House of Commons Hansard #84 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was debt.


Report Of Commissioner Of Official Languages

10:05 a.m.

The Speaker

I have the honour to lay on the table, pursuant to section 66 of the Official Languages Act, the annual report of the Commissioner of Official Languages for the calendar year 1997.

Pursuant to standing order 108(4)(b), this report is deemed permanently referred to the Standing Joint Committee on Official Languages.

Nunavut ActRoutine Proceedings

10:05 a.m.

Brant Ontario


Jane Stewart LiberalMinister of Indian Affairs and Northern Development

moved for leave to introduce Bill C-39, an act to amend the Nunavut Act and the Constitution Act, 1867.

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

Consumer Packaging And Labelling ActRoutine Proceedings

10:05 a.m.


Eugène Bellemare Liberal Carleton—Gloucester, ON

moved for leave to introduce Bill C-389, an act to amend the Consumer Packaging and Labelling Act (nutritional value of food).

Mr. Speaker, it is a pleasure to introduce at first reading this bill to amend the Consumer Packaging and Labelling Act, which provides for the listing of the nutritional value of food products.

My private member's bill stipulates that any processed food intended for retail sale must include labelling which lists the exact nutritional value of the product. Proper food labelling is an essential tool in the fight against nutrition related illnesses such as heart disease, cancer, tooth decay and diabetes.

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

PetitionsRoutine Proceedings

10:10 a.m.


Peter Adams Liberal Peterborough, ON

Mr. Speaker, today is the last day of Kidney month.

I am here to present the first of a number of petitions signed by thousands of people in the Peterborough riding and across the country, including Ken Sharp, who has been on dialysis his entire adult life, almost 25 years.

The petitioners are interested in a bioartificial kidney project which might, in the end, provide relief for those who are on dialysis. They point out that 18,000 Canadian citizens suffer from end stage kidney disease and that those on kidney dialysis and those successfully transplanted recognize the importance of the bioartificial kidney and of present treatments.

The petitioners point out that dialysis services across the country are inadequate. Therefore, these petitioners call upon parliament to work and support the bioartificial kidney which will eventually eliminate the need for both dialysis or transplantation for those suffering from kidney disease.

Questions On The Order PaperRoutine Proceedings

10:10 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

10:10 a.m.

The Deputy Speaker

Is that agreed?

Questions On The Order PaperRoutine Proceedings

10:10 a.m.

Some hon. members


The House resumed from March 25 consideration of the motion 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; and of the amendment.

Budget Implementation Act, 1998Government Orders

10:10 a.m.


Philip Mayfield Reform Cariboo—Chilcotin, BC

Mr. Speaker, I am very pleased to be here this morning to take part in the debate on the implementation of certain provisions of the budget.

We have seen something different from the government this year in that it has finally introduced a balanced budget. The government predicts that this will be the case over the next three fiscal years. However, its actions in this have not changed dramatically.

As we have seen time and time again with this government it has taken measures to limit debate on various bills, including this bill. It seems that it does not want members to do their job, that is, to examine these bills in this place and to represent the views of their constituents.

The government has with this stage of Bill C-36, as it has time after time, tried to restrict the voices of millions of Canadians so that it can have its way and pass bills which may not serve the best interests of the people and of the nation.

The official opposition has introduced an amendment to this bill which states:

That the motion be amended by deleting all the words after the word “That” and substituting the following:

“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 Canada Millennium Scholarship Foundation, fails to guarantee that appropriate and objective accounting standards will be followed as advocated by the Auditor General.”

I have had the pleasure of sitting on the public accounts committee and listening to the reports that the auditor general brings to that committee.

Before I speak to the specifics of the measures that the Minister of Finance brought forward in his latest budget which are being implemented by this bill, I would like to take a moment to talk about the auditor general.

The individual appointed to this position serves parliament as the watchdog of government, government finances and government departments. He works for parliament, not the government.

This individual is charged with ensuring that the government is wisely spending taxpayers' hard-earned money and making sure that taxpayers get good value for their money. In today's economic environment getting good value for our money is something that we all must do.

Under the scrutiny of the auditor general the government has had to become more prudent in its fiscal management, and I have the greatest respect for the office of the auditor general and for this mandate.

Bill C-36 contains legislation intended to implement many of the announcements made by the government in this year's budget. The bill is divided into 13 parts, each of which either establishes a new program, amends existing legislation to alter program delivery or authorizes the federal government to engage in some new activity.

The scope of this act includes the Canada millennium scholarship foundation, assistance to reduce student debt, grants to encourage savings under registered education savings programs, and incentives under the Employment Insurance Act to provide a premium holiday in 1999 and the year 2000 for employers who hire young people.

Low income families will qualify for the Canada child tax benefit. There are some minor changes, mainly cosmetic, which affect old age security and veterans allowances. Other provisions of this bill include a wide variety of items such as raising excise taxes on cigarettes, reducing the excise tax on air transportation and allowing certain native bands to impose a 7% value added tax on alcohol, tobacco and fuels.

Although many of my constituents in Cariboo—Chilcotin express some happiness with the fact that the books finally are balanced, they certainly do not feel this is the government's victory. They feel this is their victory. They are the ones suffering the enormous tax burden like most Canadians. They are also suffering the enormous cuts to health and social programs, a lot of them at the provincial level after transfer payments were cut.

While watching programs and services that directly affect their everyday lives such as health care and declines due to cutbacks, they have seen the federal government dole out millions of dollars on such things as free flags. This is discouraging. Many of my constituents understand that we simply cannot continue living as we have become accustomed to in past generations, we have to start taking responsibility for ourselves and our families. We have to stop living beyond our means.

My constituents are angry at the lack of prioritization by this government. They would rather have a much smaller and more affordable bureaucracy. They would rather see cuts in the senior levels of the public service than cuts at the service levels. They would rather have money go to programs and services which would benefit everyday lives instead of going into programs which are more symbolic and do not have a direct impact on everyday lives. We saw that in the flag program and we see it again in the millennium scholarship fund.

The Minister of Finance has stated in question period that my party is against education simply because we oppose this bill. That simply is not true. What we oppose is the manner in which this government has established this fund. After reading the editorials from my local newspapers and listening to my constituents, the biggest disappointments from this year's budget are that there is no tax relief and the government is not putting a real down payment on eliminating our huge debt.

I am sure it comes as no surprise that my party feels there is a better way of dealing with putting our fiscal house in order. We would introduce debt and tax relief measures as a way to stimulate job creation and economic growth. This would help alleviate the much publicized brain drain which sees many of our brightest citizens leaving Canada in search of jobs and lower tax jurisdictions.

There is also the view of many of our critics that we oppose many of the universal social programs that have become a cornerstone of Canadian society. Again this is simply not the case. We do oppose the view that these universal social programs run by the bureaucrats are the best and the only way to care for the poor, the sick, the old and the young.

We support a greater focusing of social policy benefits in hopes of targeting benefits to those who really need the help, doing so in a rational and compassionate manner. Over the past decade in particular we have had to change how we live in this country.

We are all more dependent on our families than we were before. We have had to take more responsibility for ourselves and our loved ones and we have to live within our means on shrinking budgets. Our standard of living is much lower than it was even five years ago.

I am sure there is a great deal of pride in the fact that we as a society are able to look after ourselves, our loved ones and those who look to us. But Canadians also have a lot of resentment over the abuses within our system, the money that is wasted and the intrusion in people's lives.

I hear time and time again from those in my riding the resentment of my constituents over the smugness of the bureaucrats running these programs who say their way is the best and the only way. It brings out real hostility and resentment. People are sick of governments that arrogantly impose their ivory tower, socialistic philosophies which have diminished us culturally, socially and economically.

I am in full support of the amendment brought forward by my party and in opposition to this bill and the tactics of limiting debate that the government is insistent on using in passing this bill. Not only is it censoring both me and my colleagues and the members of the House in speaking on behalf of their constituents, it is also censoring our constituents as a result of the time allocations it has imposed on the House of Commons.

The government's action immediately preceding and with the announcement of this year's budget denied Canadians their first real budgetary surplus in decades. As seen in the plethora of spending measures in this year's budget, including what many perceive as the Prime Minister's only real legacy, the millennium fund, we have seen this government return to its tax and spend ways. The government had a wonderful opportunity this year. It could have given Canadians some real tax relief and start to make payments on our debt after years of mismanagement.

The Liberal government made a clear choice this year to keep Canadians overtaxed by introducing new programs that will only help a small percentage of Canadians. The message from my riding of Cariboo—Chilcotin is clear. What a let down. I urge all my colleagues to join me in opposing this bill.

Budget Implementation Act, 1998Government Orders

10:20 a.m.


Jean Augustine Liberal Etobicoke—Lakeshore, ON

Mr. Speaker, Bill C-36 moves the government forward in its commitment to implement the Canada child tax credit.

I will take a few minutes to talk about this because I know the men and women in Etobicoke—Lakeshore who daily have to plan for their children and who daily in some way have to respond to the needs in their communities would like to find out a bit more about the child tax benefits and to see how that child tax benefit measures up in the goal of building a strong economy.

Let me start by quoting the Minister of Human Resources Development who described the challenge in two simple sentences: “Opportunity denied in childhood too often means chances lost as an adult. Children are our future, so there is no better place for Canadians to invest”.

Bill C-36 speaks to that investment in our children. The vast majority of Canadians know how lucky we are to be living in Canada. Most of our children receive a pretty good start in life but some are not so lucky. I am speaking of the children who unfortunately experience emotional, behavioural, learning problems that affect their school performance and personal development, and those caught in the cycle of poverty.

Others suffer from physical problems such as disease, disability or injury. This is not only a personal tragedy but also a loss to the nation as a whole. And so Canadians believe that their government should make it a priority to invest in the well-being of our children, the future of our country.

Governments already provide substantial support for families with children but we need to do more. The issue is not just how much support we provide but also how we provide that support. In particular, we must do everything we can to tear down the so-called welfare wall. We must ensure that parents on social assistance who rejoin the workforce will not lose all their benefits and services.

The federal, provincial and territorial governments have been examining ways to bring down the welfare wall and to improve assistance to children in low income families. We know the discussion that goes on around our country.

The proposed approach is a national child benefit system under which the federal government will provide an enriched Canada child tax benefit. In turn, the provinces and the territories would redirect some of their spending into better services and benefits for low income families, especially the working poor.

The 1997 budget started us on that road. It proposed a two step enrichment of $850 million to the existing $5.1 billion child tax benefit. The $850 million annual increase includes $600 million in new funds in addition to the $250 million for the working income supplement proposed in the 1996 budget.

I am showing here the direction in which this government is going from 1996 to 1997 to this budget. In the first step, which took effect last July, the working income supplement was changed to provide benefits for each child instead of per family. The maximum working income supplement is $605 for one income families and $1,010 for two child families. It increases by $330 for each additional child.

The second step will occur this July when the working income supplement will be combined with an enriched child tax benefit to form the Canada child tax benefit. The maximum benefit for low income families will be $1,625 for one child families and $3,050 for two children families and will increase by $1,425 for each additional child.

Those individuals who will benefit from this will definitely know that we are heading in the direction to alleviate their situation. More than 1.4 million Canadian families with 2.5 million children will see an increase in federal child benefit payments by July 1998.

As part of the national child benefit system social assistance payments made by provinces and territories will be adjusted in accordance with the increase in the child tax benefit. The provincial and territorial governments will then reinvest the savings from social assistance to improve benefits and services to all low income families with children whether they are on social assistance or working. We hope that in the province of Ontario this will definitely happen.

Provinces are currently finalizing their reinvestment plans and are considering a variety of options including provincial income benefits, earned income supplements, extension of medical and dental benefits to low income working families and increased support for child care. To ensure that aboriginal children on reserves benefit like other children from this initiative the Minister of Indian Affairs and Northern Development is working with first nation leaders and provinces to develop appropriate reinvestment strategies.

The national child benefit system is an important initiative that deserves the support of all members of this House. It will increase support to low income families and reduce barriers to work, building on the respective strengths of the federal and the provincial governments in achieving shared goals. As part of the national child benefit system the federal government has committed to further enriching the Canada child tax benefit by $850 million annually.

The 1998 budget allocates $425 million as of July 1999 and a further $425 million as of July 2000 to fulfil this commitment and this commitment is to be worked out further with provincial and territorial partners.

The federal government will continue working with the provinces and territories as well as with the first nations to reduce child poverty and barriers to work.

There can be no more worthy effort than a new partnership on behalf of Canada's children. This is why the government is more determined than ever to improve assistance to children in low income families. This is why the government is more determined than ever to open up a broader and brighter horizon for low income families and their children by bringing down once and for all the welfare wall.

That is why I ask members of the House to support Bill C-36 which moves us closer to a goal that all of us in the House should support.

Budget Implementation Act, 1998Government Orders

10:30 a.m.


Jim Pankiw Reform Saskatoon—Humboldt, SK

Mr. Speaker, I am pleased to have the opportunity to speak to Bill C-36, the budget implementation act.

The recent Liberal budget could have been historic since it is the first time in decades that our books have been balanced. However, the Liberals missed an historic opportunity in the budget to deal with the issues of most concern to Canadians.

High tax levels, a crippling national debt, bracket creep and job killing payroll taxes have all been passed over by the government, despite the fact that these things affect the quality of life in our country, that these things reduce our standard of living.

Canadians are subject to some of the highest tax rates in the world and the Liberals did nothing in the budget to address the situation. In 1993 Ottawa collected $125 billion a year from taxes, but thanks to the Liberals Ottawa will suck $166 billion out of the pockets of taxpayers in 1998. By the year 2000 Canadians will be paying $48 billion per year in higher taxes than when the Liberals were elected. That increase is equivalent to $5,000 per Canadian family. It is these taxes that are sucking the lifeblood out of our economy and forcing many of our highly skilled workers to move to the more tax friendly United States.

In the recent budget the Liberals should have addressed bracket creep but they did not. This insidious tax constantly pushes taxpayers into higher tax brackets even though their income remains unchanged. Even the OECD called on the government to eliminate this sneaky tax. Bracket creep represents taxation by stealth since taxes automatically increase each year.

The government has collected an extra $22 billion since bracket creep was introduced by the Tories in 1989. Considering the present government's tax and spend mentality it should come as no surprise that it opted to maintain bracket creep, to maintain high tax levels and to maintain a source of income for its big government programs. The 1998 budget contains $11 billion in new spending initiatives for 25 new government programs.

What it does not contain is real tax relief. It utterly fails to recognize that there is a $583 billion national debt. The debt load costs $45 billion each year to service. That is $45 billion less for important social programs like health care and education. It is $45 billion thrown into the wind each year with no direct benefit for Canadians. That is what our national debt load represents. Yet the Liberals are patting themselves on the back for taxing Canadians to death in order to eliminate the deficit. Meanwhile the monstrous debt load looms over our heads.

The finance minister had nothing to say about the serious debt situation which we now face. In fact budget documents show the national debt remaining unchanged through the year 2000. In typical Liberal fashion the government believes that if it ignores the problem it will go away.

It is not possible to sweep $600 billion under the carpet. Ignoring the debt today means that it will be passed on to the next generation tomorrow, and that is wrong. According to the budget that is what the Liberals want to do. The truth is that there was a surplus in 1997-98 of $3.2 billion but the Liberals blew it on new spending.

If the Liberals had applied the surplus against the debt, we would have had an interest savings of $235 million a year over the next three years. Rather than show a surplus on the books and face questions over excessive taxation, the Liberals simply spent the money.

Speaking of the nation's financial books, the auditor general accused the finance minister of cooking the books. His accusations are well founded in standard accounting practices as a matter of fact, standard accounting practices the government has stubbornly refused to accept.

The amendment put forward by my colleague from Medicine Hat addresses this issue. The problem is that the Liberals have assigned $2.5 billion to the Prime Minister's Canada millennium scholarship foundation despite the fact that not a single scholarship will be handed out until the year 2000. It is not standard accounting practice, except in Liberal circles, to cost future liabilities into current budget figures, but then a lot of strange things go on within Liberal circles such as patronage appointments to the Senate in exchange for certain financial remuneration.

This is not the first time the Liberals have used this method of accounting for purely political purposes. The auditor general twice criticized the government for doing the same thing with the Canada foundation for innovation fund and the $1 billion payment to Atlantic Canada for the HST.

The amendment put forward by the member for Medicine Hat would deny passage of Bill C-36 because the Liberals are cooking the books for pure political gain. I think this is obvious to all members of the House, and I urge them to support the amendment.

I would like to continue discussing the budget by pointing out the opportunity that was missed to lower taxes, particularly payroll taxes. Even the finance minister's department states that payroll taxes kill jobs. When the finance minister appeared before the finance committee in October 1994, he said that high payroll taxes were a tax on jobs and that it was ludicrous. He certainly has changed his tune in the last few years.

The CPP premium hike introduced this year is the largest tax grab in Canadian history. It will kill tens of thousands of jobs. Likewise, the minister has kept EI premiums at artificially high levels and he applied the huge EI surplus against the deficit.

EI premiums for employees are $2.70, but the break even point is $2. EI over the last few years has been taking in $8 billion more each year than it pays out. These high EI premiums represent nothing more than a tax on jobs. To the minister these high premiums have become necessary revenue to apply against the deficit.

The CFIB and small business continually cite high taxes, particularly payroll taxes, as the largest impediment to growth and expansion. If the government wants to address unemployment it must get our tax levels down and encourage firms to hire.

The Liberals just do not get it. Government does not create jobs. High taxes most certainly do not create jobs. Big government and high taxes kill jobs. They are an impediment to economic growth and lower unemployment. The Liberals do not have a plan to create jobs as demonstrated by progressively higher taxes in each subsequent budget since 1994.

However, Reformers have a plan for getting Canadians back to work and strengthening the economy. We would reduce job killing payroll taxes and capital gains taxes in order to encourage investment in Canadian businesses. We would eliminate the 3% and 5% income surtaxes introduced by the Tories and only tinkered with in the budget. As well, Reformers would increase the amount of the basic personal deduction and extend the child care expense deduction to all parents.

In all, our efforts would reduce taxes by $15 billion by the year 2001. This amounts to $2,000 per family of four. This plan is directed toward providing a brighter future for Canadians, a future filled with hope and opportunities.

Unfortunately, when we examine the Liberal government's obsession with high tax levels and its continuing yearly tax increases, the hopes of many Canadians are erased and many opportunities will simply never arise. Therefore, for these reasons I cannot support Bill C-36. I urge all other members of the House to oppose the bill.

Budget Implementation Act, 1998Government Orders

10:35 a.m.


Suzanne Tremblay Bloc Rimouski—Mitis, QC

Mr. Speaker, I rise today to speak to Bill C-36 introduced by the Minister of Finance and known as the Budget Implementation Act, 1998.

A lot could be said about this budget, but I will begin by pointing out several of its shortcomings, particularly in so far as the Department of Canadian Heritage is concerned.

In recent days, the Minister of Canadian Heritage has passed herself off as the great defender of the rights of francophone and Acadian communities. Her grand statements are beginning to sound like science fiction.

A hard look at the numbers and at what is actually going on reveals that the Minister of Canadian Heritage is cutting official language education funding by $22 million. This is particularly hard on independent schools and associations of independent schools at a time when francization needs are glaring.

On March 18, the minister announced that the Official Languages in Education Program was being renewed for a further five years, with stable funding, meaning that, despite the fiscal turnaround, the savage cuts of recent years are continuing.

The Commission nationale des parents francophones du Canada, an organization representing 11 provincial and territorial federations of francophone parents outside Quebec, reacted to this announcement in a release quite rightly entitled “Political will in free fall”.

It says, and I quote: “The announcement of another large cut in the Official Languages in Education Program for the next five years represents another disappointing chapter in the increasingly sorry turn that the future of official languages in Canada is taking—. The ongoing erosion of the Official Languages in Education Program is indicative of the erosion in the political will of the Canadian government with respect to the development of minority francophone communities. It can be expected that teaching in French in the francophone communities will become a priority as resources dwindle”.

While the federal government was paying $268 million into this program at the time the Liberals were elected in 1993, the Liberals reduced payments to this program this year to $152 million, or a reduction of 43% over six years.

According to Mrs. Johanne Lacelle, the president of the Commission nationale des parents francophones, “We are disappointed, because the educational needs in minority communities are pressing. We are still far from having the quality education that would put us on an even footing with others. Funding should be doubled or tripled rather than reduced. Assimilation is on the rise in all of the francophone communities. More and more francophones are losing their first language, while more and more anglophones are acquiring a second language. These are the results of the present language situation in Canada”.

Let us recall that the Commission nationale des parents francophones revealed in 1996 that the bulk of the funding to provinces for official languages in education was going to anglophones learning French as a second language. Finally, only the minister herself thinks that everything is fine and that francophones can be helped by reduced budgets.

We have also called upon the Minister of Canadian Heritage, both here in the House and in the heritage committee, to substantially increase the funding allocated to the court challenges programme. The purpose of this program is to provide financial support to cases taken before the courts by groups or individuals who feel that their language rights have not been respected.

Finally, the minister has announced that she would not pursue her plan to cut 9% from this program. What great progress for francophones. By cancelling this cut, the minister will have to find the $250,000 this 9% represents elsewhere in her department. So who will pay the price this time?

At the present time, there are about 10 cases before the courts, or in preparation, contesting provincial decisions on school administration or the creation of French language schools.

Unless the court challenges program receives a substantial increase in funding, some of those cases will have to be either abandoned or deferred, as the money will run out before the year is over. The past has shown that continuous recourse to the courts was the only way francophone minorities could ensure any sort of respect for their rights by the governments of the anglophone provinces, despite section 23 of the Constitution.

In another vein, the 1998 federal budget makes no provision for funds for the multimedia sector or for loan guarantees to develop content in the new media, including the Internet.

Yet, this was promised in the second red book, and the advisory committee on the information highway recommended setting up a $50 million fund. Last week, at the Standing Committee on Canadian Heritage, the representatives of Telefilm Canada indicated how important investment in the multimedia sector is to the development of television programs, videos and films.

The Liberal government could and should also have announced the immediate abolition of the GST on books. While the minister allocates $31 million a year to her program to assist publishers, the Minister of Finance pockets some $120 million in revenues from taxes on reading material. By continuing to tax books, the Minister of Finance is nullifying his colleague's efforts. He is undermining the industry and limiting public availability of written material, thus hurting both culture and education.

That is some of what is missing in the 1998 budget, which confirms that the Liberals are promoting certain values in their speeches and election campaigns but neglecting them when they deliver their budget. It is all very well for the government to set ambitious objectives for its departments, but these are unattainable without the necessary financial means.

Part 7 of Bill C-36 is intended to implement the raise in taxes on cigarettes announced by the Minister of Finance before the budget was tabled. While the Bloc Quebecois supports such an increase, it deplores the fact that the minister did not include measures to support sports and cultural events that may lose their sponsorship by tobacco companies, following the adoption of Bill C-71 by the federal government.

I should point out that the Quebec government took the initiative regarding this issue by pledging to allocate part of the revenues generated by the tax increase on tobacco—that is about $12 million—to a Quebec fund for culture, sports and health. This initiative will be confirmed in the budget to be brought down by the Quebec government.

Parts 1, 5 and 10 of Bill C-36 deal with the government's millennium scholarship fund, the measures to support registered education savings plans, and federal assistance to students. In spite of these stopgap measures, one wonders whether the federal government truly wants to improve education, considering that, between 1993 and 2003, it will have cut over $10 billion in that sector, including $3 billion in Quebec.

These federal cuts, which are partly responsible for the lower quality of our education system, have resulted in soaring tuition fees, thus contributing to the indebtedness of a whole generation of students and to a major increase in personal bankruptcies by graduating students.

Instead of providing financial solutions to these students, the federal government ties them down for a long time. With this bill, the Liberal government amends the Bankruptcy and Insolvency Act to extend from two years to ten years the period of time during which a discharge does not release the bankrupt from the reimbursement of his student loan.

I cannot talk about education without deploring once again the chronic underfinancing of research and development, as we are about to enter the 21st century. This situation directly impacts on students, because they do not have access to modern teaching and research infrastructures, and because they are deprived of the stimulating presence and expertise of teacher scientists.

I will conclude by saying that the federal government should stop talking about its noble values and boasting about its great initiatives. Instead, it should find the means to implement these projects and to take concrete and effective action, while respecting the jurisdictions of each level of government.

Budget Implementation Act, 1998Government Orders

10:45 a.m.


Alex Shepherd Liberal Durham, ON

Mr. Speaker, it gives me great pleasure to enter the debate on Bill C-36.

I would like to discuss a specific aspect of the legislation which perhaps many members have not mentioned. It has to do with the authorization in the act to allow the Canada Development Investment Corporation to dispose and transfer its assets and liabilities including the Canada Hibernia Holding Corporation.

All Canadians have been interested in the Hibernia oilfields for many years. It was back in 1965 that the initial investigative work was done in the oilfields to see whether this would have a significant potential for some of our poorer provinces.

Some people may wonder why the member for Durham is talking today about the Hibernia oilfields. My wife's family has deep roots in the province of Newfoundland. This is also something which all Canadians want to share and rejoice in. I do not think people realize that if the government disposed of its financial interest in the Hibernia oilfields, currently it would be about $2.5 billion. We can imagine what a positive impact that would have in hopefully increasing a surplus in future years.

The Hibernia project represents a partnership of Canadians for Canadians. I was in Newfoundland a couple of years ago and I discussed a number of the financial aspects with legislators there. They were very concerned about some of the cutbacks in the CHST and how they were going to be able to maintain some of their basic services through the CHST and also through the equalization payments system.

During various periods in the history of Newfoundland a depopulation has occurred. That has been a benefit to ridings like mine. A great number of people from Newfoundland are now residing in parts of Ontario. They had to leave Newfoundland because there was no employment. Unemployment levels in Newfoundland are still unacceptable. With the economic activity that is going to be generated by Hibernia, unemployment levels are going to decline.

A substantial investment in capital has already occurred in the Hibernia oilfields. Most of this money has been spent in Canada. Capital expenditures of over $5 billion have already gone into this project and 55% to 60% of these capital expenditures were Canadian. Sixty-six per cent of all employment was Canadian. Today as we speak there are over 250 jobs on that rig. Of course that money goes back into the economy of Newfoundland.

They are currently projecting to increase the production up to 20,000 barrels a day. As the entire platform is developed they are talking about 135,000 barrels of oil a day. That is a significant and major oil discovery on our east coast. It is going to have a tremendous impact on the economy of Newfoundland.

That is good. We all benefit. The federal government taxes these people when they make profits. The province of Newfoundland will get royalties from this and it also will get the spin-off jobs. This is very positive for increasing the economy of Newfoundland.

I should mention the recent discovery at Voisey's Bay. This is a long term project. When it gets going, Newfoundland will also be able to reap some benefits in the mining sector. The mining and resource sector is anticipated in 1998 by the Conference Board of Canada to increase its revenues by over 80% in the province of Newfoundland. Unemployment rates will decline due to this to 17.9%, which is still unacceptably high but is significantly lower than it has been in the past.

In St. John's and other communities in Newfoundland there has already been a tremendous increase in residential construction. The Conference Board of Canada estimates that in 1998 the renewal of the housing sector will increase 14.8%.

Some foresighted government years ago which saw the need to put in that seed capital to get the Hibernia project going was very wise indeed. This is a great opportunity for the people of Newfoundland to acquire economic benefits and to build a truly indigenous economy for themselves.

A concern I have about this issue is from time to time I hear people especially in resource based economies challenge the equalization payments system. The equalization payments system is based on certain income levels that exist within a provincial jurisdiction and then it tries to equate them with the three wealthier provinces. Through that process there have been payments to provinces to help raise their standards so that we all have equality.

That is what is so great about this country. As Canadians we agree that we have to have basic standards, standards in health care, standards in social services, standards in unemployment insurance benefits, et cetera. That is what makes this a great country.

If people were to sit down and ask what it is that Canadians understand, it is that we have over the years created these sharing arrangements. The people of Ontario and the wealthier provinces like Alberta and British Columbia from time to time have realized the importance of sharing in this way.

I have heard people argue from time to time that the resources from a resource based economy should be excluded from the equalization formula. This means we would exclude the resource sector from the calculations. The equalization payments would be skewed to allow the provinces that are utilizing their resources not to have to include them in the calculations.

I do not have to tell anyone that the province of Alberta for years and years has been a net contributor to the equalization payments system and an economy very heavily dependent on the resource sector.

Those people were able to buy into the argument. It seems that the new provinces, those now coming on with a higher resource sector must do so as well.

I understand the arguments I have often heard members speak about. They say that Newfoundland's infrastructure has deteriorated over the years, that they need time to build it up. They do not think they should be penalized by seeing their equalization payments decline at the same time that this is occurring. They want to be given some breathing room, to be given a chance to catch up.

I understand the merits of that having been to Newfoundland and having understood that its infrastructure certainly is in need of significant capital injection. However the reality is that we must as a country all live with common standards. For that reason, I believe it would be unwise for us to pursue that.

Right now the province of Newfoundland receives equalization payments of somewhere around $1.4 billion. We should all be rejoicing, including the people of Newfoundland, and saying that those equalization payments are going to come down.

Maybe one day Newfoundland will be a net contributor to the equalization payments system. That is great. Once again it shows how Canadians care and that in good times and bad times we can live together.

I also want to touch on one aspect of this legislation which I think perhaps a lot of members have overlooked. It is the ability to allow the government at any time to dispose of Hibernia by orders in council without bringing further legislation to this House.

It is a very significant time. Clearly somebody is thinking of doing just that. As we talk, international oil prices are fluctuating. It is clear that the government is going to be prudent in selecting a timeframe in which to undertake this.

We should know that our investment in Hibernia is really twofold. We have a direct investment via the Canada Hibernia Holding Corporation. That is an 8.5% interest in the entire operations. Some of the bigger players are Mobil Oil, Chevron and Petro-Canada. Interestingly enough we still own 8.3% of Petro-Canada so indirectly Petro-Canada also has an interest in the Hibernia oilfields.

I just wanted to intervene at this time to talk about the equalization payments system, about how the rest of Canada, including the people of Durham, are very thankful that this has been a success for the people of Newfoundland. At the same time I want to give them a little reminder that we are all in this club together. We are all going to play by the same rules. When things get a little better for Newfoundland, it will also have to play by the same rules. I am sure most people of Newfoundland believe that.

In closing, I wish the people in Newfoundland well. I was very happy the other day to see the first tanker shipment of oil leave the Hibernia oilfields. It marks a new day for the people of Newfoundland.

Budget Implementation Act, 1998Government Orders

11 a.m.


Wendy Lill NDP Dartmouth, NS

Mr. Speaker, it is my pleasure to address my comments today regarding Bill C-36 and my concerns regarding education in Nova Scotia and the country at large.

With this budget and with the policies and directions this Liberal government has implemented over the past five years, it has created an educational deficit in this country which threatens our ability and our children's ability to grow and prosper in the future.

In my home province of Nova Scotia funding for post-secondary education has been ravished since the federal Liberals imposed their severe cuts to education with the Canada health and social transfer in 1995. The provincial Liberals have matched the feds cut for cut. The results are rapidly rising tuition fees, spiralling student debt and a serious threat to accessibility.

Here are some sad, I would say outrageous, facts regarding public education in my province since the advent of Liberal cost cutting federally and subsequently provincially. Between 1993 and 1996 $50 million has been taken from provincial grants to school boards. That is nearly a 10% decrease. I have personally watched the tortured process by which school boards fight over whether to cut full day elementary classes, band, speech therapists or class sizes. In the late hours of these meetings we hear them bickering over elements of education, none of which are frills but are all essential to the growth of our students. Yet that is what they are being reduced to doing now.

Between 1994 and 1996 there have been 764 teaching positions cut across the province of Nova Scotia. That was a 7.5% reduction. Meantime enrolment has dropped by just 1.1%. Is it any wonder some classrooms are overcrowded and many teachers stressed out? Specialist teachers have been hit especially hard. By 1997 the education funding review work group identified a $33 million deficiency in special education funding. All these cuts are directly related to the severe cuts imposed by the Canada health and social transfer.

In Nova Scotia there is also a new twist to public education which has been brought about again by Liberal cuts. There is not enough money for textbooks, special needs students or the replacement of some of the overcrowded and substandard schools, yet the Liberals found the cash to indulge in a new scam which is called public-private partnerships to build new high tech schools. The government has gone into partnership with some companies such as IBM and Systemhouse and others of its corporate backers to build and run schools. They will not reveal the terms of the partnerships or the long term costs.

When Liberal friends and corporate backers who make up the consortium building the private schools could not find the private money to finance the construction, the government quietly loaned them more than $45 million interest free.

Here are some more facts about post-secondary education in my province since the budget cuts to education. In Nova Scotia funding for university and community colleges dropped from $270 million to $230 million this year. On average Canadian students who graduate now have over $24,000 debt in student loans. Declining government support means that universities must rely on tuition fees for an increasing share of their revenues. Nova Scotia students are paying more than 22% of the university revenue in their tuition, this versus a national average of 14.5%.

The average tuition for arts undergraduates in Nova Scotia is over $3,700. This is the highest in the country. On average Nova Scotia undergraduates paid $500 more than the next most expensive province, Ontario.

The cost of living for Canadian students in 1996 was over $12,000. Expenses for an undergraduate arts student for the 1997-98 academic year at Dalhousie totalled $9,000 in tuition, room and board and additional fees. Only the University of Toronto was higher among 10 universities surveyed by Statistics Canada.

It is not a surprise that Dalhousie, one of the proudest and oldest universities in the country, is now on strike. There are 117 professors at Dalhousie who have been laid off. This university is now in the throes of chaos and again it has to do with our lack of commitment to post-secondary education in this country.

I think it is no surprise that the people of Nova Scotia have voted very roundly against what they see as Liberal cost cutting to some of their essential services and that includes education. They have voted with their ballot against Liberal policies in Nova Scotia and continue to do so also federally because they are concerned about the future of their children. I think this budget is going nowhere to allay their fears on that score.

Budget Implementation Act, 1998Government Orders

11:05 a.m.


Deborah Grey Reform Edmonton North, AB

Mr. Speaker, I want to give a few thoughts on Bill C-36, the implementation act of the budget. This is a large piece of legislation and of course it results from some of the things that were tabled in the budget in late February. I want to look specifically at some of the issues that are talked about, the millennium scholarship fund for instance.

There are a few other things I should preface my remarks with, and that is the situation we are in fiscally in the country so that all these budget implementation things could happen at all. Of course when the budget was tabled last month the government talked about finally being in the position to have a balanced budget.

That is super in terms of Canadians saying we do not have to deficit finance anymore and hopefully it will never happen again, but the question of course is how did we balance the budget and how is it that we are operating at a zero deficit.

I would hate to be critical of government members patting themselves on the back so hugely that they would dislocate their shoulder. That would be a most unfortunate thing.

But looking at how the budget was actually balanced there are a few questions to be asked. I know Mr. Speaker would be just as concerned as I to know some of the answers to this.

In 1998 the government will collect $35 billion more in taxes than it did in 1993. I do not know whether this could be called cutting spending. I hardly think it would qualify under that category. I think of my home city of Edmonton where taxpayers have been asked to kick in $35 billion as part of the larger economy of the country, $35 billion more in taxes.

For my part of the country and my city, that equals about $1 billion just for the city of Edmonton. That is a lot of people working and a lot of people sending in their taxes to Revenue Canada to kick in our portion of this increased tax and revenue for the government of Canada. It is about $1 billion coming out of Edmonton alone.

When I think about it I would be amused if I were not so sad. When the relocation of the superbase happened in Edmonton it was treated as though this was a gift of largess from the government. It said you lucky folks, guess what is happening to you in Edmonton. You will be getting the western Canadian superbase and we will spend hundreds of millions of dollars making sure that happens.

That is wonderful and there is increased economic activity in Edmonton. We sure appreciate that but when it is treated as though it is some sort of gift from someone on high, it could be understood that the gratefulness is not quite that exciting.

After all, if we are sending $1 billion more into the Government of Canada, then a $100 million return on a superbase is not exactly a great investment on our dollar. When the government talks about partnerships and investments, I am no mathematician but I know that if I get $100 million spent in my community and then the government turns around and takes $1 billion in extra taxation and revenue from me then I am not exactly what one would call a winner in that area.

We need to realize that the government is going to be collecting $35 billion more in taxes than it did in 1993 when it came in. Who is paying that? It is the taxpayers who are sending out their cheques to Revenue Canada. People all across the country want the budget balanced and this budget has done that.

However, there is also the debt which is the accumulation of all these deficits that have added up over the years. The total debt now is $583 billion, which is an amazing amount of money. Frankly, I do not even know how many zeros that is. However, if we break it down to the average family we are looking at every family of four in this country from Newfoundland to British Columbia being saddled with an extra mortgage of $77,000. This is just scandalous. I am not sure that any government should be standing up patting itself on the back and saying it is terrific.

We need to make sure that debt reduction is the number one target but frankly I do not see it here in the budget. When the budget was delivered, the Liberals said that if there was any money left over people could rest assured that they would put some of that money toward the debt. There was a wink, wink and a hand on my wallet in my back pocket. They were going to make sure to look after the debt.

I look at pages in the House of Commons who are coming along the generation behind those of us who are getting a little older. Who is going to pay that debt? I am sure every member in the House, regardless of political party, understands that we have close to $600 billion of debt. Who is going to pay it? We can stand and brag that we do not have to worry about this anymore because we are paying off our Visa with our MasterCard, but I think that certainly defeats the purpose.

The government has slashed payments to the provinces by $7.4 billion. That is an incredible amount of money. That is 16.5% of the reduction of the deficit.

Mr. Speaker, when you travel the country, as I am sure you do, and talk to people they say what their priorities are. They want to have a good health care system in the country. They want good, sound education programs. They want to make sure they have secure pensions when they reach retirement age. I think everybody universally feels the same way about that.

However, here we are debating a bill which includes the millennium fund right now which concerns post-secondary education. How much help is it going to be? It will touch 6% of the students in the country. I think the far wiser thing the government could be doing is moving forward and realizing that what is important is not just to reduce the debt but to offer tax relief to all the provinces. With a higher amount of money in transfer payments, the provinces unilaterally could then offer universal tuition reductions. I think that would be a a lot better than picking students who are going to be able to benefit from this millennium fund.

If we talk about students, and I think of our pages who are in university right now, they are going to have their first degree under their belt by the time this millennium fund even kicks in.

When we look at how serious it is to offer real help to students and then look at this implementation of the Canada millennium fund, it looks to me like the Prime Minister, before he heads out at the turn of the century, wants this to be his shrine. He wants this to be his personal legacy. He will go out on a roll as the architect of this and they will build a statue saying he was the one who brought in the Canada millennium scholarship foundation.

If the government were seriously concerned about students it would do something in this budget to increase the transfer payments it slashed so harshly. It should put back the transfer funds to the provinces to ensure that under their jurisdictional powers they would have the money available to offer universal tuition cuts. I think that would be a very refreshing thing.

Regarding tax relief there is not a lot in the budget that offers real cash back to the people who are paying billions and billions of tax dollars to the government. The government will put a dollar in the pocket of taxpayers and say that is wonderful. Then the old hand comes around to the wallet again and it takes $2. That is not good arithmetic. It is not good politics. It is not good optics. I know you would certainly agree, Mr. Speaker, that government has to watch where it has its hands.

If we look at the ultimate amount of money the government brings in, it is absolutely staggering. I am looking at the budgetary numbers in the budget in brief. Budgetary revenue is the amount of cash the government is bringing in. In fiscal year 1998-99 it will be $151 billion. All those zeros would hardly fit on a ledger sheet. They would have to be written very small.

The government is spending $104 billion on program spending. There is a balance of $46.5 billion. The government says that is a lot of cash and it is terrific that it has $46 billion.

Do we know where that exact amount of money is going? It is going to interest payments on the debt. It is frightening when we see that kind of thing happening because interest payments will just gobble up all the cash that should be going to other programs.

There are many tremendous programs, worthwhile programs. We see some of them in the bill. Should we be thinking about education? Absolutely. This is what we talk about, that future generations need to have an education. Is the government really concerned about education, helping students and making sure that tuition fees are low? No. Instead it builds a shrine to the Canada millennium scholarship foundation. What good does that do other than provide a trophy, a plaque or a statue? It does not do a lot of good.

Let us look at the amount of money going to various projects. Talking about education again, the Canada Student Financial Assistance Act on paper looks absolutely super. We sit down and ask questions about whether this is the best way to address student finance. I do not think so.

Tuition should be lowered and transfer payments should be put back to the provinces. We should make sure that the provinces are able to deliver excellent quality post-secondary education so that kids are able to learn, get their degrees, get good jobs and pay taxes back to the government. That is what it is all about.

Budget Implementation Act, 1998Government Orders

11:15 a.m.

Winnipeg North—St. Paul Manitoba


Rey D. Pagtakhan LiberalParliamentary Secretary to Prime Minister

Mr. Speaker, today is March 31, the end of fiscal year 1997-98. Today the budget book of the federal government is balanced for the first time in almost 30 years. It will be balanced in the forthcoming two years, resulting in three consecutive balanced budgets in almost 50 years.

It can be said that the post-deficit era has begun. It is an era of new optimism and expanding opportunities for Canadians as we prepare for a new century.

We now have an economy with historically low interest rates and inflation. Thanks to lower interest rates, the monthly payment on a $100,000 mortgage is now over $250 less than it was in January 1995, a savings of over $3,000 per year. The monthly payment on a $100,000 small business loan is now over $180 less than it was in April 1995, an annual savings of over $2,200.

We now have an economy that has created over one million new jobs since the Liberals took office in October 1993. It is an economy with which the OECD says Canada will lead the G-7 nations in economic and job growth in 1998.

Indeed we have reason to be proud as Canadians. Not only will we be putting the debt to GDP ratio on a permanent downward track. Our debt reduction plan will reduce the absolute level of debt, which I say to answer the anxiety of the opposition.

Earlier I spoke of the expanding opportunities for Canadians as we enter the new millennium. The budget builds on action taken in previous budgets by proposing a Canadian opportunities strategy. The aim of the strategy is to provide Canadians, especially young Canadians, with greater opportunities to prosper in a new knowledge based economy. This strategy takes action on seven fronts. Let me name them.

The first is the Canada millennium scholarships and Canada study grants.

The second is increased funding for advanced research to granting councils: the Medical Research Council, the National Research Engineering Council and the Social Sciences and Humanities Research Council.

The third is tax relief on student loan interest and improvements to the Canada Student Loans Act.

The fourth is measures that promote lifelong learning.

The fifth is helping Canadians save for their children's education through Canada education savings grants.

The sixth is supporting youth employment through an employment insurance premium holiday for employers who hire young Canadians in 1999 and 2000.

The seventh is expanding access to advanced technology by increasing funding for SchoolNet, the community access program and the Canadian Network for Advanced Research.

On the Canadian millennium scholarship program part of the budget let me say that the foundation for the program would be the centrepiece of the Canadian opportunities strategy. It is a comprehensive strategy designed to help create new opportunity for Canadians by expanding access to the knowledge and skills needed for better jobs and higher standards of living as we enter the 21st century.

The role of the Canada millennium scholarship foundation is to remove the barriers for low and middle income Canadians, especially young Canadians so that they can get the post-secondary education or the advanced technical training they need to get good jobs in the new economy.

Beginning in the year 2000 Canada millennium scholarships will be awarded to over 100,000 full time and part time students each year over the next decade through an initial endowment of $2.5 billion from the federal government. This is the single largest investment ever made by a federal government to support access to knowledge and skills for all Canadians. It truly reflects the commitment of the government to the youth of the country.

For full time students the scholarships will average $3,000 a year. Eligible students will be able to receive up to $15,000 in millennium scholarships over a maximum of four academic years of study toward undergraduate degrees, diplomas or certificates. The Canada millennium scholarship foundation is about access, not jurisdiction, with a challenge that is crucial to the future prosperity of Canada. All levels of government have a legitimate role to play and a responsibility to work together.

Let me touch on another item in the budget concerning allocating the fiscal dividend. The fiscal dividend is the projected surplus of total revenues over total spending that would arise in the absence of any new tax and spending actions since the 1997 budget. In our 1997 election platform, “Securing Our Future Together”, we pledged that over the course of our second mandate we would allocate our budget surpluses on a 50:50 basis. Half would go to investments in social and economic priorities. The other half would go to a combination of tax relief and tax reduction. This rule of thumb reflects the balanced priorities of Canadians. The government remains committed to this formula.

The 1998 budget, the first in our new mandate, reflects that commitment. The formula will be used as a guiding principle for planning purposes. Although the annual split may vary from year to year, already the impact for the 1998 budget over three years is 40% investments on social and economic priorities and 60% on tax relief and tax reduction.

Let me go to another topic on tax relief if I may. The budget delivers $7 billion of tax relief over the next three years. Yes, tax relief for low and middle income Canadians through an increase in the basic personal exemption and the elimination of the 3% general surtax on Canadians with incomes of up to about $50,000. These are two measures that will take 400,000 Canadians off the tax rolls and reduce taxes for 14 million Canadians by the year 1999 and the year 2000.

In conclusion, let me ask all colleagues in the House to give their support to Bill C-36 which may be cited in short as the Budget Implementation Act, 1998. When we do this I am sure Canadians will be proud of all of us.

Budget Implementation Act, 1998Government Orders

11:25 a.m.


Chuck Cadman Reform Surrey North, BC

Mr. Speaker, I am honoured to be provided with the opportunity to speak to Bill C-36 and the official opposition amendment.

It was most unfortunate to bear witness to our government attempting to play fast and loose with the financial books of the country. We have a world renowned organization of professionals called the Canadian Institute of Chartered Accountants. Members of this group are contracted all over the world to audit financial records to maintain the integrity of financial statements.

The Minister of Finance's recent methods of creative bookkeeping make a mockery of Canadian professional accounting practices. All the minister can say is that he knows better.

We have the office of Auditor General of Canada. His office has a budget of approximately $50 million. Approximately 500 people are employed to scrutinize government programs and financial activities. The auditor general has been most critical of the minister's creative bookkeeping.

How does the government react to the very office set up to monitor its finances in the interest of Canadians? It provides thinly veiled threats to its servants who are attempting to do the job they have been mandated to do. It tells its own watchdog that the finance department is in charge and if the auditor general does not like it then the rules will be changed.

I sincerely hope that this is not an example of what Canadians can expect, should the Minister of Finance ever fulfil his goal of becoming prime minister of the country.

The issue of cooked books is just a symptom of the disease. Sometimes I wonder whether the Minister of Finance is conducting himself in such an irrational and questionable fashion merely to draw attention away from his failure to address the real problems of his budget.

The main element of the recent budget was the establishment of the $2.5 billion Canada millennium scholarship foundation, but the funds are not to be disbursed until the year 2000.

Canadians get little in the way of direction or assistance from the government for the years 1998 and 1999. Finally, in the year 2000 the millennium fund kicks in. Who benefits? In 1996 there were 1.7 million students. The millennium fund will only help 2% a year with $5,000 grants. It will not necessarily help the needy. It will often aid those who already have sufficient means to fund their education. It only helps those who are continuing their education.

Millions of our youth do not have the interest, background or qualifications to gain the opportunity of this fund. It will be limited to a few. It will do nothing for those who do not go to our universities.

I recently attended a forum put on by street youth, just some of those who will not be eligible for the Prime Minister's millennium fund. At this forum there was a great deal of soul searching and relating of tragic stories: abusive homes, alcohol, drugs, hopelessness, cynicism. Name it and it was there.

These kids are a major component of our next generation and society is doing very little for them. They have been forgotten by the budget. Indeed, they appear to have been forgotten by those who loudly profess to care for them. Even though there were about 150 young people attending the session, there was not one Liberal or NDP member of this place to be found, even though the gathering took place in downtown Vancouver, their constituencies, miles away from my own.

After cutting billions of dollars from transfer payments the government appears to think that our next generation's problems are to be handled by the provinces and territories. The government attempts to characterize any critics of the Prime Minister's memorial fund as being anti-education. They say the fund is all about a stronger future for our young people.

Actually this government is more concerned with creating a personal political memorial for the Prime Minister than it is with assisting our youth.

When the Reform Party and the vast majority of Canadians argue for debt and tax relief measures to stimulate our economy this government plays with the books to conceal any surplus. It says it will look at debt and tax relief once the surplus surfaces, but can and will that ever happen if the minister has free rein over his bookkeeping practices?

Instead of a millennium fund for students the Liberals have provided a millennium burden for taxpayers. By the year 2000 Canadians will be paying over $173 billion per year in taxes. That is $155 billion in total budget revenues plus another $18 billion in Canada pension plan taxes. This works out to $48 billion more and is equivalent to about $5,000 per year higher for the average family than when the Liberals were elected.

It may be a coincidence, but the $5,000 figure arises here as well; $5,000 more per year for the average taxpayer and $5,000 per year for 2% of our students who will be fortunate enough to obtain the millennium funds. This government has made a unilateral decision to tax the Canadian family of four and give those tax funds to a minuscule proportion of our youth. This government is not being overly compassionate or considerate toward youth—

Budget Implementation Act, 1998Government Orders

11:30 a.m.

Progressive Conservative

Jim Jones Progressive Conservative Markham, ON

Mr. Speaker, I rise on a point of order. There does not appear to be a quorum in the House.

Budget Implementation Act, 1998Government Orders

11:30 a.m.

The Deputy Speaker

I do not see a quorum. Call in the members.

And the bells having rung:

Budget Implementation Act, 1998Government Orders

11:35 a.m.

The Deputy Speaker

I see a quorum.

The hon. member for Surrey North has the floor.

Budget Implementation Act, 1998Government Orders

11:35 a.m.


Chuck Cadman Reform Surrey North, BC

Mr. Speaker, this government has made a unilateral decision to tax a Canadian family of four and to give those tax funds to a minuscule proportion of youth. This government is not being overly compassionate or considerate toward youth. It is merely taking from the family to create a memorial for the Prime Minister.

I will now move on to a couple of areas of concern to my constituents. This government promised to spend $30 million on crime prevention. It has been having difficulty even maintaining the status quo. In my community the officer in charge of the Surrey RCMP detachment has lost a number of his more experienced officers to other police forces and other agencies. Why? Because it took until last Friday for this government to finally provide a pay raise so that these officers could feed and clothe their children.

This government was more concerned with looking after government executives than it was with those who were in more dire financial straits. Now that it has finally brought in the pay raise it may well be too late and may not be enough.

Instead of keeping its commitment to maintain the salaries of its national police force in line with the average salary of the major municipal forces, this government has merely thrown them a bone. There is little meat involved. Many other officers from my community may be forced to move onto greener pastures. It is unfortunate.

This government has so much difficulty with its priorities that it fails to properly look after those who toil to preserve the peace in our communities, our police officers. The former minister of justice and the former solicitor general were promising $30 million for crime prevention all the way back to 1996, but little has been seen. When it comes it will again likely be for a political purpose rather than being in the best interest of our citizens.

I will provide another example of the dreadful mismanagement of this government. It is all hoopla and little action. The former solicitor general was quite proud of the RCMP for introducing its violent crime linkage analysis system, or ViCLAS, a project to monitor and solve crimes of a serial nature. It has been said that if the system had been properly used during the Paul Bernardo and Karla Homolka investigation the murders of Kristen French and Leslie Mahaffy may never have occurred.

Guess what? The province of Ontario has learned its lesson. It has managed to allocate sufficient but scarce resources to properly fund ViCLAS through the operations of the Ontario Provincial Police. But where is the federal government with the RCMP? I have been led to understand that the RCMP ViCLAS project is now under severe threat because this government has not found or made available the necessary resources to properly fund this worthwhile and world-recognized program.

Imagine, the RCMP is forced to fly the Prime Minister to the ski hills but the government does not have enough money to fund one of the world's most advanced technological crime fighting tools. As with most things, this government is more concerned with trumpeting and taking credit for the program. It is not interested in providing the funds to operate it efficiently or effectively.

With that thought I will end my comments on this bill.

Budget Implementation Act, 1998Government Orders

11:40 a.m.

The Acting Speaker (Mr. McClelland)

I believe the previous occupant of the chair had made a commitment to recognize the hon. members for Louis-Hébert, Kings—Hants and Calgary.

The hon. member for Louis-Hébert.

Budget Implementation Act, 1998Government Orders

11:40 a.m.


Hélène Alarie Bloc Louis-Hébert, QC

Mr. Speaker, it is with great interest that I rise in this House today to speak on Bill C-36 introduced by the Minister of Finance.

I have followed the whole debate on this extremely controversial bill with great interest. After reading the remarks made by a number of members, I was shocked to see those few colleagues from Quebec that sit across the way speak out in support of certain parts of this bill.

While representing the people of their ridings in Quebec, they support the Canada millennium scholarship foundation proposed by a Prime Minister seeking visibility. This is happening despite the obvious consensus of the Quebec coalition, which was reiterated by the Premier of Quebec in a press conference. I just cannot get over it. This seems to indicate a serious lack of consistency between what Liberal members from Quebec say in Ottawa and what the Liberal wing is saying in Quebec.

In its last budget, the federal government announced that $2.5 billion had been earmarked for education and that he wanted to invest it in a new program, the millennium scholarships program, which, I remind the House, will not provide any relief to the existing education system, after cuts totalling $3 billion in education.

It claims to be putting the fiscal dividend, that is, the budget surplus, to work by investing in education, skills development, assistance for low income families with children and health care, through the Canadian opportunities strategy. A better name for this strategy would be Canadian government visibility strategy.

The Minister of Finance cut federal transfers to the provinces for social assistance, post-secondary education and health as part of the joint effort to put its fiscal house in order. But I would point out that 52% of the results were due to the sacrifices the provinces have had to make. Now that this goal has been reached, the Liberal government wants to act alone and spend budget surpluses instead of making up for the harm done by cutting transfers to the provinces.

During yesterday's meeting between the Premier of Quebec, his education minister, the Prime Minister of Canada and his Minister of Human Resources Development, the two governments agreed to establish a negotiating framework for the infamous millennium scholarships.

Quebec already has its own scholarship program and post-secondary education priorities. The two levels of government agree that there should be no duplication of programs and that Quebec's jurisdiction and priorities in the education sector should be respected.

It is clear, however, that the government opposite wants to celebrate the millennium by making a significant contribution to knowledge through millennium scholarships awarded to students over a ten-year period.

The Quebec coalition representing several organizations does not, however, have the same vision of what is needed to provide real assistance to students. At a press conference yesterday, coalition president Bernard Shapiro, vice-chancellor of McGill University, said, and I quote “We feel that the bill in its present form contains no appropriate provision whereby Quebec could use the important resources allocated to the foundation in a broader manner, consistent with its priorities. Members of the coalition, including Quebec students, believe that the resources set aside for the foundation would be better used within the existing structures and budgets of Quebec's education system”.

We in the Bloc Quebecois support this view. It is obvious that the student population, the faculty and many other individuals are in agreement with the Government of Quebec's position. This is blatant interference in a provincial area of jurisdiction that all governments, since Jean Lesage's day, have ardently defended.

Education is the soul of a people, its very backbone. It allows it to develop as a society, to understand its origins and its past, and to plan its future. It is the cornerstone of any society.

We in Quebec have chosen to invest in the future of our community and of our society with a system of education which responds to the true needs of its students. We have made a choice as a society.

The federal government, on the other hand, with all the cuts it has made since coming to power in 1993, has decided otherwise. Now, having seen its popularity with students dwindling away, it is implementing a new program which will get the flag of Canada onto its cheques.

But students are no fools. They know who cut $3 billion from education, and that provincial governments have had to make some difficult choices and will have to continue to do so, because cuts in federal transfers to the provinces for health and social programs will be in the order of $30 billion from now until the year 2003. We have a social deficit and it is time that deficit was remedied before it is too late.

We are asking the federal government, given that Quebec has exclusive jurisdiction over education, to exclude Quebec from the millennium scholarship program, but with fair and full compensation.

The Liberals are using this battle against the deficit as a pretext to continue privatizating the Canadian economy and are now setting their sights on education. This private foundation, to be established under Bill C-36, will allow the companies funding it to decide, in a certain way, which students deserve financial assistance. Will they make their choice according to the field of study that responds to their needs or the general needs of Quebec?

What about the real budget for research and development of $310 million and not $400 million over three years? That will enable the granting councils to keep their heads above water, but not to expand.

We must not forget that we are at the bottom of the list of G-7 countries in terms of research and development, and nothing indicates things will improve in the future. How can we compete with rival countries? How will we keep our brains? How will we interest our young people in post-secondary education? This budget provides no reassurance.

Another failing of the budget is the fact that the Minister of Finance said not a single word about agriculture. However, there are a lot of problems, which we will be coming back to in the House. Barely 16 lines in 275 pages are devoted to Canada's rural regions. The only reference is to the minister's having given the Farm Credit Corporation more money last year. The only major expenditure in this regard is $20 million over five years and among a number of departments.

Since 1991, the Liberal government has cut the agriculture and agri-food budget by $4 billion, and this year's budget contained other cuts. There is a lot to be said in this regard, and we will come back to it in the coming months.

I will point out there are several failings in Bill C-36, but my colleagues will surely return to other very important aspects of the latest budget of the Minister of Finance.

Budget Implementation Act, 1998Government Orders

11:45 a.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, I am pleased to speak on Bill C-36, the budget implementation act.

The budget of 1998 represented a major shift in the fiscal fortunes of the Government of Canada. It has taken 15 years of fiscal planning to achieve this balanced budget as the Leader of the Opposition mentioned previously in the House. Policies including free trade, the GST, deregulation of financial services, transportation and energy, all implemented by the previous government, were necessary and appropriate. They provided the framework and the basis upon which this government was able to balance the budget.

Let us make it clear. The real heroes today are not politicians, or certainly not the members on the government side. The real heroes are ordinary taxpaying Canadians who have had the budget balanced on their backs and who endure the highest taxes in the G-7 countries.

With this budget the Liberals have gone from being a tax and cut government to now being a tax and spend government. This should not be surprising because this was the government that led us down the path of debts and deficits beginning with former Prime Minister Trudeau in the early 1970s.

The biggest single spending initiative in this budget is the millennium scholarship fund. Canadian taxpayers are contributing $2.5 billion of their money to a bursary fund that will not be delivered to students for three years. Even then it will only benefit 7% of students.

What seems to be lost on the government is who in fact is making the program possible. It is ordinary taxpayers. It is not the Prime Minister. It is not the finance minister. It is ordinary Canadians who as I have said have paid the highest taxes of any of the G-7 countries. They have seen their income taxes as a percentage of GDP rise from 13% in 1993 to 14% now. Keep in mind that the previous government reduced income taxes as a percentage of GDP from 14% to 13% between 1989 and 1993.

Now the Minister of Finance is retroactively allocating $2.5 billion from last year's budget to this program, an act that the auditor general has spoken against. The Minister of Finance has taken responsibilities away from the auditor general, the watchdog of the Canadian taxpayers in this House and provided them to the board.

When I recently asked the Minister of Finance in question period to provide the auditor general with access to the fund's books, he responded that if the auditor general would like to have access to those books, it will be arranged. The auditor general does want access to those books, yet nowhere in this legislation is their a clause giving the auditor general the access he needs to oversee the taxpayers' money. The departmental officials I met with last week confirmed that despite the minister's reassurances to the contrary in this House, the auditor general in fact will not have access to the fund's books.

This represents the second time in two years that the Minister of Finance has set up an at arm's length foundation with a significant amount of taxpayers' money and appointed a separate auditor. The last time was the innovation fund, $800 million to be allocated to medical centres, universities and research laboratories. Now $2.5 billion will be administered without a clear and transparent auditing practice.

In the legislation the board for the millennium scholarship fund will appoint its own auditor. This is contrary to common business practices where the shareholders appoint an auditor, not simply the management. In this case the shareholders are ordinary Canadians who are represented by this government. That is why this departure and this lack of accountability in practice is very dangerous. It is also why the auditor general should be involved in overseeing such a huge allocation of Canadian taxpayers' funds.

Why does the government or the minister not appoint an auditor themselves? Instead it is going to be the board that appoints its own auditor. It may be an arm's length corporation but I would suggest that the arms are very short when the government is going to be appointing a significant number of the members of the board. The accountability is certainly not provided to ordinary Canadians who are footing the bill.

If we look at the millennium foundation in this legislation there is a significant lack of clarity surrounding the criteria of need and merit. It is stated very nebulously that the criteria is based on need and merit. No further direction has been given to the board on this criteria. Depending on the make-up of the board, the need or merit criteria could vacillate from one end of the spectrum to the other.

I remind the House that there are many young Canadians who need a higher education. The need component for the millennium scholarship fund may be more appropriate than simply the merit component. There needs to be some type of guarantee that young Canadians who do not have the financial means to achieve a higher education are provided with a higher education. Keep in mind that 7% of Canadians seeking higher education will benefit. Only 7%. To have it nebulously stated as it is, is inappropriate.

Frankly students who demonstrate the merit frequently earn scholarships to higher education institutions. They can participate in a higher education without the need for some gigantic memorial fund to the Prime Minister.

It should be remembered that the Canadians taxpayers who are footing the bill for this deserve and have now lost the ability to oversee the funds with this government's reticence to use the auditor general.

A second point of Bill C-36 which is worth noting today is the changes to the RESP program. Investor's Digest recently ran an article stating that the changes to the RESP policies will simply serve to complicate the current program. I quote “The problem with the RESPs is that they are already too complicated for most investors. The new grants will create more confusion”.

I do town hall meetings in my riding. Often we talk about tax policy. I have not had one constituent ask me to complicate the tax code. I have heard a lot of them say that the Canadian tax code is not user friendly and that it is inappropriate that citizens have to hire accountants to deal with their own governments.

What does the government do to address a crisis in higher education funding? It complicates the tax code. This proposal serves to complicate a tax code that is already far too complicated.

To give one example of the potential for abuse, there is a 20% top-up for individuals investing in an RESP, a matching where the government will effectively provide grants to those who invest in RESPs. It is a worthy intention to help provide and augment Canadians' savings for the higher education of their children. However we must always be wary of the first law of public policy, which is the law of unintended consequences.

I met with departmental officials last week. Nobody has explained to me why this 20% top-up will provide Canadians with a 20% grant if they invest in an RESP. If, 20, 18 or 15 years down the road, the beneficiary of the program chooses not to go to university or to pursue a higher education for whatever reason, the government will at that point be getting that grant back. The money earned on that grant over that period of time will be left with the individual, the contributor, the Canadian investor. This creates a direct incentive to invest in RESPs.

Recognizing that there is only a limited pool of funds out there for Canadians to invest with, it creates a direct disincentive to invest in RRSPs. The government is effectively providing a 20% top-up for Canadians to invest in one investment vehicle and a similar disincentive to invest in the other, the RRSPs.

By creating a policy like this, we will create a policy that will ultimately create financial insecurity for Canadians in terms of their retirement accounts. It will create a crisis down the road.

No attempt will be made to recover the earnings from the 20% top-up. The fact is it would be almost impossible logistically to do this. Again this is going to create a decrease in the incentive to invest in RRSPs.

Let us look at another example of this government's propensity to tinker with economics as opposed to providing broad based tax relief, which was the appropriate measure that should have been taken at this juncture. Let us look at the EI fund and the employment insurance holiday for employers hiring young Canadians.

Our party has repeatedly called for the government to reduce EI premiums to $2 from the current rate of $2.70. We outlined our position in our plan for growth, which was our prebudget submission.

The finance minister has stated categorically time and time again that EI premium reductions will not create jobs, will not lead to increased job creation in Canada. I heard the minister speak recently to the board of trade in Halifax. He stated that reducing EI premiums would not lead to greater job growth. Today the minister's agenda has obviously changed. Why would he eliminate EI premiums for young people if he did not feel that the reduction or the elimination of those EI premiums would lead to increased job creation for young people?

Everybody wants young people to have greater opportunities to seek employment in Canada. But we want all Canadians to benefit from reduced payroll taxes.

We have established that the minister cannot have it both ways. Effectively he is articulating that reducing payroll taxes will not have an impact on employment growth. Yet he is implementing policies where effectively that is what he is doing for that intent. Effectively he is playing one group against another. Certainly young Canadians between the ages of 18 to 33 need a break. But through this employment eugenics policy or this Pavlovian economics policy, he is creating a direct disincentive for Canadian businesses to hire other Canadians.

Again, it is an example of a government that prefers to make decisions for Canadians as opposed to ordinary Canadians, who deserved broad based tax relief in this budget, to make their own decisions as to what to do with their fiscal dividend.

While this government now brags about being in the black, many Canadians are still in the red because of its reticence to change fiscal policy for the better.

Budget Implementation Act, 1998Government Orders



Art Hanger Reform Calgary Northeast, AB

Mr. Speaker, I appreciate this opportunity again to stand today to support the official opposition's proposed amendment.

I bring the amendment to everyone's attention again by reading it because I think it is quite appropriate in the way this debate has been shaped and in the way the Minister of Finance has structured his budget in an effort to hide the truth and in effect impact negatively on the taxpayer who actually funds this hidden contingency fund that the minister has so carefully deferred to the future.

This is the proposed amendment by the official opposition:

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 Canada millennium scholarship foundation, fails to guarantee that appropriate and objective accounting standards will be followed as advocated by the auditor general.

There is no question that the auditor general has warned this government time and time again about its actions. Even when it comes to some of the chief proposals, it seems like his warnings continually fall on deaf ears. This is not a very good example for the people in this country who are footing the bill and paying hard earned tax dollars to see it squandered by the Liberal government in such ways that are inappropriate and despicable for the most part.

It is another example of government manipulating the system in a cynical attempt to fool the taxpayer into thinking the government is being productive. In this case we are talking about the $2.5 billion that would have gone to debt reduction and tax relief. We owe tax relief to the taxpayer. This is what should have happened with the $2.5 billion.

What is the government doing? It is just playing a shell game with the books and are becoming experts at it. It should be held accountable for it. Instead of translating a surplus into lower taxes for Canadians, the government is pretending that the surplus does not exist. Instead of reducing the massive national debt standing at close to $600 billion, the government buries its head in the sand and pretends that there is no problem and tells taxpayers there is no problem.

This is not the first time this government has tried to pull a fast one with the books. As the previous speaker pointed out, last year the government was criticized for allocating the cost of the Canadian Foundation for Innovation of $800 million a year before the foundation was created. It was all deferred.

In 1996 the government gave a $1 billion payout to the Atlantic provinces as an incentive to harmonize the GST in that region. Once again, this happened a year in advance of the payout.

I was looking through other portions of that act and at the proposed changes by the government to Bill C-36. It sure likes to defer things to the future. I think the small business community, the engine of our economy, should be paying particular attention to something in the bill which deals with employment insurance and premium holidays.

In the years 1999 and 2000, employers who hire young people between the ages of 18 and 24 will pay no EI premiums on their wages. If EI premiums remain stable this will save employers up to $3.78 per $100 in earnings, a measure that will cost about $100 billion.

What is this? They are deferring it to the year 1999, another deferred promise that will not take effect until the next year. It gives the view that the Liberals are doing a great big favour to employers by bringing this change into the act. What is so great about it? Right now there is about a $13.5 billion surplus in the EI account. By March of next year that will have grown to $19.6 billion. Whose money is that sitting there? It is the taxpayers' money.

If the government were truly interested in helping employers, in pushing this economy along even more, it would give that tax relief directly to the employers, it would place it back into the hands of the employers and employees by an across the board EI reduction in premiums. Then it would benefit someone. Right now who is it benefiting? It is sitting in an account. It is the taxpayers' dollars. All could be part of a relief plan or a benefit to the employer in expanding his business. Anything is better than being in the hands of this government or a bureaucrat.

The auditor general has complained about each of these cases. What is the government's response to the auditor general's complaints? It had the gall to threaten him. The deputy finance minister fired off a letter to the auditor general telling him to mind his own business. If that is not a shameful act, I do know what us. The auditor general is hired to do a job and what happens? The government threatens him for doing it. In reply to the auditor general the government said that it could change the rules if it liked.

The auditor general pointed out that if the government gets away with this it will open the door to future governments simply allocating expenditures from year to year regardless of when the expenses occur. In other words, Liberal habits have become almost institutionalized. Taxpayers spend an awful lot of their hard earned money on the federal government. They deserve to be able to look at the books knowing that the government is being above board in return. There is something unethical about it.

We all know the real reason for the finance minister to continue the Liberal tradition of bending the accounting rules. He wants to be able to keep a tight control on the fiscal reins so that he can better position himself to become the Liberal leader. I guess that is the ultimate agenda. He wants to become the leader. After all, what better way of winning support than giving taxpayers a tax break just before a leadership bid. Is that the plan of the finance minister and the Liberal government? There are personal agendas here. I do not think they are acceptable to most Canadians.

I would like to give the finance minister a bit of strategic advice for free. If he did the responsible thing now, pay down the debt and deliver tax relief today, he would find that his popularity would increase immediately. Probably his chances for leadership would be better. Everyone would rally behind him in much more substantive way and with good reason. Is that not good advice? The members across the way do not agree with that. They want to see more of the same. Best of all, his popularity would be earned legitimately. Imagine that, a Liberal finance minister who became popular by being straightforward and honest with Canadians about their tax dollars.

In this case I urge all members of this House to seize the opportunity to show Canadians transparency, honesty and integrity in this government, support the official opposition's amendment and bring transparency to the government's bookkeeping.