Mr. Speaker, I am pleased to rise to speak to Bill-36, the Budget Implementation Act, which is a culmination of the Minister of Finance's budget that he tabled back in February.
There are a couple of issues about the budget which I would like to discuss. Number one, of course, is that the minister announced a balanced budget. However, there was actually a surplus of $2.5 billion, because the minister charged $2.5 billion to this fiscal year to set up his millennium scholarship fund.
I take exception to the way he has been doing his accounting. The auditor general pointed out the previous year that the finance minister had made an $800 million charge for an expenditure that had not been made. I would have thought the Minister of Finance would have listened to the Auditor General of Canada who is the watchdog for all Canadians. He ensures that the books of the Government of Canada are clear and prepared in a manner consistent with normal accounting practices and that they do not contain misleading information.
The Minister of Finance has unilaterally decided to change the accounting policies of the Government of Canada to allow him to make a charge when he decides to make an announcement regarding a new program, and in this particular case $2.5 billion for the millennium scholarship fund.
That means that we have taken $2.5 billion out of the books for the year ending March 31, 1998 and have set the money aside. We have not spent the money. We have not even set it aside at this point in time. But the Minister of Finance has made this expenditure or charge on the financial statements with the idea that after the turn of the millennium, which is closer to the next election, the government is going to have $2.5 billion to spread around to young people in our country who will benefit by having assistance with tuition and education expenses.
We Reformers have never had a problem helping kids to get their education, but we do have a problem with this sleight of hand type of accounting that is being proposed by the Minister of Finance and being condemned by the Auditor General of Canada who says this cannot be the way.
I think that for the second time in a row the Minister of Finance should listen to the auditor general, rather than thumbing his nose at the auditor general, because we need to have integrity in our financial statements. We need to have integrity in our government. Surely, if there is no integrity in the financial statements being prepared by the government, then the government loses its integrity, and that is not in anybody's best interest.
I hope the Minister of Finance will take the auditor general's serious criticisms to heart, that he will recognize the error of his ways and will ensure that our financial statements are prepared in a manner that is acceptable to the Auditor General of Canada. That way not only Canadians but international investors can have faith in our financial statements.
While we have a balanced budget, we must remember that we still have a debt of almost $600 billion, which is $20,000 for every man, woman and child in Canada. That debt is being funded and financed by overseas investors, bankers and so on who look at our financial statement and if they find that it is qualified by the auditor general then we may end up having to pay higher interest rates on that debt. That is also not to anybody's benefit.
I have to laud the government for achieving a balanced budget. With prodding by the Reform Party it has finally got itself there. We take exception to the fact, however, that it got there by increasing revenues from taxation rather than by cutting expenditures and bringing the government down to a more appropriate size.
The employment insurance fund now has a surplus of almost $20 billion, which is far in excess of any surplus it has ever had before. It is ten times larger than any surplus it ever had before. The government has taxed employment and jobs to balance the budget rather than cut the size of government. Taxing jobs seems to be a backward way of trying to achieve economic growth so that the government can get its finances in order while everybody else has to pay through the nose and find out that their personal budgets are being squeezed to pay for extra taxes to the government.
That tax revenue comes with a potential price. We have now had seven years of economic expansion. We know economic expansions come to an end. When that happens, government expenditures go up by increased unemployment insurance premiums, reduced taxation revenues, additional welfare costs and all other government costs. Since we have relied on increased revenues to balance the budget, we run the risk of slipping back into a deficit if economic activity slows down.
Last weekend the Minister of Finance was in Kananaskis, Alberta, to enjoy the fine scenery and accommodation of my part of the world. He was at the APEC conference, the Asia Pacific Economic Council, dealing with economic issues in the far east. Things are not as rosy over there as perhaps they could be or even should be.
We are glad to see the resignation of President Suharto. However we have some doubts about his successor who may follow in the same vein. There is an economic crisis there that is already impacting on the province of British Columbia. Alan Greenspan, the chairman of the Federal Reserve Bank, said over the weekend that the impact of the economic slowdown in Asia could have a small but not negligible impact on North American economies.
I read in the Financial Post today that the Bank of Tokyo Mitsubishi reported a loss of $10 billion. When banks start to lose $10 billion we should begin to take a look at what is going on in financial markets. Therefore I point out to the Minister of Finance and to all Liberals that although they may have a balanced budget today, it may not be as rosy as it could be or should be if they had taken this opportune time to cut government when the economy was chugging along quite nicely. When the economy turns downward is no time to squeeze Canadians with fewer and fewer services.
The government should be very cautious and careful about spending any money it has or any surpluses it has. It should still be vigorous in its efforts to root out waste. I publish a waste report periodically. I brought one out last week with all the different grants. For example, we gave some money to somebody to study dress in 19th century Istanbul. I wonder what benefit that is to Canadians.
The auditor general pointed out that in one of our embassies we had spent $3,500 a month to store furniture, but when we looked at the furniture being stored we found it was only worth $1,000. We have idiotic expenditures right across government. We have waste, mismanagement and incompetence in many areas. It requires accountability. It requires to be rooted out, and that is what the government has failed to do.
When we next see a Budget Implementation Act for which the government is asking the approval of the House to implement the recommendations of the Minister of Finance, I would find it very difficult to do so based on the fact that they have not put their own fiscal house in order.