House of Commons Hansard #79 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was debt.


Government Response To PetitionsRoutine Proceedings

10 a.m.

Peterborough Ontario


Peter Adams LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to eight petitions.

Energy Price Commission ActRoutine Proceedings

10 a.m.


John Solomon NDP Regina—Lumsden—Lake Centre, SK

moved for leave to introduce Bill C-384, an act respecting the Energy Price Commission.

Mr. Speaker, it is my pleasure to introduce in the House today a bill to establish the Energy Price Commission. This bill will establish a commission to regulate the wholesale and retail price of gasoline. The purpose of price regulation is to avoid unreasonable increases which affect the cost of living and depress business activity.

The bill will facilitate reasonable consistency in prices from province to province, allowing for production and distribution costs.

The regulations will further minimize the risk of collusion in pricing and will prevent dominant suppliers from setting unreasonable prices.

The bill links the issue of price control to competition. Any investigation of an alleged offence under the Competition Act which is related to gasoline pricing will be remitted by the competition tribunal to the commission for investigation, and the commission will report to the tribunal before it makes a determination or order on the matter.

Many Canadians are looking for this bill so that gasoline and oil companies will stop the gouging of consumers, business people and farmers in Canada.

(Motions deemed adopted, bill read the first time and printed)

PetitionsRoutine Proceedings

10:05 a.m.


Gar Knutson Liberal Elgin—Middlesex—London, ON

Mr. Speaker, it gives me great pleasure to present a petition signed by 100 constituents of my riding.

The petitioners pray that Parliament act immediately to extend protection to the unborn child by amending the Criminal Code to extend the same protection enjoyed by born human beings to unborn human beings.

Questions On The Order PaperRoutine Proceedings

10:05 a.m.

Peterborough Ontario


Peter Adams LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, I ask that all questions be allowed to stand.

Questions On The Order PaperRoutine Proceedings

10:05 a.m.

The Deputy Speaker

Is that agreed?

Questions On The Order PaperRoutine Proceedings

10:05 a.m.

Some hon. members


Budget Implementation Act, 1998Government Orders

10:05 a.m.

Richmond B.C.


Raymond Chan Liberalfor the Minister of Finance

moved that Bill C-36, an act to implement certain provisions of the budget tabled in Parliament on February 24, 1998, be read the second time and referred to a committee.

Budget Implementation Act, 1998Government Orders

10:05 a.m.

Stoney Creek Ontario


Tony Valeri LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I would like to take a few moments to speak on behalf of the government in support of Bill C-36.

The proposed legislation contains some very important provisions that will help build a strong economy and a strong society, goals which this government has pursued since coming to office in 1993.

We have pursued these goals first and foremost by getting our fiscal house in order. The federal books will be balanced this year for the first time since 1970 and we will balance the budget next year and the year after that for the first time in almost 50 years. It will be the first time in almost 50 years that Canadians will see three consecutive balanced budgets.

Our commitment to fiscal responsibility, to putting an end to credit card government, does not end there. We will reduce Canada's debt burden through a two-front strategy of stronger economic growth and a concrete debt repayment plan.

What we will do is take the same approach to the debt that we have successfully used against the deficit since 1993. We took the deficit down step by step. The same incremental approach will, year by year, steadily reduce the debt burden.

We intend to keep the debt to GDP ratio on a permanent downward slide using a two-track strategy, a strategy of supporting economic growth and reducing the actual level of the debt.

This means that we will continue to present fiscal plans based on prudent economic planning assumptions. Let me say that most budgets fail because they are based on overly optimistic assumptions. The consequence is severe. It is lost credibility.

In addition to prudent planning assumptions we will continue to build our plans on a substantial contingency reserve of $3 billion a year. This is designed to handle unexpected events and to provide greater certainty that we will meet our balanced budget targets.

However, if the contingency reserve is not needed, and in fact it has not been needed in each of the past three years, it will go directly to paying down the overall stock of debt.

Where do we expect this prudent approach to budget planning to take us?

We project that by 1999-2000 the debt to GDP ratio, by our comprehensive Canadian measurements, will have fallen almost 10 percentage points from its peak of almost 72% of GDP in 1995-96. If we use the measurement which most other countries use, that being the debt held by the public, Canadians' market debt to GDP ratio will fall from a peak of almost 59% in 1995-96 to 48.5% by the year 1999-2000.

In fact the Organization for Economic Co-operation and Development is forecasting that between 1997 and 1999 Canada will have the largest decline in debt burden among the G-7 countries.

While we must ensure the continuing decline of the debt, we also recognize that the tax burden on Canadians is too high and has to be reduced. That is why we have introduced targeted tax relief measures in each of our previous budgets. For now these measures are modest because the so-called fiscal dividend that makes them possible is still modest. But even so, 90% of all taxpayers will get some degree of personal income tax relief from our recent budget.

Some 400,000 low income Canadians will be taken off the tax rolls entirely. As our financial resources permit we will broaden tax relief in future budgets.

Of course, some would argue that the dividends should go only to reducing debt and cutting taxes. In my view this would be shortsighted and, quite frankly, bad economics. We recognize that the private sector is the engine of job creation, but government too has a responsibility to provide leadership in the economy.

To meet that responsibility we are putting the fiscal dividend to work by increasing our investments in access to education, in skills development, in low income families with children and in health care.

For example, in last month's budget we unveiled the Canadian opportunities strategy. It is a co-ordinated set of measures to provide Canadians with enhanced access to knowledge, knowledge and skills for jobs that can deliver a better standard of living for the 21st century.

In fact, Bill C-36 implements some very important elements of this strategy. For example, it establishes the Canadian millennium scholarship foundation. This arm's length foundation with an initial endowment of $2.5 billion will award more than 100,000 scholarships each year over 10 years to full and part time students across Canada.

Scholarships will increase access to post-secondary education for low and middle income Canadians to prepare them for the jobs and knowledge based economy of the 21st century.

As the minister of finance said in the 1998 budget speech, “This investment in the future of our country is the result of our successful battle against the deficit. It is an investment that will pay for itself over and over again in the years ahead”.

The Canada millennium scholarships are, in effect, the largest single investment ever made by a federal government to support access to post-secondary education for all Canadians. They will be awarded to individuals who need help financing their studies and who demonstrate merit. For full time student scholarships will average $3,000 a year. Individuals will be able to receive up to $15,000 over a maximum of four academic years of undergraduate study.

What this means is that a student receiving a $3,000 scholarship for four years will in fact see his or her student debt load cut by $12,000, about half of what it otherwise could have been.

These scholarships are not just for young Canadians at university. Canadians of all ages studying full or part time in publicly funded universities, community colleges, vocational and technical institutes, and cégeps will be eligible. Awards will help recipients to study away from home, particularly outside their home province. They will also support limited terms of studies in other countries.

Student debt has become a heavy burden for many Canadians. In 1990 a graduate completing four years of post-secondary education faced an average student debt load of about $13,000. By next year the same graduate's average debt will almost double to $25,000. At the beginning of this decade less than 8% of student borrowers had debts larger than $15,000; now almost 40% do.

Last December federal and provincial first ministers agreed that something must be done to reduce the financial burden on students. They asked the federal government to take action in the 1998 budget and we have. Bill C-36 will put in place a number of provisions that will help individuals manage their student debt loads.

First, we are increasing the income threshold used to qualify for interest relief on Canada student loans by 9%. What that means is that more graduates will be eligible for interest relief.

Second, we are introducing graduated interest relief which will extend assistance to more graduates further up the income scale.

Third, 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.

Fourth, 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 difficulties after taking advantage of these relief measures, we will reduce their student loan principal by as much as half.

Together these new interest relief measures will help up to 100,000 more borrowers. Over 12,000 borrowers a year will benefit from the debt reduction when this measure is fully phased in.

Any long range plan to acquire knowledge and skills for the 21st century must look ahead to the students of tomorrow. The best way to help to ensure children's futures is to save for education today. We want to establish a new partnership to help parents save for their children's future.

Bill C-36 introduces the Canada education savings grant. What it does is it makes registered education savings plans even more attractive.

Beginning January 1, 1998 we will provide a grant of 20% on the first $2,000 in annual RESP contributions for children up to age 18. That is $400 of grant money per child that would go directly into an RESP program. With the introduction of this new grant, RESPs will now be among the most attractive savings vehicles available to Canadians for their children's education.

Bill C-36 also contains measures for the Canadian opportunities strategy to help address the urgent problem of youth unemployment. In this bill we propose to provide employers with an employment insurance premium holiday for hiring additional young Canadians. Canadian employers who hire young Canadians between the ages of 18 and 24 in 1999 and 2000 will be allowed to take advantage of a premium holiday in employment insurance. This will increase employment opportunities for youth and reduce payroll costs for employers by about $100 million over the next two years.

While the role of education is very important in ensuring equality of opportunity, the capacity to learn does not begin in school. It begins at home and depends on the nurturing and caring provided to the smallest infant.

That is why over the past year federal, provincial and territorial governments have begun to build a national child benefit system that will help fight child poverty so as to provide a good start in life for all Canadians. To build the system the 1997 federal budget allocated $850 million to create an enriched and simplified Canada child tax benefit. Bill C-36 implements this commitment.

The new benefit commences in July and provides $1,625 for the first child and $1,425 for all other children to all families with incomes up to $21,000. In the future legislation will be brought forward to implement the commitment in the 1998 budget to further enrich the child tax benefit by an additional $850 million. The federal government will announce details of this enrichment after discussions with provincial and territorial partners and Canadians.

The Canadian opportunities strategy and the child tax benefit provide diverse and comprehensive assistance to Canadians. These initiatives will help Canadians acquire the knowledge and skills they need for better jobs and a better life in the 21st century. By expanding access to opportunity we are building a stronger economy and a more secure society. I urge all members in this House to support Bill C-36 in moving us forward to implement key elements of our strategy.

Budget Implementation Act, 1998Government Orders

10:20 a.m.


Monte Solberg Reform Medicine Hat, AB

Mr. Speaker, it is a pleasure today to rise and lay out why I and the Reform Party stand in opposition to Bill C-36, the budget implementation act. I will start by giving the House an overview of the three big reasons why Reformers stand opposed to this legislation.

The first reason is that there is simply no overarching plan that really defines the roles and limits of government in this bill or in fact in any of the previous legislation we have seen from the government and which really establishes what the relationship is between government and its citizens.

The second point is that there is simply no solid plan to pay down the debt in this bill. Canadians have spoken with one voice from across the country and have said that paying down the debt is their number one priority. We see nothing that addresses that need in this legislation.

Finally there is no net tax relief in this legislation. I ask my friends across the way to note that I used the word net. While government members would have Canadians across the country believe that they are going to be better off after this budget, Canadians will pay more in taxes this year than they paid last year as a result of Liberal government tax increases.

I ask people to consider those as the reasons for our opposition to this legislation.

I want to make my point by speaking in the form of a metaphor. Taxpayers are like the goose that laid the golden egg. In fact you could say they are like the flock of geese which keep laying golden eggs. Over the last many years we have seen Ottawa run around and scoop up those golden eggs as quickly as they are laid. In some cases the government uses them to run essential programs and we are grateful for that.

People in Canada value some of the programs they get from government. They want a strong health care system. All members acknowledge that. They want a system that ensures they can get a decent education. They want a system that will provide vital essential services like national defence, foreign affairs and criminal justice. People do not begrudge for a second having to see the golden eggs that they produce go toward those types of programs.

We also know that much of what taxpayers produce in the form of revenue or golden eggs for the government is used for things that are simply not essential. The best example of that is the interest we have to pay on our debt today as a result of previous governments that have lived far too high on the hog.

Taxpayers are producing these golden eggs to the tune of about $45 billion a year just to pay the interest on the debt. The way it works out is that the average taxpayer in Canada today pays over $21,000 in federal taxes. Roughly a third of that, $6,000, goes to pay the interest on the debt.

My point is that these geese are laying a lot of golden eggs currently and Ottawa is scooping up the huge majority of them. Ottawa scoops up at least half of all the income of the average Canadian today. That is a tremendous amount.

As a result we think that these geese who are laying these golden eggs are feeling more than a little bit abused. They do not mind seeing the government take its fair share of these golden eggs, but they get a little incensed when they see the government eyeing their golden nest egg. That is exactly what is happening today in Canada.

As a matter of fact members should know that according to the Fraser Institute, since this government came to power in 1993 we have seen disposable incomes fall by $3,000 for the average family of four. We know that in Canada today we have virtually a negative savings rate. In other words people are having to dip into their savings to pay their taxes so that the government can spend more money on all kinds of inane things. Sadly that has been the case for a long, long time. When those sorts of things happen, there are real consequences.

What has happened is that we see these Canadian taxpayers, these geese who are laying these golden eggs, looking to the south. They are starting to say “We are Canadian geese. We do not want to go south, but unfortunately we are being forced to consider that option because we have mouths to feed”. They have all these goslings that have to be looked after. They have to feed the people they are responsible for. They are starting to cast about for other alternatives.

We point to the Nesbitt Burns study which came out not long ago. It showed that many professionals are fleeing this country for better opportunities south of the border and in other parts of the world. That study points out that although there are a few engineers coming in from other parts of the world, there are a whole lot more engineers disappearing from this country and going to places like the United States where they have a far better tax environment and more opportunity as well. Taxes are lower and there are more jobs in their field.

We see the same thing happening with people with skills in the high tech industries, computer scientists for instance. We also see the same thing with respect to the medical profession with both doctors and nurses. They are fleeing in droves. I know that my friends in the House, especially those from smaller centres, will acknowledge that there is not a doctor in the country who does not regularly get offers from American hospitals. Many of them ultimately end up going. As a result this country has a shortage of physicians.

As a consequence the situation today is people are being educated in Canadian universities at a tremendous cost to the Canadian taxpayers. Then we see them quickly leave to go to other jurisdictions around the world because there just is not the opportunity here.

The best example is British Columbia. British Columbia today has the highest taxes in all of North America. We can thank the provincial NDP government for that, but all of the blame does not lie there. We also have to point a finger at the federal government.

In Canada today we have the highest personal income taxes of any country in the G-7, not by a little but by over 50%. Our income taxes are 56% higher than the G-7 average. Is it any wonder that British Columbia today is entering a recession? It has gone from being the fastest growing economy in Canada to being 10th out of 10 provinces and 2 territories. It is unbelievable.

My friends across the way still continue to fire this tired rhetoric about the need to invest. That is fine. We understand the need to invest. However, if one is investing in education only to see the people who benefit from that education flee the country in terror at the prospect of having to pay taxes that are staggering compared to anywhere else in the world, does it make any sense?

The government talks about a balanced approach. Let us have a balanced approach but let it be an approach where we see taxes starting to fall in a meaningful way so that we can remain competitive with people in the United States, the U.K, Japan and other countries around the world.

Yesterday I pointed out to the House that we have members in this place who have seen family members leave for other countries to make a living. When I talk about this I should also point out that it is not necessarily just for lower taxes that they leave. An added incentive is that lower taxes create more jobs and better paying jobs.

Today the United States which has 4.8% unemployment does not have to worry about three people chasing every one job. Three jobs are chasing every one person. It is the complete reverse to Canada. As a result, wages are much higher, so people can go down to the United States and essentially command whatever price they wish.

We recently read in the newspapers the story of Waterloo university. A third of the graduating class disappeared to the United States because Microsoft made them an offer they could not refuse. I was talking to a gentleman who is on the board of directors of Waterloo university. He raised this issue with me as a serious consideration. The budget has done nothing to address that problem.

I know my friends across the way will talk about the tax relief in the budget. In fact, an hon. member at the beginning of my speech yelled across the way what about the tax relief in the budget. It is fair he raised that, but I think it is also fair for me to point out that Canadians have come out behind as a result of the government's actions since the beginning of the year.

Let me explain. It is true that the government will lay out about $7 billion in tax reductions over the next three years. However, what my friend across the way would have us forget is that on January 1 the government produced the biggest tax hike in Canadian history, a tax hike that will see CPP premiums rise by 73%.

What my friend across the way would also have us forget is that every year as a result of deindexation of the income tax system we now have an automatic tax increase called bracket creep that pushes different people in different income groups into higher tax brackets as a result of the impact of inflation.

Therefore, in this current year alone the impact of bracket creep will bring in just over $1 billion in new revenues for the government, wiping out the $880 million the government is to give people in tax relief. People are behind. My friends may call that progress but it is a perverted view of progress. We are going backward.

It is no wonder we have colleagues in this place who have children fleeing Canada as economic refugees and going to other parts of the world. Yesterday I referred to the member for Red Deer who has three children all living in different parts of the world because they went where the opportunities were best. What can they do? Are they to work in some minimum wage job simply so they can remain in Canada? They cannot do that. They need to pursue opportunity wherever it is.

My friend from Red Deer has a son who is now teaching at Princeton. He is a Rhodes scholar but he could not get a position at a Canadian university so he is teaching at Princeton. What is going on with this country? He has two daughters. One is in Norway and one is in the Netherlands. They had to leave to pursue opportunity. I point to my colleague from Calgary Southeast who has family members spread out all over the world because that is the only place they could find jobs to meet their skill levels. We have a problem.

It is fine for the finance minister to focus on education and for the parliamentary secretary to wax eloquent about what the government is doing for education. On the other hand they do not talk about what people do after they get that education. The millennium scholarship fund will end up being a subsidy to Microsoft. It will end up being a subsidy to big American corporations that scoop up those people who then go to the United States and other countries around the world. What about the balanced approach? Why has the government not addressed this problem?

I was talking a minute ago about British Columbia and I want to continue down that same path. As I mentioned, British Columbia is now in a recession. The government was patting itself on the back during the Liberal convention on the weekend, just about dislocating its shoulders. It was patting itself on the backs for the wonderful job it has done with the economy.

The Liberals forget that big chunks of the country are in serious trouble. Atlantic Canada is certainly in trouble with double digit unemployment. The fishery is dead. In many parts of the country there are no prospects.

In British Columbia both the NDP government at the provincial level and the federal government did what they could to kill the economy of one of the shining lights of the country. I point to a specific example of how that impacts on people. I could point to a number of examples from B.C. but I want to point to a recent example.

I just received a fax that was actually sent to another member of Parliament, the member for Edmonton North, by a lady from Port Moody, B.C. Members may have heard that a byelection is being held in Port Moody—Coquitlam, so it is interesting we would get this fax.

This lady is complaining about the amount of tax she has to pay. She enclosed photocopies of two cheques she sent to the Receiver General for Canada. At the bottom of the fax it says “taxes paid in instalments during the year, $46,000, which represented 23% of a $200,000 profit. The above two cheques are for profit exceeding the small business tax credit of $200,000, i.e. these amounts represent 55% of the profit”.

The total amount of these cheques would be somewhere in the range of $98,000 which they have had to pay in taxes to the federal government. That is a staggering amount of money.

Is it any wonder the job creating engine of the economy, small business, is staggering to create the jobs that are necessary? We still have an unemployment rate of 8.6%. I know my friends across the way think that is good, but it is almost double the unemployment rate in the United States. We are nowhere near our job creating potential. I encourage my friends across the way to consider that small businesses, the real creators of employment in Canada, are staggering with the tax levels.

My friends across the way have received visits from members of the Canadian Federation of Independent Business, one of my favourite organizations. These people stand up for small business owners. They stand up for people who are doing all the things that annoy Liberals. They are hardworking, honest and pay their taxes. They are complaining bitterly about high taxes.

When will the government understand that $7 billion in tax relief against probably a $15 billion tax increase means people are coming out behind? We cannot continue down this road. It is killing jobs. It is killing opportunity and is driving people from the country. This has to come to an end.

I will conclude by asking my friends to look up to the relief on the wall just above the gallery. They will see a word carved on the top of it. The word is “tax” carved in stone. How appropriate that in the House of Commons in Canada we have a shrine to taxes, but that is indeed the case.

Under the word “tax” we see a family sitting on a bench. It looks as though it is a very gloomy looking family. There is a mother, a father and a child. They are sitting on the bench probably in the ante-room of the minister of finance or perhaps in Revenue Canada, waiting to find out the verdict after they have submitted their income tax for the year. I guarantee they will be sorely disappointed. We know in Canada today they would find out they owe half their income to government.

The symbolism of having that relief on the wall is interesting. It is the only tax relief we have in Canada today. There it sits almost directly over the head of the finance minister and almost in direct alignment with the finance minister. That symbolism speaks volumes. It speaks more eloquently to our situation than I ever could.

There are a couple of interesting symbols just below that family. One of them very appropriately is a serpent, a snake. Somehow to me that symbolizes the government's approach to dealing with taxpayers. At the very bottom we see a whale. I think we should take that to represent government which has become huge and consumes about 46% of the wealth of the economy every year. The final figure is the man with the briefcase just on the right hand side.

Budget Implementation Act, 1998Government Orders

10:40 a.m.


Charlie Penson Reform Peace River, AB

The taxman.

Budget Implementation Act, 1998Government Orders

10:40 a.m.


Monte Solberg Reform Medicine Hat, AB

The taxman. The member for Peace River has correctly identified the taxman. We see his briefcase bulging with proceeds he has taken from individual taxpayers across the country.

I encourage people to reflect upon this tax relief, the only tax relief we have, sitting above the head of the finance minister, and to consider the symbolism of that piece of work above the public gallery. It speaks volumes about where the country is and perhaps even speaks to a perversity the government has in honouring taxes that I do not think should be honoured.

I conclude with the following amendment. I move:

That all the words after the word “that” be deleted and the following substituted therefor:

this House declines to give second reading to Bill C-36, an act to implement certain provisions of the budget tabled in Parliament on February 24, 1998, since the principle of the bill, while charging the consolidated revenue fund to establish and fund the Canadian millennium scholarship foundation, fails to guarantee that appropriate and objective accounting standards will be followed as advocated by the auditor general.

Budget Implementation Act, 1998Government Orders

10:40 a.m.

The Deputy Speaker

There seems to be a hue and cry for questions and comments. I should advise the House that on 40 minute speeches, as this one was, there are no questions or comments. I know it was shorter than 40 minutes but the rule is the rule.

In the opinion of the Chair the amendment moved by the hon. member for Medicine Hat is in order and therefore I put it to the House.

Budget Implementation Act, 1998Government Orders

10:45 a.m.


Ken Epp Reform Elk Island, AB

Mr. Speaker, I rise on a point of order. Since there was some expression of interest in interrogating and cross-examining the member for Medicine Hat, I would ask that you seek unanimous consent to extend his time by 10 minutes so that debate can take place.

Budget Implementation Act, 1998Government Orders

10:45 a.m.

The Deputy Speaker

Does the House wish to give unanimous consent for a question or comment period consequent on the speech of the hon. member for Medicine Hat?

Budget Implementation Act, 1998Government Orders

10:45 a.m.

An hon. member


Budget Implementation Act, 1998Government Orders

10:45 a.m.

The Deputy Speaker

I am afraid there is not consent.

Budget Implementation Act, 1998Government Orders

10:45 a.m.


Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Mr. Speaker, the Liberals are having fun and we are wondering why. They should be working at meeting the needs of the public instead of making jokes as they always, or almost always, do when we deliver speeches on the real issues.

We have before us Bill C-36 to implement certain provisions of the last budget tabled by the Minister of Finance. I am pleased to speak on these provisions and I would like, for openers, to define what we expect from this budget and which expectations have not been met through Bill C-36 before us, which implements certain provisions of the budget for 1998-99.

Just a few months ago and during the election campaign as well, we asked the Minister of Finance to pay special attention to actions that adversely affect the provinces. Since he tabled his first budget in 1994, the Minister of Finance has made cut after cut after cut in transfer payments for social assistance, postsecondary education and health.

He has cut back so dramatically that 52% of the success achieved in terms of balancing the budget and restoring health to the public finances has in fact been achieved through the sacrifices the provinces have had to make because of the drastic cuts made by the Minister of Finance. This means that 52% or most of the sacrifices were made by the provinces, which are really the ones who restored the public finances to health.

We therefore ask that the government take a very simple measure, which was proposed last year by Quebec Premier Bouchard and approved by all the premiers across Canada. The government was asked to use, over the next two fiscal years, that is to say 1998-99 and 1999-2000, 50% of the forecast surplus in tax points—the real surplus, not the one given in the Minister of Finance's budget, with its rounded down and close to falsified figures—to counteract the harm done to Quebec and to the rest of Canada, in the health sector for instance.

A transfer of just 50% of the surplus in tax points, in an area that would become wholly provincial in the coming years, would be sufficient to remedy the increasingly irremediable harm the Minister of Finance has done to health, social assistance and higher education.

The Minister of Finance refused to respond. He even refused to acknowledge that the provinces had inherited the entire responsibility for putting federal public finances in order.

During the election campaign, as well as in the months following it, we also called repeatedly upon the Minister of Finance to change the way he was handling employment insurance and the EI fund.

We proposed three changes which reflected a consensus not only among Quebeckers, but among all Canadians, about the program and the way the fund made up of employer and employee contributions was being managed. Let us not forget that the federal government has not put a red cent into the fund for years. The employers and employees are the ones who contribute year in and year out to the surpluses. Because of the high rates that have been set, they are contributing to the huge surpluses the fund has generated, to the tune of $6 billion yearly.

We therefore called for three things relating to the employment insurance fund. First, that the Minister of Finance stop using the surplus to put his financial books in order. The employment insurance fund is in place for two reasons: to support those who are without work, and to attempt to help them back into the work force.

Instead, the Minister of Finance has been shamelessly pocketing the surplus, and continues to do so. He has not met the expectations of the Bloc Quebecois. He is still pocketing this $6 billion annually in order to build up a spectacular surplus and make himself look good as Minister of Finance.

Second, we called for a substantial reduction in EI premiums in order to boost job creation. The surplus in the EI fund did not just miraculously fall down from heaven. If there are surpluses, it is as a result of the excessive contributions employers and employees have to make. This limits our job creation capacity. In Quebec, Ontario, the west, British Columbia and in the maritimes, employers and entrepreneurs are saying so, and even unions are saying so.

Not only has the Minister of Finance not reduced contribution rates substantially, as we asked, but he has kept them at an even higher rate. We talked about an overall drop in contribution rates of $3 billion, half of the surplus in the employment insurance fund. The Minister of Finance gave us a few tens of millions of dollars in reductions, which has no significant impact on job creation.

The third change we sought, which was not in the budget speech and is not in Bill C-36, is the creation of an independent fund with the employment insurance fund, independent of the government's general balance sheet, so that we may follow the progress of contributions, the size of the fund and the contributions made by employers and employees, and ensure that the fund is really managed appropriately for the labour market.

The auditor general has also asked for this and he has received no response from the Minister of Finance in the budget or in Bill C-36, which implements some of its provisions.

We called for a significant reduction in people's taxes. Some 52% of the results obtained in the effort to improve public funds are due to the provinces' efforts. Bernard Landry and Lucien Bouchard in Quebec did the work there, to the tune of 52%, and not the Minister of Finance.

Taxpayers' share in improving public funds in the past four years amounts to 37% of the total effort. In other words, since the Minister of Finance has been in his position, since he has become a part time shipowner—sometimes he is full time, it depends on the bills he introduces—Quebec and Canadian taxpayers have paid over $30 billion more in taxes than they should have, had the Minister of Finance indexed the tax tables and made a targeted reduction in individual and SMB taxes, as we asked him to do.

Instead, however, he preferred to keep taxes high. These levels, together with the lack of changes in tax rules, to indexing, for example, have resulted in taxpayers paying $30 billion more in taxes than they should have.

The Minister of Finance took $30 billion out of our pockets. This means that 32% of the budgetary effort is not the result of his own efforts, of his department's efforts, or of his innovative spirit—I would rather not talk about the minister's innovative spirit—but of the efforts made by the provinces and the taxpayers.

If the minister's estimates had been based on the proper data— and we will get back to this later on—if the minister had shown the true picture in terms of expenditures and revenues, in terms of the surpluses generated over the years, he could have made a substantial effort to reduce personal and even corporate taxes, but he did not, even though it would have been desirable.

The minister could have done even more to alleviate the burden of taxpayers and businesses if he had listened to us. For four years now, we have been telling him—with the figures to support our claim—that it is possible to reform Canada's individual and corporate tax system and to get rid of all the obsolete provisions that no longer meet the needs of our businesses—in the context of globalization and competitiveness—and of our families, given the current socioeconomic reality.

The first question we asked the Minister of Finance when we got here was when would a true tax reform take place to improve our system and increase our ability to reduce taxes and better manage revenues.

The minister made us wait. We waited for the first two years, since his inaction left us with no choice. But in the second year we told ourselves that if the Minister of Finance could not take his responsibilities, if he was not innovative enough to come up with a new way to collect taxes—that is to say a more efficient and beneficial way for society as a whole, and not just for the federal government—we would propose ways to do it.

We wrote over 300 pages of suggestions to reform personal and corporate taxes. When we tabled our document, the Minister of Finance said we had done a great job, a job that required incredible dedication. It is no laughing matter trying to clean up the Canadian taxation system, which has remained basically unchanged since the Carter Commission in the later 1960s. It is not easy to pick your way through it and identify those measures that still serve a purpose as opposed to those that no longer serve any purpose at all, but which are costing Revenue Canada a lot of money.

Taxpayers must not forget that every time some person or some business somewhere does not pay taxes or avoids paying part of the taxes they would normally have had to pay, had it not been for some outdated tax loophole, which does nothing for society or the economy, but which is there because it has been almost or completely forgotten, or because the Minister of Finance lacked the resolve to do anything about it, it is the average taxpayer who makes up for what the business or rich individual should have paid but did not because of this loophole. We have to remember that.

So, the Minister of Finance had four years to undertake a complete overhaul of the taxation system. He did nothing, and we see the results. Over the last four years, taxpayers have paid $30 billion more in taxes, and the much-heralded cuts over the next three years pale in comparison to what could have been achieved, and in comparison to what has disappeared from taxpayers' pockets through the inertia and ineptitude of the Minister of Finance.

We also asked the Minister of Finance something else—and he did not listen to us—and that was not to create new programs. He he turned a deaf ear and did as he pleased. He acted as though nobody existed but himself and created new programs with the assistance of his Prime Minister, who delights in leaving his symbolic mark on Canadian political history.

He went ahead and created a new program, one we detest, called the millennium scholarship fund.

This is a program we detest because it encroaches, and shamelessly to boot, into an area of jurisdiction which generations and generations of politicians, generations of premiers as well, starting back in the 1960s with Jean Lesage, have jealously guarded as exclusive to Quebec.

According to philosopher Jacques Danton, a people's first need, after bread, is education. Education is the backbone of the survival and progress of every nation. Education gives us everything we need to understand. It tells us where we come from, who we are, who we want to become. Education is the basis of any people's survival.

We understood this in Quebec years ago, and being federalist or sovereignist does not change it in the least. When it comes down to it, every Quebecker is a nationalist. When it comes down to it, every Quebecker wants his people to continue to survive, to progress, to expand as an international presence, to endure for as long as it is possible to imagine.

One of the cornerstones of our longevity as a people, one of the cornerstones of our strength as a people, our economic strength as well as our cultural strength, the strength to which we owe our existence, is education.

Each time the federal government has lifted a finger to interfere in education, or a federal political party or its leader has talked of education, of Canada-wide standards, of making our children take tests, we in Quebec have risen up in opposition. Even some federalists have joined forces with the sovereignists to point out how deeply rooted our belief in education as our prerogative is rooted, so deeply rooted in our convictions that we rise up in aggressive opposition as soon as actions are taken, or words spoken, that point to the possibility of federal intrusion into education in Quebec.

The millennium fund, the millennium scholarships, which are without a doubt the Prime Minister's idea of the way he can leave his mark on the verge of the 21st century, are totally unacceptable to us. This is something we will fight against until our last breath. It raises a hue and cry in Quebec and will continue to do so in the coming months and years. We will never agree to their investing in this field. We will not let them put their foot in the door in order to gain more entry and to take the education sector away from the exclusive jurisdiction of Quebec and make it either shared or the exclusive jurisdiction of the federal government.

We will never let anyone tell us Quebeckers, francophones most of us, what our children will have to learn in school or what they will be tested on in exams at the end of the year. No one but ourselves will test their skills.

We will use every means we have to block the implementation of the millennium scholarship fund and to ensure that what the Quebec premier, Lucien Bouchard, and minister of education Pauline Marois have called for comes to pass. They are calling for the withdrawal of the millennium scholarships, with full compensation for Quebec, given Quebec's exclusive jurisdiction over education.

We will repeat this demand ad nauseam. We will also denounce ad nauseam in this House and elsewhere the claims of the federal government.

This matter really energizes my colleagues in the Bloc and myself, because it symbolizes perfectly what we have always opposed in the federal government and what the Prime Minister has always presented as the centralizing claim of the federal government. We will put all our energy into it and get into the thick of it to make sure that this so thoroughly detested program never makes it to Quebec.

It is not just the way this intrusion into Quebec's exclusive jurisdiction was forced on us, but also the way it was presented, that obliges us to reject it.

I am referring to the Minister of Finance's accounting practices. For four years now—members can check Hansard —there were always questions about the Minister of Finance's dubious public accounting practices. I am not alone, nor is my party, in having raised this problem of borderline accounting practices. Two or three times, to my knowledge, the auditor general singled out the Minister of Finance because of his less than orthodox approach to accounting.

I mention the example of the millennium fund because it comes up in Bill C-36 before us this morning. In the case of the millennium fund, from which initial grants to so-called deserving students will not be made until the year 2000, the full amount of $2.5 billion has been posted to this fiscal year, that is, 1998-99, when—and I would like to repeat this—the first millennium scholarships will not be handed out until the year 2000. Immediately this year, they slap down the cost of a program that will not be implemented until the year 2000. This makes no sense.

There is no accounting rule by which one may honestly attribute to the current budget expenditures that will be made only in two years' time. Once again, the auditor general criticized the finance minister's approach. On leaving the House and reading the budget, we also criticized his way of doing things. This is not the first time, and we will return to this a little later on.

This method of accounting produces the following sort of nonsense. On page 12 of the 1998 budget plan “Building Canada for the 21st Century”, incomplete data are used to show that the government's budgetary balance, in other words the deficit or surplus, will be 0.0 in 1997-98, 0.0 in 1998-99 and 0.0 in 1999-2000. This is partly due to the fact that the $2.5 billion of the millennium fund has been posted under this fiscal year, when payments will not actually be made until the year 2000. An actual surplus of $2.5 billion that could have been generated this year has already been removed.

It is not for reasons of prevention that this amount has been set aside, because it will be spent in any event on items other than the millennium fund. What it boils down to is that the Minister of Finance has gotten us used to his fiddling with the numbers. He is literally cooking the books, and we are not the only ones to say so.

The day after the budget was tabled, all serious financial analysts—whether they are federalists or sovereignists—said it did not make any sense. There is a budget plan, but we do not really know where we stand, because of things like the $2.5 billion for the millennium scholarship foundation which the government has already posted to this fiscal year. It is becoming impossible to make proper estimates. We can no longer say whether the expenditures and revenues indicated are appropriate, because the figures were fixed. The government made sure that, for every year, its expenditures would be more or less equal to its revenues, so as to arrive at a balanced budget. It is a shame to present things in this fashion.

Budget Implementation Act, 1998Government Orders

11:05 a.m.


Michel Guimond Bloc Beauport—Montmorency—Orléans, QC

It is all done with smoke and mirrors.

Budget Implementation Act, 1998Government Orders

11:05 a.m.


Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Precisely. This is unacceptable. This is an outrageous approach. The public expects some openness on the part of the Minister of Finance, who should present the true figures, the true situation, the true expenditures for this year, for next year and for three years down the road. The minister should not include in the 1998 budget expenditures that the government will only make in the year 2000, and make it look as if the money was going to be spent this year. These figures make no sense.

People are tired of the government's treating them like idiots who cannot understand balanced budgets and realistic estimates, as opposed to unrealistic, cooked up estimates such as those presented by the Minister of Finance.

Just six months after the Bloc Quebecois presented its deficit forecast for the year ending in April 1997, we anticipated the deficit would be approximately $10 million. With the meagre means available to us as an opposition party, we were nonetheless able take a pencil and paper—we also used a computer, which helped—to forecast what the deficit would be for the next six months. We also looked at the deficit forecasts for the previous year.

We asked the Minister of Finance whether it was true that, far from reaching about $19 billion or $20 billion, as mentioned in the last budget, the deficit for 1997-98 would actually be approximately $10 billion. The minister stood up angrily and almost threw his budget papers at us as he replied that this was nonsense and that we were just throwing out figures.

Six months later, in Vancouver, he confirmed that our figures were right. Six months later, he admitted his forecast was off by 63%.

If we were able to make calculations with a pencil and a computer, it seems to me that, with the help of the hundreds of officials and experts at Finance Canada and Revenue Canada, he could have come up with figures that more accurately matched reality, but he never did. From the very first budget the minister brought down in 1994, we have been presented with nothing but hogwash, making it impossible to see where we are at.

Now the Minister of Finance is making himself look good because all that matters to him, the champion of surpluses, of jack-in-the-box budget surpluses, is the Guinness Book of Records . But that is not what the people want. What they want is honesty and openness from their Minister of Finance. They want to be given the straight goods, not the sort of nonsense we are being dished up, especially in the last budget.

In 1996, the Minister of Finance pulled the same trick he is pulling now with the millennium fund. He included in the 1996 budget the $1 billion in compensation unfairly paid to the maritimes, when this compensation should have appeared after the maritime provinces harmonized their PST and GST, in other words this year, in 1998. He put down $1 billion under fiscal 1996-97, two years in advance, when the actual expenditure came two years later.

What he is doing is not right, and he should look out, because we are getting a little tired of the way he presents things and takes us for something we are not.

The Minister of Finance should look out, because of these examples and because of many others it would take too long to go into here. For instance, why does the finance minister not create an independent EI fund? The answer is that he likes to hide the truth. He knows that he can easily help himself to $6 billion annually from the EI fund. This does not show up anywhere because there is no specific entry showing that the Minister of Finance is going to help himself to $6 billion from the EI fund. He puts it under general revenue. The Minister of Finance's refusal to create an independent fund strengthens our feeling that he has things to hide, that he is not telling us the truth.

The Minister of Finance is really starting to get on our nerves. We began to doubt his integrity, especially when he introduced Bill C-28, which is 464 pages long and which contains two paragraphs on his international shipping companies, and did so without warning, on the sly. When the opposition discovered these two paragraphs, which could mean tax benefits for him, he turned to his ethics counsellor, Howard Wilson, who is paid by the Prime Minister's office to save his neck.

People will realize one day, and I hope they will come to understand it from our arguments, that they have been had, that the Minister of Finance is playing tricks on them, that he did not tell them the truth, that he presented incorrect figures and that he asked them, in recent years, to make unprecedented sacrifices in terms of the excess taxes they have paid. Thirty billion dollars in four years ain't peanuts. He also asked them to make unwarranted sacrifices in the area of social assistance.

He asked the provinces, in particular, and the poor as well, to make unwarranted sacrifices. He also asked students to make extraordinary sacrifices and he is now asking the sick to make extraordinary sacrifices.

Injecting $1.5 billion a year over the next three years is not going to change anything. People have to know that, in addition to cooking the figures, the Minister of Finance is cooking the facts.

In 1995, he brought down a budget that had a domino effect. He announced once in it—he did not dare say it a second time, because he was ashamed—that the social transfers to the provinces to help fund social assistance, higher education and health would be cut annually.

Instead of cancelling the cuts, he announces millennium scholarships for some students, in the amount of $2.5 billion but only starting in the year 2000, as well as $1.5 billion more for the health care system for the next three years. Although the Minister of Finance does not put it that way—the way it is presented is very hypocritical—he is cutting $6 billion per year until the year 2003 from transfers to the provinces. There are $30 billion in cuts still to come.

On the government side, they are bursting with pride over this. Either out of ignorance or ill will, I do not know which, they are telling us “The government has heeded the people's cry of alarm, and will put $1.5 billion per year into health”. My foot they will! They will cut $6 billion per year from health and social programs. That is the reality. They will take $30 billion dollars away from it between now and the year 2003. That figure is a very long way from the $1.5 billion they are putting back into health. They have just made $30 billion in cuts, mostly from health.

The bottom line, then, is that in his 1995 plan the Minister of Finance forecast cuts of $48 billion in health, transfer payments to the provinces to fund health care, higher education and welfare. Now, he is all proud to announce that he will not be cutting $48 billion, but only $42 billion. There is nothing in this government's measures, or the implementation of part of what was forecast in the latest budget via Bill C-36, to be proud of.

This budget—and my hon. colleagues will have the opportunity to return to this point—contains other unacceptable measures which do not reflect what people wanted. For the most part, it contains some general measures which will not provide all those who have done the Minister of Finance's work for him, in other words getting public finances back on an even keel, with any reward for all their efforts over the past four years to achieve that result.

The very day of the budget speech, the public's reaction of those really responsible was obvious. People were angry with the Minister of Finance. They felt it was ungrateful of him to make them do the work and then to boast about his wonderful accomplishments over the past four years. Those who are really responsible, and who received nothing in return, will not forget this.

When the Minister of Finance asks them to co-operate on federal-provincial programs, I doubt he will be successful, and I am not only referring to Quebec—because our province will not forget the millennium scholarship fund—but to the other provinces as well. When Mr. Romanow said he was speaking on behalf of the other premiers in Canada and felt like going after the Minister of Finance to get what he is owed, his statement may have signalled the beginning of more strained relations between the federal and provincial governments.

It seems to me the Minister of Finance had always told the provinces, directly or indirectly, that some day, when our fiscal house was in better shape, he would compensate them for some of the sacrifices they had made. That time has now come, with the last budget and with the next three years.

The Minister of Finance never had a kind word for his provincial counterparts and for all those poor people who had to put up with his savage and drastic cuts. The minister will pay for this.

His integrity will also take a beating, because he has been hiding the real budget figures for the past four years. The result of hiding the real figures, of fixing them, of almost falsifying them—to the point where editorialist Alain Dubuc wrote in La Presse that the budget was almost misleading—is that the finance minister's integrity appears to be vulnerable. Moreover, the minister is sponsoring bills to benefit his own foreign shipping businesses in Liberia, Barbados, the Bahamas and elsewhere. That takes the cake, as far as I am concerned.

Throughout the second reading of this bill, we will point out certain aspects of Bill C-36 relating to the budget, including those that I just mentioned. We are going to repeat them over and over again, and that is not all. Outside the House, we are going to launch a real public information campaign so that people know what sort of government, what sort of finance minister, they are up against, who is really responsible for the problems in the health sector. The guilty party is not Mr. Rochon in Quebec City, but the Minister of Finance here in the House of Commons in Ottawa. These are things we are going to say and keep on saying.

We have not done with the business of the finance minister's ships. If members opposite think we are going to work ourselves into a state over Bill C-28 and the finance minister's apparent conflict of interest while they look all innocent, they are mistaken. We are not about to give up. At the least, the minister appears to be in conflict of interest. He could be in total conflict of interest. I am convinced that he made a mistake in introducing this bill and that he made a mistake in approving a bill that will favour his offshore shipping holding company and shelter it completely from Revenue Canada's reach.

That having been said, I turn the floor over to my other colleagues. They will examine other very important aspects of the finance minister's last budget as they relate to Bill C-36.

Budget Implementation Act, 1998Government Orders

11:20 a.m.


Dick Proctor NDP Palliser, SK

Madam Speaker, it is always an honour to stand in this House at any time but I am particularly pleased today to participate in the debate on Bill C-36, the budget implementation act.

In his budget speech last month the finance minister congratulated himself and the government for balancing the budget after almost 30 years. Bill C-36 which is before us today puts in place the mechanisms to carry out certain provisions outlined in that budget.

My adopted province is Saskatchewan. Our party, which is now the New Democratic Party and before that the Co-operative Commonwealth Federation party, has been in government for most of the last 45 years in the province of Saskatchewan. We have had some financial messes to clean up.

Of our previous premiers, I think of Tommy Douglas who inherited an atrocious mess from the provincial Liberals back in 1944. As premier of the CCF and later the NDP government of the province he proceeded to balance the books for a full 20 years.

In the 1970s the NDP government under Allan Blakeney, for whom I had the privilege to work for a time, guided the province of Saskatchewan for 11 years. In every one of those years the Blakeney government delivered at least a balanced budget and in many of those years modest surpluses.

The Conservatives came to power in 1982. They virtually bankrupted the province of Saskatchewan. They managed to run up huge deficits, basically $1 billion each and every year for the nine years. It was clearly the worst government in the history of the province of Saskatchewan. It probably can be fairly said it was the worst provincial or territorial government in the history of Canada.

The Devine government was succeeded in 1991 by the Romanow administration which inherited this enormous mess. Over the past seven years in the best traditions of social democratic fashion, the Romanow government has gone back to work and the results have been stunning. The Saskatchewan budget for 1998-99 was tabled last week. For the fifth year in a row the Saskatchewan budget is balanced.

The point I am trying to make is that there are great differences in how Saskatchewan and Ottawa have achieved the goal of balanced budgets.

This year Saskatchewan was again able to balance its books as I have said, but at the same time it has increased spending on health care, education and on getting more children out of poverty. There is more money for agriculture and highways. The provincial budget also includes increased investment in jobs and economic growth. This is after totally eliminating the deficit. Saskatchewan continues to pay down the debt inherited from the Devine administration by an additional $500 million in this fiscal year.

As I said yesterday when we were debating Bill C-28, it is backfilling every dime the federal government has taken out of medicare as a result of slashing transfer payments to the provinces in 1995 and the years thereafter. To preserve and protect this country's health care system particularly in the province of Saskatchewan, Saskatchewan has put back in every dollar that the federal government has taken out.

This is a stunning achievement. As Saskatchewan finance minister Eric Cline indicated last week, the credit belongs to the people of that province. As the minister said, those people are now seeing the benefits which flow from the sacrifices they had to endure in the past several years.

The Saskatchewan budget is one thing. The federal Liberal budget is quite another. In my humble opinion it is a cynical budget, a testament to the black art of accounting.

The finance department always hires slick, highly paid media professionals to put a positive spin on the budgets. In 1995 the government did its polling. There were focus groups in advance of the tabling of the budget and it was found that Canadians would stomach no more tax increases. Therefore the finance department packaged a budget that contained few new tax increases.

All the television news programs began that budget evening with the Peter Mansbridges and the Lloyd Robertsons saying “Budget '95, no new taxes”. Of course that was not the case. What the 1995 federal budget did contain was an unprecedented attack on health, education and social programs, on unemployment insurance and billions of dollars in cutbacks in transfers to the provinces as I indicated a moment ago.

Those same or similar spin doctors are at work once again. This time they are patting themselves on the back by saying that they balanced the budget. Don't worry, be happy. Happy days are here again.

The Minister of Finance in the federal Chamber has to hope that Canadians have short memories about these billions of dollars that have been slashed from spending on education, health care, unemployment insurance and agriculture.

The minister now announces that he will not proceed with further cuts scheduled for this year on health care for example and then he portrays this somehow as new spending and new money. Having mugged Canadians for five years, he now gives them 35 cents and urges them to go and purchase some coffee.

Let us look for a moment at what is missing from the budget, and therefore from Bill C-36. There is nothing to put right the damage done by the minister's earlier budgets to medicare. Not so very long ago, we heard on the news that Edmonton hospitals were having to send patients to Saskatoon because no beds were available. This is what the Liberals have done for health care.

What else is missing from this budget, and therefore from Bill C-36? There is no new investment in jobs for young people, no objectives for reducing overall unemployment, no objectives for reducing child poverty, no drug plan, no home care. The government may not have a deficit in 1998, but ordinary Canadians do.

We have a social deficit. Who is paying for this deficit? It is children living in poverty, the unemployed, students abandoning their studies because they are too deep in debt.

Take the case of the really nice young man who worked in our office recently. After finishing two years of university, he had to quit because he owed too much money. The minister announces that Canada no longer has a deficit, but things are very different for this young man.

What else is not in the budget? The budget speech was entirely silent on agriculture. The minister spoke in this House for almost 90 minutes and the word agriculture never passed his lips.

Furthermore, in a 275 page document which was tabled relating to the budget there were a mere 16 lines about rural Canada. Most of that space was devoted to reminding us that the minister provided additional money to the Farm Credit Corporation last year.

The only current spending mentioned for agriculture is $20 million spread over five years and throughout several government departments.

Federal government spending in support of agriculture and the agri-food sector has declined drastically throughout this decade. Spending has tumbled from $6 billion in 1991 to less than $2 billion in 1997. This year's budget confirms even further cuts.

We submit that the Liberals are dismantling rural Canada piece by piece. They are closing post offices and allowing the railways to double freight rates on grain and tear up branchlines. They have totally forgotten rural Canadians.

One might well ask where the agriculture minister is in all of this. Where is the Minister responsible for the Canadian Wheat Board or the Minister of Transport? What are they doing to represent the interests of rural Canadians at the cabinet table? The answer clearly is not much.

Farmers and other rural dwellers have sacrificed enormously in the fight against the federal deficit. The finance minister now says that the battle has been won, but these same people could be well forgiven for asking if we are any better off than we were when the Liberals were re-elected five years ago.

I want to turn to post-secondary education and the millennium fund.

I said that this is a cynical budget and nowhere is that more clear than in its centrepiece, the millennium fund which has been much touted by Liberal members opposite. Part I of Bill C-36 deals with the fund's foundation and its board of directors. This scholarship fund is a clear example of the budget being used as a tool of ideology, as the speaker before me so well indicated and documented. The Liberals have used the fight against the deficit as an excuse to pursue privatization throughout the economy. Now they will use new spending to privatize education.

Here is how it will work. In 1995 and the years following, the federal government withheld billions of dollars in transfers to the provinces for education. Universities and technical institutes have been starved for funds. Their roofs leak and buildings threaten to collapse onto students. The universities were desperate for money and raised tuition fees to the point where university graduates with a debt of only $25,000 should consider themselves fortunate. After years of starving students the finance minister has announced this wonderful new scholarship fund which he says will be worth $2.5 billion.

Let us deconstruct this for a moment. The millennium fund is announced with great fanfare in February 1998, although it does not actually begin until the year 2000. Coincidentally, that will be when the Liberals begin their run-up for the next federal election, but I digress. Tens of thousands of students will face another $10,000 of debt each before the scholarship fund ever kicks in. All the analyses indicate that at best the fund will help only about 7%, perhaps less, of Canada's post-secondary students.

The minister tells us that this fund will be established by a private foundation, and Bill C-36 provides for its establishment. This foundation will determine which students are worthy of receiving these scholarships. The foundation then has an amazing amount of power to decide who is and who is not worthy of receiving a scholarship. Indirectly the foundation's board, appointed by this government, will have great power to decide which educational programs are worthy of support. Is there any chance, for example, that the foundation will reward those students enrolling in university courses which focus on programs that business has been demanding all along?

As I have said before, we believe that this is the Liberal's first step in privatizing education, just as they have privatized so many other things. Having starved our public system of education, they now establish a fund for those individuals whom someone else will decide are worthy enough to attend.

What about those who do not qualify for millennium fund scholarships? As of this budget their parents are told that they can cash in their RRSPs to help pay for their children's tuition fees.

People in Canada are more insecure than ever. Study after study shows that real wages and family incomes have been static or declining for years. People are selling the family silver or, in this case, the family RRSPs to help pay for the education of their daughters and sons.

This is the brave new world of the Liberals. The deficit and now the surplus is being used to support a growing gap between those who are wealthy in our society and those who are poor or of modest means. This growing inequality is continuing and I would like to elaborate on it by quoting a prominent citizen.

What kind of society do we have, when we see these gigantic salaries up there and these huge amounts of poverty down here? I think that we are reaching the point of absurdity, in terms of inequalities. There is third world poverty in this country. It is beyond belief.

Any guesses as to who might have said this? Would it have been the leader of our party, the member of Parliament for Halifax, or perhaps the head of the National Anti-Poverty Organization? The answer is no. This is a quote from the federal Minister of Finance in an interview with the editorial board of the Ottawa Citizen . Did he really mean it? What was he up to? Perhaps he was casting himself for a part as a left Liberal, but he quickly decided that he did not want to be in that play after all. It has been reported in the news media that finance department officials told their minister not to make that kind of statement again. He certainly has not.

Surely the Minister of Finance knows, however, that the chief executive officers of the Bank of Montreal and the Royal Bank have take-home pay in excess of $10 million a year when stock options are considered. This is hundreds, even thousands of times what the average bank employee earns. Matthew Barrett might make an argument for a salary which is 10 to 20 times higher than that of a bank teller, but it is simply unjust for him to take $10 million a year. I very much like the suggestion made recently by the United Church of Canada that we do not only need a minimum wage in this country, we need a maximum wage as well.

In the meantime, these millionaire CEOs want their banks to merge even though Canada already has the most concentrated banking sector in the G-7 group of countries. Even the CEOs admit that the merger would result in the shredding of 10% of their workforce which amounts to about 10,000 people. We believe that the job loss would be much higher than that, probably in the magnitude of 25% of the staff or more than 20,000 jobs in the banking industry overall. The NDP is going to fight this merger every step of the way. I believe that we will be the only party to do that.

What is the finance minister's answer to this proposed merger and to the massive job losses that would occur? We are waiting for it. He has certainly looked uncomfortable when attempting to answer questions in question period on the topic.

The minister and the Liberals remain the champions of big business. We see this in spades in their unqualified support for the MAI, which has been called a bill of rights for corporations and the NAFTA on steroids.

I listened with interest an hour or so ago when the member for Medicine Hat was talking about the number of Canadians who have to flee Canada or leave Canada. Perhaps flee is too strong a word, but they choose to leave Canada because there are greater opportunities elsewhere.

But there is another side to the story the member did not talk about, which deserves to be talked about, and that is the flight of capital from this country. Successful entrepreneurs are making the decision that, having earned large sums of money here, they will now take their business and move it offshore where they can avoid paying taxes of any kind, or very modest taxes.

I guess for me there is no greater example of that than the New Brunswick multi-billionaire, Mr. K.C. Irving, who left a will a few years ago for his sons, turning over all of the assets of his very successful business to the children on the condition that they could not live in Canada. In other words, they had to go to a tax haven offshore, the Cayman Islands or perhaps the Bahamas, where they would pay no taxes.

Those are the kinds of things that all freely elected governments will have to deal with in the years to come. I would suggest that it is far more important that countries like those in the OECD deal with these kinds of issues rather than the multilateral agreement on investment.

For too long the Conservative, Reform and Liberal parties have had it their way. They have convinced many people that there was no alternative to the attacks on our communities, our public institutions and our families. I submit that is changing. I think, for example, of the broadly based coalition working for fair trade and against the MAI. I think of our party's work in the alternative budget coalition with other social movements.

Together we believe we can provide economic alternatives that once again will put people first.

Budget Implementation Act, 1998Government Orders

11:40 a.m.

Stoney Creek Ontario


Tony Valeri LiberalParliamentary Secretary to Minister of Finance

Madam Speaker, in listening to the hon. member's speech, I would ask if rural Canadians will not benefit from reduced taxes. Will the children from rural Canada not be able to attend higher universities, educational institutions, and have access to the millennium fund and the Canadian opportunities strategy in order to further their education and be able to compete?

This budget allows farmers and other self-employed business people to deduct premiums for health care. This would put them in line with other businesses. Do they not benefit from this type of initiative?

I also remind the member of the elimination of the surtax on incomes below $50,000. Does that not benefit Canadian farmers and rural Canada?

The member talks about rural Canada as though it were not a part of Canada, as though it were not benefiting from the initiatives in this budget. I want the hon. member to answer to that.

Students from rural Canada who are dealing with student debt will benefit from this budget.

I also want to mention that in my riding of Stoney Creek we have a substantial amount of grape growing and winemaking. Brock University put in place a university course for winemaking. Students in the rural part of my riding will be able to access, through the Canada millennium scholarship fund, education courses at Brock University. Do they not benefit from these types of initiatives?

Rural Canadians benefit from a balanced budget. Rural Canadians benefit from low inflation and low interest rates. The hon. member must stand in his place and admit that rural Canada will benefit from the achievements of this government. He may not agree with everything that we are doing but I cannot possibly accept the fact that he says this government has done absolutely nothing for rural Canada.

Budget Implementation Act, 1998Government Orders

11:45 a.m.


Dick Proctor NDP Palliser, SK

Mr. Speaker, people in rural Canada will benefit from having a balanced budget, and some very minor nod on reduced taxes.

The point in the references to agriculture was primarily how much has been slashed from the agriculture and agri-food budget by this government over the past number of years. It had gone from $6 billion in the early 1990s to $2 billion today for a drop of $4 billion. I contrast that in terms of the farming community, especially grain farmers in western Canada who have played an enormous role in helping this government balance its books by exports of grain and oilseeds. They have been rewarded by seeing their grain transportation rates doubling and in some cases even tripling as a result. They are now faced with low commodity prices.

The point I attempted to make is this government has retrenched in terms of its commitment to agriculture and the result has been much lower expectations in the agricultural community.

Budget Implementation Act, 1998Government Orders

11:45 a.m.


Angela Vautour NDP Beauséjour—Petitcodiac, NB

Madam Speaker, I thank my colleague for everything he said. I totally agree with what he said. I would like his opinion on a few issues.

What is in the budget for regions that have very high unemployment rates and for the regions that are running out of unemployment because the UI program has been totally dismantled? What is in the budget to help somebody on a waiting list for months for heart surgery? What is in the budget to help a student who has a $50,000 loan? What is in the budget to help the people who are now paying 15% of the BST we have in New Brunswick and Nova Scotia that we now pay 15% on heating fuel?

What is in the budget to help the people who now have to pay on the toll highways in New Brunswick and Nova Scotia? What is in the budget for the people who have all these additional burdens and still have absolutely no jobs?

Could my colleague help Canadians across this country figure out what is in the budget to help all these people who are suffering today?

Budget Implementation Act, 1998Government Orders

11:45 a.m.


Dick Proctor NDP Palliser, SK

Madam Speaker, I thank the member for the question.

The unemployment rate remains very disturbing, as has been mentioned by a number of other speakers in this debate today. There is absolutely nothing that we can point to specially in the budget that will have any impact on reducing that. In this country in recent years we have gone from an unemployment insurance system that basically paid claims in the area of 85% to 90% to well under 50% of claimants receiving any kind of employment insurance when they present themselves to the officials. This is as a result of the changes from unemployment insurance to employment insurance.

In terms of waiting lists in hospitals and other medical facilities around the country, it is not a very encouraging sight. The lists are growing. We read about it every day. There is no new money in this budget. They are just taking less away from us to help the provinces alleviate that condition.

I touched on student loans in my remarks. I think the scholarship millennium fund will, as I indicated, help less than 7% of students. A number of students have debtloads in the range of American universities now. When I was a university student many decades ago, we had a very low rate of tuition fees. It was possible to graduate from university with a modest debt, as was my case, and to get it paid off. Students today are looking at $30,000 to $35,000 worth of debt. It is a horrendous figure with virtually no way out.

Budget Implementation Act, 1998Government Orders

11:50 a.m.


Gar Knutson Liberal Elgin—Middlesex—London, ON

Madam Speaker, I have a question for the hon. member. Did the NDP in the last election not call for a student assistance program that would give qualified students access to post-secondary education? Have not we, the Liberals, actually delivered on that NDP plan in our millennium fund? Should we not be applauded for that?

Did the NDP not call for increased capital and research funding to restore and renew post-secondary facilities? Have not we, the Liberals, in the last two budgets increased funding to research granting councils? In this last budget and in the prior budget did we not provide $800 million to create the Canada foundation for innovation?

Did the NDP not also ask for investing in families with measures such as access to high quality child care and support for parents? Does not the increase in the child care tax deduction by $2,000 partially deliver on that promise? Should we not be applauded for that as well?