Debates of Feb. 5th, 1998

Supply

[Dick Proctor, NDP, Palliser, SK]

Mr. Speaker, I wanted to direct a brief question to the member through you. It deals with an item that came up last night on television and I am wondering how the Reform Party might respond.

In the last several years successive governments in this country have eliminated the social portion of Canada Mortgage and Housing Corporation. Last night viewers apparently saw some of the results of that in the city of Calgary where there is admittedly a very successful economy at the moment. A number of people simply cannot afford to rent accommodations there. The shelters are stretched and bursting at the seams.

I do not quite equate the member's answer that this has dramatically increased spending. We do not have enough social spending in this country on things like that. I am wondering how the paper the member's party has been touting all day deals with those kinds of problems.

[Myron Thompson, Reform, Wild Rose, AB]

Mr. Speaker, once again, just talk about one of the priorities alone. I believe that we should make every effort and take whatever steps are necessary to see that we do what we can to help people get into proper homes and shelters. If they need it, that is going to happen. There is no doubt about it. Nobody denies that. Let us do what we can. That is a priority to me. Not only that, once we get them into a shelter, into a place where they can live, let us help them meet their needs the best they can.

If the Liberals would stop to analyse it, it might take a little time and be a little slow but the best way to do this is to get out of their pockets. Leave money in their pockets. Do not tax more to spend on programs. Leave it in their pockets. People will look after themselves. That is the whole point.

These socialists do not believe that Canadians are capable of looking after themselves. It is getting very difficult because they will not stay out of their pockets and it is time they did.

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

Mr. Speaker, I am pleased to address the motion before us today. It is a motion that tries to question this government's good judgment and its commitment to Canadians.

Our hon. Reform colleague would have this House believe that the government is about to suddenly change course to embark on a reckless course of overspending, throwing away in effect all that Canadians have worked so hard to achieve. This is absolutely untrue.

[An hon. member]

A $600 billion debt. That is what they worked so hard to achieve.

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

I think the member for Medicine Hat is speaking through his hat.

[An hon. member]

Oh, that is funny.

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

First, when we came to office, we set about putting our fiscal house in order. We did this because we knew that it was the essential foundation for lower interest rates and higher economic growth. That means jobs. That is exactly what we have achieved. We knew that without a fiscal turnaround we would never be in a position to pursue broader tax reduction.

In his first budget in February 1994, the Minister of Finance shared with Canadians this government's vision for the future and firmly stated how we would get there.

The Minister of Finance declared that we are pursuing a balanced approach to fundamental reform to create jobs, to continue to care for those in need and to get the deficit down. We have done that.

Our sound judgement, our balanced approach and prudent planning have secured important gains for Canadians, and it would be the furthest thing from the truth to suppose that this government would risk all that we have achieved together.

Let us look briefly at the achievements. As I said earlier, this government realized in 1993 that the key to a prosperous future for Canadians was getting Canada's books in order. Our prudent and balanced deficit control plan, centred on cutting government spending, has met its targets. In fact, we have exceeded them.

It is worth repeating the fundamental facts of our stewardship because it is our proven ability to keep our promises that should reassure Canadians that we will continue to keep them today and in the years ahead.

In 1993-94 the federal deficit stood at $42.5 billion, or about 6% of our economy. We said that we would bring that down to 3% of GDP within three years. This is a benchmark that is used in Europe and is centred in the Maastricht treaty, and that we would not stop until the budget was balanced. We exceeded our own target on the timeframe of balancing the budget.

By last year, fiscal 1996-97, the final deficit figure was down to $8.9 billion. That is 1.1% of GDP. That is $20 billion lower than the previous year for the biggest year over year improvement in our history. At $8.9 billion, it is the smallest federal deficit in 20 years.

In fact, we are now internally borrowing the money that we need. We are not borrowing internationally. There no more outside of the country credit leak, and it represent a resounding decline from some $33 billion since we came to office. I think that is a very good record.

Contributing to this success have been the unprecedented spending restraint measures introduced in our budgets. Also contributing to our deficit success is the new expenditure management system that the government has put in place, a system on one hand that affords departments greater flexibility in budgeting while on the other hand forces tradeoffs and reins in spending.

Last year program spending, that is all government spending except interest payments on the debt, fell by more than $7 billion to just under $105 billion. This means that between 1993 and 1994 and the last fiscal year, total program spending has been reduced by $15.2 billion, and our deficit progress has delivered real and rewarding results for Canada.

Let us take a look at interest rates. About three years ago short term interest rates in Canada were almost 2.5 percentage points higher than those in the United States. By last fall, they were almost two points lower than what was in the United States.

This is not an abstract achievement. It has meant, for instance, that a homeowner taking out or renewing a $100,000 mortgage for 25 years has saved $3,300 a year. A consumer, for instance, taking out a $10,000 car loan has saved $320 a year. It gets better. Savings on a $25,000 small business loan, the engine of our economy in this country, over 10 years would total $7,500. That is a definite advantage for small business.

Figures like that clearly illustrate the real benefits that this government's sound judgment and balanced and prudent management has secured for Canadians. That means lower deficits and lower interest rates.

We all know interest rates will be affected by many factors such as domestic conditions which can change and many global influences which are beyond the control of even the largest economies. We have seen this very clearly recently as Canada has been buffeted by what everybody refers to as the Asian currency flu.

Imagine what would have happened to this country back in 1991, 1992 or even 1993 when we were running a $42.5 billion deficit in this country with interest rates in double digits. It would have killed us as a country. However, through prudent management we got our country on line and within safe measures before something like that happened. It saved our bacon.

However, because our underlying economic fundamentals are now strong, as I have said before, we are in much better shape to meet this type of development than we were just a few years ago. That is why, despite the fact that our interest rates have increased, they are still below U.S. rates. That clearly shows that we have the right economic policies to weather the storm and to ensure that continued strong growth and job creation prevail.

Job creation is indeed another vital area in which we have made significant progress since coming to office. Between 1989 and 1993 some members in this House may recall that employment had dropped by over 100,000 jobs. Since this government has come to power, employment is up now by 1.1 million jobs. These are all in the private sector. Nearly nine out of ten of these jobs are full time.

Last December, for instance, employment increased by 62,000 jobs, contributing to a total employment growth of 363,000 jobs in 1997 as a whole. At 8.6%, December's unemployment rate, that is at the lowest level since September 1990.

The very real results of our second sound and balanced judgment in these three areas, the deficit, the interest rates and employment, are quite clear and, as far as I am concerned, very impressive.

There is more good news. The real GDP, the measure of economic growth, has risen by 4.1% in the third quarter of 1997. While the month to month figures can fluctuate, the growth has continued on average in the fourth quarter. In other words, it is an upward march. As a result, the consensus of the private sector forecast is that Canada's economy will continue to expand into 1998 and beyond.

Here is the type of evidence that backs up this outlook. Do not take my word here. Manufacturing shipments remain on an upward trend with the average growth for October and November running at about 5% and above on the third quarter. When the hon. member for Wild Rose asks about the dollar, that is one of the reasons. Because of that dollar our exports are very competitive. Merchandise exports increased by 1.5% in November and reached a record high.

Business investments have surged by some 25% over the past year and remain at a record high. Housing starts were up by 16% in 1997. Vehicle sales were up by 17.8%. Since its 6.6% plunge in late 1989 and late 1993, real disposable income has stabilized. Consumer confidence which declined by 6.9% between 1989 and 1993 has surged by 18% over the past year alone as the recovery has fully taken hold in the domestic economy. Consumer confidence has reached its highest level in eight years.

These are all very significant achievements but the real issue is what lies ahead. That is what we are talking about here today. According to the member for Medicine Hat what lies ahead is a 180 degree about face. He wants Canadians to believe that what lies ahead is a government prepared to abandon a course of balanced and sound prudent management that has brought Canadians the rewards that I have just described.

He wants Canadians to believe the government that is about to take this nation to a balanced budget in 1998-1999 is also a government that will take this nation back into the dark ages of overspending and deficit financing. That is absolutely wrong. This will not happen. We are not the party that changes its economic principles and political focus just for the sake of votes.

In the 1997 election I was the only one who stood at an all candidates debate and said if you want a tax cut vote for those guys, do not vote for me, and I am back. As the prime minister has said, we will never again allow the financial health of our country to get out of control. As the finance minister declared last October, responsible financial management is not a fad or a phase. It is a permanent feature of a successful society. These statements are the statements of the government that is going to take this nation into the next millennium financially healthy and strong.

[The Speaker]

I see five members rising but we have about 30 seconds. I do not think I could even get one of you in in 30 seconds.

It being 5.30 p.m., it is my duty to inform the House that proceedings on the motion have expired and the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

The House resumed from November 19, 1997, consideration of the motion and of the amendment.

Child Benefit

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, I rise today in this House in support of my colleague's motion requesting that the government review the level at which the child tax benefit is currently indexed.

I wish to congratulate the hon. member for Shefford for bringing such an important issue to this House. Campaign 2000 recently released its 1997 figures on child poverty and the figures are unbelievable.

There are 500,000 more children living in poverty today than in 1989, the same year that Parliament unanimously passed a resolution to achieve the goal of eliminating poverty among Canadian children by the year 2000.

One poor child is just one too many. What can we say about the 1.5 million currently living in poverty in this country? The figures tabulated by Campaign 2000 clearly indicate that the problem is increasingly alarming and must be attended to immediately. The situation demands that the government examine the child tax benefit and adjust it to better assist the children and families with incomes that fall under the low income cut off level, better known as the poverty line.

Poverty is more than just a lack of money. It affects a child's health, education, welfare and general well-being. On this I want to tell this House today that when I was mayor of Saint John I sat on the board of the Rotary Club for the Rotary boys and girls club. When we were having a breakfast meeting one day we heard a noise outside. I went out. Here was a little boy going through the garbage barrel. I said “What are you doing?” He said “I'm hungry”.

I picked him up. I brought him in. We found out that there were a number of children attending an elementary school nearby the Rotary boys and girls club who went to school on a Monday morning with nothing to eat. We started a breakfast for them and we had over 50 little children from that elementary school who came and we fed them their breakfast.

I also tell the House this. The Rotary boys and girls club every year would honour one of their very special people, someone they thought so much of they would make a little crown for them. Do you know who they gave the crown to, Mr. Speaker? It was a senior citizen who came and cooked for those children. She became their nanny and they loved her so much.

You see, it is so important. It was affecting, according to the teachers, their level of learning because they were hungry.

The Canadian School Boards Association believes “The relationship between child poverty and its adverse affect upon children's readiness to learn and their ultimate success in school is well established”.

Furthermore, the connections between child poverty and youth unemployment are tremendous. Our teenagers are our future: our teachers, our doctors, our plumbers, our electricians and prospective parents. If we are not able to break the poverty cycle in which they live today, it surely will be passed on to their children.

When poor children become adults they are less likely to find well paying jobs. Why? Because the children living in poverty do not have good health. They have a difficult time to learn. They are likely to miss school and are more likely to fall behind in high school as well. When all hopes and dreams vanish, they are more likely to drop out before graduating.

For governments this situation translates into higher hospital and education costs and more spending on social assistance programs. It also represents less tax revenue to Canada. At the end of the day we all pay the price.

Let us not forget that children are poor because their parents are poor. These parents need secure and better paying jobs to allow them to meet their financial obligations and to provide their families with safe and adequate housing, to provide meals, warm clothing and an overall healthy environment conducive to their development.

Having a little bit of money at the end of the month may also mean that children will no longer miss birthday parties, school trips, or get involved with sports.

Mr. Speaker, I have just painted for you the sad picture of child poverty. Now let me tell you what we can do to help.

Improving the level at which the child tax benefit is indexed could go a long way against the devastating effects of child poverty. This assistance program is not a luxury but a necessity for many Canadian families. Sadly, the benefit's value keeps decreasing every year due to inflation and, although the inflation rate has remained below 3% in recent years, it has fluctuated enough to affect poor and low income families.

Food, as I have stated, clothes and rent cost more. Back east they cost much more because the HST is applied to little children's clothing. These things cost more, but these families do not get more money to pay for them.

To survive parents must make choices. They must make difficult choices. I must admit that some make the wrong choices.

I urge all members of the House to vote in favour of my colleague's motion. Both she and I realize that simply increasing payments will not solve the problem. Unfortunately, the issue of poverty is too serious and complex to be disposed of so easily. We must seize the opportunity and make use of the tools which are available to us.

I want to quote another member of this House who said “Poverty is the enemy of a good start”. That was said by the current prime minister, and he was indeed right. I encourage all members of this House, especially members on the government side, to support the motion of my colleague from Shefford. Let us give our children a good start. When the prime minister said “Poverty is the enemy of a good start”, yes, he was right. I agree with him. I am hoping that everyone in this House does.

[Karen Redman, Liberal, Kitchener Centre, ON]

Mr. Speaker, I rise in the House today to speak against Private Member's Motion No. 198 regarding the indexation of the child tax benefit.

I acknowledge and am proud that this government is now on sound economic footing. This stability has been attained through reworking government priorities and maintaining good fiscal management.

Throughout the pre-budget hearings in the fall it was brought to the attention of the Standing Committee on Finance that this good news was achieved at a cost; a social cost in some cases.

This motion calls for a review of the level at which the child tax benefit is indexed.

On the face of it the motion sounds plausible. However, there are some compelling reasons why, after giving it thought, it cannot go forward.

First, income tax has been and will continue to be reviewed to make strategic adjustments.

Second, there is a trigger. The Income Tax Act states that the child tax benefit will be indexed each year by the amount which the annual change in the consumer price index exceeds 3%. This policy of partial indexation is consistent with the treatment of most other parameters of the personal tax system and is respectful of the fiscal problems which are facing the federal government.

Third, there is the option available in the Income Tax Act, as it now stands, to allow discretionary adjustments to the child tax benefit as needed.

Finally, this government is committed to listening to the people's request to make strategic investments.

For these reasons I would have to ask the question: Why, when this government has shown commitments to low and middle income families and to combating child poverty, would the member opposite suggest a review? I can only assume that the change the member is calling for is for that of full indexation of the child tax benefit.

The current policy of partial indexation in the tax system applies to the basic personal credit, spousal credit, tax bracket and others. For this reason it would be difficult to go to full indexing for some parameters and not for others. As the member opposite mentioned, there are not poor children, but poor families, and I believe this needs to be looked at in a holistic manner.

The full indexation of the child tax benefit in other parameters would mean a cost of about $850 million per year. On a cumulative scale, this would mean $1.7 billion a year, and so on. The full indexation of the child tax benefit alone would mean, with the inflation rate of 1.6% per year, a cost of about $160 million a year, and would keep building.

This type of yearly commitment is not one which would be withdrawn once it was made. This commitment would threaten the government's program to restore and maintain fiscal balance and would therefore not be prudent at this time.

This government has stated that it will review its policy of partial indexation once its fiscal position makes it appropriate. In the meantime, government policy has been strategic and targeted to assistance in priority areas, like families.

Although the government has maintained its position on partial indexing, it has made related adjustments to address the needs of low and middle income families. This government has made and will make improvements to the child tax benefit. This includes an increase of $850 million in assistance provided to low income families through child tax benefit implemented over the past two budgets.

We have promised a further enrichment of child benefits of the same magnitude during this current mandate. This is just one of many initiatives that this government has made. These actions demonstrate that assistance to families, particularly aimed at low and modest income levels, is and will continue to be a priority for this government.

Throughout the prebudget hearings we heard from Canadians. Canadians are looking to this government for leadership. They are relying on the delivery of policies that are sustainable and funding that will endure.

Canadians asked for strategic reinvestment in programs. The government is answering this request slowly and carefully. Have we done enough? No, not yet. Can we do more? Yes, we can and we will. However, this government cannot and will not put Canadians at the risk of bankruptcy as past governments have done.

This motion deals with exactly the type of uncalculated economic commitment which made this government's corrective fiscal actions a necessity.

Although child poverty is on the mind of almost every member in this House, regardless of party, this is not the step to take and I believe this is not the time to take it.

[Eric C. Lowther, Reform, Calgary Centre, AB]

Madam Speaker, I appreciate the opportunity to speak to this motion. I believe it is important for us to understand what this motion is attempting to do so we can speak to it intelligently.

Clearly the child tax benefit that has been in place since 1984 has had a regime which requires a 3% adjustment for inflation on an annual basis. If we do not have that 3% increase in inflation, there is no adjustment to the child tax credit.

What we have noticed with that is that there is a double whammy here actually for Canadians. First, if someone's income goes up at about the rate of inflation, 1% or 2%, they are now in a higher dollar bracket with no real additional spending power. Therefore, their child tax benefit is actually reduced. Over and above that, the child tax benefit is also not indexed with inflation and therefore the buying power of it is also lower each year. Because we do not adjust this unless the inflation rate is over 3%, there has been a slippage over the last 12 years in the value to Canadian families of the child tax benefit.

As the member opposite alluded to, the real buying power loss of those Canadian families who have participated in this over that 12 year period is about a $900 million shortfall in the benefits that are paid out under this program when it is adjusted for inflation. If it had kept in step with inflation, there would be $900 million more available for Canadian families.

The member said that we cannot afford to do this because we have to balance the budget. It is interesting that we would prioritize drawing these funds on the backs of Canadian families to balance the budget. I am suggesting there is probably quite a few other lower priorities that should be looked at first.

The key point is that there is a continual ratcheting down effect so that the benefit to Canadian families continues to drop. The winner is the federal government in that the program to which it has been committed is there for Canadian families and continues to cost it less and less even though its tax revenues continue to increase. It is one small example of the beginnings of many incremental pressures on the backs of Canadian families for some time.

I refer to the outcome of the incremental ratcheting effect of the pressures on Canadian families. It is interesting to note—and some members in the previous debate made reference to it—that the average Canadian family has suffered a $3,000 drop in real income since the current government took office in 1993. It is this subtle, tax by stealth approach that has eroded the real income of Canadian families.

For example, in 1996 Statistics Canada said that the average Canadian family spent $21,000 on a combined tax bill and only $17,000 on food, clothing and shelter. It is time to stop the kind of thinking which says let us take a dollar from a Canadian and give it to the government. Then the bureaucracy and the overhead involved in it take a portion of the dollar and some fraction of the dollar in benefit is given back to Canadians. Our approach in this party is that it is best to leave the full dollar in the pockets of the Canadian family.

There have been many comments made about some of the government's programs and the rhetoric surrounding the concern for children. I was glad the member who just spoke acknowledged that it was not children in poverty but the family. The best way to care for the children is within the family. I appreciate that comment and I concur with it. We must make sure our policies are not blind to the fact that children are dependants within. They are not entities.

The value of the family cannot be understated. The mothers and fathers are raising our next generation, our future Canadians. They are the ones who teach them right from wrong. They are the ones who pass on our culture. Within a family we learn the subtleties of human relationships and personal sacrifice and how to get along with one another. It is a critical institution. It is the foundation of our society.

I quote from the United Nations General Assembly which said some years back that the family was a natural and fundamental unit of society and was entitled to protection by society and the state. The World Congress of Families in Prague last year said that the family was the first social unit and that it held primacy over all man-made communities, economic entities and governments. It also said that policies which undermined the family eroded the bedrock of society.

We have a number of special interest groups and people clamouring for more rights. This is going on while the mom, the dad and the kids are under attack. I liken it to having a nice home. The top floor is being renovated. A crew is fixing things and changing wallpaper. This is the people clamouring for more rights, the special interest group.

Unfortunately some of the policies in our current government has a demolition crew working on the foundation. All the effort to try to renovate the house on the top floor is for not when the foundation is being torn apart.

One of the best examples I can use to illustrate this point is the fact that we have a discriminatory policy surrounding children and child care. We have had it for a number of years. We do not like to talk about discrimination in Canada. We think we are above that. Yet we have tolerated it for years when it comes to Canadian families.

Parents who wish to care for their children at home are given a subtle message by the government. There is no value in their doing that, but if they wish to have someone care for their child outside the home they will receive a full tax benefit. Or, if a third party cares for their children there is tax treatment for that. There is absolutely none for the parents who wish to care for their children at home.

It is not even a money issue to me although that is part of it. It is the subtle message to these parents, to these mothers or fathers who care for their children at home, that there is no value in what they are doing. It is absolutely the wrong message to be sending to Canadian families who are working so hard to raise our next generation.

That is why the Reform Party has long been calling for a child care deduction for all parents including those parents who care for their children at home. They should not be excluded so that the parent could make the choice. A number of studies have been conducted. One study done in Ontario quotes the fact that most parents believe that the best way to raise and care for children is with a parent at home.

With that in mind I bring forward other proposals Reform is encouraging the government to adopt in its upcoming budget. The government should consider a spousal deduction that would enable families to better support one of the spouses at home. It should begin a plan that would see any surplus applied to reducing the debt and reducing taxes.

We are very confident in our numbers. If the government were to follow our plan, by the year 2001 the average family of four in Canada could have $2,000 in its pocket which it otherwise would have had to pay in the form of tax bills to the government. That would be $2,000 in the pockets of Canadian families to take away some of the pressure they are under. We would encourage that approach.

We have other proposals. One is to take low income families right off the tax roll altogether. There is no sense in taking money from someone who is at a low income level and then trying to give them money back because government overhead takes much of that money away.

This motion is a tiny step in the right direction because it has compassion for families and children. We are not saying that it is our whole program or that it is even part of our program, but it is a step in the right direction that recognizes the importance of families and some of the inequities they have been dealt by the current government.

Without a doubt the Canadian family is part of the foundation of society. It is the commitment of the Reform Party to do everything possible in the days and years ahead in every act and bill we bring forward to strengthen and encourage the Canadian family in every way.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Madam Speaker, the motion before us recommends that the federal government review the level at which the child benefit is indexed. I believe this is a laudable goal. The Government of Canada fully supports the broader goal of increasing assistance to families with children.

The government initiated a national system to prevent and reduce child poverty more effectively than ever before when it introduced the national child benefit system in the 1997 budget, scheduled to take effect on July 1, 1998. The system has been designed to co-ordinate child poverty programs across Canada and to provide additional assistance to low income families working to provide for their children.

While programs have existed to assist low income families, the system has created disincentives and barriers to working. In the past when parents chose to leave social assistance and join the job market they lost badly needed social services such as health, dental and prescription drug plans. This clearly is a disincentive and is not acceptable.

The national child benefit system is an enriched and improved federal child benefit which will complement provincial-territorial programs to provide more effective assistance for low income families. These services will be made available to all low income families, the working poor and those on social assistance. I applaud the objectives of the national child benefit system to prevent and reduce child poverty, to improve work incentives and to simplify administration.

Governments have clearly recognized there is a significant problem in terms of child poverty. It has increased about 50% since 1989. The motion before us asks for a feasibility study on indexing child tax benefits.

The difficulty is that the potential fiscal costs of such a measure cannot be supported at this time. The financial impact of the proposal with the current inflation rate of approximately 1.6% per annum would cost the federal government about $160 million per year of indexation, that is $160 million in the first fiscal year, $320 million in the second and so on.

The child tax benefit allows for partial indexation to help address the severe fiscal problems facing Canada. The policy applies broadly in the tax system to spousal credit, basic personal credit, tax brackets, et cetera.

It would be difficult to apply full indexing to some tax parameters and not to others. It is estimated that the cost would be about $850 million per year. This would have a major impact on the government's ability to restore fiscal balance.

The government, however, has made a commitment to review the policy of partial indexation once it in a fiscal position to do so. In the meantime, the government has made it clear that it is targeting additional assistance in priority areas.

The prime minister stated in June 1997 that the government will double spending aimed at reducing child poverty once the government gets it fiscal house in order. He stated “We would like to double the funding when we have the means”.

The 1997 budget created a child tax benefit at a cost of $850 million. Since July 1997, over 720,000 low income working families have received increased benefits as a result restructuring and enrichment of the working income supplement.

Maximum benefits increased from $500 per family to $605 for the first child, $450 for the second child and $350 for each additional child. For the lowest income families the increases in the child tax benefit represent a 50% increase in federal benefits. Starting July 1998 these benefits will be extended to all low income families as a result of the national child benefit system.

The federal government is assuming a larger role in providing basic income support to families which children. We are moving in the right direction. We are assuming our responsibilities.

We believe in a society that is compassionate and cares for the less fortunate. It is interesting to note that Campaign 2000, a non-government anti-poverty organization, has abandoned its goal for the elimination of child poverty by the end of the century. It is taking up the need for sound fiscal management and furthering the interests of children. In November 1997 it stated that the social policy community in Canada had a high stake in becoming public interest guardians of the fiscal stability of federal finances.

Campaign 2000 commended the government for being particularly articulate and passionate in its concerns for children. It went on to say that strong fiscal stabilizers are an essential part of a sustainable social investment strategy for children and youth.

The government has demonstrated that it is committed to this important issue. Ken Battle of the Canadian Institute of Social Policy stated in February 1997 that a national child benefit system has the potential to be the most important social policy innovation since medicare.

The Globe and Mail stated in May 1997 that in difficult times it made sense to focus government generosity on those who most need it. The proposed child benefit is a good way to do it.

Yes, the government recognized the plight of those families that need support. The government has chosen to act, to demonstrate its commitment that this is a priority. A full review of the policy of partial indexation will take place once it is fiscally appropriate to do so. This is a commitment. This is our promise to the Canadian people. For those reasons, I cannot support the motion before us.

I believe I have demonstrated that this government is moving in the right direction, that it is the beginning of a process, not the end. We will see our obligations to the end.

[Caroline St-Hilaire, Bloc, Longueuil, QC]

Madam Speaker, I am pleased to rise today to speak in the debate on the motion of the member for Shefford on the indexing of the child benefit.

I would first like to congratulate the member for Shefford on her fine initiative. Clearly we must reduce child poverty now in any way we can.

I will start by saying that the Bloc will obviously be supporting this motion. Better yet, however, to ensure greater effectiveness, my colleague for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques proposed an amendment.

We are talking here of a relatively recent benefit, which dates from 1993. Before then, the main federal tax measures for children were the family allowance, the child tax credit and the dependent child credit. Under the Conservatives, the child tax benefit replaced these other measures.

The benefit is intended primarily to increase the income of less fortunate families and is therefore tied to family income. At this point in time, the federal government no longer universally recognizes children. Family policy and the fight against poverty are intertwined.

It is rather surprising to see today that roles have changed. At the time, the Liberal Party was sharply opposed to selective measures. In 1992, the Liberal member for Davenport stated in the House that universality is the work of the Liberal party, and something we still cherish today, as it is the best method. Might the Liberal party have had a change of heart, perhaps?

The current deputy prime minister also criticized this measure, and I quote his words: “In fact, a family with a $40,000 annual income will only receive $44 more each year. Within three years, this benefit will be reduced by 10% and, in ten years, most families will no longer be receiving any assistance because this benefit is not indexed for inflation”.

Once again, might the Liberal party have had a change of heart, perhaps?

In addition to objecting to this benefit because it abandoned the principle of universality and merely gave the illusion of devoting more money to children, the Liberals were opposed to it because the benefits were not indexed. The Conservative party appears to recognize some of the shortcomings of the child benefit by proposing to re-examine its level of indexing.

After several years of low inflation rates, the harmful effects of this measure are making themselves felt. Benefits are not increasing, but consumer prices are. In case the Liberals are not aware of this, in 1977 everything costs more than it did in 1993, whether it be housing, clothing or food.

While an attempt is now being made to make the necessary corrections in order to improve the child tax benefit, as was called for in part by the Liberals when they were in opposition, now they are the ones opposing it. I would remind the House that they are the only party in the House opposed to this motion.

All the opposition parties are unanimous on at least one point: this benefit should be indexed, for the sake of the children.

I must admit that I do not quite follow the logic of the Liberal Party. Why does this party, which claims to be concerned about the well-being of children, object to this motion? In its action plan and its speech from the Throne as well, it maintains that it is important to invest in children and in the fight against poverty. Fine promises and rhetoric are not enough. We want to see concrete action.

As we have heard time and time again in this House, children are poor because their parents are poor. Talk is cheap. Actions speak louder than words. With its 1.5 million children living in poverty, Canada ranks second among industrialized countries for the number of children living in poverty. It that the Canada the Liberals want?

As far as we in the Bloc are concerned, this is clearly not the kind of system we want, let alone the kind of leaders we want for our children.

I am shocked to see that the Liberals are trying to make political hay at the expense of children when that serves their purposes and will not support a sensible motion to take positive steps. The well-being of children goes beyond partisanship.

The facts are there: since 1992, inflation has never been higher than 3%. What this means is that the value of the child tax benefit has been eroded by almost $850 million. But what does this $850 million really mean for the 1.5 million poor children in Canada. I am going to tell the House. It means that hundreds of thousands of children across Canada and Quebec go to school on an empty stomach, that they lack the concentration to really focus on what they are learning, and that they will fall ill more often than other children.

It is because inflation is under 3% that there is no price fluctuation? If you ask poor children to tell you what price fluctuation means, it is true they will not be able to tell you in so many words, not just because they have missed several days of school through illness, but because the concept is much too abstract for children.

Ask them, however, what rising prices mean. Now they will be able to tell you that that means their parents have trouble buying enough food for the whole family, that they have trouble buying the school supplies and clothing they need. In short, it means that Mom and Dad do not have enough money to provide for them. Ask these children to tell you about their daily reality. Then you will not say to me, as did the parliamentary secretary to the Minister of Finance, that it is impossible to index the child tax benefit, because it would cost the Canadian government too much, particularly when that same government has a budget surplus.

The 1997 Liberal Plan, a fairly recent document, says on page 58: “Research has proven consistently that investing in early support for families and children at risk yields real results.—By helping young children get off to a good start and preventing problems before they occur, these programs significantly decrease the need for far greater spending in future”. This is not from me. It is taken from the Liberals' action plan.

In conclusion, I wish to remind you that the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques tabled an amendment, to make the motion even better. The amendment seeks to delete all of the words after the word “review” and substitute the following: “the possibility of fully indexing the child benefit”, which gives the following motion: “That, in the opinion of the House, the government should review the possibility of fully indexing the child benefit”. The purpose of this amendment is merely to reinforce the motion, not to change its meaning. I therefore urge hon. members to support the amendment and, of course, the motion as well.

[Jean Dubé, Progressive Conservative, Madawaska—Restigouche, NB]

Madam Speaker, my colleague, the hon. member for Shefford, has presented a motion concerning a review of the level at which the national child benefit is indexed.

As the human resources development critic for the Progressive Conservative Party of Canada, I feel duty bound to defend children and the quality of life to which they have a right to aspire.

Let us recall briefly that the question of child poverty has been raised on a number of occasions in recent years. I was not an MP at the time, but I do recall this Parliament being unanimous in resolving the problem in 1989. There was a projection that child poverty would be eradicated by the year 2000. In 1989, one child in eight was considered poor. Now the figure is one in four. In some regions, this proportion might be one in three, and in others perhaps a bit higher.

Yet the principle is a simple one. Today we are working to get an economy working that will redistribute benefits to strata of society where people are less active in the work force, whether the young, the old, the sick, or those forced into inactivity by the economic context. If we do not focus on our children and provide them with a good quality of life, adequate health care and quality education, we will pay for it later. We will end up paying for not having invested in our most important resource, people.

First of all, families have the prime responsibility for raising their children. They must look after their development. They are our front line workers. However, as a government, we must give them support. We also share in the responsibility. Many of us are involved in looking after society's greatest investment, its children. Parents, federal, provincial and territorial governments and community and private agencies must join together to help those who come after us achieve their full potential.

I need not tell you that the experiences of our young people will shape their behaviour later on, that the living conditions we provide for them today will affect their future health and well-being and that their ability to learn and adapt is closely linked to the environment in which they grow up.

Another conclusion, which my colleague mentioned, seems relevant. If children are poor, it is because their parents are. Naturally, the best solution would be job creation. This would be the best way to eliminate child poverty.

I will not fall into a partisan speech on the merits of the Conservative approach to job creation, of reducing taxes and employment insurance premiums. Although no one has a monopoly on truth, I do know that we are proposing the most realistic way to put hope back into the hearts of Canadians.

Let us admit that these issues are closely linked, that it is difficult not to deal with all of them at the same time. There are poor children because there are parents who do not work, or who work in bad conditions. And bad working conditions stem from another problem I have not mentioned: education.

Investing in our children also depends very much on the framework in which they are given the chance to develop their skills. With everything moving ahead so rapidly nowadays, how can investing in education not be regarded as a priority?

If the technological evolution of the last 30 years is any indication of the next 30, investing in education is no longer a priority, but an obligation. If I mention education or employment when talking about child poverty, it is only because there is not just one solution to a problem such as poverty. A series of solutions implemented simultaneously might help. Taken singly, each solution would not solve the problem, but each has its importance and the whole would not work as well if one were missing.

There is one solution that would play an important role in the national benefit reform that has been announced. It is the only cash benefit that will be left once the federal program is inaugurated, hence its significance. Under the new distribution of government responsibilities, the central government's role would be to deliver the cheques. This money will constitute the only money coming in every month for many families, and in some cases would mean the difference between falling below the poverty line and managing to make ends meet.

Unfortunately, these benefits are only partially indexed, a policy that was set at a time of rampant inflation. Inflation is nibbling away at the benefits of people for whom every dollar counts. Now that inflation is stable, it is our duty as legislators to tailor the legislation to society.

For this reason, I support the motion of my colleague for a review of the level at which the child benefit is indexed. I encourage all members of this House to do so as well.

[Ken Epp, Reform, Elk Island, AB]

Madam Speaker, it is a delight to stand up in the House of Commons, Canada's Parliament, and speak on behalf of families.

I would like to draw to the attention of the House and any Canadians who happen to be listening that the Reform Party believes very strongly in protecting families and in protecting children.

There is a motion on the floor today to address the issue of family and child poverty. We of course are adamant in saying that children are probably universally poor. I know children of parents who are very well off but the children themselves do not have money. These children are poor because they are dependent on their parents. I think it would be certainly true that every child in Canada who is poor is poor because they are members of a poor family.

There are a number of reasons for this poverty and there are a number of different ways in which that poverty is measured.

I was reading the other day that different countries use different measures of poverty. In some countries a family is considered poor if it simply cannot afford 100% of the costs of basic food, clothing and shelter. In other words, everyone in the country should be entitled to those basic necessities. On the other hand in Canada we use varying definitions.

One that is often used is that families are poor if their family income is less than half of the median income, and so this provides a movable measure of poverty. Sometimes this is valid. Indeed we all know of families that are poor. We all know of children who are poor. We have encountered them. We have encountered families that have a great deal of difficulty and sometimes find it impossible for a number of different reasons to meet the basic necessities of their needs.

Yet we have also of course this flexible measurement because of the percentage it is based on so that in some cases one could really say that there are many people who are living on a very small amount of income but they do so very efficiently. By the measure of our normal standards of poverty they may classify as being in a poor home but as a matter of fact they are able to meet all their needs. They are comfortable, they are warm, they are fed and, most important, they are loved. Those children would not be classified as poor in the usual sense but they might by the statistical definition that they live in a family where the family income is less than half of the median income in the country.

I do not know whether I should be so bold as to say that I grew in what by today's standards would be called a poor family. We were talking about it the other day. We were talking about the great hardship that many families encountered because suddenly they had no electricity. I was telling a friend of mine that as best as I recall I was around 10 when we first got electricity. Of course the big difference between now and then was that at that time we did not have it, so therefore we made other arrangements for heating our home and for providing light. Those other arrangements were always in place.

But I was really genuinely in a poor family. My dad started farming in 1935 in Saskatchewan. I do not know if members heard about the big depression out in the prairies but things were very bleak. My family started farming and for several years did not get a crop. We raised a few chickens and a few animals and we were able to live.

We never thought of ourselves as poor. There was a strong relationship not only within our immediate family but also among the neighbours. We all shared. We looked after each other. When I was a youngster we used to pile into the car, visit different neighbours and sometimes different relatives. We did not have a refrigerator so we took turns slaughtering animals for meat. One day it was this person's young heifer or a steer that got chopped up. We would all divide it up and 10 families would go away with meat for a week. The next week it went to another place and so on.

By today's standards we were living in total abject poverty. Yet we never thought of ourselves as poor. We were happy, we were loved, our parents got along well with each other and with everybody else. We enjoyed firm and loving discipline in our families and we never thought of ourselves as poor.

My mother told me one of my favourite toys was a lid from a syrup pail. I used drive around the House with that thing and push on it. That would be my horn, beep, beep. That is how we played. Those were our toys. I am very proud to announce that after I left home my father finally got on his financial feet. There may have been a correlation there. My parents are now in their mid eighties and doing very well.

We need to keep the idea of poverty in perspective. I really believe we need to help those who have genuine needs. We know they are there. However, I greatly resent that we are taxed so much in this country that we find our governments are taking away from us the joy of sharing. We no longer have enough disposable income that we can go to a person and say I see you are in need, let me help you get on your feet.

One of my favourite stories is of one of the most exciting events in my life. A number of us got together to buy not a new bed for their child but a new house. This guy came to me and said our rent is more than what I would have to pay per month if I could get into this low cost housing, but I cannot raise the down payment. I went away and thought that was a young couple we should be able to help. I got together with a bunch of my friends. None of us were very well off. I gave them the option of either giving an interest free loan or an outright gift. There were about 25 of us. We all kicked in anything from $100 to $1,000. We had the down payment for a house for this young couple. They eventually paid us back and they had their own house.

That was no government program but how many people can now afford to do that when the governments are spending half of our income for us? If they could only let us keep more of our income and cut the taxation then we could have families together.

There is no doubt in my mind that one of the greatest stresses in families is money. I also believe that one of the most important things for the security of children is to be in a secure home in which the marriage is strong. I am going to make that connection. If we can reduce the financial pressures on families, on couples, so there is less stress on the marriage, then the families will remain strong and our children will be wonderfully looked after by loving parents who care for them and who can provide for them.

We need to learn, as has been the topic all day today, that governments of all levels need to take as little as possible out of the pockets of the wage earners so they can have the pride and the dignity of providing for their own families. Enough of this crazy concept of taxing every family so heavily that both parents have to work, get two incomes and give half of their total income in taxes. Basically the income of one of the parents goes to pay taxes. Talk about shovelling wheat into the truck while the end-gate is open. It does not make any sense.

I believe we need to address the question of child poverty by addressing the question of family poverty. If we can address that and particularly make the contribution of reduced taxation to give these families financial independence, I think we will be on the way to solving the problem of child poverty because we have solved the problem of family poverty.

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Madam Speaker, I appreciate the opportunity to speak today to this private member's motion which recommends that the government review the level at which the child tax benefit is indexed. In particular, I want to respond in the short time that is remaining in this debate, five minutes or so, directly to the hon. member's claims that were just made in this House moments ago. He points across our hall here in the House of Commons to say this government has to be doing something in order to help the family, in order to help child poverty.

I remind the hon. member that in just the last two budgets the federal government increased by $850 million the assistance provided to low income families through the child tax benefit, $850 million. It is a commitment that this government sees toward families, toward families in poverty, toward children in poverty, even though we are attempting to do exactly what the Reform Party wants this government to do, to take hold of our financial responsibilities in this country.

What else did we do? Since July 1997, over 720,000 low income working families have received increased benefits as a result of the restructuring and enrichment of the working income supplement. What does that mean in practical terms?

Maximum benefits increased from $500 per family to $605 for the first child, $405 for the second child and $330 for each additional child. That is a commitment by the federal government toward child poverty.

Next July these benefits will be extended to all low income families as a result of the establishment of the national child benefit system. It is a joint federal/provincial initiative. The national child benefit has three objectives. We are trying to prevent and reduce child poverty, improve work incentives and simplify administration, three solid goals.

Under the national child benefit system the federal government will assume a larger role in providing basic income support to families with children.

For their part, the provinces and territories will be making corresponding reductions to the child component of their social assistance payments and reinvest all the savings in complementary programs and other benefits and services for low income families. Again, that is a commitment by the federal government of Canada toward child poverty.

For the lowest income families, the increases in the child tax benefit represent a 50 per cent increase in federal benefits. The federal government has promised a further enrichment of child benefits of the same magnitude during this mandate. We have promised that.

The hon. member opposite understands that. He has heard us say this time and time again. Selective memory, I suppose. You know, when in opposition, we oppose. No matter how good those government programs are, no matter how fiscally responsible the government opposite is, we have to piecemeal and pick out any opportunity we can to justify ourselves as an opposition.

Do you know why I can say that? Because I sat over there from 1988 to 1993. I understand the mentality of opposition. But there were times, even when I sat over there, that I applauded the federal government for initiatives it took between 1988 and 1993.

Most certainly there were not many of them. When you recognize that the federal government is doing a job for the people of Canada, especially when we are talking about low income and children in poverty, this government has been very successful to date for children.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Rick Laliberte, NDP, Churchill River, SK]

Madam Speaker, on October 6, 1997 I asked the Minister of Environment about additional cuts to her department's mandate and staff. These cuts will affect up to 200 positions on top of the 1400 positions cut from the previous Liberal budgets. There was an apparent shortfall of $8 million to $10 million to meet the finance minister's deficit quota.

The entire planet has realized that there are problems in our atmosphere yet the environment minister will be cutting the atmospheric environment program, a program that includes internationally recognized research, science and development. As a nation we are beginning a journey to reduce our greenhouse gas emissions to meet international obligations from Kyoto and to take steps to protect the atmosphere for our children and their children. How can the minister justify further cuts to the department that is so vital to understanding our atmosphere and climate change?

As my colleague from the Yukon described last fall, the weather for the Arctic will be forecast and broadcast from southern British Columbia. Will it take the loss of lives caught in a freak winter storm to bring the minister to her senses?

In my riding of Churchill River air services are a key component of our northern lives. We now rely on weather reports from as far away as Winnipeg. When will the cuts to weather services be stopped? Enough is enough.

The Environmental Protection Branch is also slated for further cuts. This is the very department which monitors most of the worst polluters in this country. It is responsible for waste management and risk management in the mining, chemical, pulp and paper sectors.

Not all companies are polluters, but to expect Canadians to believe this Liberal government and to tolerate the cuts to the very department which protects communities from the bad apples is asking a bit too much.

Voluntary, voluntary is what Canadians are told by the Liberal government as the best way for industry to monitor and police itself. Who is the Liberal government trying to protect? Is it the industry and its lobbyists or the health, safety and environment of all Canadians?

The decline in environmental services is felt right across this fine country. The big problem is not just the federal environment cuts. One must consider the added insult that many Canadians share. The provinces have been meeting deficit quotas as well and the environment departments are often the first to be sliced and diced.

Ontario has cut over 40% of its environment ministry since 1995. Staff levels have been reduced by 36%. Who is protecting the environment?

The Plastimet story reminded every Canadian that accidents can happen. The health and safety of Canadians is being compromised.

In my riding of Churchill River we experienced severe flooding last summer. Communities were not warned, properties were damaged and many lives were disrupted. I discovered that Environment Canada does not monitor rivers or possible flooding in my riding. It has been passed off to the province or to the private sector, or even partnered.

It is hard to keep track. There are so many different names but the story is the same. Cut, cut, cut. The deficit quotas must stop. With the deficit battle met and a balanced budget close at hand, will the minister stop the cuts and invest $8 million to $10 million in our children's sustainable future?

[Karen Kraft Sloan, Liberal, Parliamentary Secretary to Minister of the Environment]

Madam Speaker, I would like to make note of the contribution that the hon. member from the opposition has made in his hard work as a new member on the environment committee. The House should also be aware that the member was a member of the Canadian delegation that went to Kyoto to discuss the very urgent issue of climate change. We are all aware of his very important and continued contributions to this House on the ecological agenda.

On behalf of the minister I would like to take the opportunity to clarify several points regarding Environment Canada's program review.

It was reported in the fall that this government had mandated new cuts to Environment Canada. That is not true. What is true is that Environment Canada announced to staff early last September that the department had to adjust its strategies for dealing with the 1996 budget reductions that will take effect on April 1, 1998.

The 1996 budget reductions are the result of program review two. The department's budget is reduced by 3.5% or $17.2 million. Originally the department felt that about 70% of the reduction could be met through increased cost recovery.

While cost recovery revenues have been increasing, it is now clear that they will be insufficient to deal with the budget reduction in 1998-99. So the department is having to eliminate approximately 200 positions, as the member opposite has pointed out.

Environment Canada will endeavour, as best as it can, to enforce regulations to reduce pollution and protect wildlife, to set national standards and to issue weather warnings to protect the health and safety of all Canadians.

[Lynn Myers, Liberal, Waterloo—Wellington, ON]

Madam Speaker, prior to my election to the House of Commons, I was involved with adult education and adult literacy. It is an area of great interest to me and an ongoing concern. I know firsthand about the problems associated with the lack of literacy skills.

A recently released international adult literacy survey ranks Canada near the top of those who participated in that survey, yet more than 40% of adults or 7 million people in Canada do not have the literacy skills needed to function effectively at work or at home.

Canada still ranks near the top of the 12 countries which participated in the survey. Indeed, it ranks first among the English speaking countries, including the United States, Britain, Australia and New Zealand. However, this is not good enough.

People with lower literacy skills are more than twice as likely as those with mid range to high literacy skills to be unemployed. Clearly this needs to be changed. This is unacceptable and it has to be changed.

Literacy skills are necessary if Canada is going to keep pace with a rapidly changing workforce that expects more expertise from workers. This is more so as we go into the globalized markets.

Literacy skills are necessary to enable people to get meaningful employment. This is very important and it is part and parcel of Canada's inevitable march to globalization and the interconnectedness of the economies of the world.

Therefore, I call on the federal government to work closely with the provinces and other groups who want to improve the literacy skills of Canadians. The Canadian government must continue to develop and support more effective strategies in order to improve literacy levels.

Will the parliamentary secretary commit to this very worthwhile undertaking?

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Madam Speaker, the member for Waterloo—Wellington has a very good question for us here this evening. I can offer what I think is an equally good answer for him.

On behalf of the Minister of Human Resources Development I can report that the Government of Canada places a high priority on literacy. This was reiterated in the February 1997 budget where the funding was increased in the national literacy program to $29.3 million from $7 million. Our commitment was also why on September 8 Senator Joyce Fairbairn was appointed as special adviser for literacy to the Minister of Human Resources Development.

HRDC and StatsCan released a report back on September 8 that the hon. member referred to which was the first of the international adult survey monogram series. The first report highlighted the strong literacy skills of Canada's youth which is the highest literacy score of all Canadians. HRDC supported this report as part of our commitment to understanding literacy issues better. It reinforces a serious literacy challenge that has profound social and economic implications faced by industrialized nations around the world.

I promise the hon. member for Waterloo—Wellington and other members of this House that this government will work in partnership to ensure Canadians have access to literacy skills. After all, this is a prerequisite for participation in an advanced economy.

[The Acting Speaker (Ms. Thibeault)]

A motion to adjourn the House is now deemed to have been adopted. Accordingly, the House stands adjourned until tomorrow at 10 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 6.40 p.m.)