the minister of finance in Quebec.

Why does Russell MacLellan who is running in an election campaign as the Liberal candidate, the ambassador of the Liberal government in Nova Scotia, say that it is the best budget in 20 years? I say to Mr. MacLellan, please get off your knees. Start representing and defending the interests of the people of Nova Scotia. Since he cannot do that, John Hamm will do it instead.

I will give an example of the Liberal cynicism of this budget. Page 13 states: “Today we are announcing the largest single investment ever made by the federal government to support access to post-secondary education for all Canadians”. The Liberals forgot to say that this was preceded by the biggest ever cut in post-secondary education.

And what is the consequence? Do not believe me. I will quote from a well-known document by this government: “In 1990, only eight years ago, the average debt load after a four year program was $13,000. By next year it will have almost doubled to $25,000. At the beginning of this decade, fewer than 8% of borrowers had debts larger than $15,000”—and if I remember correctly, at the beginning of the decade a Progressive Conservative government was in power—“now almost 40% do”.

Who said that? The Minister of Finance said that. There it is, the Liberal record. Even the Liberals cannot hide from the facts. This is the sad record of a government that has lost sight of priorities.

I would like to know how we got there. The government is also announcing a millennium scholarship program that will not be implemented until the new millennium—in two years' time—while students are facing an unprecedented debt load.

Furthermore, as the Prime Minister acknowledged in the House today, main purpose of this program is not to help students but to increase government visibility. To be quite honest, I have nothing against the federal government's visibility. I am a federalist. I am proud to be a federalist. I am a Quebecker and proud to be one. That does not bother me, I am happy the federal government gets the credit it deserves when it makes its contribution, on behalf of taxpayers, of course.

However, when visibility becomes the prime objective, we have to say that they are turning an issue all too important to our society into a political football. I find that a disappointment. I would really like to know where the Minister of Finance was when he made these cuts to education and health care. Suddenly he wakes up, and the issue becomes important.

The best consequence, the most important one was noted by a woman named Sherry Cooper from the investment firm Nesbitt Burns. She made a very common sense remark, which will surprise you with its simplicity and truth. She said “What is the point of investing all that money in education and information if students earning their diploma head off to the United States to work because of high taxes here”?

What is the point? We have to ask that hard question. What is the point of investing in education and training if the students who graduate, because of high taxes and because of lower pay, leave Canada to work in the United States?

Apparently the Prime Minister will be in New York next week, hosted by a prestigious New York club. I can only assume it is to thank him. I can see it now. They will say “Thank you very much, Prime Minister, for everything you are doing for the United States. We cannot tell you how much we appreciate your paying for the education of these young people and keeping your taxes high and your productivity low so that these young people will come to the United States to work for us. We think it is the best thing you could have done for us. Thank you very much”. That will be the message.

That tells us what is wrong with the government. I do not think its members realize the consequences which their lack of understanding has.

The government has also been cynical in the way it has turned the budget into a game. Now we are in the game of underestimating the revenues and overestimating expenditures.

The government is digging its hands deeper into the pockets of Canadians. How is it doing that? By deindexing the tax rolls it is able to get billions more in revenue from Canadians. The government does it insidiously. It says “We do not increase taxes, we just take more money from you”. It is all a technicality. It is called bracket creep.

All of a sudden we are supposed to have a surplus, but it is well hidden. The government even in the millennium fund cannot come clean. It has booked the money this year. In other words, it says to the indebted students “Pay this year. You will not benefit from it, but in two years from now the fund will kick in”. That is something the government did with the innovation fund, which has been largely denounced by the auditor general.

This government lacks transparency in the area of employment insurance. The auditor general criticized them for using employment insurance to reduce the deficit, when the system was not set up for this purpose.

I would point out that in the budget the government boasts of reducing all taxes by $7 billion over three years. Yet this same government is taking $6 billion annually out of taxpayers' pockets. To my knowledge, this is the only government to establish an unemployment plan for Canadians. They create more unemployment, raise taxes, tax employment insurance and create unemployment. That is what their policies do.

When they are asked to reduce contributions, they say “No, that does not work. It will not create real employment”. And yet, in the budget, they are doing just that for people between the ages of 18 and 24, for two years only. When they are asked why, it is “to create employment”.

If it works for young people aged 18 to 24, would it not work for people aged 45 or 55? Why not do it for everyone who wants a job, since unemployment is too high in Canada? No. They believe only in minor measures, always in order to save face.

My party believes that it is time for Canada to get a strong plan for growth in our economy. We need to get our foot off the brake. What this means for us is lowering taxes. Lowering taxes by reducing EI premiums by about a third so we can create more jobs. Lowering taxes by increasing the basic exemption for Canadians to $10,000 so we can allow lower income Canadians to earn more and buy more of the essential goods they need.

The 3% surtax should be eliminated completely. The government said “We have taken it off for the poor”, but the middle class is still being hit. If there is one victim of this government and this budget it is Canada's middle class. They are getting whacked to the tune of billions of dollars. They are not going to get a break.

This is a government which had a great opportunity to launch us onto a new path, to close the chapter on deficits, but also to start us on a new path. It should have set a target for debt reduction so that we are able to measure our performance, so that we are able to live in a political environment where we can go to our neighbours and say “Together we need to limit spending, to keep it under control. If we do we will meet a specific target. When we get there we will be able to reduce taxes further”. If we create that kind of a political environment we will all increase our chances of succeeding. Those should have been hard lessons learned in this budget.

Our party firmly believes that we need this plan for economic growth and that this budget is more than just about numbers. It is about values, it is about the choices we make. It is not good enough to shift the numbers around.

Some parties would say they would put more money into education, but then they would cut equalization. The position we have taken is that there should be more money put into education by building a new deal with provincial governments so that there is a health care guarantee for all Canadians, so that we can leave provincial governments alone.

I feel for the people of Nova Scotia today. I feel for the people of New Brunswick. I feel for the people in Yarmouth. I was with my colleague from Kings—Hants during the election campaign. Together we visited a hospital wing that was completely closed. Now the government is saying to the people in Nova Scotia there will be more cuts in the next few years. This is wrong. We need to change our priorities.

We believe in a plan for strong economic growth in this country. As we do that we can reallocate priorities. We can put the emphasis on education, health and guaranteed services to Canadians. It requires the political will, the vision and the foresight to make it happen, something that was not part of this budget, I am sorry to say.

I want to close by putting to the House, through unanimous consent, a subamendment to the amendment proposed by our Reform colleagues. This was put to our colleagues before. I hope today that they will see clear to offer some consent to a very useful amendment that would allow all members of this House to rise and vote democratically and take a position on this.

The subamendment we would put to the House for a vote, which we hope all parties would agree with and would give consent to would be:

That the amendment be modified by deleting the word “and” after the words “tax hikes” and adding after the words “tax relief” the following words “it continues to tax low income Canadians earning less then $10,000, it does not set specific targets for reducing the national debt, and it continues to tax Canadians by stealth, by refusing to index income tax brackets”.

Madam Speaker, you have heard the amendment to the motion. We feel that all members in this House would probably be glad to have an opportunity to rise in their place and speak on this and to vote on it. We actually anticipate enthusiastic consent so that we can all speak on this.

[Myron Thompson, Reform, Wild Rose, AB]

Madam Speaker, I rise on a point of order and ask you to inform me if I am incorrect. It seemed like yesterday we went through this process and that before you put forward a motion, you have to get the consent of the House. Is that wrong? That seems to me what happened yesterday.

[The Acting Speaker (Ms. Thibeault)]

Does the hon. member have unanimous consent of the House to propose such a motion?