Debates of March 10th, 1998

The Economy

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I am very pleased to take part in the debate this evening. My speech will reflect what my constituents think of the budget.

I asked my constituents whether this budget was supportive of regional development or not. The first finding is that it is a standardizing budget. The government decided to treat all the regions of the country in the same way, regardless of their specific circumstances. The only exception is northern Ontario. Everywhere else in the country, the proposed measures have a standardizing effect.

Yet, in the case of the employment insurance surplus, the government could have said “Some regions are in a more difficult situation as regards employment. We will show some innovative spirit”. For example, the government could have allowed businesses and employees in high unemployment areas to stop paying employment insurance premiums and make up for the lost premiums by dipping into the surplus. After all, it is these workers and these employers, along with those of the other regions of Canada, who generated this surplus. The government could have allowed people in high unemployment areas to stop paying premiums, so as to promote employment. But there are no such initiatives. There are no specific measures to give all Canadians the same opportunities to find work.

The budget reflects a neoliberal philosophy. It is in keeping with the practice started by the Conservatives and perpetuated by this government, by the current Minister of Finance, to the effect that the market will regulate everything. We see the result of this reliance on the market. We now have a situation where there is high unemployment in some regions, in spite of an improved economy.

The situation of some people is getting worse all the time. More and more people end up on welfare, mainly because of the restrictive employment insurance rules put in place by this government, as part of its fight against the deficit. We now have a surplus, but the government refuses to budge. Those who made sacrifices are not the ones eligible for the benefits generated by this surplus, and I think the government will be judged very severely on this issue.

The millennium scholarship fund is another element which I considered in the context of regional development. Will this fund be a good thing for Canadian regions?

We have to realize that the province of Quebec has developed an education system where regional universities, such as the Université du Québec in Chicoutimi, for instance, or in my region of Rimouski, and the general and vocational colleges called cegeps are funded by the provincial budget, a part of which is made up of transfer payments coming from the federal government.

For example, since 1994, for each dollar the Quebec government has had to cut, 75 cents were because of the decrease in federal transfer payments. This year, we had hoped that with the surplus the provinces would get a break and receive more money for health and education. But that is not the case.

What really upset our regions was to see that the surplus was used for the millennium scholarship fund. A marvellous program that will provide grants to students, mostly in the other nine provinces, where the student debt level is very high. These grants will surely be welcomed. In Quebec, however, we already have a student loans and grants program. We already provide grants, which explains why the average student debt in Quebec is $11,000 compared to $25,000 in the rest of the country.

One can understand why the residents of the nine other provinces have asked for a grants program, such as the one that has been in place in Quebec sine 1964. The program is in place. On this issue, the sovereignists, the Liberal Party of Quebec, the student federations, university presidents, all of the stakeholders in education want the same thing. They want the money to go to the Quebec government so that it can be added to the existing program which—the evidence is there—is the best one to keep the student debt load down and to provide well balanced funding in the area of education.

So, millennium scholarships will be granted to students, but where will these students choose to study? If the Université du Québec in Rimouski does not have the necessary funding to ensure its future, if it is unable to develop interesting programs to attract the students, these students will go and study outside their native areas. It is like the Hygrade sausage complex. The less money universities have to offer interesting programs, the less students go to these universities and the less funding these universities will get.

It is this vicious circle that the government should have broken by putting money back into transfer payments. However, this is not in the budget. Therefore, it is a budget against regional development.

I was saying this was because of standardization; I am also saying this is because of the federal government's intrusion in the education sector, as there is no other reason for it than visibility. Indeed, the prime minister has admitted here, in response to a question by the member for Lac-Saint-Jean, that the government was doing this so that people could see where the money was coming from.

This could have been done in another fashion. The government could have given the money to Quebec and ensured it was known that it was coming from transfer payments. This type of situation was uncalled for. It is a bit like someone who owns a house. You have maintenance expenses to pay, you have made plans to repaint it and, all of a sudden, there is money coming from someone else, from an inheritance or some other source. You are told that, with this money, you will have to build a chimney, a fireplace. You say this is not what you need, that you have to repaint the house. The person who lends you the money says that it is for the chimney and nothing else. This is not doing a favour to the homeowner.

It is the same thing here. The federal government is not doing a favour to the provinces by not allowing them to get some money for their education and health sectors. This has a major negative impact in our regions. This further contributes to depopulate the regions. Students will go elsewhere and we will have less chance of seeing them come back home.

I think there is a principle here that this government did not put forward at the beginning. Quebeckers and Canadiens had the right to live in their region, to develop the human and financial resources available to them, and to promote interesting life environments, without people being displaced from one end of the country to another for no reason. The market alone must not dictate what happens. This cannot be the choice to be made in our society. There again, the budget is not interesting.

The holiday on EI premiums for emplloyers hiring 18 to 24 year olds is a pretty good thing in terms of visibility but in reality it could have consequences for a small business with only four, five or six employees. What small business will create a job paying $20,000 or $25,000 a year in exchange for a premium holiday of $800? This is not the way to generate growth of the economy.

What was needed was a more general reduction of premiums representing a significant amount of money for a business. This would have generated enough growth to promote job creation. A small business of 20 employees that could save $10,000, $12,000 or $15,000 in EI premiums would be interested in creating jobs. The government could also have also required that the premium holiday be applied to the hiring of young people. This could have been an interesting requirement but the government's initiative lacks that kind of originality.

The last thing I would like to say is that as early last January, I told my constituents to watch to see whether the government would introduce measures in the coming budget to address the issue of poverty. There again, the government has failed. It does not get a passing grade. The most effective way for the government to address poverty would have been to improve the conditions of the employment insurance program and allow people to maintain an acceptable standard of living between jobs.

This week, we had clear evidence. Almost 750,000 people, including 200,000 in Quebec alone, had to go on welfare in Canada because the employment insurance program was not adequate or did not provide an acceptable standard of living. The areas with high unemployment were particularly hard hit. I think there is nothing in the budget to address poverty effectively.

I believe that in this year's budget, the federal government missed a fantastic opportunity to give their due to those people who had contributed to the fight against the deficit and to go back to a value traditionally shared by Quebeckers and Canadians, that is a fair distribution of wealth. The budget lacks those elements. For these reasons, I believe that the Minister of Finance should go back to the drawing board.

In particular, I call upon the Minister of Human Resources Development to review the employment insurance reform so that such measures can be implemented in the future. There is a lot of money in the fund, and each year the surplus will be $6 billion. There will be a $25 billion surplus at the beginning of the year 2000.

I will end on that. The government has a chance to go back to square one and ensure fairness in the future, otherwise Quebeckers and Canadians could continue to judge the government's budget very severely.

[Louise Hardy, NDP, Yukon, YT]

Mr. Speaker, a close examination of the budget reveals to Canadians that this budget fails point by point and initiative by initiative to live up to the expectations and the needs of the Canadian people.

In education, providing only 7% of the nation's students with benefits of the proposed millennium fund, which will be administered by the CEO of Chrysler, for industry to train people for industry ignores the role that education plays in our society.

Instead of reinstating funding for post-secondary institutions, the Liberals have chosen to dole out some money which is desperately needed to a few students who are cash starved and then to offer advice to them on how to manage their debt. They are ignoring the student debt crisis and advancing our educational institutions at an alarming rate.

Even the Yukon, a very poor area of Canada, has recognized the importance of investing in education and for over 20 years has provided approximately $5,000 for each of its graduating students accepted at an accredited institution. Part of that is for travel and part is for tuition and books.

This is a really poor area of the country that through thick and thin has provided that amount of funding for students. I believe the federal government should match that as well as provide funding for the institutions to make sure that our students and our young people have a place to go and be educated.

The modest increases in transfer payments to the provinces and territories do not begin to restore the cuts made in 1994. The Liberal government is only giving back a small portion of what was taken from Canadian people.

Saddest of all, this budget ignores the poor people of our country. It has nothing for the poor and the minimal tax breaks announced will for most families amount to less than $500 in tax relief a year.

It will not take the elderly poor off the tax rolls. Over and over members of my community ask why, when they get so little, they have to pay so much in taxes. That is income taxes and the GST. People are struggling to make ends meet. Gone are the days when the single income would support a family.

This budget is a reflection of free enterprise government, a government willing to transfer responsibilities for governing this country to large, private corporations or business associations.

The Liberals have created fundamental shifts in the building blocks of this Canadian society. Canada is running toward a society where the protection of profits and corporate rights are paramount to the protection of our individual rights, our culture, our health, our social and our educational institutions.

This budget confirms the direction of policies that select a few to thrive and prosper while the rest sink and suffer. An important aspect that we are missing in the debate is the original causes of the huge government deficit.

The finance minister stated that never again will we let old habits return of defining bigger government as better government or believing that every problem requires another program.

What is happening is the denying of anything more than a minimal role for government in the economy and a minimal role for governing our country, a government that believes only private companies and market forces will bring employment and prosperity to Canadians. This is not true. It has brought only poverty, not prosperity.

The liberal Conservatives or conservative Liberals running the government are believers in high unemployment but low in stable inflation and low in stable interest rates as the tools for profit oriented companies looking to take over the role of government in society.

The Minister of Finance is preaching a misleading hypothesis that deficits have been caused by extravagant, big-spending government and the only cure was to cut back. Who was cut was the poor and middle class.

The deficit came from high interest rates, overspending and support for very big business and high unemployment. A Statistics Canada study indicated that the rise in deficits came mainly from high interest rates to a Bank of Canada obsession with zero inflation.

An Alberta former civil servant explanation of the deficit is government overspending on business support while slashing health and education that was the real cause of the deficit.

Montreal economist Harold Chorney argues that high unemployment with its loss of revenues and social costs has created far more debt than social spending. The above explanation seems to be shared by the finance minister who said that only a quarter of the savings that cut the deficit came from program cuts. Far more were due to low interest rates, growth and raiding the UI funds.

There is no balanced budget with the present government policies. There was a drastic shift of federal government deficit to the provinces through federal transfer cuts, then to municipalities and finally to individual Canadian families. We see the consequences of these policies in our health system, our education system, in UI benefits that are no longer available, in housing that is no longer there and in the total loss of a whole generation of young Canadians.

Canadian priorities and the priorities of the NDP are being ignored by Liberals. There are no new job strategies, no support for education or health infrastructure and no indication of a fair tax system. Our priorities for the federal budget are to make full employment the primary goal of government and to make a real commitment to addressing the cost of education. It is not a sustainable policy to provide a student with small financial relief if the universities are not being funded and are forced to increase tuition costs to counter government cutbacks.

We want strategic investment to rebuild health care and targeted direct tax relief. This government must stop taxing the poor and the elderly who live below the poverty line. We want targets for the elimination of child poverty as many countries do not accept the level of poverty we accept. Our country is wealthy and we do not have to accept poverty in our midst. We want to rebalance taxes to achieve greater fairness and advance broader goals. We want to see government bring the people of Canada to the centre of government policies.

Between 1993-94 and 1996-97 government budgetary revenues increased by $24.9 billion. Of this increase, 48% was due to personal income tax. Corporations through corporate income tax paid $7.6 billion or just 30%, a clear indication that the federal government is squeezing the people of this country.

To reward Canadians for their individual contributions to the reduction of the federal deficit, the government reduced federal cash transfers to the provinces for health care, education and social assistance from $18.7 billion to a floor of $12.5 billion.

The Yukon has already faced a reduction of 11% in just one year which comes at the very time of a major closing of a mine in the Yukon and absolutely devastates its economy. The federal government is not willing to do anything to recognize the hardship and strife of Yukoners. This is compounded by changes to the EI system where people are not eligible and will not be relocated out of the north to places where they can work.

Canadian living standards are falling. An ever increasing slice of the family budget is consumed by income tax. Twenty-two per cent of Canadian families spend their budget on income tax. The federal government has been taking a bigger slice of Canadians' income but there are still hundreds of rich Canadians who are very good at not paying taxes.

Recent figures indicate that 230 individuals who earned at least a quarter of a million dollars did not pay income tax. Another 1,520 who earned between $100,000 to $250,000 a year did not pay any tax. These figures provide a very good picture of the growing disparities in our country. It is clear that the Liberals are not reinforcing the foundations of an egalitarian society at all.

The minister needs to look back to students with high debts and no jobs, back to those waiting for surgery, back to working Canadians who are slipping economically and socially, to those who are not working and who cannot even get UI. The federal government says that it has won the war on the deficit but its policies are based on the need to make corporations profitable while the social and economic costs are not a concern.

Let history record that the Liberals tore up the just fundamentals of our society and that the deficit was defeated on the backs of Canadian people and the fundamental tenets of a caring society.

Numbers and words say this budget is balanced, but is our country balanced? Poor regions are sinking into poverty and they are taking the young and elderly with them. This budget makes sure it will stay that way.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, it is a pleasure to rise in this debate.

My remarks by coincidence are going to dovetail to a certain extent the remarks of the member for Mississauga West. The member was commenting that one of the provisions in the budget is the mandatory reporting of construction contracts which would help solve some of the problems of the multibillion dollar underground economy.

The member for Mississauga West was saying that this change in the budget came as a result of lobbying by members of the construction industry, the unions and so forth. I do not doubt that these groups lobbied, but I happen to know that a colleague of the member for Mississauga West, the member for Mississauga South, was a very strong champion throughout the previous Parliament in addressing the issue of the underground economy. Indeed he moved a private member's motion that addressed among other things the possibility of bringing transparency to the reporting of construction contracts as a means of solving the problem of GST evasion.

This is one of the things I like about the budget. We on all sides of the House should admire this budget as it is very much the MPs' budget. As we look through it we find many instances where the finance minister has heard MPs and made the appropriate changes.

I am thinking for example of the restoration of funding to the Medical Research Council. There was an enormous movement inside the Liberal caucus asking for this funding to be restored. I do not doubt that members on the opposite side also campaigned to restore this funding.

Similarly there was a concern on all sides of the House about the problem of student debt. This budget has provisions which will help alleviate the problem to some extent for students who have found themselves burdened with enormous debts at the conclusion of their studies.

I too had input into the budget and had hoped that the finance minister was listening to me. I must say that after reading the budget I was disappointed to a certain degree because I have long been a champion of cutting back on the GST. Reducing the GST by even one percentage point in my view would be a very positive saving for Canadians, particularly because of the underground economy. In the previous Parliament I was very concerned about the amount of money that was being lost to government coffers and to the economy at large because of unreported work and the resulting unpaid taxes.

I was disappointed for a short while in what I found in the budget, but then I encountered that portion of the budget which dealt with the elimination of the 3% surtax for all those Canadians earning incomes of less than $50,000. The more I looked at this provision, the more I realized the government had come up, if I may say so, with its own novel answer to some of my own concerns. I do not remember at any time before the budget was actually brought down a debate at least in my own caucus about getting rid of the 3% surtax.

When we examine this initiative we can see that there is some genuine wisdom on the part of the government. By limiting the elimination of the tax to 13 million Canadians whose income is less than $50,000, what we are in effect doing is putting more money in the pockets of not only less better off Canadians but also younger Canadians.

The reality is that those who earn more than $50,000 are likely to be the more affluent Canadians and more likely older Canadians who have established households. They have boxed their worldly wealth and are probably enjoying retirement and perhaps leaving the country to take holidays down south. Younger Canadians on the other hand, those earning less than $50,000 are the ones who are going to be buying consumer goods. They are going to be buying automobiles, refrigerators and new homes. They are going to be stimulating construction.

When we think of the elimination of the surtax in this context, that it actually puts money back into the pockets of consumers, what we see is a very efficient way of not only stimulating the economy but getting maximum value for the tax cut dollar which has been put in place.

When these young people buy things, it creates jobs. It creates employment. It creates salaries for people who will in turn pay taxes. The tax cut which is involved in eliminating the 3% surtax has enormous repercussions throughout the economy.

Particularly after the remarks of the member for Mississauga West, I realize that the government in its wisdom has found a better solution than I had thought of with respect to the underground economy. It is stimulating younger Canadians to purchase by eliminating the surtax instead of simply taking a percentage point off the GST. That would have been an across the board tax cut. It would not have been half as effective as eliminating the 3% surtax.

It is very important not only to praise the government and to look at what was done in this budget, but also to look ahead. We have to tell the finance minister at this early stage what we would like to see in the next budget.

I regret that sometimes the opposition members focus only on criticizing what is already on the table and what is already very good. They should be looking at this debate as an opportunity to make suggestions to the finance minister on what we can do next year. He listens.

In fact I will give an offhand compliment to the Reform Party. The Reform Party embarked in 1993 on a deficit reduction platform and continued the deficit reduction campaign. If the NDP had been the official opposition, there is no doubt in my mind that the finance minister would have perhaps within his own caucus had more of a struggle with the very good and tough medicine he came up with. Even the Reform Party shares in the success of the finance minister's budget, and so it should be.

Let us look ahead. I am very interested in finding novel ways in which to make the economy run more efficiently. One of those ways is for the government to address those sectors of the economy which have been overlooked for decades. One of those sectors is the not for profit sector.

Some people would be amazed to realize that the Canada Business Corporations Act has fairly stringent reporting requirements for profit companies, yet it requires virtually nothing of not for profit companies. For example, not for profit companies are not required to prepare financial reports on an annual basis, as are for profit companies. There are no standards set for not for profit companies to prepare financial reports for their own members. There are problems.

Some of the not for profit companies are very large. Many charities are not for profit companies. Large entities such as the Canadian Automobile Association are not for profit companies. These companies take in millions of dollars a year, yet the government requires no financial reporting to government of their activities. There are no mandatory standards on how these not for profit companies should report to their memberships.

It is amazing to realize that the Canada Business Corporations Act does not even require not for profit companies to use a qualified accountant or auditor to prepare financial statements for their members. Literally anyone can do them. There is a lack of transparency. I could go on.

Even Revenue Canada has no way of adequately tracking the financial activities of not for profit companies. Such reports as are required of these companies to Revenue Canada are not public documents.

I would like to see the federal government take careful aim in the next budget at the not for profit sector and rewrite the Canada Business Corporations Act. It should require of the not for profit sector the same standards of financial transparency as are required of the for profit sector. Since the not for profit sector deals with an area of the economy in the billions of dollars, I think it would be a very positive measure for the next budget.

[John Herron, Progressive Conservative, Fundy Royal, NB]

Mr. Speaker, it is with pleasure that I have this opportunity to speak on the 1998 budget.

This budget represents a lost opportunity for Canadians. It is a lost opportunity for us to actually change course in the direction we have had within our economy.

I will be speaking over the next 10 minutes about our plan for growth and what we should have seen in the budget. It is the plan presented by the member for Sherbrooke, the leader of the Progressive Conservative Party of Canada. He is someone who will be the best prime minister we will ever see in this country in a few years from now.

We need a plan for growth in this economy. A plan for growth based on less tax and less debt will ultimately mean more jobs and more money back into the pockets of Canadians.

Budgets are supposed to be a reflection of our values and our priorities. I find it very difficult to understand that this budget has not provided tax relief to the middle and lower income Canadians. By that I mean as a society, within this budget we are saying it is acceptable to tax someone who makes $7,000 per year, $14,000 less than the poverty line. We are saying as Canadians that it is acceptable to tax those individuals.

We need a plan to grow our economy so that more individuals, middle and lower income earners, can actually participate in the economy to the degree they are capable of doing it.

It is not just the Progressive Conservative Party that actually understands that we need a plan for growth in our economy. I would like to make reference to a press release sent out by the Canadian Chamber of Commerce on February 24, shortly after the budget. The Canadian Chamber of Commerce challenged the government to draw up a detailed fiscal framework for the new millennium based on clear criteria for growth, competitiveness and opportunity rather than arbitrary commitments to allocate half the surplus to spending and half to debt reduction and tax relief. We need to deal with it more strategically.

I am speaking on behalf of the citizens of Fundy—Royal. Actually the chairman of the board of the Canadian Chamber of Commerce, Gerry Pond, happens to be a Fundy—Royal resident. What he is saying can actually be incorporated with the initiatives we have put forth in this budget.

Before we actually start talking about a surplus or perceived fiscal dividend, I think it is very healthy for us to actually examine whether we have a surplus in the first place.

Members probably know as they may have heard when we were out campaigning back in the month of May leading up to the election on June 2 that there is a $14 billion accumulated surplus in the employment insurance fund, $14 billion. I know the member from Kings—Hants and the member from Chicoutimi understand that that money belongs in the pockets of Canadian taxpayers. The chief actuary for the EI fund maintains that the EI fund is sustainable at $2 per $100 of insurable earnings as opposed to $2.70 where it certainly lies.

There has been a lot of debate on whether lowering job killing payroll taxes will actually have a jolt in terms of job creation. One does not have to take it as my word. In this very same press release the Canadian Chamber of Commerce stated that if the premium were a $1.95, which is even lower than the $2 I mentioned, instead of the present $2.70 per $100 of insurable earnings, every medium size company across Canada would be able to hire at least one more person. Those are not my words but those of the Canadian Chamber of Commerce.

We need to put more disposable income into Canadian taxpayers' pockets. I would like to quote the member for Sherbrooke who understands this initiative. He stated that the message the Prime Minister and his government seemed to be sending to Canadian taxpayers was that he knew how to spend their money better than they did. The truth is that less taxes and less debt means more growth and more jobs for Canadians and more money in the Canadian taxpayers' pockets.

The government actually maintains that there is tax relief within the budget. The average amount of tax relief for a low or middle income earner in Canada is about $80. That represents a cup of coffee a week. As the hon. member for Kings—Hants pointed out it would represent one a month if you go to Starbucks.

We are actually pledging as one of our primary first initiatives to raise the personal exemption on the income tax form from $6,500 to $10,000. That one initiative alone would take two million off the tax rolls overnight, two million Canadians who should not have been there in the first place.

We are also calling for an initiative that actually kills the 3% surtax, the deficit elimination surtax, as the budget is now perceived to be balanced. We can actually put more money back into Canadians' pockets.

Before I go further I want to point out that we have a balanced budget. We should say bravo, that is good for all Canadians. It ensures that we are headed in a better direction and that we will not continue to mortgage the future of younger generations any further. We have a debt of $600 billion. The younger you are, the higher proportion of the debt you have to repay. It is fiscally immoral to pay for today's programs with tomorrow's moneys.

We need to ensure that we never go into the spiral of deficit spending again. I challenge the government to bring in a balanced budget legislation with teeth. One of our proposals within our plan for growth, which the member from Kings—Hants was instrumental in developing, was to ensure that if we do not balance the budget we would cut the salary of the Prime Minister and the salaries of the cabinet ministers if they failed to reach their actual targets. That is the minimum we owe Canadians.

The balanced budget initiative has been a result of almost 15 years. As pointed out in the Economist magazine's year end review, Canada's balanced budget is largely due to structural changes in the Canadian economy implemented in the late 1980s and early 1990s. It pointed to tax reforms, privatization and making our economy that much more cost effective, or free trade as the member of Kings—Hants pointed out.

Meanwhile the Liberal government has balanced the budget on the backs of Canadian taxpayers by only having the courage in leadership to cut Ottawa bureaucratic spending by a mere 9% while cutting transfer to the provinces for health care and education. These are the priorities of the Liberal government. Yet it actually maintains that its priorities are health care and education. It gutted health care and education by over 35%.

Over the past five years the government has taxed and cut indiscriminately. The advent of a balanced budget does not give the authority to tax and spend indiscriminately. Canadians have made their priorities clear: increased job creation, the protection of health care service and investing in young people's future through education.

Canada needs a plan for growth. In the budget the government had an opportunity to outline some positive measures to make our economy grow, and that starts with real, meaningful, across the board tax relief.

I apologize to the 410,000 unemployed young Canadians that I am leaving youth to the end of my speech. In terms of our economic spending we almost forget about our youth. When it comes to student debt, I understand that back in 1993 in Atlantic Canada there were nine students who actually had a student debt of over $30,000. Today there are 904 students who have a debt of over $30,000.

If we do not actually provide the funding that today's younger generation requires to ensure that they have access to post-secondary education, and we do not have a lower tax regime so that once they graduate from university they actually have a chance to seek a job and have some opportunity, the brain drain we talk about will turn into a brain train.

I challenge the government to actually provide Canada with a plan for growth through less tax. Less debt means more jobs and more opportunity for young Canadians.

[Carolyn Bennett, Liberal, St. Paul's, ON]

Mr. Speaker, it is with great pride that I am able to speak to the budget, especially after my week back in the riding of St. Paul's where it was very clear that the people of St. Paul's and indeed the people of Toronto were extremely grateful to the Prime Minister and to the Minister of Finance for their leadership in what they felt they had asked for, in what they had voted for and in what had been delivered.

I would like to thank the people of St. Paul's and all other people of Canada. Everybody knows that over this past four years there had to be tough decisions. Those people have paid in ways that they felt hard. They are very relieved that the days of cuts are over.

The comments I had on the budget back in Toronto were that it was thoughtful, intelligent, practical and compassionate. It exceeded people's expectations of how well the pulse of the people had been taken.

As has been said before, it was not only a balanced budget but it was a budget that demonstrated balance in its being able to deliver new programs, debt reduction and strategic tax relief. The people felt relieved.

It was a great privilege last week to see my predecessor, John Roberts, who was ecstatic that we could actually reach a time where Jeffrey Simpsom from the Globe and Mail could actually applaud a Liberal budget. His quote was:

As a long-standing and often acerbic critic of federal budgets, let me switch gears completely. This week's budget was the best in a generation. Here's why: It got priorities roughly right. It helped redefine the proper role of government in a modern economy. It balanced revenues and expenditures. It opted for prudent forecasts. It resisted the temptation to spend gobs more money in the wrong areas—

It contained modest tax cuts. It was a balanced budget. It provided additional spending in the right places and avoidance of foolish spending. It adds up to the best budget in a generation and it sets a stage for what must come next, lower taxes and less debt.

The budget has been called an education budget. It was interesting to see the faces of our Reform colleagues at the HRDC meeting last week when Frank Graves of Echos Research came to present his data on what Canadians wanted with respect to the role of the federal government in training and education. Well over 59% of Canadians said that the federal role must be increased and 21% said that it must at least remain the same.

It was interesting that the sentinel piece of the budget is indeed the $2.5 billion millennium fund which the Prime Minister promised to Canadians. When we look around the world in the year 2000 we will see that lots of countries built buildings and great monuments to themselves. This country will be seen to have created a legacy in terms of the future of our young Canadians.

Life-long learning is indeed the future. As we see people perhaps requiring four careers in a lifetime, the ability to go to university is one of the biggest things we can give.

Last week at a skating party in St. Paul's Ken Dryden came to sign autographs and was able to talk to people about what we were raising some money for in terms of the three out of the cold programs in our riding.

Mr. Dryden actually has his own scholarship fund where every year he is able to fund six young Canadians. He chooses young Canadians from either group homes or foster homes. He says that the hardest thing is to read those 75 applications for those six precious spots and realize that every one of those extremely special young children has demonstrated with very little family support an ability to go to university. He would love all 75 of them to be able to go.

It is interesting to look at the other budget items in terms of the RESP and the Canada education savings grant, huge incentives for parents to save for their children's future education.

The tax free withdrawals for life-long learning from RRSPs is important when we realize that the most important indicator for Canadians at 30 years of age of whether or not they are working is whether or not they have been to university. It is something important for us to move forward on. The presence of the university community was felt today on Parliament Hill. University presidents are very happy with the millennium fund, a future investment in young Canadians.

Robert Pritchard from the University of Toronto, where I am on the faculty, said that we could not do a better as a country. He could not be happier for our students because this help will make all the difference in the world to them and their ability to manage the costs of higher education.

As a physician I heard clearly the member for Winnipeg North complaining about no new money for health care. I feel I should respond and say that I am very happy with the direction of the government in health care. The restoration of the CHST to $12.5 billion is exactly what the National Forum on Health asked for. The additional $134 million for the MRC, the $211 million for the HIV and aids initiative, and the $60 million for the new blood agencies are indeed new money.

The innovative tax relief evidenced in the budget in health and dental care allows self-employed people to proceed with preventive care. The caregiver tax credit is the beginning of a home care plan. Tax credits for training courses for caregivers of dependent relatives with disabilities and helping families with child care show the ongoing commitment and dedication of the government to health care.

I was happy with the 1997 budget where we began with a health transition fund of $150 million, the innovation fund of $800 and the national system on health information with $50 million. These are the building blocks to creating a sustainable health care system for the future.

I believe the percentage of GDP, which is a good marker for countries in terms of health care, is appropriate. At 9.7% for Canada it is clear that the 14.2% in the United States does not give better health care, does not give better perinatal mortality or better health in all the other markers we now have.

I am encouraged. We need principles and values. Then we can form a plan and only then can we cost it out. The health transition fund is helping us with these three conferences, the last of which concluded today on pharmacare, information structures and home care. We still do not have consensus on exactly what is the right thing to do. We cannot in any way allocate budgets until we know what we want to do.

In pharmacare there is still a debate on whether it should be a single payer or whether we should patch the holes in the patchwork quilt. In information structure we know we need an ability to be able to measure quality as we go so that we can then allocate resources appropriately.

Information technology is imperative. We are still overcoming the stumbling blocks of privacy and confidentiality. We must do those things first.

In terms of home care we need research into health care delivery and we still need to debate who is doing it.

Yesterday the minister of health eloquently articulated the principles and values and the priority of this government to maintain the confidence of Canadians in our health care system. We recognize that when medicare was designed health care was delivered in hospitals by doctors and nurses. Times have changed and we must now evaluate that delivering medically necessary services to Canadians cannot depend on the building in which the care is delivered.

We must move on to a new system so that Canadians do not lose confidence in their system. We as a government are committed to that and we will not allow the slippery slope of two tier medicine that happens when Canadians lose confidence in the system. We have to do our homework. We develop a plan and then together we can go together with the post-budget consultations and plan for the budget of 1999, the health care budget.

[Paul Forseth, Reform, New Westminster—Coquitlam—Burnaby, BC]

Mr. Speaker, the constituents I represent I think have a correct sense that the country is not functioning anywhere near its economic potential. They know they are generally worse off this year than in past years and they know that the average person is not confident about their financial future. Neighbours talk about the weather but soon they break into groans of dismay or sad laughter of hopeless resignation that the federal government just does not care. They are saying that it knows little about their financial realities, the real truth about families and what they face.

My neighbours may not be experts in macroeconomic and the doublespeak of the annual budget speech. However, they did have some reasonable expectations this time around and they were sadly disappointed. It was not extreme but reasonable to desire that the federal government live within its means and not spend more each year than it takes in.

The federal Liberals were excruciatingly slow to get this country to the balanced budget situation, and in hindsight the numbers reveal that the most prudent course would have been a balance last year after the debacle of the Conservatives.

Their government was replaced in October 1993 and the Liberal's spending control really began with the 1994-95 budget. However, like in 1984 when there was a national mood and general public will to quickly get the national finances in order, the Liberal government dithered and we wound up with worse pain and unneeded deeper financial wounds to heal.

There was a big missed opportunity in 1984, and again in 1994 there was brief hope but it was soon dashed with another big disappointment when the Liberals set such an anemic response to a Canadian financial situation that was by then almost out of control. We plodded so slowly toward a balanced budget but we failed to reap the benefits of earned confidence from the international community and we dragged out the pain of internal disruption.

We also achieved a balanced budget through massive tax hikes rather than a more appropriate balance of spending restraint. We got to the right economic position in the wrong way, in a needlessly painful way, especially concerning health care. The Liberal's cut on that national trust was heartless. It reflected their lack of competence to cut elsewhere, to stop the giveaways to favourites. They failed to be realistic with program review concerning measuring the actual results of much of their program spending. Then from a balanced budget Canada is again disappointed.

Setting a right course for budgets is not all that difficult when a government listens and strives to be accountable to the community. The Liberals are weak in view of the national challenges because of that very fact. They are not committed to local community accountability. They have too many vested interests. They care too much about other agendas and they are too weak to control them. The needy average Canadian at the lower end of the economic order becomes only a Liberal afterthought or a mere slogan. The Liberals lack the accountability to what average Canadians want and need, and this is revealed in the numbers of every budget since the election in 1993.

My constituents have told me that they agreed with the opinion of the leader of the Reform Party when he said: “What a disappointment. For the first time in a generation a prime minister could have charted a new course for our country. He could have set us on the path to debt reduction and tax relief, but he blew it”.

This is what the Leader of the Opposition said at the first question period following the February 24 budget speech. What is resonating in British Columbia is exactly this, debt reduction and tax relief. It seems that those from the left are also attempting to adopt the notion of fiscal responsibility, albeit with a radical twist.

The NDP member for Qu'Appelle recently made some interesting comments in a newspaper article when he stated: “The party and the left in general now has realized that we have to have now a sound financial base”.

This goes back to the CCF and Tommy Douglas. The first thing he preached is that you can't do anything for people unless you have your financial house in order.

The radical twist is that the NDP now wants the government to allocate large amounts of money on new program spending while maintaining strong fiscal practices.

I would like to suggest to the member for Qu'Appelle that a sound financial base includes debt reduction. We cannot ignore the debt. As of today, it is moving frighteningly close to $585 billion or more. Canada's fiscal house is not in order. It is not even close.

The Liberals in the last election promised that of the surplus, half would go to new spending and the other half would go to debt reduction and tax relief.

Canadians may have been impressed by this notion, however Reformers knew very well that, like so many broken promises before, this was just another to throw on the heap of promises.

The Liberals promised to make changes to the North American Free Trade Agreement and they did not. The Liberals promised to scrap the EH-101 helicopter deal. At first they did and then the pressure got to them and they were forced to renege on that promise. Then there was the infamous promise to scrap, kill and abolish the GST. They did not.

These were major policy decisions upon which governments are made or unmade, a series of broken promises. I cannot speak for all Canadians, but I can speak for my own constituents in New Westminster—Coquitlam—Burnaby and I can assume that their feelings are similar to those from other cities and provinces and territories. They simply want promises kept. It is as simple as that.

Why is it so tough for this government to understand what is meant by integrity in politics? Government members sit in their seats, smirking, thinking about how wonderful it is to have gotten away with broken promises. They said things to get elected which they had no intention of keeping. These actions will come back to haunt.

I watched the newspapers quite closely following the budget. It was important to me to see how the others reacted, in many cases columnists and financial institutions in the private sector with their finger on the pulse of the nation.

I want to read a couple of the quotes that I pulled from the papers: “The government's approach in this budget falls far short of providing adequate emphasis on debt reduction”. That is Ernst & Young's analysis of the 1998 federal budget.

Another one: “Lower tax rates would generate more spending, jobs and income. They would increase Canada's attractiveness for new investment and improve the quantity and quality of job opportunities, particularly among our youth”. That was also from the Ernst & Young analysis.

Another quote: “For a situation in which balanced budgets are being forecast for the years ahead, there is not nearly enough relief for overburdened taxpayers who have taken the hits for deficit reduction”. That was Neville Nankivell of the Financial Post .

From the Canadian Chamber of Commerce: “The federal budget sets its sights on the wrong target by focusing on spending rather than taking strong action to pay down the massive $583 billion national debt. The federal debt translates into $19,000 for every man, woman and child”.

Canadians are being squeezed to death and they are pleading for tax breaks, yet the finance minister feels that Canadians want more program spending. Did the minister not consult with the average citizen to see what they really needed most and wanted?

Did the average citizen really tell the minister that what was needed was a $2.5 billion millennium scholarship fund that would only affect 6% of all students in Canada and would discriminate against students who choose open public universities that do not take taxpayer money through direct support?

Did the minister believe that Canadians would accept a tax increase to pay for new program spending of paid day care while discriminating against parents who sacrifice income for one parent to stay at home to look after their own? Absolutely not.

The minister does not care what ordinary Canadians think because they have expanded their discriminatory ways. The only thing that the minister cares about is finding new methods to reclaim the old Liberal ways of spend, spend, spend.

The Reform's budget plan says there is a need to revise the Income Tax Act regulations to end discrimination against parents who provide child care at home and also ensure equitable treatment for one income child care at home.

Thankfully this year's budget is balanced but now is not the time to open up overall spending again. Canada cannot continue down that path. Our fiscal house is not in order. The finance minister cannot claim victory. There is still a tremendous amount of work to do.

Moody's Investor Service of New York has indicated that it is not ready to reinstate Canada's highly coveted triple A rating. It says that the success of this budget was due to extremely good luck due to the upturn in the economy and tax increases. This says to me that the government could have done so much more. Had the government attacked the debt Moody's may have been compelled to boost the national credit rating.

I want to close by saying that though things may not look very good, Reform is not going to give up. In 1993 we came to Ottawa with ideas that made sense and they make even more sense now. The vision we have for this country is sound and we have stood by our principles and our promises. We believe in Canada and we believe strongly that it can recover from this fiscal crisis.

I desire to serve to bring a better Canada to everyone regardless of economic situation, and with more economic compassion we can do better as we enter the next millennium.

[Stan Dromisky, Liberal, Thunder Bay—Atikokan, ON]

Mr. Speaker, it feels like a very short time ago, but a little over four years ago I as a newcomer to the House of Commons heard my first budget presentation by the hon. Minister of Finance.

It brought a little apprehension to me because after listening I believed what he was saying. He said that we could do what was necessary to achieve our deficit target of 3% of GDP and we would repair the disaster that was left to us by previous administrations. Naturally I had faith in his plan, a plan that was laid before us. However, I am going to be very honest, there were some reservations.

Why did I have these reservations in my mind? It was simply because I as a student of the political scene had followed the 34th session of Parliament during Brian Mulroney's government and had watched the hon. minister of finance, Mr. Wilson, time and time again make predictions and discover that he was always way off in his predictions. I was a little fearful that maybe that would be a permanent sort of occurrence that happened with every budget.

Fortunately with my faith I knew that we could achieve the target. However, not in my wildest dreams did I think we might be in the position that we are today, balancing the budget so quickly and so far ahead of schedule.

Sure, I am ecstatic about this situation and proud but I am also relieved to see that the promises made back then have been fulfilled and then some. We have a balanced budget and Canadians should be proud. Their efforts and sacrifices have paid off.

Yes, we have all made sacrifices. We all know the vast majority of companies in this country have debts. We know the vast majority of households in this country have debts. However, there comes a time, whether in a corporation, a company, a business or in a household, when some decisions have to be made. We cannot have expenditures exceeding income. That is when the sacrifices have to be made. In a household that is when the husband and wife get together and say they cannot afford this or that and must make a decision. They have to curtail their spending. They decide that the wife will not get a fur coat this winter but will get it when they can afford it.

In other words, sacrifices of that nature had to be made on a personal basis by all Canadians in order for us to achieve the targets that we have in a little over four years.

As a long time educator, I was particularly pleased to see the efforts that were made to improve the situation that faces our students. Improvements for the management of student debt, the provision of tax relief for interest payments on student loans and the granting of increases in funding for advanced research and for graduate students were most welcome announcements.

We all are aware of the fact that we have done quite a few things by implementing certain measures in past budgets as well as this one. I predict that there will be many more measures in budgets in the years ahead. These measures will help many to survive and benefit from their involvement in the post-secondary educational system.

I would like to point this out to all the august members of the House of Commons who are here to listen to my presentation tonight. Just about everything the budget implements has a direct or indirect bearing on the educational development of each and every citizen of this country. Whether they be health, agriculture or industry, whatever measures are implemented will have positive spin-offs as far as learning processes are concerned.

Despite popular support for this educational budget initiative, we are still hearing complaints from the opposition. For instance, Premier Bouchard and his Bloc allies have claimed that the millennium scholarship fund represents interference in provincial jurisdiction. Others also complain about that very same issue. The reality of the matter is that his position is seriously at odds with the sentiment of his constituents.

A survey which was taken last fall by a major polling company indicated that the notion of a scholarship program was widely popular in Quebec, so much so that only 6% of Quebeckers opposed the concept of a scholarship fund. This is clear cut evidence that the Bloc and Mr. Bouchard are seriously out of touch with their constituents, as are other premiers of this country.

Last weekend I was very fortunate to have spent three days in Montreal. On Friday night I spent over two hours with four students, three from McGill University and one from a college. They pointed out to me that they were not opposed to any federally funded initiative that would help people in post-secondary educational systems in their province, provided that it was fair.

When I asked for their definition of fairness they said “What is good for the goose is good for the gander. If we can get it, it must be equally available to someone else in another province. Whatever they get in British Columbia we should also receive”.

An interesting point emerged. They felt that fairness could only be achieved through national federal programs. That is quite obvious. When there are as many provinces and partners as there are in this federation, which represent a variety of ideological political positions and which have a variety of strategies for achieving their goals, there will be great discrepancies between and among each and every province.

The only way we can get uniformity and the only way we can maintain a degree of fairness is to have a nationally instituted, initiated, administered program.

I believe the real problem is that Mr. Bouchard has a serious problem allowing young Quebeckers to be aware of the fact that Canada contributes moneys to their education.

Let us take a look at what is happening in the province of Ontario. There have been a lot of complaints about the transfer payments. We know that the 30% tax cut pledge of the Mike Harris government will cost that province $4.8 billion each year. This represents money that could have been used for education and health care in Ontario.

This tax cut in the province of Ontario amounts to approximately five times more than the federal transfer reductions to Ontario in 1998 and 1999. Rarely does a premier of any province mention the transfer of tax credits which is another strategy we have agreed upon to transfer money directly to the provincial coffers.

Higher and higher levels of education are now necessary in order for Canadians to adequately participate in today's job market. I am not only concerned about the job market, but also about quality of life. It is absolutely essential that we be the guardians of the individuals in this country. That is the main purpose of a government, to protect its citizens, to see to it that their quality of life is enhanced on an ongoing basis, to see that its citizens grow. We must bring about those strategies to guarantee that all people in Canada will continue to progress.

I could go on for another two or three hours talking about all the wonderful things that have happened, are happening and will happen under this government.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Mr. Speaker, like you and everybody else in the House, I am really eager to wrap up this debate, which is of concern to all our fellow citizens, since we are talking about the budget.

I am extremely disappointed by the budget brought down by the finance minister. He is known to be somewhat undemonstrative, with a lack of vision and imagination, as shown in previous budgets. What we did not know, however, was how little concern the Minister of Finance and his government had for social issues.

Mr. Speaker, you who are concerned with social justice, can you understand how this government, in a context of budget surplus, the first in a number of years, can give no thought to those people who are our society's most disadvantaged and who need the government's help?

I would have hoped to see much greater concern in this budget over the social role of the banks. I would like to give you an example of the situation in the United States since 1977, when the Democrats passed a certain bill. It certainly cannot be said that the United States does not foster freedom of enterprise. Well, since 1977, they have legislation that requires banks to become involved in underprivileged communities.

This legislation annually reviews a public report, which obviously receives a lot of attention from consumers. The report, released in June, evaluates the social behaviour of banks.

Is there one good reason why such legislation would not be well received in Canada? There is one: we need a government that has some backbone, that has vision and that can stand up to the financial world. We know that we are not talking about this kind of government.

Like you, Mr. Speaker, I am a great traveller and, undaunted by a challenge, I went to Washington three months ago. There I met members of the American Banking Association, businessmen and consumer groups and I was told about all the good this sort of legislation brought about.

I got the list of investments. If members want to obtain a copy, I would be delighted to circulate this list. Since 1977, American banks have invested $356 billion in local communities?

What did Canadian banks do? Throughout the world, conventional wisdom has it that Canada is the easiest country of all for banking. It is a well-known fact that Canada is a very well protected market for bankers.

What has happened in Canada? We have four major chartered banks which have made record profits. In 1994, profits stood at $4 billion, but they reached $7 billion last year, and there is no reason to believe this trend will abate. In this context of banks getting richer and richer, with our Canadian borders closed to foreign competitors, banks have resorted to the most drastic streamlining ever.

I remind the House that since 1991, banks have laid off one way or another 10,000 employees. In the next ten years, they are expected to lay off 35,000 more. All of this, when profits are at a record level and the return on common equity has never been so high.

Why should this Parliament remain indifferent and silent, callously silent, about the social role banks could play? In many communities experiencing a great deal of poverty and unemployment, where it would be important for the banks to get involved in the development of the local economy, banks are conspicuously absent.

Let us take the riding of Hochelaga—Maisonneuve, for example, which I believe you had the chance to visit recently, Mr. Speaker. The number of underprivileged people there is quite high. But I hasten to add that there is also an intense community involvement, so that for each of the existing problems, we have community resources to help individuals through their particular situations.

Seniors in my riding tell me that 20 years ago, we had about ten branches of the various chartered banks. Believe it or not, no more than two are still there. They tell me that there are no banks in Saint-Henri any more. If it were not for institutions like the caisses populaires, it would be impossible for people to access basic financial services.

How can a Minister of Finance responsible for preparing a budget, one with any feelings, remain cruelly silent on the question of financial institutions? Are members aware that, across Canada, there are 600,000 Canadians who have no bank account, because the existing rules demand identity documents, and some branches even require them to have a job, and they therefore do not have access to basic financial services.

I believe that it must be made perfectly clear that the banks have acted like highwaymen, like Shylocks, like thieves, without any respect for consumers. In major cities, there are voices asking that we, the law makers, regardless of political affiliation, take action to get the banks to shape up.

I think that in the next few days, we could adopt a community investment bill, as they call it in the United States. We could give the Superintendent of Financial Institutions the mandate of assessing them on the basis of widely known and accepted criteria; this could be done in co-operation with community groups, representatives from the banking community and the private sector. Banks should have to account every year, in a report which would be made public, for their actions, investments and community involvement.

You know what I am like. I am certainly not someone who shrinks from political life. Faced with the problem of the banks, I introduced a private member's bill that, as luck would have it, is now before the House and should be debated in the coming days, probably in early April.

I call on the solidarity of all my colleagues. Can it be that, for once and for all in the House, we are going to ask the banks to behave like true corporate citizens with a stake in their community? It requires a certain amount of political courage. It requires that we work together.

I have not given up the hope of creating a coalition with a number of members to pressure this government to provide legislation such as they have in the United States.

Mr. Speaker, I need only your support now. I know you support such action, and I am sure that legislation of this kind ensuring social justice will, in the end, be passed in Canada.

[The Deputy Speaker]

Pursuant to order made earlier this day, the motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 24(1).

(The House adjourned at 10.01 p.m.)