House of Commons Hansard #68 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was finance.
The House resumed from February 25 consideration of the motion that this House approves in general the budgetary policy of the government; of the amendment; and of the amendment to the amendment.
The BudgetGovernment Orders
The Acting Speaker (Mr. McClelland)
There are 10 minutes remaining for questions and comments to the hon. member for Medicine Hat.
Tony Valeri LiberalParliamentary Secretary to Minister of Finance
Mr. Speaker, I will make a few comments and ask my hon. colleague a question.
He mentioned yesterday that the millennium fund was a waste of taxpayer money and that it was overspending by this government. I would like the hon. member to comment on the fact that he does not believe that helping 100,000 young Canadians gain access to post-secondary education, skills training, vocational schools is a valuable investment for this country in order to pursue their education and their careers into the next millennium.
Also, on page 10 of the Reform Party's alternative budget it advocates federal spending to drop to 10.5% of GDP. In real terms that is another drop of $10 billion in spending cuts each year. I suspect that it has to find those cuts. It has yet to identify those cuts of $10 billion. I would like the hon. member to make reference to that.
Finally, I would like the hon. member to stand in his place and reiterate what was said to the Calgary Herald , that this budget, a balanced budget, is very hard to criticize: “It does make it hard to criticize. I am not going to argue a balanced budget is not good”.
Perhaps the hon. member for Medicine Hat can for once stand up and say a balanced budget is good, the government has made progress, and speak to Canadians in a very forthright way.
Monte Solberg Reform Medicine Hat, AB
Mr. Speaker, it is a pleasure to respond. Obviously the Reform Party believes a balanced budget is good. We have been arguing for that since we came to Ottawa in 1993.
When we came to Ottawa in 1993 we were fighting a tremendous election battle in the months leading up to that point. One of the quotes I remember best was a quote from the Prime Minister on the campaign trail. He said “zero deficit, zero jobs, zero hope”. What a difference the Reform Party has made. We have convinced the Liberals across the way that a zero deficit is a good thing. We moved the government and we channelled a lot of the opinion of the public toward moving toward a balanced budget. I am glad that my friend across the way and his colleagues have had a change of heart and have realized that a zero deficit no longer means zero jobs and zero hope. It actually is a very good thing.
I would also point out that it was the taxpayers who really did balance the budget. Sixty-six per cent of the improvement in the government's balance sheet came from increased revenues which came directly out of the pockets of Canadian taxpayers. The other big chunk of that, two-thirds of the remainder, came from cuts in transfers to the provinces for hospital beds and higher education.
That brings me to my friend's point about the millennium fund. He suggested I said it was a waste of money. That funding would have been better used by the provinces to restore transfers for things like higher education. We pointed out that the millennium funds benefits 6% of students. What about the other 94%? Why not allow the provinces to lower tuitions so that all students can benefit?
Finally, my friend has pointed out that the Reform Party believes that we should reduce the overall size of government to 10.5% of GDP. I absolutely believe that. We think the government is too fat. I notice the government increased spending in this budget for the Department of Canadian Heritage; more money for TV production funds while it is closing hospital beds around the country. That is ridiculous.
We say trim spending in Canadian heritage. Cut the waste in Indian affairs. There is a tremendous amount of it. Cut funding for regional development which is simply corporate welfare. We know that the Chamber of Commerce comes before the finance committee every year and says please do not fund business anymore, it does not want subsidies for business anymore.
We also point out that we can make more savings in employment insurance. There are tremendous savings to be made there. We believe that we need to reform equalization. We are not afraid to say that. We think equalization formulas need to be changed. In a country as wealthy as Canada it is ridiculous that three provinces would support seven. That is where we would make some of those changes.
Bob Nault LiberalParliamentary Secretary to Minister of Human Resources Development
Mr. Speaker, I have listened to the Reform Party bash Indian and northern affairs now for a number of years. I want to ask the member a question. Seventy per cent of all transfers from this government to native people go directly to native people and to their bands. We all know that is a fact, those of us who have first nations in our communities.
The member says we should help the poorest of the poor, first nations people. Can he tell me where the waste is that he seems to think he can trim? If he goes to first nation communities he will see the worst housing in the country, he will see that in some cases there are no sewers or water, that they have the worst health and that there is more poverty there than anywhere else across the nation. If he is so convinced that there is a bunch of waste going on in Indian and northern affairs, we would like to know from this member and his party exactly where that would be.
In the 51 first nations I represent, I do not see that waste. I do not see that there is some native chief or some band running around, going to Vegas or driving around in a Cadillac, as some of these people suggest. We all know that is not factually correct. I would like to know from this member just where that waste is because I do not see it in the 51 first nations I represent.
Monte Solberg Reform Medicine Hat, AB
Mr. Speaker, Canadians are very concerned about the plight of natives in this country. That is why we want to reform the department of Indian affairs. Right now in Canada we spend over $6 billion a year to help natives. But in fact a great chunk of that, as much as 50%, is chewed up in bureaucracy.
The auditor general routinely rips the department of Indian affairs because of the complete lack of accountability. A lot of that money does get to the band level only to not get to the grassroots natives simply because there is no accountability at the band level.
My friend just alluded to this. I along with colleagues on both sides of the House probably recently saw an expose of what happens on some reserves where money gets to the band level but does not get to the people at the grassroots level. We saw an expose of one band in particular where in fact the chief was driving a Cadillac, going to Las Vegas, had a huge house, and that is not unusual. Unfortunately it was in Manitoba. Unfortunately my friends across the way are blind to this or they do not want to hear about it. They do not want to wade in and fix this problems. Reformers do.
Randy White Reform Langley—Abbotsford, BC
Mr. Speaker, I would like to ask the hon. member for Medicine Hat maybe to straighten up these misguided Liberals over here on a couple of issues.
The Liberals announced the other day that they were going to look after the debt, they were going to put a whole bunch of billions of dollars and shrink the amount of debt we have in this country. It is only about $588 billion. I believe they were going to put around $3 billion if they had that left over from a contingency fund.
I would like to ask the member for Medicine Hat, as many Canadians would like to know, what is the impact, the reality of this philosophy that they have brilliantly come up with?
The BudgetGovernment Orders
The Deputy Speaker
The member for Medicine Hat has 60 seconds to do this.
Monte Solberg Reform Medicine Hat, AB
Mr. Speaker, I think I can do it.
First of all, I point out that the government blew the contingency fund last year. In three successive budgets it said it would ensure the contingency fund is only used for emergencies, for no policy initiatives. In this year's budget it blew the entire $3 billion.
Even if the Liberals did devote the entire contingency fund in debt repayment, it would take them 200 years to pay down the debt. It is a ridiculous plan and they are being beat up by all the analysts who know their plan is not going to help pay down that debt.
Ted McWhinney LiberalParliamentary Secretary to Minister of Foreign Affairs
Mr. Speaker, as the hon. member opposite invited me, I will speak for British Columbia and for Canada. There is no dichotomy there.
Let us come to defining moments in our history as Canadians, and I think I can take note of two events of great interest. One is of course the role of the United Nations secretary general in the peaceful settlement of the gulf conflict. We will note here that the primacy of the Canadian policy of settling international differences by negotiation, quiet diplomacy, has been reaffirmed. It should be noted the foreign minister was very active in New York at the United Nations in the week before leading up to that.
I will take notice and with pleasure, because it involves the co-operation of an hon. member opposite, that B.C. spoke out for Canada, got rid of some of the old shibboleths. A British Columbia panel on national unity found that British Columbians have no hang-ups about understanding that Quebec does have civil law, that it does have a French language and culture and that a strong united Canada recognizes that fact. It is an interesting and total across the board expression of opinion in British Columbia without any demand for quid pro quos or reasoning arguments in return.
On the budget, it is a defining moment again in our history. It is not simply that after so many years the budget is balanced, but that it has been achieved ahead of the schedule that we projected when we first took office in 1993. From a $42 billion annual deficit, a disgrace, the budget we inherited, we are back to a balanced budget and that will be the reality of our times from now on.
Second, it has been achieved by using the theme which we campaigned on and I campaigned on in British Columbia in 1993, that the best way to balance a budget is to create new jobs, to create new meaningful employment. That is where we get more tax revenue. We tax the incomes. That is the way to do it and this is the way we are going.
Mr. Speaker, I forgot to say that I am sharing time with the hon. member for Kitchener—Waterloo.
I will say that the keynote in this budget is the emphasis on advanced education and research. That is a distinctive British Columbia contribution to this budget.
We fought the battle five years ago in support of TRIUMF, a pure research project. We had to face the inherited $42 billion annual deficit situation to make the case that pure science pays off. It is not simply some abstract ivory tower concept. The scientific ideas of today properly tested and properly applied mean jobs in industry down the line. With the German and Japanese syndrome the key to their economic recovery was to invest in higher education.
We took the minister for science and industry, one of our most imaginative cabinet ministers, to B.C. and we said that is a very distinctive laboratory. He said that it looked to him like a run down laboratory. We said that that was where the Nobel prize winner worked when he first came to Canada. He worked there and it is still in the same condition as it was 25 years ago. Something has to be done about scientific infrastructure. We cannot engage in advanced research, we cannot engage in research that is oriented eventually to production technology and everything else, without building up the infrastructure. The point was well made and in a period when we were still staggering economically because of that inherited deficit, the money was allocated to TRIUMF, $167.5 million.
We have basically been selling the idea that the next century is the knowledge century. Our universities, our graduate institutions have been allowed to run down in a real way by benign neglect by provincial and other financing authorities. It is time to correct it.
We see the response in terms of the grants for infrastructure, the Foundation for Innovation, to encourage medical research. By the way it should be known that British Columbia leads in areas of biomedicine and pharmacology. We lead in North America in these areas. We have already developed consortia style research arrangements with neighbouring American states. The networking of centres of excellence and the millennium scholarship foundation are other examples.
I had people speak to me about the millennium foundation when the idea was first in circulation. They asked “Isn't that elitist? Is it only for graduate institutions?” We explained that first of all there is a constitutional issue. We have no doubt that we can constitutionally put the money into advanced research. It is getting beyond that. We need the co-operation of the provinces. We are trying to get it, but they are not as active in education in all parts of the country as they should be. Some provinces like to spend money which we think should go to education on highways or something else.
We are basically stressing in this particular issue the need for federal leadership. In the budget the finance minister used a very delightful phrase. He did not simply speak of our great universities which now have international status and they really are leaders. He also mentioned the community college in northern Alberta and the institute of technology somewhere in rural Ontario. It is reaching down. Frankly, our hope and our intention is, with the co-operation of the provinces, to get into the secondary education field.
Education is our investment in making sure that the jobs created are meaningful jobs. Look at the statistics. People without advanced education, without college degrees, have very limited chances of finding employment. The opportunity to grow is with the people who have diplomas. That is why we are investing in this area. It is a dramatic, radical doctrine in that sense. It reflects the inspiration of ministers like the science industry minister, his very bright secretary of state who is no longer with us because of electoral vagaries, the finance minister himself and the Prime Minister, who accepted the notion that it is the knowledge century and that is where this budget should make a breakthrough.
We have learned the lesson of the Germans and the Japanese. If we want to recover, we have to invest in knowledge.
I would like to acknowledge the assistance given to us by the university faculties, in my province the University of British Columbia, the science faculty and deans, and also the Association of Universities and Colleges of Canada, the association of university professors and the community colleges who are coming to us. We want to reach out to the community colleges. They have helped to make this a very dramatic budget which will put us firmly into the position where we can lead in the next century.
When we took office, the reality was that we were lagging behind the countries with which we were competing in world markets.
The telling point concerning TRIUMF was that it was not simply pure research. We have already seen a $200 million export contract spinoff from TRIUMF. We are outbidding other countries in Indonesia and elsewhere. We have brought $200 million of business to British Columbia. That is where the link was made. I compliment my caucus colleagues and the caucus committee on higher education and research for the work they have done.
John Solomon NDP Regina—Lumsden—Lake Centre, SK
Mr. Speaker, I listened with interest to the Liberal member's comments regarding higher education. As many members of the House of Commons know, the hon. member for Vancouver Quadra has been involved in education for his entire career. I am sure he understands as a former university professor the plight of post-secondary education students, in particular as it applies to their finances.
In my constituency there are many students who have $25,000 to $40,000 in student loans. Some of them are unemployed after graduation and are unable to meet their obligations to repay those loans.
I am wondering if the hon. member could enlighten us and provide us with his views as to whether or not the millennium fund will be of any assistance to the people I have described in his constituency, in my constituency and right across the country. How will they be assisted in repaying their loans when they are unable to find work?
As an educator, how does he feel about whether the government should be assisting students who are in university now who are unable to obtain appropriate financing for their education? I would like to know his views on that issue.
Ted McWhinney Liberal Vancouver Quadra, BC
Mr. Speaker, I would like to thank the hon. member for a very thoughtful question. I would take notice of the fact that he also has devoted a great deal of his life to higher education at the very low financial remuneration which we know that occupation offers in comparison to other professional fields. I congratulate him on what he has done.
The issue of student loans is a very vital one. My first executive assistant had a $55,000 accumulated loan because he had taken three senior degrees. This is a crippling debt and the obvious situation is that people with those sorts of debts will go down to the United States. We will have a brain drain.
We have addressed this in the previous budget and the pressures within the government will continue. I do believe that this is a necessary and inevitable follow-up to what we have done in terms of grants for education in this budget. It is the signal that higher education, all education is a matter of national concern.
We understand the constitutional divisions of power. We have made the necessary nexus in terms of higher education. We can justify that constitutionally. It becomes greyer as we get below but we want to work with the provinces. The key to federalism in the next decade, once we get rid of the constitutional battles of the last 30 years, is in partnership between the provinces and the federal government, and in education we are ready and willing.
Gerry Ritz Reform Battlefords—Lloydminster, SK
Mr. Speaker, as the parliamentary secretary for foreign affairs, I just wonder whether he would care to comment in that in the budget document the government talks about spending for foreign affairs at $2.2 billion and for health at $.9 billion. I wonder how it can justify those priorities to the Canadians standing in waiting lines at hospitals.
Ted McWhinney Liberal Vancouver Quadra, BC
Mr. Speaker, I think it is always difficult as I have said before to the hon. member opposite to make invidious comparisons.
With what we spend on foreign affairs, we are already being criticized by the OECD and others for not spending enough. We try to get good value for our money in foreign affairs. That is why we use quiet diplomacy. We would not send off intercontinental ballistic missiles even if we had them.
On the health issue, it is certainly a high priority in my area. Within the government I am one who certainly is arguing for the increasing of expenditures in the medical field.
Rob Anders Reform Calgary West, AB
Mr. Speaker, we hear from this government a commitment to education. Yet I remember in 1993 the Liberals attacked us for at least being willing to address these issues. They came in and cut $2 billion from post-secondary education in this country. Does the member not feel it is just a band-aid to put a couple of hundred million dollars a year back in a scholarship fund from what the government has cut?
Ted McWhinney Liberal Vancouver Quadra, BC
Mr. Speaker, I am not aware of the facts as the hon. member describes them. I do not believe we have cut money from higher education.
Frankly, if the member examines the policy on tax points, he will find that the position we made is that the provinces have exercised their option for the extra tax points and not to spend money on education.
We think that is the wrong policy. I am sorry to say that British Columbia has not been one of the better provinces in showing a constructive attitude to education but we hope to change that.
Andrew Telegdi Liberal Kitchener—Waterloo, ON
Mr. Speaker, when I first came to this House in 1993, we were on the brink of losing Canada's economic sovereignty.
During the previous nine years, the Progressive Conservative government had grown the debt from $208 billion to $508 billion and left an all-time high annual deficit of $42 billion. More than 11% of Canadian workers were unemployed and the Tory Prime Minister of the day did not expect the rate to go below 10% in this millennium. Unemployment insurance premiums stood at $3 per $100 of income and were scheduled to rise to $3.30. Our nation was falling into self-doubt and we were the economic basket case of the western countries.
I want to remind the House of the bleak situation we inherited from the Conservative government so that never again will we go down the track of fiscal ruin as the Conservative Party did in the nine years it was in government after having campaigned with deficit reduction as a major plank in its platform.
To quote the Ottawa Business Journal editorial of February 23, 1998: “It is to the party's everlasting discredit that it held power during booming economic times yet boosted taxes to unprecedented levels and never ever made much of a dent in the deficit. That is a dismal record”.
As we have recovered the fiscal integrity of our nation, we must thank all Canadians for their support in this effort. We must also recognize and commend the leadership of the Minister of Finance and the Prime Minister. Who would have believed that this day would come?
In order to complete this first stage of the recovery plan and balance the budget, we pursued a balanced program of reduction in spending, reducing transfer payments to the provinces and growing the economy.
In reducing spending the government was streamlined and the public service reduced by 20%. Our program spending has declined every year since we took office both as a percentage of our GDP and relative to the average for G-7 countries. We have taken it from 17.5% of the GDP in 1992-93 to 12.8% in 1996-97. The G-7 average is .09% in reductions.
Federal transfers to the provinces were reduced but we cut federal spending even more. In the case of my province of Ontario, the Canada health and social transfer was reduced by an amount equal to about 2.5% of Ontario's revenues or $1.2 billion less than they received the year we took office.
The revenue problem in Ontario was caused by the decision of the Ontario government to give a tax cut with borrowed money which would reduced its revenues by $4.9 billion. This amount was four times greater than the $1.2 billion we cut transfers by.
The slash and burn policies pursued by the Ontario government to deliver meaningful tax cuts for the rich have seriously impacted negatively on every community in Ontario. This hurting of the most vulnerable in our society is contrasted by the balanced approach of the federal government.
As an unswerving supporter of Canada's health care system, I am delighted that the cuts of previous years are now being replaced. Under the budget my province gets $308 million more than last year. There is an increase under the cash portion of transfers and tax points. In all, the provincial governments will receive an additional $7 billion over six years because of the budget and the increases will continue in the future.
We grew the economy. In constant 1992 dollars our GDP based on expenditures grew from $716.1 billion in 1993 to $769.7 billion in 1996. Last year's statistics are not in yet, but the rate of growth is expected to come in at 3.5%.
My time is limited and I want to talk about the importance of education to growing our economy and creating jobs. Statistics Canada produced figures on what most of us take as a given, that the more education one has the less likely one is to be unemployed. There is unemployment also among university graduates but at a lower rate than among those with a secondary level of education or less.
In 1995, for example, the general unemployment rate was 6.5% for people with post-secondary education, 8.5% for those with secondary, and 12.8% for those with less than secondary.
The Waterloo region is blessed with three excellent post-secondary institutions. I am proud to have served those institutions: the University of Waterloo as a two term student body president and member of the senate, and Wilfrid Laurier as a member of the board of governors. I served as a chairperson for a community reference group on basic job readiness training at Conestoga College.
More than 250,000 Canadians have attended these institutions over the years. If one multiplies that by the $50,000 a year of wealth generated by each of those individuals, we have a figure of $12.5 billion that the Waterloo region adds to Canada's economy each and every year by virtue of higher education.
Dr. James Downey, president of the University of Waterloo, describes the budget as a triumph for the minister and for the Government of Canada because it blends prudence with compassion and is a superb blueprint for the future.
Jeff Gardner, vice-president, education, at the University of Waterloo federation of students, also approves. He says:
It is a huge step forward not only for Canadians going to school but for other Canadians coming back to school.
He understands that education is a lifelong process.
Dr. John Tibbits, president of Conestoga College, recognizes that in the budget the government has “provided vehicles to students and families to invest in education”.
The president of Wilfrid Laurier University, Dr. Rosehart, called yesterday to say that this new budget makes a positive impact with the extension of tax credits and child care expense deductions to part time students. He is very pleased to see assistance offered to students with children, a group which has been overlooked in the past.
These individuals, and many like them, have had a role in preparing the budget. During the prebudget consultations the finance minister met with groups representing students, faculty and staff of post-secondary institutions and with representatives of the scientific and medical research community, in addition to the other groups that usually take part. I am very happy to have contributed to this process through the post-secondary education caucus.
I was one of the original members, along with the hon. member for Peterborough and Dr. John English, then member of parliament for Kitchener, who has now returned to teaching at the University of Waterloo. Having worked with the post-secondary education community for a long time, I knew the post-secondary education caucus would help them in putting their message across.
In the consultations before the last budget, the post-secondary education caucus helped to ensure that future post-secondary institutions and hundreds of thousands of students were given high priority. As a result, the last budget was good news for post-secondary education and that is why this budget works. The people had an influence in its preparation.
Canadians from coast to coast are working hard to better themselves and improve their prospects. In so doing, they are enhancing Canada's economic strength and furthering Canada's future prospects, enabling us as a nation to compete successfully in the new economy. Research and development are crucial to our economic well-being as we compete in the new economy.
It is more imperative now as we are undergoing an information technology revolution which has a greater impact on jobs than the industrial revolution. Millions of jobs across the country were lost in the old economy and the millions of net new jobs created in the past four years are a tribute to our ability to embrace the new economy, much of it a new economy founded on research and development.
Under the new budget the industrial research assistance program will receive $34 million in increased funding to enable NRC to reach and provide technology support to small businesses, according to Dr. Art Carty, president of the NRC.
Dr. Tom Brzustowski, president of the Natural Sciences and Engineering Research Council of Canada, hails the increased funding for the granting agencies as an extraordinarily important decision by the Government of Canada:
Canada's young people will be very encouraged by the increased allocation for university research. It will help many of them directly to pursue postgraduate studies in research and to develop their talents to the full.
I must add that this will also enable them to do these things in Canada and not elsewhere such as in the United States. This will help stop the brain drain.
I salute the pioneers who founded our post-secondary institutions. Let us be bold enough and forward looking enough to uphold their vision by continuing to invest in our future and our nation's future.
In wrapping up my speech, keeping our country competitive lies in affording an opportunity to our young people, and indeed all people in Canada, to participate in the new economy. Spending money on education, research and development is a fundamental investment in the development of our nation.
I think this budget more than any other has struck this approach. I think in the future that Canadians will be the beneficiaries of it as we continue to be the best country in the world.
Jason Kenney Reform Calgary Southeast, AB
Mr. Speaker, during his remarks the hon. member criticized the Ontario government for its brutal cuts. How dare the member? The hypocrisy is overwhelming.
The member stood up in this place and voted to cut transfers to the province of Ontario from $7.6 billion in 1994 to $5.8 billion in 1996. For his constituents there was a $1.8 billion cut in net cash transfers for health care and education in Ontario, a 24% cut. And he has the gall to criticize Mike Harris for increasing health care spending by $100 million, for absorbing the $1.8 billion cut but still finding the resources to increase health care spending by $100 million, all the while increasing provincial revenues from income tax by $2 billion even after his tax cuts are taken into account. Mike Harris cut taxes, absorbed your transfer cuts and increased health care, Mr. Speaker. How could the member possibly criticize Mike Harris for cutting when he voted to cut health care for his constituents?
The BudgetGovernment Orders
The Acting Speaker (Mr. McClelland)
Before the hon. member for Kitchener—Waterloo responds, I remind all members to address each other through the Chair.
Andrew Telegdi Liberal Kitchener—Waterloo, ON
Mr. Speaker, we must be tolerant toward new members of the House. I am sure he will learn many things over time.
The Mike Harris government in Ontario is a reform government. That is why the people in Ontario elected zilch Reform members to the federal House of Parliament. I mentioned that in order to balance the budget we had to cut all areas of government spending.
Andrew Telegdi Liberal Kitchener—Waterloo, ON
One of the things that member will learn is that when other people are speaking, he should allow them to speak. That is democracy. It is also something his party should be promoting.
Let us be clear. We cut transfers to the province of Ontario by $1.2 billion. The tax cut put in by Mike Harris cut his revenues by $4.9 billion. It was on the backs of the most vulnerable people in Ontario. This year, at the first opportunity, we in the federal government restored funding to the social transfers to the tune of over $300 million and it will grow over the years. Over the next six years it will grow to the tune of $7 billion.
I see young Reformers stand in the House to say “do not spend money because it comes out of the pockets of taxpayers”. I decided to look up some of the CVs of the members of the Reform Party. The member for Calgary West attended the University of Calgary for all of four years to get his degree. During that time the money he contributed to his education through tuition was $11,600. The actual cost of that education was $50,877.19. Almost $40,000 was contributed by the taxpayers of the country.
When that member talks about spending on education he should support the efforts of the government because we are investing in the development of our future generations.
Gilles Duceppe Bloc Laurier—Sainte-Marie, QC
Mr. Speaker, I will say right off that I will not be congratulating the Minister of Finance.
You do not congratulate someone on work others have done, or on efforts others have made. It was the provinces that had to make the cuts in health care, education and income support. It was the provinces and the unemployed that made all the efforts.
When this government took office in 1993, 61% of the unemployed were entitled to unemployment insurance benefits. Now, five years later, fewer than 40% of the unemployed enjoy benefits.
The Minister of Human Resources Development wonders why. He says he will investigate. He is perceptive that one. Very perceptive indeed. If he were at all self-critical, he would very quickly realize why the proportion has dropped so tragically.
When I read the budget I thought it was the work of the Minister of Finance. I was wrong, because it looks increasingly like the Prime Minister's budget. He had his hand in it—
Gilles Duceppe Bloc Laurier—Sainte-Marie, QC
—in an effort to make his mark in history. He will, but not for the budget. We will get to that a little later.
It is so definitely the Prime Minister's budget that, for the first time in years, he will be the one going to New York to talk to financiers about the budget rather than the Minister of Finance, who, however, reduced the deficit to zero this year.
For the first time in 28 years, we have a balanced budget, yet it is not the Minister of Finance who is being sent—this would perhaps take time away from his leadership race—but the Prime Minister. He is the one going to New York.
I said that it was the provinces and the unemployed who did the work. Let us take a look at how the zero deficit was achieved.
Fifty-two per cent of the cutbacks were carried out by the provinces, in health, I recall, in education and in income support for the most disadvantaged. This means that for each dollar cut in Quebec, 75 cents was because of Ottawa, and the people of Quebec need to be reminded of this. The cuts, the problems in the education, health and welfare systems are the fault of the federal government.
Individuals suffered 37% of the cuts, and only 12% were to federal spending. The Minister of Canadian Heritage was able to continue draping herself in flags. There were no cuts to the heritage minister's flag budgets.
Then a surplus appeared. We might have expected to see it go to the provinces, but no, 23% went to them, 26% went to individuals and 51% was spent by the federal government on new initiatives in areas of provincial jurisdiction. This is why we have this crushing $583 billion debt. A good part of it is because of the genius of the Prime Minister when he was finance minister.
But that is not all. In addition to grabbing revenues, the Minister of Finance is not telling us everything. He keeps quite a few things to himself, does the finance minister. We saw it in Bill C-28, which he sponsored. While it contains provisions on international shipping, he claims he did not know. That is worrisome in a finance minister. If he did know, there may not be a conflict of interest, we shall see about that, but there is definitely, at the very least, an apparent conflict of interest.
This minister hides things from us, not only his personal interests, but also his deficits. Last year, the Bloc Quebecois said he had approximately $12 billion in leeway. We did not have figures, but our prediction was about $12 billion. We were told we did not know how to do the math, that it was ridiculous, that our figures did not hold up. Last year, they realized there was a $15 billion error and this year, $17 billion. We were right on. This minister maximized his deficits. This year, he is minimizing his surpluses.
We are not the only ones to say so. I am thinking of financial expert Jean-Luc Landry of Bolton Tremblay, whose comment on the Minister of Finance's surpluses was “He hides them from us, that is very clear”. Alain Dubuc, editorial writer at La Presse , which is not known for its sovereignist views—it is owned by Power Corporation—wrote that the minister was so prudent that he is becoming untruthful. That is what Alain Dubuc said.
But why all this whispering about? It is clear. If the minister showed us he had surpluses in hand, he would then be obliged, if he had that amount to spare, to meet the needs of the provinces, of the unemployed, of the taxpayers whose taxes have gone up because the tax tables have not been indexed since 1993, and even back in the days of the Conservatives.
This raises the whole matter of this government's hypocrisy. It cuts assistance to the provinces and then comes along pretending to be their saviour, saying “Look here, we have injected $6 billion into the Canada social transfer”. That is one way of looking at it. The reality is that instead of cutting $48 billion by the year 2003, they will cut $42 billion. And they call this investing $6 billion. The reality is $42 billion in cuts. For Quebec, this means $12 billion in cuts.
Politically, this has been explained. From time to time, ministers tell us what they are really up to. The President of the Treasury Board said that, when Bouchard would be forced to make cuts, they in Ottawa would be able to show that they can afford to preserve social programs for the future. That is clear.
When the Prime Minister saw French people marching to protest cuts to social programs, he told Jacques Chirac in his colourful way of speaking: “You know, things are done differently in Canada. Decisions are made in Ottawa, and the province have to make cuts”. It was crystal clear. That is exactly what they are doing, and the premiers have noticed.
Just this week, Saskatchewan Premier Roy Romanow, who is no sovereignist—he was there with the Prime Minister on the “night of the long knives” in 1982 at the Château Laurier, so he is not exactly a friend of Quebec—
