Debates of Dec. 16th, 1999

Standing Committee On Finance

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, I assert that it is true. I would be happy to talk with my friend about it later.

That is only one example.

If we want to talk about productivity and helping business, we should consider the situation in Alberta of Mr. Nickerson. Mr. Nickerson mortgaged his home and his farm to purchase a limousine from the United States, which he transformed and now calls the longhorn limo. He brought the vehicle into Canada to rent it out. He was making a living.

The limousine passed the Alberta transportation safety inspection standards with flying colours. All of a sudden, the people at Transport Canada got wind that Mr. Nickerson had become a successful entrepreneur and they decided to impound his limousine. They are not convinced that it will pass certain safety standards. They will not tell him what the specific problem is. In fact, the bureaucrat who made the decision, Mr. Boily, decided that he would impound the car without having seen it for himself and without providing any kind of detail on what exactly was the problem.

This man basically mortgaged his entire life savings for this business and now the government has snatched his dream away with absolutely no explanation. Mr. Boily, who is 2,000 miles away, will go home tonight and sit down with his family for dinner. It is no sweat off his nose. But in Alberta, Mr. Nickerson has to live with friends because he has lost his business.

This is the type of arbitrary, ridiculous regulation and bureaucracy that people in this country run into all too often. It is shameful that members across the way would sit and mock this situation. It is shameful and they should be embarrassed.

Program after program which the government brings forward retards productivity in Canada. The Liberals talk about a productivity covenant. Virtually all of what members on the other side do in some way gets in the way of business and making the country more productive. Liberals find ways to build massive bureaucracies which take days, weeks and months to make decisions which people in the business world would make in a few minutes. That slows things down. Is it any wonder we trail the United States when it comes to productivity?

This has been pointed out by the Minister of Industry. My friend across the way is heckling. Let him heckle the Minister of Industry. He has pointed to the fact that Canada is falling further and further behind the United States when it comes to productivity. This means that our standard of living is falling as well. Friends across the way know it. They are upset. I have obviously touched a very sensitive area. They are very upset about this.

If the Liberals are concerned they should talk to the Minister of Industry because he raised it first in this place. The minister pointed out that if our standard of living and our rate of economic growth had stayed even with those of the United States over the last many years, the average family of four in Canada would have a standard of living $28,000 higher than it is today. That is $7,000 a person. My friend across the way doubts it, but I invite him to talk to the industry minister because he raised it in this place.

What is the impact of all this horrible Liberal record on Canadians? It is absolutely devastating.

I will read into the record a couple of letters that I have received from people across the country who are concerned about where the government is going on the issue of taxes. The first letter is from a gentleman from Clarenville, Newfoundland. He writes:

I understand you were interested in how much taxes Canadians were paying. Have a look at this. I work at the oil refinery at Come-By-Chance, Newfoundland. Last month there was an error in my paycheque due to a mix-up in the number of hours I had worked. When the mix-up was straightened out, payroll issued me a separate cheque to make up the difference. They owed for eight hours regular time and sixteen hours overtime. My gross pay came to $801.92. There was $536.20 taken out for income tax and $10.42 for union dues. My net pay was $255.30. This is a tax rate of 67%.

I invite my friend over there, who thinks of himself as an expert on these things, to come and check the pay stub because he is welcome to do it.

[Paul Szabo, Liberal, Mississauga South, ON]

One pay stub doesn't show the whole thing. Tell the truth.

[Monte Solberg, Reform, Medicine Hat, AB]

Now, Mr. Speaker, they are justifying it by saying that one pay stub does not tell the story. Over the course of a year, the hon. member knows what the story is.

I will read another letter from a gentleman from Montrose, B.C. who writes:

I have enclosed a copy of my two most recent pay stubs. I think they stand as a good example of how high taxation rates in Canada can be a disincentive to productive workers.

This is unbelievable, and I know my friend across the way will heap scorn on it because it is profoundly embarrassing to his government, but I will read on.

During the two week period ending November 5, 1999, I was paid for 40 hours work, while in the following period, I was paid for 40.5 hours work, having put in a half hour overtime. The half hour overtime increased my gross pay by $19.66. Amazingly, this resulted in my federal income tax increasing by $20.13. In effect, I paid (the Prime Minister) 47 cents for the privilege of working a half hour overtime.

This is so incredible that one would think I am making it up. My friend can come over and examine the pay stub. He is so embarrassed his face is red with rage. I do not blame him. I would be embarrassed if I was a Liberal as well.

The letter goes on to say:

I recognize that this is an anomaly caused by steps in the tax tables, but the very fact that a step could result in an apparent marginal tax rate of 102% tells me that our tax rates are too high. As a resident of British Columbia with a good salary, my actual marginal tax rate is well over 50% and the pay stub is included.

I would be happy to table these letters in the House if my friend would like. I will voluntarily table them for my friend and he can have a look at them and explore them all he wants. I offer these to the Clerk.

[The Acting Speaker (Mr. McClelland)]

Is the hon. member for Medicine Hat requesting the unanimous consent of the House to table the documents?

[Monte Solberg, Reform, Medicine Hat, AB]

Yes, Mr. Speaker.

[The Acting Speaker (Mr. McClelland)]

Does the hon. member have the unanimous consent of the House to table the documents?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, it will be noted that the Liberal member for Provencher said “No, we won't allow that to be tabled in the House of Commons”, because they are so embarrassed.

[The Acting Speaker (Mr. McClelland)]

As the member for Medicine Hat is well aware, we do not refer to the absence or the presence of any specific member during debate.

[Monte Solberg, Reform, Medicine Hat, AB]

Well, I am here, Mr. Speaker, and I hope that is okay.

Suffice to say that members across the way are profoundly embarrassed by their record of taxation and they should be. Do members know why? It is because people on the Liberal side of the House spend hours, days, weeks professing how much they care. They care so much. They care about the poor, the downtrodden and the middle class. My goodness, if words of concern were dollar bills, we would be millionaires. We hear it every day from that side of the House. We saw it in the throne speech. Oh, they care so much, but when it comes down to action, my God, they tax the hide off people. We see it every day. We get these kinds of letters every day.

Because of bracket creep, on January 1, 85,000 low income Canadians, who have never paid taxes in their life, will be dragged onto the tax rolls for the first time. They will start paying taxes. Six billion dollars a year is what this government takes from Canadians who have incomes of less than $20,000 a year. That is shameful. It is shocking.

The Liberals should be embarrassed, especially when they get up and rant and rave about social justice and concern for the little guy. No one should believe it. Those are empty words that we hear over and over again from the people on the other side.

There is a better way of approaching this. The very first thing that needs to be done is for them to quit pretending they care about cutting taxes. They should admit that they have no intention of cutting taxes in a substantial way and that they will continue to spend because Liberals are tax and spend. It seems to be something genetic.

What we ultimately want to see in Canada is a government that is committed to cutting taxes, paying down debt and holding the line on spending. We are already spending more than we have ever spent before. We believe that is the real way to help people.

I will say a few words about how to help some of the people who my friends across the way say they care so much about. How do we help people who do not have skills and who really are people who suffered over the last many years? The most obvious way is to create so many jobs that we have three jobs chasing every person instead of the other way around.

It is time to get this economy roaring so that we regain the heritage that is ours, although unrealized over the last generation. It is the heritage of an economy that is prospering so much that Canadians can go out, sometimes get jobs without many skills and be trained on the job.

My friend from Provencher can heckle all he wants. He can heckle and make fun of people on the low end of the income scale, but that is wrong.

What we are looking for is an economy that booms to the point where if people do not have skills or perhaps have not finished school, they can get a job and learn those skills on the job.

One of the most amazing examples of how that can happen is what has happened in the boom in the United States in the last little while. The United States has an unemployment rate of around 4.1%. Our rate is about 75% higher and 75% higher than our historical average. We used to have an unemployment rate that was lower than the United States.

What is happening now in the United States is that many people, the ones who were often the last to benefit when something was going well in the economy, are benefiting in a tremendous way. The bottom 20% of the black community in the United States, in terms of income, has traditionally been a group that was left out whenever there was any kind of increase in prosperity. There is no question that they were a downtrodden group. Since the economy in the U.S. has taken off, because it has been unfettered to a big degree by the regulations and taxes that we still bear, the bottom 20% of that group has an unemployment rate of 6.9%, the same unemployment rate that we have in Canada. These are the poorest of the poor in the United States. These people, who often have little skills, are now getting jobs, experience, contacts and are regaining pride. In many cases, they have had to rely on welfare in the past, but that is no longer the case. They now have real hope.

Why are we denying that to people in Canada? There are many places in this country where unemployment is through the roof. Everyone is in the same boat in places like Newfoundland, Cape Breton, parts of Quebec, the northern regions, the inner cities and in parts of every province. We see it all over the place in Canada. Why are we denying those opportunities to people who need it most in Canada? We can do it here as well. We do not have to be second cousins when it comes to economic prosperity. We used to be the economic betters of the United States. We have it within us to do that again.

Why do we accept this malaise that we see coming from the Liberal government, this mediocre approach to everything? Why not cut taxes? Why not get the economy booming again and put people back to work in droves? Why not do that? Mike Harris does it in Ontario. They do it in Alberta. Why will the Liberal government not do it?

We have an obligation as legislators in the country to do what is right for Canadians. We are failing in that job. The Liberal government has let people down. I members across the way will not do it for themselves then they should do it for their children and grandchildren. We have a moral obligation to leave the country better than we found it.

[Leon Benoit, Reform, Lakeland, AB]

Mr. Speaker, I rise on a point of order. I would like to ask for the unanimous consent of the House to have a 10 minute question and answer period. The government has probably been so damaged by this speech that it should have a right to question—

[The Acting Speaker (Mr. McClelland)]

As I should not have been able to see the hon. member because he is not in his place, we are going to ignore that because it did not really happen.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I am pleased to take part in this last debate on the prebudget consultations that have been going on since the beginning of this session.

From the outset, I would like to thank the thousands of Quebecers who, in September and October, contributed to one of the largest democratic exercises undertaken by the Bloc Quebecois, over the past two years now, which was meeting Quebecers to ask for their opinions on the federal government's budget.

This year in particular, we asked those whom we met all over Quebec the following question: How should the Minister of Finance use the huge surpluses that he generated at the expense of the unemployed, the sick, the students, the provinces and everyone, except itself?

I am also taking this opportunity to thank my leader, the member for Laurier—Sainte-Marie, for giving us the opportunity to meet our constituents and for having established a practice which, we hope, will continue in the future. Finally, I would like to thank my Bloc Quebecois colleagues for agreeing to take part in this excellent exercise and for making a brilliant presentation of the conclusions of these consultations.

These conclusions were collected in a synthesis report presented by the Bloc Quebecois, through its leader and its finance critic as well as the hon. member for Lévis, who took the opportunity to promote a shipbuilding policy. I just wanted to point this out to my fellow Quebecers that we delivered the goods by tabling about three weeks ago on their behalf a document that includes the consensus reached and their main priorities.

First of all, I want to go over the Minister of Finance's estimates concerning the surpluses for the years to come. With this minister, we have gotten used to the way he fiddles with the real budget figures and his forecasts, first with regard to the deficit and then with regard to the surplus. He has made us very conservative, because his forecasts are very conservative, but he has shown us in the past that he can be incredibly secretive.

Often, he has even juggled the figures to prepare an extremely summary and fragmented table regarding the options available to the federal government in order to fight the poverty to which he himself has contributed since 1994 by drastically cutting our social programs and to support economic growth and job creation.

When the Minister of Finance tells us in his economic update that he expects a $95 billion surplus to be accumulated in the next five years, the truth must be even more amazing. For this year alone, the minister expects a $5 billion surplus. When he comes up with these sorts of things, he shows little respect for the public.

The federal government's surplus for the first eight months of the current fiscal year is already $8 billion, that is $3 billion over the minister's forecast surplus for the whole of this year. We can expect that the surplus will easily top $12 billion this year. This is more then twice what the minister had forecast.

That gives the government considerable leeway. As a matter of fact, we did not wait. In September and October of this year, we made our own projections regarding the current surplus, next year's surplus and the leeway that could develop as a result and be used to improve the Canadian economy and social programs.

We believe that, with part of this year's surplus and with next year's surplus, which we think will reach $15 billion, and with a tax reform, which would not take ten years but a few months to achieve, the minister could have $25 billion to play with in the next fiscal year.

We have consulted the people regarding this possibility. Everywhere in Quebec, the Bloc Quebecois, through its members who work hard to defend Quebec's interests, has consulted Quebecers regarding these projections and the use of that money.

Here are the main things on which people agree with regard to the use of this enormous amount of leeway the federal government has over the next year.

First, Quebecers have always believed—and they still do, as shown in the latest survey—it is essential that the Minister of Finance restore transfer payments to the provinces for health, higher education and income security.

Second, it is important to return to a true employment insurance plan, one that really helps the unemployed. There is almost complete unanimity that the EI plan has to be revamped, because it no longer covers all the people it should.

Third, we were hoping that there would be promising projects for the financial and social economy. We are thinking in particular of a real shipbuilding policy for Canada, which does not exist at the present time, the construction of social housing, and infrastructure programs, including highways.

Fourth, we called for a real tax cut for low and middle income Canadians and Quebecers, not just window-dressing, but lasting tax reform that would permanently end the injustices that have hit middle income families particularly hard in recent years.

I will go through these four points, one by one, comparing them with what the Liberal majority is proposing in its report.

First, there is the issue of social transfers. As I mentioned, the consensus is clear that this is top on the priority list. Quebecers want the CHST restored. It will take $3.7 billion annually, starting next fiscal, to return to the level of the transfer in 1993-94, before the Minister of Finance slashed the payments that are used to help fund health and education.

Yesterday, I listened to the secretary of state say that cuts to provincial social transfer payments were a athing of the past. What hypocrisy, especially from the secretary of state. I hope he has some idea of the figures. If not, his incompetence is shocking.

The cuts announced by the Minister of Finance in 1994 are ongoing and will continue to apply until 2003. Up until now, the cumulative drastic cuts to education, health and income security total $21.4 billion. By the year 2003, since the cuts are ongoing and despite the fact that parts of the cuts were cancelled, federal transfers to the provinces for health care, education and income security will have been reduced by more than $30 billion.

This is not a thing of the past. The cuts are still being made, but in an underhanded way. As members know, we have gotten used to the Minister of Finance's vile hypocrisy. He makes one announcement only, but the cuts he announces are good for seven or eight years, and he does not have to repeat them year after year.

What is so revolting is that, because of the drastic cuts made by our Minister of Finance, a shipowner and a millionaire, Quebec is out by $6.3 billion to pay for health care, higher education and income security.

It comes to $860 per Quebecer and 37% of all the cuts made in Canada. The Quebec population accounts for 24.5% of the Canadian population, but the Government of Quebec was hit by 37% of the cuts to the Canada health and social transfer.

No wonder our health sector is having problems. Although these problems occur throughout the country, they hurt us a lot more. And the Minister of Intergovernmental Affairs said it before: Quebec has to hurt. Well, the government is certainly on the right track, particularly with its bill preventing Quebec from using the democratic process freely in a referendum. If Quebec has to hurt, the government is definitely on the right track.

This year alone, the Government of Quebec will have $1.7 billion less for health, post-secondary education and welfare. Based on the historic distribution before 1994, before the federal government's contributions in those three sectors were consolidated into a single transfer called the Canada social transfer, here is what it looks like.

This year, the Government of Quebec will be short $875 million in federal transfers for health. Do members know what such an amount of money represents? It represents 3,000 jobs for physicians. It represents 5,000 jobs for nurses. It is a lot of money. And then people say that the Government of Quebec really has lots of problems in the area of health. But it is this government that is causing considerable harm to the sick in Quebec and to the finances of the Government of Quebec.

Based on the historic distribution, $500 million of the $1.7 billion would have gone to education. Do members know what we could do if we had $500 million more to put into education in Quebec? We could hire 5,800 university professors. And the cuts are a thing of the past? How hypocritical can one get? In terms of income security, the Government of Quebec is getting $325 million less to fight poverty in Quebec. Do members have any idea what could be done with that money? It would mean an additional $500 for each and every welfare recipient in Quebec.

Of course, $500 a year is not a lot of money for a millionaire like the Minister of Finance, but for those who are having trouble making ends meet, who are struggling, $500 a year is a fortune. And this is what they are being deprived of. Then the government goes around bragging that cuts are a thing of the past, that they have put their fiscal house in order and that they are on the right track. Give me a break.

The report of the Liberal majority on the finance committee does not recommend that the social transfers to the provinces be restored. It does not say a word about poverty either, but I am going to come back to that issue.

Second, the report says nothing about reinstating a real employment insurance program. Despite the representations made here and elsewhere in Canada and especially in the province of Quebec where the Bloc carried out wide consultations, the report of the Liberal majority on the finance committee does not mention the need to reform the employment insurance program. It is shocking.

Only 42% of the unemployed are eligible to benefits, even if 100% of the workers pay premiums. The situation for women is even worse. Only 31% of them are eligible, but all of them do pay premiums. They are going after the men and women who are unemployed, as well as pregnant women. Their benefits are being cut because they have been on precautionary cessation of work under the CSST. Because the days and hours during which they were covered by the CSST are not factored in, they are not eligible to special benefits for pregnant women. This is scandalous.

So, nothing on EI. The representations made by thousands of Quebecers and Canadians were ignored.

Third, the structuring projects. I mentioned earlier that the budget offers many great possibilities. The Minister of Finance is hiding more surpluses. He is hiding facts about his real leeway. He has much more flexibility than he cares to admit. He has more leeway than he knows what to do with. The liberal majority on the finance committee could have suggested to spend more than $500 million a year on structuring projects, on infrastructure projects. This is ridiculous.

With the possibilities and flexibility anticipated for next year and the subsequent two, the committee could have suggested $3 billion a year, as we had. In this regard, we had the support of all stakeholders in civil society, including employer associations.

There is nothing either on structuring projects in support of a real shipbuilding policy for Canada. My Bloc colleague from Lévis-et-Chutes-de-la-Chaudière has worked very hard for many years to promote such a policy. Canadians from sea to sea want a national shipbuilding policy.

Not long ago, my colleague informed me that he had gained the support of the Canadian Shipowners Association, of which our finance minister is a member. No one is asking him to secure privileges as a shipowner. There is a difference between passing legislation that favours him and his companies, as he did two years ago with Bill C-28, and developing a national shipbuilding policy to help create jobs in Canada and ensure, for instance, that the level of jobs at Lévis shipyards gets back to what it was before, that is 5,000 jobs, if my memory serves me right.

[An hon. member]

Three thousand.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

I am told there were three thousand. It is now less than half. What we need is a new shipbuilding policy with economic spinoffs. Not a word from the Liberals on that, though. Everyone agrees there is a need, but the Liberal government is turning a deaf ear.

Concerning social housing, it is a joke, there is nothing in here. It only says that a report is expected from the minister responsible for the homeless, who is still travelling all over the country to hear comments. The government recently announced that $500 million might be made available for community shelters where the homeless could spend the night.

They earmark a mere $500 million to shelters. They completely ignore the whole issue of social housing and overlook the fact that there is a way of doing things. Opening shelters is one thing, but support must also be provided to help the homeless get out of that situation.

I take this opportunity to congratulate my colleague from Quebec for her excellent analysis on poverty, homelessness and federal government policies. Since 1994, this irresponsible government should have implemented policies and increased its contribution over the years, using the tremendous surplus it generated last year and will be generating in the coming years.

I also want to pay tribute to the members of the Accueil Bonneau choir, who honoured us with a visit on the occasion of the tenth anniversary of the anti-poverty motion passed by the House. They gave a wonderful concert. I want to remind members once again that it is because of the admirable work done by my colleague from Quebec and by the Bloc Quebecois in their fight against poverty. While we are fighting poverty, the government is creating poverty. The Liberals create poverty.

With respect to tax cuts, I notice that the Liberal majority members of the Standing Committee on Finance are the true reflection of their government. These are people who put on a big show, making suggestions that may look spectacular and generous at first glance. At one point, they even got us wondering if an election was not about to be called.

However, a closer look reveals a big problem with the tax proposals put forward in the Liberal majority report on taxation. In our consultations, Quebecers told us “Yes, substantial tax cuts are required, but first tax tables and the whole tax structure must be fully indexed”. Since 1985 tax tables and tax structure are no longer indexed.

As long as this issue remains unsettled there will be no lasting solution to the problem of tax fairness for all. We are not talking here about insignificant amounts. Since 1994 the bracket creep has resulted in extra tax revenues of $17.6 billion for the federal government. It is unfair.

In the few minutes I have left let me explain what indexation is all about.

Let me put it simply, as we should always do in this kind of demonstration. If a taxpayer earns $100 a week and his employer gives him a $2 raise, his new salary is $102. But in the economy, prices in general have gone up $3, which means that the taxpayer is actually poorer.

After a $2 pay raise and a $3 overall price increase, this taxpayer is in fact $1 poorer. Full indexation of the tax tables and the tax structure as a whole takes into consideration the fact that the taxpayer is poorer and not richer, even with an income of $102 compared to $100 the previous year.

So, this increase in poverty is taken into account and the taxation level is reduced according to the inflation related rise in poverty. This measure was abolished and, since 1974, $17 billion in new taxes have been collected. The government cannot be blamed for doing something to increase taxation, but it can be blamed however for not reforming the tax system and restoring the full indexation that was abolished in 1985.

Do you know what $17 billion represent? It is a lot of money. With $17 billion, one could give around $2,400 to each of the 7 million Quebecers and that would make up for the money that was stolen from them. It represents about twice the education budget for Quebec and one hundred times its environment budget. It is a lot of money.

The report does not address these issues but it does mention the elimination of the 5% surtax. That measure, along with the elimination of the 3% surtax announced in the last budget, will greatly benefit those who earn $250,000 or more. It will give them $9,300.

However, the taxpayers earning between $30,000 and $70,000 will see their taxes reduced by only $200. Even by increasing the ceiling to 15%, this solution will only last until 2001. After 2001, without full indexing, our tax system will become unfair again and taxpayers will continue to pay more taxes than they normally should.

For all these reasons, we tabled a minority report, a dissenting opinion based on what we heard when we went to meet the people, putting our ideas together with theirs. We gathered different priorities and views and presented them, the leader of the Bloc Quebecois and myself, to the Standing Committee on Finance on behalf of Quebecers.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, I listened attentively to the member's speech. It reminded me that we are in the House as members of parliament not just to speak for our own communities but to represent all regions of Canada when there is a particular crisis.

The problems we have had in terms of changing the fiscal direction of the country have not just been difficult for the province of Quebec. I acknowledge that we have problems in my community of downtown Toronto with a lack of affordable shelter. We have had lots of problems, but when we on this side of the House as well as members of the New Democratic Party and members of the Conservative Party stand, we speak for all Canadians.

It is terribly unfair that the member positions his criticisms of us as a government. By the way, some of those criticisms can be valid because we have had a very tough time with the economy. He should also position them in a way that acknowledges the province of Quebec over the last 10 or 12 years has been classified through the economic formula as a have not province. Those provinces in an advantaged position have transferred over $100 billion. I have never heard any resentment on any side or from any other members of parliament about the fact that those transfers have been made, because that is the nature of a federation. I appeal to the member to consider that the House is the boardroom of Canada. It is not just for us to come here and speak only for those people who are in pain in Quebec.

The member should start to realize that the special privilege and responsibility of being in here is that it is as much my responsibility to care about his constituents as it is his to care about mine. We have to remind ourselves and Quebecers that they are not a persecuted community or a persecuted province. In fact all Canadians have shared happily with Quebecers over the last number of years, and we will continue to do so long after these separatists are put into extinction.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, there are three main points in the member's question. First, yes, it has been more difficult for Quebec because it had to absorb 37% of cuts in the Canada social transfer, which is more than its percentage of the Canadian population, that is 24.5%.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

You only care about Quebecers. Is that it?

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Second—if the member could stop shouting, I would answer—the views I expressed on behalf of Quebecers, as the Bloc Quebecois is called upon to do and will continue to do and to fight for Quebecers in the years to come until we get out of this federation, those views are the same as the ones we heard throughout Canada. If they are not to be found in the Liberal majority report, it is simply because the member and his colleagues did not do their job. That is the problem.

Third, we have had quite enough of the kind of nonsense we have just heard. The recent adjustment in equalization payments is money that we were owed and that had not been given to us for two years because the parameters involved in equalization had not been properly assessed. That is the fact of the matter. That money was owing to us and more is still owing.

To give but one example, the harmonization of the GST with the provincial sales tax in the maritimes. Since the early 1990s, we in Quebec have harmonized the GST and the Quebec sales tax. We should be getting $2 billion for that and they are refusing to hand it over.

As I have said, the effort we are being asked to make with respect to the cuts has been $2 billion too high ever since 1994. That is another $2 billion they owe us, on top of the rest.

Much more could be added. There are the R and D laboratories, the productive spending in procurement of goods and services. Anyway, it is pointless. We have been telling them this for 20 years now and they refuse to believe it, even to believe their own statistics.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the minority report of the Bloc Quebecois, and indeed the member's speech, discussed very briefly the aspect of deindexation. He noted in his dissenting report that the federal government would collect an estimated $17.6 billion of additional tax, thanks to non-indexation.

I will accept the numbers subject to check, but the budget surplus in the fiscal year ended March 31, 1999, was $2.9 billion. Since we have balanced the budget the surpluses have been quite modest. If deindexation had not been in place, clearly the government still would have been reporting deficit positions each and every year because of sheer size.

Does the member concede that deindexation or indexation is simply a form of delivering tax cuts? Is he in favour of tax cuts to the extent that they would put Canada back into a deficit position?

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Absolutely not, Mr. Speaker. I would, however, like to correct the figures the member has given.

For the last fiscal year, 1998-99, the surplus is not $2.9 billion but over $9 billion. However, the Minister of Finance took $6 billion away during that same fiscal year, unexpectedly, and applied that amount to the debt right away.

Point one, situations can be corrected and so they should be. The public finances must be put on a healthier footing, but when that is done at the expense of one category of taxpayers and the others are left to profit unduly from the taxation system, and by that I mean the people with the highest incomes, something is not working right.

We do not have to correct problems by creating injustice and by maintaining that particular injustice. It is all very well but the ones who have had to pay are the people earning between $25,000 and $70,000 a year; those are the families that have borne the brunt of it.

People with incomes of $250,000 and up have not had to pay. Point two, millionaires like the Minister of Finance have not had to pay either. Point three, tax reform has been talked about since 1996. Ideas had even been submitted to the Minister of Finance and he applauded these suggestions. Since then, he has been standing there with his hands in his pockets. He is looking out for himself first and foremost, but he has done nothing as far as the tax system is concerned.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I rise on a point of order. In the response to the member's question he reputed the $2.9 billion figure. The public accounts report—

[The Deputy Speaker]

I do not think that is a point of order.

[Christiane Gagnon, Bloc, Québec, QC]

Mr. Speaker, I thank my colleague for his statement on what was said during the prebudget consultations. This is very much like what was said regarding the Canada social transfer in the meetings of the committee on children and youth at risk. They were told to give the missing money back to the provinces.

They created six years of social deficit and this gave rise to poverty. Creating poverty has consequences, on the quality of services in hospitals for example, on special support for children who live in poverty and on thousands of women on welfare having a little extra money. For them, it means having more money to pay the rent and to buy groceries.

We heard a little earlier that the minister responsible for the homeless is going to announce a $500 million program for their benefit. What scares me is not the money to be invested in that project but rather the way this program will be adapted to the situation in Quebec. It is true that realities differ. We were saying a while ago that there was a shortfall, that Quebec did not get its fair share. In social housing, Quebec never received its fair share. I would like my colleague to tell us if he is worried about the federal government's flexibility.

As a matter of fact, the minister responsible for the homeless will be judged on the way this money is given to the provinces and on her flexibility with regard to the distribution of the millions of dollars invested for the homeless. I would like my colleague to comment.