Debates of March 10th, 1998

House Of Commons

[The Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Speaker]

In my opinion the yeas have it.

And more than five members having risen:

(The House divided on the amendment, which was agreed to on the following division:)

Division No. 98

[The Speaker]

I declare the amendment carried. The next question is on the main motion as amended. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Speaker]

In my opinion the yeas have it.

And more than five members having risen:

(The House divided on the motion, which was agreed to on the following division:)

Division No. 99

[The Speaker]

I declare the motion as amended carried.

Pursuant to order made earlier today, the motion to adjourn the House is now deemed to have been moved.

The Economy

[The Speaker]

It is my understanding that all speeches will be 10 minutes or less.

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, it is truly a privilege and honour to rise this evening to speak to the first balanced budget since 1970.

While the credit undoubtedly goes to the Minister of Finance and the Prime Minister for their vision and leadership, primarily first and foremost it must go to all Canadians. Without the partnership that existed between the government and Canadians from coast to coast in our first mandate and our subsequent re-election on June 2, a balanced budget would not have been possible.

Some other good news from the budget of 1998 is a guarantee of consecutive balanced budgets for 1998-99 and 1999-2000.

While hon. members from across the floor may disagree with aspects of the budget, they must accept at the outset that a balanced budget is a good start. Many of my colleagues have talked about the wonderful aspects for education the budget gives our youth in retraining and the vision of the budget as an educational budget.

I would like to concentrate in my 10 minutes on actually talking about the government's renewal of the arts and cultural industries in Canada. I submit that the budget already sets the stage for dialogue about the strategic reinvestment in our arts and cultural industries. In the budget it is clear that we are again promoting Canadian culture.

[The Speaker]

I think some colleagues are close by and their conversation is coming over the system. I wonder if we could just ask them to take their meeting outside.

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, three programs were announced by the Minister of Canadian Heritage prior to the release of the budget: the additional $25 million to the Canada Council, an increase of $15 million in support for our publishing industry, and an additional $50 million to cover athletes and coaches.

Most important, what I would like to talk about is the government's renewal of the Canada television and cable production fund. This fund represents a uniquely successful blend of public and private funding. It joins government and cable industry contributed moneys to enhance the broadcast presence of high quality Canadian programs.

Last year the fund supported from 19,600 full and part time jobs throughout Canada. I must emphasize it was throughout Canada. Most of these jobs were in highly specialized skilled and were well paid jobs. The direct economic spin-off benefits are in the range of $625 million.

There also exists further economic benefits to those small and medium size businesses that supply services as a result of this increase in production activity.

The funds objectives are clear: to increase the quality and quantity of Canadian programming available to Canadians on television, to assist job creation and growth in all regions of Canada, to enhance the capacity to produce and distribute domestic television programs, to maintain and increase broadcast presence of distinct Canadian programs, and to encourage greater export opportunities.

The fund is financed by the Department of Canadian Heritage, Telefilm Canada and the cable industry's former cable production fund. In its first year of operation the new television and cable production fund has made possible a record number of 2,221 hours of Canadian programming that reflect the dynamic increased talents of Canadians and reach wide audiences both at home and abroad.

At a time when Canadians watch an average of 24 hours of television a week we must realize that this medium is our primary source of entertainment, information and news.

Coupled with the size and resources of the television industry of our neighbours to the south there exists a real danger of Canadians, young and old but especially our young people, our future, knowing more about the United States than about their own country, Canada.

The renewal of the fund represents not only the government's commitment to Canadian television but recognizes the positive economic impact of Canada's arts industry.

A country's real strength lies in its people. The arts and the culture of a people are the expressions of their heart and soul. It is the movies, television, music, painting, dance and theatre that enable Canadians to laugh, talk and cry together. Through them we can express our identity, our similarities and differences.

The production fund is a proven success, culturally and economically. The government's decision to extend the program is recognition of that success and of the importance we attach to Canadian cultural expression.

Canadians have a right to see and hear their own stories on television, the most powerful cultural medium of our time. Canadians deserve Canadian programming.

The renewal of the Canada television and cable production fund will go a long way to achieve this end. To date the fund has delivered more than 2,200 hours of high quality prime time programming from all regions in Canada. Without funding from the fund, many of these projects would never reach television audiences in Canada.

This is not just good news for television. This fund in particular was good news for the CBC. The 1996 cable production fund brought critical new resources to CBC schedules.

In 1996-97 the fund supported independent production for CBC-SRC totalling $91 million and produced $218 million in overall program budgets. The fund supported independent production for CBC-SRC totalling some 384 hours in 1996-97 with over 300 more new hours projected for 1997-98.

The CBC's Canadianization of English television and the significant enrichment of French television could not have happened without the fund.

There was the establishment of quotas for access to funds investment and licence fee components by independent producers working with the CBC. Half of the fund's moneys went to fund CBC programming production.

This targeted predictable funding has partially offset other funding cuts. It has permitted the CBC's television services to pursue national cultural objectives that would not otherwise be obtainable.

The broadcast schedules are unique in the volume and distinctiveness of their identifiably Canadian programming, from Omertà and Urgence to Wind at My Back and Black Harbour , from Juste pour rire to The Red Green Show . There are programs that arise from both the major centres and the regions of Canada, from Riverdale to North of 60 and from Watatatow to L'Ame d'un peuple . There are programs that affect all of Canada's peoples and reflect the way we look at each other.

As I stated this is just the beginning of our reinvestment into the arts. One of the things the public has sometimes felt is that when we are investing in the arts we are only investing in arts organizations. That is not true. The message we must bring to all Canadians is that when we invest in the arts, we are also investing in our economic and social well-being.

Recently the Canadian Conference of the Arts published a discussion paper “Arts in Transition Project”. It looked at how and why the Canadian public should justify public sector funding. I would like to conclude by reading from this report.

No reasonable Canadian believes that the purpose of our health care system is to employ doctors. No one complains that our legal system exists only to pay judges—.We value our health care, legal, and educational systems because of the fundamental benefits they make available to all Canadians who want or need them, whether or not specific individuals ever go to a hospital, take a case to court, or study at a post-secondary institution.

I would challenge our arts and culture industries and the government to work together with the public to show once again that our strategic reinvestment in the arts and culture industries is not just to benefit the artists and arts organizations, but is to benefit Canadians and our economic and social well-being as a whole.

[Myron Thompson, Reform, Wild Rose, AB]

Mr. Speaker, it feels just a little bit strange tonight after the episode that we have gone through over the last couple of days that I would be up speaking on the budget which has already been passed. I thought the purpose of a debate was that hopefully you could sway somebody to see things your way and maybe influence them when the issue came to a vote, but this issue has been settled and we are still debating it.

I am pleased to participate to that extent but I find it really strange. I should not get too upset or worried about it. What I have seen happen in this House in the last four and a half years that I have been here is that most of the decisions are made before we start talking about them in the House of Commons. Unfortunately, behind closed doors a decision is made by a few then everybody is instructed how to vote. That is exactly what happens. They come out like little puppets and vote the way they are told, then it carries and the debate does not really mean much anyway.

I am going to take this opportunity to extend my gratitude to the taxpayers of Canada. Although for the last month the Liberals across the floor have been busy patting each other on the back for a job well done, we all know that the balanced budget is due to the hard work and sacrifice of Canadians from coast to coast. Their sacrifice has been compounded through provincial hardships which no one wants to talk about in this House.

The truth of the matter is that the federal government has forced the provincial governments to do its political dirty work by reducing transfer payments by up to 55% for health care and education. That has put an additional strain on our already strapped provincial governments while the Liberal government has been allowed to write in black ink. It has forced provincial governments into the red in an effort to balance their budgets. This cannot, in my view, be considered a success.

To add insult to injury, the Liberals have begun a surplus spending spree, which is a very good habit of theirs. We can simply look at the $600 billion debt. We know that the Liberals started that debt and then the Conservatives chimed in. They really like to spend. They spread our hard earned gains so thin that no real good will be done.

Instead of giving taxpayers well deserved tax relief or reducing the debt, they have launched $11 billion of new spending. Once again we have all sizzle and no steak from our finance minister. It is a classic example of short term thinking and there will be no long term rewards for our nation. It is obvious the Liberals can only think as far ahead as the next election.

The big government philosophy of the 1980s has not yet left the Liberal Party. We continue to see billions of tax dollars wasted each year in the name of political pride.

First we had the Pearson fiasco to the tune of $260 million. Then we had the Airbus scandal which cost us $3.4 million. It was a futile but expensive effort to try to embarrass a past prime minister. The helicopter deal cost us $478 million in cancellation penalties. Only in the Liberal Party could they spend twice the amount for half of the helicopters and call it a good deal.

This budget is clearly without a plan.

In presenting the 1991 budget Michael Wilson stated “We will establish a debt service and reduction fund solely dedicated to offsetting the costs of the public debt. All revenues from the goods and services tax and from privatization will flow into this fund”. That was a promise made back when the fabulous GST was brought in, which the Conservatives were going to steer directly toward the debt in order to get it under control. It was a big joke.

If nothing else, the 1991 budget had a vision. It was not long after that that the Tories gave up the responsible spending fight and selected the easier tax and spend rhetoric, just like the Liberals are doing today. We really only need two parties in the House, the spenders and the non-spenders.

In addition by the year 2000, Canadians will be paying $48 billion per year more in taxes than when the Liberals were elected. This increase alone is equivalent to $5,000 per Canadian family. Beware Canadian families. The day is coming. Taxes are going to go higher and higher. This budget proves it.

In addition, by the year 2000 the Liberals will be collecting $22 billion per year in GST. That is 46% more than the year they were elected. That is an awful lot of money for a tax which our Prime Minister promised to abolish. He gave the nation his word. He was going to abolish it. Instead it is going to draw 46% more.

As a former teacher I am deeply concerned about the young people of Canada. What will the future hold for them? This budget offers them little hope.

The Prime Minister's millennium legacy scholarship fund and job training programs, such as youth service Canada, are merely band-aids and not solutions to the problems facing youth. Once again our government is playing a public relations game with Canadian youth. On the one hand there is the slash and burn approach to cutting education transfer payments to the provinces which makes the dream of a university education unattainable for many. Then in a vain attempt to make itself look good, the government offers a select few students funding by way of scholarships which will not begin until the year 2000. For the vast majority of desperate youth today, the millennium fund will be too late.

The Liberals' ambivalence toward children begins at an early age. By expanding the child care expense deduction they have added to the degeneration of the Canadian family unit by promoting non-parental child care. It is beyond me why the government does not understand that a child's parents will provide the best care available.

Our entire tax structure focuses on those who use alternative care. A recent Compas research poll stated that 90% of the population believes a family setting is preferable to daycare when asked what is the best for an infant or a preschool child.

I really have a tough time when I hear about a father or mother who wishes to stay home with the children while the other one works and they are not going to be able to because of this budget and this government. These parents must work in order to meet the taxes that they are going to be obligated to pay. I truly believe that many of the problems with today's youth, including violent crime, teenage pregnancies and the intolerable dropout rates stem back to the government's promotion of limited home parental care.

When I came here in 1993, the Liberals said there were one million children in this country who were living in poverty and starving. Now in 1998 I still hear the same thing from that side of the House. I heard a member a moment ago talking about all the wonderful money they are going to give to the CBC, the little give outs here and all the wonderful glorious things they are going to do. But nobody has given any money to these children.

How about giving to the children's aid societies in these cities that are struggling to try to keep food on these kids' tables and clothes on their backs. When are they going to start doing something like that? I guess that is not the politically popular thing to do.

One more group which has been neglected and which I would like to speak about is the seniors. This budget has left them standing in the cold. In 1996 the seniors benefit was floated as a trial balloon in the budget with the legislation promised for the fall of that year. This proposal established a punishing marginal tax rate of up to 75% for middle and upper income seniors while providing a meagre 17 cents a day to the poorer seniors. Two years have passed and the finance minister has not found a face-saving solution to this dilemma.

Reform believes that changes should be made on the following basis. The benefit must be better targeted to those in need. Any reduction in benefits must treat middle and upper income groups fairly. There must be sufficient time for not yet retired people to make retirement plans. For those whose birthdays cause them to miss the cutoff date they are being unduly penalized. Apparently this government feels that it is fair to ignore Canadians who have generously paid taxes their entire lives and are looking to enjoy what few years they have left. They should not get their hopes up because there is nothing in this budget that is going to make that happen.

Next on the list of those that do not concern the Liberal government are the Canadian small businessmen. It has upped the payroll taxes and given no tax relief to the businesses, especially small businesses that provide jobs. People running small businesses should not get their hopes up because nothing is going to happen through this budget.

In conclusion, the Canadian government has finally stopped acting like a household living beyond its means. It may have cut up the credit cards but the debt remains. Regretfully the Liberals' spending of our surplus on new programs is a sign that we will soon see a deficit again which will truly be a shame.

[Christiane Gagnon, Bloc, Québec, QC]

Mr. Speaker, I am pleased to take part in the debate on the budget speech, all the more so as it is ironically at complete odds with its title: Building Canada for the 21st Century.

What this budget really does is provide the tools to weaken Canada. It seems that a real blueprint for society should contain a genuine vision, and that is what this budget lacks. It should also respect its partners and be attentive to the needs of the disadvantaged. It is about this lack of vision, respect, compassion and transparency in the budget speech that I am going to talk to you today.

After four years of fighting the deficit on the backs of the provinces, the unemployed and the disadvantaged, the Liberal government is in a hurry to get back to its old habit of spending. In his budget, the Minister of Finance announced over $10 billion in new spending and tax cuts of $7.2 billion by 2001. But nowhere did he mention that his government wanted to pass an anti-deficit bill, the purpose of which would be to balance the budget.

The federal government will once again be interfering in provincial areas of jurisdiction, ones that do not belong to it. Instead, it should be looking in its own backyard, reducing its own expenditures so the people of Canada and of Quebec will never again have to experience the situation they were thrown into of battling the deficit. As we know, everyone contributed heavily to that effort.

The Minister of Finance's audacity does not stop there, moreover. The Liberal party bagman, the man with the heavy responsibility of deciding what he will do with the surplus, is talking about a balanced budget. The provinces, who got hit with 52% of federal cuts, are entitled to only 23% of the new expenditures. Individuals got hit with 37% of the federal cuts and are entitled to only 26% of the new expenditures. Federal spending was cut by only 12%, yet accounts for 51% of the new expenditures.

So it is easy to understand why the President of Treasury Board has said “When Mr. Bouchard has to cut in Quebec, we in Ottawa will be able to demonstrate that we are the only ones preserving the future of social programs”. We can say that this greatly desired objective of the President of Treasury Board has been attained.

What is happening in the provinces? Cuts are being made. What is happening at the federal level? Money is being spent left and right in areas under provincial jurisdiction, without any real vision or strategies. The deception has now been revealed, the figures are there to prove it.

How can the minister talk about balance when he has reduced his own spending by only 9 per cent? We all know that he had promised cuts of over 19 per cent. Therefore, it is not the first time the finance minister has made vague and contradictory statements.

On January 10, 1997, this same Minister of Finance said, and I quote: “I believe child poverty is the greatest political challenge of our time from a social point of view”. Whatever happened to this minister's willingness to fight poverty? Instead of eliminating the problem, I think he is making it worse.

The government just gave a meagre $600 million that will be added to the $250 million announced in 1995 for the child tax benefit. This increase will not take effect until next July. The finance minister also announced another $425 million for July 1999 and the same amount again for the year 2000.

He has been saying since 1996 that he would do something to fight poverty and he has not done anything yet. He is promising something for next July, but he is already $250 million behind. To be effective in our fight against poverty, we need $2 billion right now. Members of the Bloc deplore the present situation.

If the Minister of Finance took action to index the child tax benefit, 50,000 more children would be eligible for this benefit, children who are not eligible now because no indexation has been done in a very long time. There were indeed solutions, but the minister did not want to listen to the solutions proposed by various groups. That is what Campaign 2000, a very well known organization in Canada, had proposed to the finance minister to deal with the issue of child poverty.

In the fight against poverty, the government could have tackled the indexation of personal income tax tables and the GST. Once again, the minister failed to go after the real problem of poverty. Had he done so, 840,000 low income households would not have paid income tax. At the moment, because there is no indexation, they do.

These are therefore specific measures that the Minister of Finance often neglects. He could have taken real action to fight poverty among adults and children, because when children are poor their parents are poor too.

Another measure the Minister of Finance neglected was a reform of employment insurance. Such a reform has a negative impact on poverty. The reforms that took place were hard on people without work.

The first report on EI reform recently obtained by the Standing Committee on Human Resources Development and the Status of Persons with Disabilities is a great disappointment. You might say the Liberals are incapable of seeing the day to day reality, and are promising another report to evaluate the impact of these measures.

We all know that those who cannot get employment insurance are on welfare. Studies have been done in Quebec showing that 220,000 people are on welfare. When you are on welfare, you are not in the labour market. This is where to attack the problem of poverty.

That means an additional 194,000 welfare cases in Quebec. That means that Quebec has to pay out an additional $845 million in assistance to people who cannot find jobs. Countrywide, the figures are as follows: an additional 730,000 welfare cases or an additional cost of $2.5 billion to the provinces, while the federal government saves $6 billion. That will enable it to spend wildly, as it wishes, with its propensity for meddling in provincial jurisdictions.

The sum of $2.5 billion is destined for the millennium scholarship fund. That is not acceptable because it does not deal with the problem; rather, it amounts to investing money without vision or strategy. There have been cuts in Quebec. Canada has cut $10 billion in education, including $3 billion in Quebec.

The Bloc Quebecois has proposed many measures for analysis by the Minister of Finance. Instead of that, we get this skimpy budget. And who is going to pay for it in the end? We are paying too much in federal taxes for the strategy chosen by the Minister of Finance. It is a short term and shortsighted strategy that ignores the demands of the various stakeholders.

In education, for example, a number of people told the Minister of Finance that their energy was misdirected. They were ignoring educational priorities. Furthermore, a lot of people are dropping out of school and there is a shortage in funds for education because the transfers to the provinces are not there.

I will not name everyone in positions of authority in the various university and college administrations who want the money needed for education to be given to the provinces. The students federation and a lot of people are disappointed at the federal government's attitude regarding the millennium scholarships. It is ignoring what is happening in the provinces.

We have asked the minister to stop spending in areas of provincial jurisdiction, to not create any new programs and to give the money back to the provinces. The administration of the employment insurance plan must also be changed. There must be a targeted reduction in the tax burden. Legislation must be passed—

[The Speaker]

I am sorry to interrupt the hon. member, but her time has run out.

The hon. member for Winnipeg North Centre.

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

Mr. Speaker, I rise today to express the disappointment of my constituents and Canadians everywhere with this federal budget. It was a budget of profound disappointment for Canadians, particularly on the health care front. It was a budget that was greeted not only with disappointment, but with disbelief from Canadians who really believed that this government was prepared to deal with the critical health care situation in this country.

We have heard those sentiments expressed from all parts, all areas in this country. We have heard it from nurses. We have heard it from doctors. We have heard it from people in hospital hallways and many other Canadians. We have even heard it from the Minister of Health. Medicare is underfunded and people are suffering unnecessarily for it.

This budget offers no new money for medicare. We have heard time and again from Liberal members suggesting that the cancelled cut of $1.5 billion is new money.

Let us be clear, it is not. It goes no distance at all to reversing the $3.5 billion that this Liberal government took out of health care in 1995. There is no new money in this budget for health care. There is no federal leadership in this budget. There is no commitment to expanding on our medicare model by putting money toward home care in this budget.

It does not work for Canadians to continue to recycle old commitments and to transform foregone cuts as if they were new proposals and new initiatives. It does not work to continue to blame the problem on the provinces although it is quite obvious that one cannot ignore negative developments on the provincial front.

This afternoon I listened very carefully to comments by the member for Brandon—Souris who tried on the one hand to suggest that the federal government had made a terrible mistake in this budget with respect to health care and I agree with him on that point.

On the other hand he tried to suggest that the Conservative government in Manitoba had made brilliant decisions with respect to health care and done a great service to Canadians in that province. It makes no sense to on the one hand criticize the federal government and then to praise the Manitoba government for doing precisely what has been happening here federally.

On both counts we are dealing with governments which are so busy offloading and privatizing and deregulating in the area of health care that it is in fact the patients who are suffering and Canada's health care system that is in disarray.

It is true that there is no longer a fiscal deficit in this country, but what cannot be overlooked is that there is a profound human deficit. It is the result of another kind of deficit, a moral deficit on the part of this government.

The Liberal government does not want to reinvest in health care because it is afraid it will not get the credit for it as those funds are channelled through the provinces. People can literally suffer, even die, because the Liberals may not get the credit they and only they feel they deserve.

Another offensive argument that is being used by the government to justify their continued squeeze on the health care system is that if they give the provinces money, it may not be used for health care because we have a block transfer system for health and social services.

Let us not forget who established this block transfer system. It was the Liberals and now the same Liberals are using it as a convenient excuse to starve medicare out of the billions of dollars it took out of it.

In these difficult times it is important to acknowledge how Canadians are struggling and trying to cope in the face of these continued and demoralizing cuts. The media have also played a role in bringing these stories to the public's attention; painful, personal stories about waiting for hours in an emergency ward before receiving any treatment, stories about nurses working 24 hour shifts and collapsing from exhaustion.

When the Liberals patted themselves on the back for this budget, Canadians did not let them forget the terrible cost. We once had one of the finest health care systems in the world. For decades our health care system provided efficient, good quality service for all Canadians. Now, because of successive Conservative and Liberal cutbacks, we are left with a system practically in chaos in which people can no longer count on timely treatment.

The solution is clear. A reinvestment in medicare is absolutely imperative. Let us not turn to a private system in which the rich go to the front of the line and low and middle income people suffer and die on long waiting lists. Let us reinvest in medicare so every Canadian has access to timely, good quality health care.

On another matter, it is clear that there is a set of issues that have been certainly left off this agenda for a very long time.

It is hard to believe from the absence of discussion on child care, on women's health, on violence, that in 1984 there was actually an all party leaders' debate on women's issues.

Yet today many of the issues that are central to the lives of women, that are critical for the advancement of the goal of equality, have been forgotten, ignored, disregarded, and are invisible on the agenda and in the budget. Like pay equity, for example, the federal government continues to refuse to pay its own women workers what they are worth.

On another matter, we had hoped to see in the budget a restoration of funds to the women's program which has been cut back by millions of dollars over the years.

The fair share campaign is calling for the government to spend $2 for every woman and girl in Canada, on organizations and projects that bring women and men closer to social, economic and legal equality. Unfortunately the government and the Secretary of State for the Status of Women are silent on this matter in the budget.

The government has committed itself to analysing all policies and programs for any possible differential impact on women and men. It begs the question where that analysis is in the formulation of the budget. We want to know if this analysis was ever considered in terms of the budget decisions like the decision not to reverse the Liberal's $7 billion cut to health and social services.

Women, as we all know, make up the majority of workers in and users of health care and social services. These cuts clearly have a disproportionate affect on women.

In the budget child care expense deductions were raised. That is a good step, but where is the national child care program that was promised and promised until the Liberals were blue in the face? The 1993 red book promise of 150,000 new spaces is long forgotten. What good is a child care expense deduction by itself for those parents whose children have been waiting on lists for years?

I want it to be known that my colleagues in the NDP caucus, in particular the member for Vancouver East and the member for Beauséjour—Petitcodiac, have launched a national campaign for child care on behalf of NDP participation in the women's committee. We will do what we can to put pressure on the government.

There are many other issues to raise, but let me conclude by saying that I am certainly proud to represent the people of Winnipeg North Centre. It is a diverse riding made up of seniors, children, parents trying to make ends meet, people working in all sorts of jobs and professions, and people looking for work. What is in the budget for them? Not much.

The government plays with numbers. It sets targets for inflation. Why can it not set targets for employment, to get people into jobs? There is no new spending for youth employment. Less than half of one per cent of unemployed youth will get a job as a result of the budget.

The Liberal government now has the money to do something about health care and unemployment and chooses not to. That is the sad and unacceptable thing about the budget. The government had a wonderful opportunity to deal with both fiscal issues and the human deficit. It has missed this opportunity and left a terrible price for all Canadians to pay.

[André Harvey, Progressive Conservative, Chicoutimi, QC]

Mr. Speaker, we are being spoiled this evening. I am pleased to speak to the budget speech. Normally, the main purpose of a budget speech is to generate a bit of enthusiasm among people, to generate a bit of hope, but after a few hours, this budget has been completely torn to shreds. We are going to have to live with a budget that has not inspired a single Canadian.

The vast majority of editorial writers across the country panned the budget, which is completely regressive, and puts Canadians in an even tighter spot.

Instead of generating hope, the budget has shown us once again that this government has absolutely no agenda of any sort. Budget-wise, this government has spent the last five years fixated on the deficit. It should at least have done its homework, however, in preparation for introducing progressive measures, because it knew full well that, in the ten years leading up to 1984, the debt had been increased eleven-fold by the former Trudeau government from $18 billion to $200 billion.

Over almost the same length of time, about ten years, instead of multiplying the debt by 11, we multiplied it by two. The operational deficit was kept under firm control during that period. But, in the meantime, we had to adopt measures that would subsequently enable us to wipe out the deficit and also pay down the debt. We adopted measures such as free trade. As members will recall, we waged an extremely strong campaign on the issue of free trade. We were almost defeated on the issue, and this is what enabled us—and I point this out to our colleague who used to work in the finance and trade sector—to increase our exports from $90 billion to $215 billion over a seven-year period.

Sight must not be lost of the money this brought into Canada for the government. They had promised to abolish this measure. The government campaigned on a platform of abolishing free trade. In the end, this government embraced free trade with a vengeance. Talk about an about-face. This takes the cake.

Let us not forget the GST. It was a disaster for us, the goods and services tax. We knew at the time that it was the fairest tax. It was the best route to take before starting on a major tax reform to get the richest people contributing to the government coffers. Obviously, a doctor or engineer earning $50,000, $100,000, $150,000 or $200,000 will pay more GST than someone who just gets the old age pension. That was precisely the objective.

Tax shelters were considerably reduced. We knew it would not win us any popularity contests, but we felt in all conscience that when one has a country to administer, one must do so objectively, and with the conviction that the best interest of the country is being served.

Our ultimate goal was a comprehensive reform of the tax system for individuals and small businesses. But what did this government do? Absolutely nothing. They raised taxes, 40 tax increases for a total of $30 billion, a pretty considerable amount, as well as several billions in cuts to essential services. If we add on the considerable tax hikes and the cuts in transfer payments to the provinces, we have our answer. The deficit was attained at the expense of the poor and of the individual taxpayer. Such is the policy of the present government.

I could spend a couple of hours listing all of the tax increases the present government has slipped in. There is nothing surprising that nearly all the media reports state that Ottawa is pocketing the savings and sticking the provinces with the bill. That is how it is in all fields. Our fellow citizens in every province are afraid to get sick, because of the budget cuts, the cuts to transfer payments, made without consulting the provincial governments.

Millennium scholarships have been created to benefit tens of thousands of students, while thousands of children in primary and secondary school no longer have even basic services. There are schools that no longer have guidance counsellors, that no longer have psychologists. They are trying to convince us that they believe in the importance of education for our young people. No way. They are making drastic cuts.

When an organization like the OECD blames the shrinking of available income after tax and the major brain drain in this country on our overall tax policy, I think we should take heed.

We are told that our small businesses are no longer able to reinvest because of our extremely regressive tax system, which is aggressive to them, they not longer have the required net assets to reinvest. I think this is serious.

Editorial writer Alain Dubuc said “Here is why Mr. Martin is no longer credible”. These are not my words but those of an editorial writer known from coast to coast. “In March 1997, the minister announced that the deficit for fiscal year 1996-97, which was ending, would be $19 billion. It turned out to be $8.9 billion”. That is not a small miscalculation; it is a huge one.

This was an error of $10.1 billion. Mr. Dubuc went on to say “This did not stop Mr. Martin from once again announcing an obviously unreasonable deficit of $17 billion for 1997-98. It turned out to be a zero deficit. This is a $20.5 billion miscalculation, and Ottawa anticipated expenditures like those associated with the millennium fund”.

To establish such a fund when most provinces, and Quebec in particular—we will speak for Quebec—have a very well organized system, for the sole purpose of ensuring that recipients will see that their cheques were issued by the federal government and not to promote harmony, again this borders on provocation.

There are two major problems in Canada. In both cases, provocation is involved. On the constitutional issue, on numerous occasions over the past 30 years, Canadians agreed on proposals but, invariably, the Liberal government was responsible for one failure after another. Support for the sovereignist movement in Quebec has grown from 3% originally to 50% today. Why? Because of provocation.

Fiscally, the federal government has yet again found a way to use a budget to provoke the provincial governments. That takes some doing. It could have said “We are for harmony and good understanding; there is a little money left over, we will transfer it to the various provincial governments; you are good managers, you are close to your people, you will manage these surpluses”. It did not even do that.

Instead, it arbitrarily—fancy that—established a new $3 billion fund that cannot be used for another two years. Again, it is only to create a little interest among those concerned. But, in fact, these budget measures that do not favour decentralization and do not respect other levels of government do nothing but accentuate our problems.

Not only does the government base its economic intervention on provocation, but it travels the world singing the praise of economic missions. In my mind, the first economic mission that the government must undertake is the Canadian economic mission.

For the whole world, Mr. Chrétien's government is in favour of free trade, but not for Canada. Tariff barriers between the provinces cost a fortune each year. The time has come for businessmen from Chicoutimi, from Nova Scotia, from Shefford, from New Brunswick, from all regions, to travel across Canada with the various governments to create free trade within our country.

I will tell you a secret. Do you know how many jobs a 10% increase in interprovincial trade would create? Free trade strictly within Canada would create 200,000 jobs. I think that if there is an issue that needs to be addressed, it is the issue of Canadian free trade. We must eliminate trade barriers between the provinces.

That is the reality the government must work on. It must stop provoking all the provincial governments by creating new programs without ever consulting them, or pretending that it is consulting them through committees that travel across the country, knowing full well that the Minister of Finance will not listen to them. He is not interested in that. All he wants is to write cheques for the millennium scholarships.

I do not think this is the road to the future. It seems to me that when a party governs a country such as Canada, it must do it a lot more selflessly than the Liberals are doing right now.

I was pleased to say a few words on the budget. We should also have a long discussion on the growing problem of poverty in our country. People on welfare eat very poorly because of cuts in transfers.

[Susan Whelan, Liberal, Essex, ON]

Mr. Speaker, it is a pleasure to rise in the House of Commons this evening to represent the people of the riding of Essex and to participate in this economic development debate.

On February 24 we introduced our fifth budget. I am unsure if this is the most important budget in our country's recent history or if the distinction more rightly belongs to our government's first budget which set the course that allowed us to be debating today, for the first time in 28 years, a balanced budget and the economic development that results from a balanced budget.

One thing I am sure of is that our Prime Minister and our Minister of Finance deserve praise and thanks for restoring fiscal sanity to our country's books and for ensuring the future of Canada's children and grandchildren for years to come.

When we were first elected in 1993, the federal deficit stood at $42 billion. It is sad but amazing to consider that prior to this budget one in three Canadians, everyone under 27 years of age, had never seen their federal government balance its books. For the 1997-98 fiscal year there will be no deficit, for the first time since 1970. This historic announcement that the Government of Canada has recorded its first budgetary surplus in 28 years is great news for all Canadians.

I also want to extend praise and to thank all Canadians who helped guide this government through the difficult task of balancing the books.

One thing this government did different from previous governments in addressing the deficit problem was to consult with Canadians. I know full well from my experience as vice-chair of the finance committee last year on how widespread those consultations were and how seriously the Minister of Finance viewed them. It is not just the finance committee that holds prebudget meetings. Many individual members of Parliament also do.

Each year since being elected in 1993 I have hosted prebudget hearings in my riding. Each year I am pleased with the articulate and well thought out presentations and how many of the suggestions, which come up in similar meetings across the country, are reflected in the budget. I held my fourth prebudget consultation in the town of Essex on November 14, 1997. I would like to read into the record my conclusion from that meeting.

“In conclusion, the one point on which there seemed to be almost universal agreement was that the federal government should be allocating financial resources and management to training and to research. Although the debt was acknowledged as a problem, it was not given priority over basic concerns for our social programs, pension plans, health care and education”.

I would like to take a moment and compare that statement to the 1998 budget. One of the themes of my meetings was the need to allocate financial resources and management to training and education. This is certainly reflected in the 1998 budget.

In the budget the government introduced the Canadian opportunities strategy which builds on actions in the 1996 and 1997 budgets and also introduces new measures. The Canada millennium scholarship program is the centre of the Canadian opportunities strategy. It is the single largest investment ever made by a federal government to support access to post-secondary education for all Canadians. Through an initial endowment of $2.5 billion, the arm's length Canada millennium scholarship foundation will provide scholarships to over 100,000 students over 10 years.

Scholarships will go to help Canadians who need help financing their studies and demonstrate merit. For full time students scholarships will average $3,000 a year. Individuals can receive up to $15,000 over a maximum of four academic years. The Canada millennium scholarships could reduce the debt load that recipients would otherwise face by half.

The government is also introducing Canada study grants. These recognize that many students needs are not fully met by scholarships and student loans. Beginning in 1998-99, Canada student grants of up to $3,000 a year will go to over 25,000 needy students who have children or other dependents. These grants will help both full time and part time students and will cost up to $1 million annually.

As we are aware, student debt has become a heavy burden for many Canadians. In 1990 a graduate completing four years of post-secondary education faced an average debt student loan of $13,000. By next year the same graduate's average debt will almost double to $25,000.

To deal with this problem, the budget proposes five things. First, all students will get tax relief, 17% federal credit for interest paid on their student loans. Second, we are increasing the income threshold used to qualify for interest relief on Canada's due loans by 9%. More graduates will be eligible. Third, we are introducing graduated interest relief which will extend assistance to more graduates further up the income scale. Fourth, for individuals who have used 30 months of interest relief, we will ask the lending institutions to extend the loan repayment period to 15 years. Fifth, if after extending the repayment period to 15 years a borrower remains in financial difficulty, there will be an extended interest relief period. Finally, for the minority of graduates who still remain in financial difficulty after taking advantage of these relief measures, we will reduce their student loan principal by as much as almost half.

Another item in terms of training that often came up at my prebudget hearings was that assistance needed to be targeted, not just toward youth and students, but also to assist individuals already in the workforce who needed to upgrade their skills.

Several new measures are proposed in this budget that will improve Canadians' access to learning throughout their entire lives. The first is tax-free RRSP withdrawals for life long learning. At least six million Canadians have RRSPs with total assets of $200 billion. This represents an important source of funds. Beginning on January 1, 1999 Canadians will be able to make tax-free withdrawals from their RRSPs for life long learning.

An individual who has an RRSP and has enrolled in full time training or higher education for at least three month during the year will be eligible. An individual will also be able to withdraw up to $10,000 a year tax free over a period of four years to a maximum of $20,000.

To continue to upgrade knowledge and skills can be particularly hard for the growing number of Canadians studying part time and trying to manage the difficult balance of work, family and studies. The 1998 budget proposes two measures to help them. Beginning in 1998 the education credit will be extended to part time students and, in addition, for the first time parents studying part time will now be able to deduct their child care expenses.

The Canadian opportunities strategy also addresses the urgent problem of youth unemployment. The actions we are taking will give young Canadians the job experience they need and provide support for those who have dropped out of school and face particularly tough challenges.

As well, the 1998 budget provides employers with an employment insurance premium holiday for hiring additional young Canadians in 1999 and the year 2000 between the ages of 18 and 24. This will increase employment opportunities for youth and reduce payroll costs for employers.

Second, investing a further $50 million in 1998-99, $75 million in 1999-2000 and $100 million the year after will more than double fund the youth at risk who lack basic education and skills.

These programs do work. For example, there are several at work in my riding currently. There were four youth centres in my riding just last week which received $33,000 in funding to run programs to assist young people, to help find employment, write resumes and prepare for job interviews.

Another comment that came up during my prebudget hearing, not just this year but over the last several years, was the need for Canada to invest in research and development. As chair of the industry committee, this is a theme very close to my heart. Consequently, I was thrilled to see the 1998 budget provides additional funding of $34 million annually for the national research council industrial assistance program to help small and medium size businesses as was announced in our election campaign promises.

As well, the budget also makes available increased funding for more than $400 million over three years for science research granting councils: the medical research council, the national science and engineering research council and the social science and humanities research council: $120 million in 1998-99, $135 million in 1999-2000 and $150 million in 2000-2001, providing invaluable service to Canada. This will encourage our best and brightest to stay in Canada.

Again, similar to the concerns of my constituents, this budget has proposed a rational approach to reducing national debt, and to do so in a manner that does not put our social programs or health care or education at risk. I know that in my home province the premier has claimed the opposite.

To set the record straight, I would like to quote a Southam newspaper journalist, Andrew Coyne, who had little time for the tired old provincial complaint about transfer cuts, pointing out that “the total cut to federal cash transfers to the provinces amounted to barely over 3% of total provincial revenues, hardly draconian”.

In conclusion, I would like to outline for my constituents that this budget also confirms a four year, $20 million Canada rural partnership initiative. It will support programs, help rural Canadians and communities to find and support maintaining good soil and water and charting a successful course.

In conclusion, our budget has many stages and we go on into the future. It delivers real benefits for Canadians today and a great outlook for Canada as we start the new millennium.

[Jim Abbott, Reform, Kootenay—Columbia, BC]

Mr. Speaker, this budget is very interesting in terms of the response that it has had in my constituency. The members of my constituency have seen through this budget very clearly. They have seen the flimflam that is involved with it.

First, they are asking a very simple question, one of many. For example, the finance minister is very proud to have eliminated the deficit retirement surcharge for most Canadians. We note that the finance minister has also eliminated the deficit. Under what pretext does he continue to collect the deficit retirement surcharge from any taxpayers? This is part of the flimflam.

Second, they are also aware of the fact, and this is according to a news release from the Government of Canada dated March 9 on supplementary estimates, that what Canadians may know is that obviously there are estimates made as to what revenue and expenditures we are going to have.

After the fact, there have to be adjustments to reflect reality. They are also very well aware of this fact. The government document calls for decreases in the expenditures, a decrease of $4.5 billion in public debt charges from $46 billion printed in the 1997-98 main estimates to $41.5 billion reflected in the supplementary estimates.

I do not understand how this government can possibly take the credit for the fact that world interest rates have declined. As a result of the world interest rates declining, it has had a windfall of $4.5 billion. That is part of its saving.

The document also talks about a decrease of $1.4 billion in forecast employment insurance payments resulting from improvements in labour market conditions. This government is still taking $5 billion to $6 billion out of the pockets of Canada's workers and Canada's employers in the form of a tax for employment. In fact, if there was a decrease of $1.4 billion in the forecast for employment insurance payments, surely there should have been a decrease in the premium.

It is unconscionable that this government continues the practice started by the Conservatives of including in general revenue the so-called insurance rates under Employment Canada.

I am the heritage critic and I would like to deal specifically with the heritage department.

Again in the supplementary estimates, we see that all of a sudden they have had to ask for and have achieved an increase of $59.9 million just for department expenses. That is over a one year period. The department itself will now be spending $1.1 billion on itself.

The National Capital Commission is looking for and has received an increase of $1.6 million. The National Capital Commission is now budgeted to spend $72.7 million, up $1.6 million. The National Film Board, an increase of $2.4 million, now up to a rate of $61.4 million.

This kind of spending we know about because it has ended up in supplementary estimates. It must drive most Canadian taxpayers wild.

Why in the world must we have constant increases in spending while at the same time there is a meagre, tiny turnback of tax revenue for Canadians? Canadians want to know why we must have these increases.

Let us look at one specific area of Canadian heritage, that of sports. It is interesting to note the comments made by Ms. Lori Johnstone, the chair of Athletes Canada, to the committee a couple of weeks ago. She was commenting on the Nagano Winter Olympics which were held at that time. She said:

It's very exciting. There's a lot of interest and emotion. At the send-off in Calgary, (the heritage minister) thanked the athletes for letting us share the dream. These athletes are representing our nation and we are sharing in their successes and their failures, their disappointments, their joy and also their controversies.

She went on to say about the athletes:

In terms of sacrifices, the cost question was asked earlier, the cost of pursuing the dream and roughly, athletes at an elite level can incur as much as $10,000 per year of their national—dream. When you combine that with the income that most amateur national team athletes make, which tends to be under $15,000, it's quite a powerful statement of the willingness to make sacrifices to pursue the dream.

As a matter of faith it strikes me that the heritage minister, and indeed the whole government, should respect the fact that we have some of the world's finest athletes in Canada. They go to world events to compete for us. Not only do they make themselves, their parents, their sponsors and their coaches proud but they make us as Canadians proud. And what do they get?

I quote from an article published today in the Globe and Mail in Toronto entitled “Canadian athletes want shirts to pin medals on”:

Six months from the opening of the 16th Commonwealth Games in Kuala Lumpur, Canada's team is outfitted with 400 airline tickets—and perhaps 400 fig leaves.

The Commonwealth Games Association of Canada is about $1.5 million short of its budget of $3 million to take a full team to the Games and the team hasn't a stitch to wear.

“Clothing is what we need, big time,” says Margie Schnell, the chef de mission for the Canadian team. The games will be held Sept. 10-20 in Malaysia.

“It will cost about $6,000 per athlete to outfit and send the team. Air Canada and Malaysian Airlines are looking after most of the travel, but we still don't have clothes”.

This compares with the question I asked in the House on Monday. I asked where the Minister responsible for Francophonie got the idea that she could arbitrarily, off the top of her head, determine that she was going to offer free airline tickets to foreign athletes to come to Ottawa-Hull for the Francophonie games in the year 2001.

At the time she made that commitment she new the Ottawa-Hull games were budgeted by the federal government for an expenditure of $12 million. She also found out that it was likely Ottawa-Hull would not get the games, that Lebanon would get the games with the backing of France. The reason she thought Lebanon would get the games was that it was offering to pay half the airfare for the athletes to go to Lebanon.

What did our minister do? This comes right back to the starting point of my speech. Where did these extra expenditures come from? How did they happen?

Off the top of her head she suddenly said “Why don't we give free airfare to all the foreign athletes so they can come to Canada?” We are talking about 42 countries and probably 2,000 athletes. We do not know how many millions of dollars it would cost to get them here. Meanwhile back at the ranch our Canadian athletes do not even have uniforms to pin their medals on. It is absolutely ludicrous.

Furthermore, in a report to parliament from the International Assembly of Parliamentarians of French Language on February 17 I noted that some prize winners at the earlier games, that is at the Francophonie games, have still not even claimed their prizes.

I would like to know the priority of the government. Is the priority of the government to get foreign athletes to come to Canada? Indeed, should the priority of the government not be our athletes? They are contributing money from their own pockets. They are contributing their time, effort and sweat to represent us as Canadians. The priority of the government should be to properly look after our athletes.

I cite this as one example of a thousand stories I could tell to illustrate how the government is completely out of control. The government has no idea where it is going. All it knows is that it has a blank cheque. Guess what? That cheque was signed by Canadian taxpayers and the government is spending it.

[John McKay, Liberal, Scarborough East, ON]

Mr. Speaker, I rise in the House tonight to add my congratulations to the Minister of Finance on the balanced budget. Not only did he balance the budget but he brought in a budget with balance.

Governing is more than merely making the books balance. If you are not fiscally responsible you will soon not have a nation to govern.

I am one of those who thought that debt reduction should be the first priority. After 30 years of running deficits it seemed to me that getting our fiscal house in order was the highest priority. I heard that at the door. I heard it at three town hall forums. I heard it by way of correspondence and I heard it in my office. The people of Scarborough East repeatedly said to me that debt reduction was the highest priority.

I communicated those views to the minister and to the Prime Minister, privately and in caucus. I was therefore pleased to see the commitment of the minister to debt reduction. It is something to be celebrated.

The budget documents that the debt for fiscal year 1997-98 will be $583 billion. That is a serious amount of money by anyone's standards.

The debt is divided into two components: market debt and non-market debt. Approximately $477 billion or 80% of the debt is in fact market debt. Because the total is so high our percentage of GDP is approximately 73.1%, which has since been revised down to about 71%. Some market analysts actually put our GDP to debt ratio at about 68%, primarily due to the growth in the economy.

We will recall recently that when the Prime Minister was in New York he chastized money market traders who buy and sell the Canadian dollar. He called them the men in red suspenders. He was upset because Canada's fiscal house was in order, the fundamentals were the best of all the G-7 nations, and yet the dollar continued to be discounted.

Unfortunately our debt is high relative to our G-7 partners and the traders have noticed. We have no choice but to commit ourselves to a steady reduction in the absolute amount of the debt.

Some economists feel that the economy will grow us out of our debt difficulties. However, if one is to commit oneself to the virtuous circle, one needs to make an absolute commitment to debt reduction.

With the greatest respect, I do not believe that merely letting the economy grow us out of our difficulties is an answer. There are at least two significant reasons beyond interest rate fluctuations for that view. The first is the diminished size and role of government in the lives of Canadians. The second is the wild card effect of a rogue provincial government.

When the people in red suspenders look at Canada they are not only looking at federal government debt. They are looking at national debt. The provinces contribute to the national debt. In fact, if we add the provincial debt to the federal debt, it virtually adds up to 100% of the gross domestic product. If every man, woman and child worked in this country for an entire year they might pay off the debt.

Canadians have been saying in a variety of ways that there is too much government and too much overlap. In some measure the government has listened and has devolved or even abandoned areas of jurisdiction to other levels of government. The House has vociferously debated those things, but even after the cacophony has died down this is a reduced federal government, a reduced entity.

The net effect of the role of government, therefore, in terms of GDP is a reduced role. The government plays a significantly reduced role in the gross domestic product and the red suspenders crowd has noticed.

Another reality is the role of provincial government national debt. New Brunswick, Saskatchewan and Alberta have all balanced their budgets and are not contributing to the debt. However I cannot say that for Ontario.

Ontario will over the course of the mandate of the current government add $30 billion to the national debt. It is a charter member of the flat earth society. It expects that the provincial economy will grow its way out of its difficulties. This is a terrible waste of a time of prosperity. It is as if we have learned nothing. We have learned nothing from the Mulroney years where there were periods of prosperity which were squandered.

The men in red suspenders have taken note and Canada does not get enough respect, a la Rodney Dangerfield, because Canada is far from out of the woods when it comes to the management of the national debt.

The federal government, to its credit, paid down $13 billion of market debt last year. In addition, it did not go to the market for any new debt. It reduced the ratio of foreign debt as a per capita and a per cent of the overall federal debt. It is on the way to becoming a master of its own house.

However, certain provinces have not seen the light, in particular the province of Ontario. The good efforts of the federal government may well be offset by those provinces. The men in red suspenders, I anticipate, will have a few more profitable years.

The federal government wants the ratio down from 73% over the course of the mandate to a low 60% or 50%. A number of private forecasters have in fact said that will happen. For instance, CIBC-Wood Gundy predicts that even if the contingency reserve is not used there will be an absolute reduction in the net debt by about $20 billion over the next two budget years.

Instead of a debt to GDP ratio of something in the order of 70%, it will be down around 59.7% according to that private forecaster. It is good news indeed and something that the red suspenders crowd should notice. However, it will not have any impact on the dollar unless provinces make similar commitments. Spending one's way to prosperity does not work. Tax cutting one's way is equally foolish.

Books that balance is a laudable achievement but a balanced approach to debt reduction makes the budget even better. Building into the budget a contingency is prudent. Committing to debt reduction on a straight line basis is even more prudent. Diminishing the per cent of debt to GDP is more prudent again. However, balancing to other compelling priorities is the most prudent thing a government can do, and to heck with the red suspenders crowd.

[Steve Mahoney, Liberal, Mississauga West, ON]

Mr. Speaker, I am pleased I am not wearing my red suspenders this evening. I congratulate my colleague from Scarborough East for some thoughtful comments on the budget, on the state of the economy and on where we are going.

I want to specifically talk this evening about one page in this budget that I think is equally as telling and equally as important in laying out what this government thinks about turning the economy around and moving forward. It is page 127. While I certainly would agree with my friend and my colleagues who have spoken about the significance of a balanced budget and what that will do to the overall economy, what happened on page 127 will go an enormous way toward bringing fairness to our economy and increasing the revenue not only for the federal government but for the provincial government which we constantly hear talking about how it has been cut back and it is always moaning, at least in the case of the province of Ontario, which my friend has referred to.

The reality is page 127 of this budget will indeed put more money in the hands of Ernie Eves in the province of Ontario and all provinces. Perhaps even more important than that, it will put more money in the hands of average Canadians. The heading is Tax Fairness: Tackling the Underground Economy.

There have been studies done on the underground economy. We all know what we are talking about. If you do this for cash we will not pay the taxes. We will give you a special deal if we pay you under the table. We know this goes on. We also know, and I think we should admit, that a tax regime that is too high and does not put fairness into the system will drive the economy underground.

Page 127 in my estimation goes a long way toward tackling and fighting the battle of the underground economy. It goes on as follows:

Tax evasion through participation in the underground economy penalizes honest taxpayers. The federal government has a comprehensive strategy for addressing this problem. This budget announces additional measures to reduce the underreporting of income.

Federal departments and agencies will begin issuing information slips for contract payments made from January 1, 1998 as will federal crown corporations effective January 1, 1999.

The various associations involved in the construction industry have been concerned with competition from the underground economy for some time.

I might add that it is the construction industry that actually tackled the underground economy head on. It came united with the private sector, with the labour movement and with academia. It came united to this place and said it had a plan that will fight tax evasion in the underground economy. This was not something that was dreamed up in the finance department. It was not something dreamed up by a committee of parliamentarians. It came from the men and women who work in the industry on all sides. I really congratulate them for their foresight.

The budget page goes on:

In response to their concerns, the 1995 budget implemented a voluntary reporting system for the construction industry.

More recently, key industry associations, including the building and construction trade department of the AFL-CIO and the Interior Systems Contractor's Association of Ontario, have indicated that the reporting system to be effective needs to be made mandatory.

The private sector and the unions came forward and said voluntary is not working, they need this to be a mandatory reporting system.

In conclusion on this page:

Effective January 1, 1999, reporting of construction contract payments to Revenue Canada will become mandatory. The federal government will consult with industry to ensure that any industry compliance costs are minimized and the system is effective.

In perhaps a little more plain English what this simply means is that if contractor A wins a contract for $1 million and decides to sub it out to three contractors, B, C and D, for $300,000 each and pocket $100,000 for doing it, that is perfectly legal. We have no problem with that. What this budget change will do is ensure that contractor A must not only say that he has offloaded $900,000 worth of revenue but now in a mandatory prescription he must say who exactly he is paying it to.

Heretofore what would happen is that contractors B, C and D would have the option of taking that $300,000 in cash, maybe even discounting it and doing the work for $250,000 and avoiding taxes.

We are not just talking about a sales tax. We are talking about the ability to avoid employer health tax which would be an enormous loss in revenue to the provincial government here in Ontario. We are talking about an ability to avoid worker's compensation premiums, extremely important particularly in the construction industry.

What this does is give some security and some assurance to the men and women who work in the construction industry and let us face it, most are men but there are also more and more women coming into the business. It gives them the assurance that they need not worry about getting injured on the job and then finding out that their employer ducked the responsibility of paying the workers compensation premiums.

It really makes the entire process transparent. I think it is an enormous step to put this mandatory reporting system in place. I think we will see over time. Rather than simply guessing at the figures, I think we should monitor this and the people in finance should monitor this to see exactly what it does to the revenue base of this country.

It is my belief right across the country we will see an increase but we will also see greater protection for our workers. One of the reasons that this is important is there are tens of thousands of people who work in this business in the construction trades. Whether we are talking about carpenters, electricians, boiler makers, pipefitters, formers, we are talking about labourers, it is tens of thousands, hundreds of thousands of men and women across this country.

Until this change was brought in by the minister of finance in this budget, they were simply at the mercy of some of the companies. Not all of them were. I do not want to cast aspersions across a broad perspective or suggest that everybody in the construction business is avoiding taxes. I do not think that is true. I do not think that is fair.

This amendment came about as a result of the efforts of people like Joe Maloney with the Construction and Building Trades Council here in Ottawa. A number of people along with Joe, his colleagues, did their homework. They explained to us on this side of the house how important it was.

I know one of the concerns was that business would come out and say you cannot do this, it is more red tape for business. But ask a simple question. If a business does not want to disclose a contract that it just received the question is why. What is it trying to hide? What is it trying to avoid? There really is nowhere to hide in this. It is transparent and it is fair.

On the issue of what it means in our communities, let me just tell a little about my riding Mississauga West which is fundamentally a bricks and mortar economy. Certainly we depend on the auto industry, just like many other parts of this great country, and we depend on software companies. We are known for pill hill where all the pharmaceutical companies are, in the north end of my riding.

We are, if nothing else, a bricks and mortar economy and as the construction trades win a contract they then put into practice a process that leads to the development of new communities, industrial, residential communities. Out of that comes everything a family needs when it moves into a home, everything a business needs when it opens in a new industrial complex, and it goes on and on.

It is a snowball rolling downhill and it all starts with an amendment like the one on page 127 which brings fairness to the economy, which helps to fight the underground economy, ensure that employees, hardworking men and women in the construction trades, are protected, and ensure that government gets its fair share so that we can continue to provide the services Canadians want and indeed deserve.