Debates of Feb. 1st, 1999

The House resumed from October 26, 1998, consideration of the motion that Bill C-302, an act to establish the rights of fishers including the right to be involved in the process of fisheries stock assessment, fish conservation, setting of fishing quotas, fishing licensing and the public right to fish and establish the right of fishers to be informed of decisions affecting fishing as a livelihood in advance and the right to compensation if other rights are abrogated unfairly, be read the second time and referred to a committee.

Fishers' Bill Of Rights

[Bob Kilger, Liberal, Stormont—Dundas, ON]

Mr. Speaker, I rise on a point of order. I would like to begin by giving the House the assurance that discussions have taken place between all parties and the member for New Brunswick Southwest concerning the taking of the division on Bill C-302 scheduled at the conclusion of Private Members' Business today.

I believe you would find consent for the following:

That at the conclusion of today's debate on Bill C-302, all questions necessary to dispose of the motion for second reading on the said bill shall be deemed put, a recorded division deemed requested and deferred until Tuesday, February 2, 1999 at 5.15 p.m.

(Motion agreed to)

[Gary Lunn, Reform, Saanich—Gulf Islands, BC]

Mr. Speaker, I am pleased to rise on behalf of the constituents of Saanich—Gulf Islands to speak to this private member's bill to bring forward a fishers bill of rights.

I have a few concerns about this bill. However, I give my qualified support to the member for bringing it forward. I believe some of my concerns can be addressed at the committee level.

The intent of this bill is to bring accountability to the Department of Fisheries and Oceans.

We have travelled to both coasts of this country. In Atlantic Canada we visited some 15 to 20 communities. We visited approximately 15 communities on the west coast. We listened to fishers from all of these communities who raised a number of concerns which consistently involved the department.

The member for New Brunswick Southwest has a very large presence of fishers in his riding and he is trying to offer some protection to them with this bill of rights, to which I give my qualified support.

The intent of what the member is trying to do, first and foremost, is to ensure that there is some form of accountability within the department. We often see a lack of accountability in many areas of government, such as the decision which was brought down a few weeks ago in British Columbia by the judicial system. We need to address accountability within our judicial system when decisions are made that are completely outrageous. I am making reference to the child pornography decision. There are many examples where there is no accountability and we have to do something about that.

I have a concern about the right to compensation. The bill states that if the rights of fishers are abrogated unfairly they have an absolute right to compensation. I do not think we can put that into legislation.

I have always been a strong believer that the fishery must be both environmentally and economically sustainable. I accept the fact that the Department of Fisheries and Oceans is the largest single factor. There are other factors, but without question the Department of Fisheries and Oceans has not been held accountable for the collapse of the cod fishery in Atlantic Canada where we have seen over $2 billion of taxpayers' money being paid to fishermen who sit at home.

There is no question that the fishery was mismanaged, but I do not believe the answer is to send out more money, bad money on top of bad money. The one area of concern I have is with putting something in legislation which would give a group of people the absolute right to compensation. I think that is something that has to be addressed on a case by case basis and we have to be very careful in doing that.

I look forward to addressing that concern at committee. Again I would offer my qualified support for this bill and suggest that we look at it when it comes back from committee to decide if we should support it at that time.

[Sophia Leung, Liberal, Vancouver Kingsway, BC]

Mr. Speaker, I am pleased to rise today to explain why Bill C-302 should not become law.

Fishermen and mariners alike know how easy it is to get lost at sea, especially in fog. Debate on this bill seems to be like sailing in a particularly thick fog. The debate has wandered all over the map and has been lost in the fog of rhetoric and politics. It has strayed far from the facts and facts are what we need when we talk about Canada's fishery. Facts are what are needed here, not emotion, not fed bashing, not rhetoric and not scoring political points. Few facts have been advanced from the other side of the House.

One important fact is that none of the opposition parties would support this bill in the unlikely event they were to form a government. Why? Because it is a bad bill that would become bad law, one that would neither preserve fish stocks nor help fishing communities.

During early debate on this bill my colleagues spelled out its many deficiencies, but today I would like to return to the issue of compensation which was raised by the hon. member for Nanaimo—Alberni when this bill was last debated.

He said that the right to compensation for those whose rights were taken away or abrogated by the federal government was probably the most controversial aspect of the bill. It would be hard to say which is the most controversial aspect of this bill but this one certainly ranks close to the top. The strangest assertion in the hon. member's qualified defence of this bill came when he said that government and DFO bureaucracy will fight this clause tooth and nail because it attempts to make them accountable for decisions they make about people affected by their decisions.

How does this clause contribute to making the government and the so-called bureaucracy more accountable than they already are? Presumably by making them pay for the so-called damage their policies have caused. But who pays here? What did the architect of the bill have in mind? Where does the member think the money would come from to compensate fishers harmed by a government decision? Not from the minister and the so-called bureaucracy, but from the taxpayer. This is from a party that prides itself on fiscal responsibilities.

The government cannot afford the luxury of throwing taxpayer money around. The government has to be responsible to all Canadians. Sometimes that requires making tough calls, the kind which do not please everyone but which hold the greatest hope for the future.

When the hon. member says that it is far easier for bureaucrats or ministers to sit ensconced, buffered and unchallenged and be securely protected from the results of their decisions, he implies several things.

First, he implies that public employees and the minister are somehow unaccountable, but the fact is the government is responsible to the people of Canada. When the people of Canada vote they pass judgment on the government's performance. If the government needs to be held accountable for mistakes every Canadian can do so at election time.

Second, he implies that instituting a regime that would hand over millions of taxpayer dollars would somehow punish those who make decisions in Ottawa. To this I can only say that it seems as if the fog has rolled in and completely obscured the hon. member's argument.

Leaving aside the strange notion that public employees should be punished for doing their jobs to the best of their abilities, this clause would punish no one but the member's constituents and those of every member in the House.

What would it accomplish other than to burden the taxpayer and take money away from other worthwhile causes? Nothing. Would it create more fish? No. Would it preserve the fish that are left? No. On the contrary, if the bill succeeded in discouraging DFO and the government from taking steps to conserve fish stocks it would do just the opposite.

I am taking time with this argument because the hon. member for Nanaimo—Alberni said it was the crux of the bill to bring accountability to the bureaucracy. The women and men of the Department of Fisheries and Oceans are already accountable to their superiors who report to the minister, who is in turn accountable to the people of Canada.

Once more we can say how badly conceived and unnecessary this bill is. The member went on to say the DFO bureaucrats would prefer not to deal with people affected by their decisions because plainly it is uncomfortable for them.

Again let us look at the facts. In September the Minister of Fisheries and Oceans convened a meeting with fishermen for a mid season review of the cod stocks in the gulf of St. Lawrence. He took with him to the meeting those same DFO scientists and managers the member says would prefer not to deal with people affected by their decisions.

The member would have us think that DFO does not seek input from fishers, but my colleagues have already recounted in detail how fishers across the country are participating in fisheries management decisions that affect their industry. Fishers are actively involved in stock assessment, fish conservation and monitoring. They participate in the development of integrated fishery management plans and the setting of fishing quotas. Many fishers are already involved directly in managing fisheries through co-management or joint project management with DFO. DFO developed co-management to give the people who work in the fishery more say in how it is managed.

The new fisheries act will offer individuals and communities even more say over the decisions that affect their lives. We need to bring this debate to a speedy conclusion so this bill can come to the floor of the House and be rejected, as it should be.

There are far better ways to serve the needs of Canada's fishing communities and preserve the fishery for future generations. The government has taken a number of important steps and is moving on others. I urge the House to reject the bill.

[Louise Hardy, NDP, Yukon, YT]

Mr. Speaker, I thank the member for New Brunswick Southwest for bringing this bill forward. It is an attempt to bring attention to the terrible situation of the fisheries and fishing families. I would like to bring to the debate a northern perspective.

Most people do not think of Yukon as being a place where there is a fishing industry, but it certainly sustains the first nations fishing industry. The Yukon River starts at Skagway, an American city, and comes up through Whitehorse. This year the salmon did not come. The fish ladder was almost empty by the time the river got to Carmacks. Alma Wrixon, a first nations woman, could not put her fish net in and that is part of what she has done every year for generations to sustain her family.

At Pelly Banks they would catch perhaps three fish in a week if they were fortunate.

We are talking about their winter food. In Dawson City they could not fish. By the time they got to Old Crow there was no fish. The Gwich'in people depend on the fishery and the caribou. They have one caribou herd that is under stress. They could not catch any fish to make it through the winter. That is like their savings account, their money, their potatoes, their way of life to get through winter to the next spring when the birds return.

This bill brings accountability to the department of fisheries. It is another mechanism to make sure the public resource of our water and the fish in our water are available to the people who depend on and need them. It is not necessarily for profit, though profit is an important part of it. It is the benefit of having food to make it through a year.

There are families and towns that depend on fish. Again I stress it is a public resource. It is not anything that is privately owned. They have a right to have a say in how our fishery is managed. So far we have not seen a good record of how our fishery has been managed under the federal government.

To allow this fishers bill of rights would be an important in-road in the bureaucracy so that those who live on fish have a say in how they are distributed. It devolves some powers to those who need it.

Since 1988 the federal government has spent $4 billion to restructure the fishery. What it has meant is a total collapse in our fishing system.

On behalf of the folks who depend on fish but who do not get the limelight, and those who live inland and whose resources are dependent on decisions by people they never see, this would give them an avenue to have a stronger and clearer say in their livelihood.

[Brent St. Denis, Liberal, Algoma—Manitoulin, ON]

Mr. Speaker, I am pleased to join with a number of my colleagues on this side of the House and across the way as we debate Bill C-302.

I preface my remarks by saying that my northern Ontario riding abuts Lake Superior and Lake Huron. The commercial fishery is something that is important to my area as well. Even though an inland fishery, the Great Lakes are among the great waters of the world. The commercial fishers who extract fish from this resource are among the finest fishers anywhere.

Although I believe the genesis of this legislation relates more to the difficulties facing fishing communities and fisher persons on the east and west coasts, it is important that the House be reminded that there are a great number of people involved in the commercial fishing trade in the Great Lakes of Ontario. I hope they will take some comfort in the comments being made today that their concerns will be addressed as well.

Let me come to Bill C-302. We have heard that while this bill is well intentioned there are many flaws. This is not unusual when one attempts to make a simplistic response to a very complex problem. This is not to denigrate in any way the initiative of the sponsoring member, but the issues are complex.

When it comes to our fish resources the most important thing is that sustainability be our primary objective. It does no one any good and no fishing community any good if the long term sustainability of the fish stocks on which they depend is compromised. As the Minister of Fisheries and Oceans has said, above all we must ensure the viability of this fish resource. It is only from that principle we can ensure the long term viability of the communities, businesses and individuals that depend on it.

As a number of my colleagues on this side have said, fishers do not need a bill of rights. They need a healthy fishery, a fishery that is sustainable and that can support fishermen today and their children, grandchildren and future generations.

The average citizen who is not involved in commercial fishing is well aware through the media and news stories of the plight facing fishing communities and fishers. While there may be some merit to ensuring that fishermen are involved in planning for sustainable use of the resource, I do not believe that a bill of rights for fishermen is the way to go.

The goal of the government is to protect and conserve Canada's oceans and great lake resources on all fronts. As the minister has said, fish must come first so that people can then be taken care of.

No so-called bill of rights will protect fishers when the fish are in jeopardy or gone altogether. A bill of rights cannot prevent the disappearance of fish stocks. Only sound management, conservation based management can do that.

I would like to spend my remaining few minutes outlining some of the initiatives the government has taken. It is not by one silver bullet that all the problems can be solved but rather by a series of well targeted and well managed programs that objectives when it comes to preserving a sustainable resource of fish can be maintained.

Members opposite may be quick to point out what has not been done, but we know that politics is the art of the possible and much has been accomplished. We are living in a world where real achievement comes through patience, persistence and negotiation, not grandstanding. So much has been done that I can only highlight some of those accomplishments.

Last June was a particularly productive month. On June 19 the minister announced the $250 million Atlantic groundfish licence retirement program, which is part of the federal government's $730 million worth of measures for restructuring an adjustment in the Atlantic groundfish industry. The licence retirement program will help to reduce the number of groundfish enterprises in Atlantic Canada and Quebec. It provides financial assistance to groundfish licence holders who retire their licences and leave the commercial fishery.

Also in June the Minister of Fisheries and Oceans and the Minister of Human Resources Development announced $400 million worth of additional measures to restructure and rebuild the Pacific salmon fishery and to help people adjust to the reality of a smaller conservation based fishery. There is no denying the scientific evidence shows that wild coho are declining and that some stocks are at extreme risk.

As the minister said at the time, “permanent change is necessary for the future of fish and fishermen. We must get ahead of the curve and shift to a conservation based fishery”.

Canada made a major breakthrough on the east coast in June when member states of the North Atlantic Salmon Conservation Organization followed Canada's lead and agreed to a number of strong conservation measures. Among these was NASCO's formal adoption of the precautionary approach in Atlantic salmon fisheries management. Canada had already adopted a precautionary approach in its 1998 Atlantic salmon management plans. Greenland joined us in this approach when it agreed to restrict its 1998 fishery.

Progress is being made. It may seem at times that progress is slow but such is the way of the world. The inexorable flow is toward a better and better understanding of our fish resources and a better and better approach to sustainable conservation.

Just rounding out those June accomplishments, the minister announced that the Davis Strait turbot fishery had been fully Canadianized and that no foreign vessels would be used in this fishery. This should help allay the fears of those still raising the spectre of foreign overfishing.

The five year management plan the minister introduced was developed with the advice and recommendations of the Nunavut Wildlife Management Board and the views of the industry. These measures and numerous others are quite a record of achievement, one that demonstrates conviction and determination to put conservation first. It is not enough to say that mistakes were made in the past. What good is it to criticize the mistakes of the past and then advocate the same behaviour today?

We have to change our behaviour, as painful as that may be. That is what the minister has been telling Canada's fishermen. I believe that Canadians in my constituency, in particular in the riding of Algoma—Manitoulin which as I have said is a beautiful Great Lakes riding, understand the importance of making change. They trust that the government will make change in a responsible, caring way. Above all, as a government we have always tried to put people first. While I would be the last one to say we have never made any mistakes, I would put our record as a government up against any record of any government anywhere in the world, particularly against recent past governments of this country.

A bill of rights for fishers is certainly not necessary, especially when we consider the record of the government.

[Jean Dubé, Progressive Conservative, Madawaska—Restigouche, NB]

Mr. Speaker, I am pleased to speak today on this first day back to the House. I would like to take advantage of this opportunity to wish all my colleagues a happy New Year.

I am even more pleased that I am speaking on a bill initiated by my colleague, the member for New Brunswick—Southwest. The House is addressing a matter that is of great importance to a number of Canadian communities. The fishery is not the focus of the economy in the majority of ridings represented here. Still, there must not be indifference to the ongoing crisis in the fisheries sector in my province, in the Atlantic region and in the Pacific region.

With all due respect to the scientists in the Department of Fisheries and Oceans, as well as the minister and senior departmental officials, those who earn their daily livings from the sea are the ones who know it best. That is why I applaud the initiative of my colleague from New Brunswick—Southwest.

His intent in this bill is to ensure that fishers have a say in decisions which may affect their work, their community and their way of life. What could be more praiseworthy?

Allowing fishers to have their say is not so far fetched. It is something we as elected persons have been struggling to do for years.

For instance, the Standing Committee on Fisheries and Oceans visited 15 communities over a period of nine days in the late fall of 1997. The committee spoke with fishermen, plant workers and others involved in the east coast fisheries in Newfoundland and Labrador, Quebec, New Brunswick and Nova Scotia.

Many of the witnesses who appeared before the committee felt betrayed by the federal government. In their opinion the federal government was responsible for managing the fishery and did not meet its responsibility. The committee heard about the inequities and the arbitrary designations of those ineligible for the TAGS program. Many plant workers were ineligible because of small breaks in employment despite a long attachment to the industry.

It was felt that the licence buyout portion of TAGS was not successful because the boats, gear and other licences were transferred to other fishermen. Therefore the capacity was not reduced. Fishermen have little confidence in the ability of the Department of Fisheries and Oceans to manage the fishery. As well fishers question DFO's scientific estimates.

There is a concern about the independence of the fisheries resources conservation council as the council used DFO staff and office space. Fishermen from all areas are criticizing the quotas for foreign fishermen. One fisherman quoted in the committee's report said “The fishery is the biggest foreign aid program around”. The east coast communities want fish caught in Canadian waters to be processed in Canadian onshore plants rather than on foreign vessels that process onboard.

The standing committee travelled in January 1998 to west coast communities where it heard many of the same concerns it heard on the east coast.

The west coast fishery has experienced a rapid restructuring, due in large part to the Pacific salmon revitalization program, but also to various other factors affecting fishers and coastal communities.

Very many fishers are of the opinion that DFO no longer has any interest in the future of their communities, but has centralized its decision-making process in the regional offices and in headquarters.

Many witnesses have criticized the lack of resources allocated to new fisheries. Downsizing at Fisheries and Oceans has resulted in a shortfall of personnel available to develop new fisheries.

DFO policies have raised serious concerns in many communities. For instance, the village of Ucluelet has invested massively in enhancing its water supply system because the processing of hake requires huge amounts of water. Then, DFO announced it planned to review its hake policy.

Also, DFO imposed on municipal governments in the Fraser Valley complex and expensive requirements with respect to cleaning ditches, while not taking any responsibility or sharing any costs.

Such departmental decisions may be warranted, but they are being made without any consultation or paying any attention to their impacts on the individuals and communities concerned. That is what needs to change. They must be accountable to these people.

There is a wealth of information and plain good common sense to be had from simply listening to the people who know the fishery best. It is time to rely on more than just the good graces of the Standing Committee on Fisheries and Oceans. The time has come to formally recognize the voice of fishers in the decision making process.

The bill endeavours to establish the rights of fishers so they will be involved in the process of fishery stocks assessment, fish conservation, setting fish quotas, fishing licensing and the public right to fish. The bill would establish the rights of fishers to be informed in advance of decisions affecting fishing as a livelihood and the right to compensation if other rights are abrogated unfairly. The livelihoods of people in Atlantic Canada and Pacific coast fish industries have been affected by arbitrary decisions made with little or no consultation with those directly affected.

It is nothing short of a crisis. Fishers are increasingly frustrated and discouraged with the government's inability to deal with real issues affecting their lives. The fisheries industry should be a sunrise industry, not a sunset industry as seems to be the case today.

The bill before us today is a votable one. I urge all my colleagues to vote in favour of this bill.

There has been such turmoil recently in the fishing industry that the least we can do is to involve fishers in decisions affecting them personally.

Business Of The House

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I rise on a point of order. Rather than interrupt the hon. member once he starts his remarks, I would like consent for the following motion which has to do with today's and tomorrow's order of business. What I will propose has been subject to a meeting earlier this morning among House leaders. I believe you will find consent thereto. The motion is as follows:

That, on Monday, February 1, 1999 and Tuesday, February 2, 1999, the House shall continue to sit after 6.30 p.m.;

That the business to be considered after 6.30 p.m. on Monday, February 1 shall be the third reading stage of Bill C-58, followed by the report stage of Bill C-49, provided that, when Bill C-49 is under consideration, all amendments that are otherwise in order shall be deemed to have been duly moved and seconded and, when there is no further debate thereon, the question deemed to have been put and a division thereon to have been requested and deferred to February 2 at 5.30 p.m. and provided that, when the aforementioned business has been completed, or, in any case, no later than five hours after consideration of the said business is commenced, the House shall adjourn to the next sitting day;

That the business to be considered after 6.30 p.m. on Tuesday, February 2 shall be Government Order, government business number 19—

—provided that, when no additional members rise to speak, or, in any case, no later than seven hours after consideration of the said business is commenced, the House shall adjourn to the next sitting day;

Provided that, after 6.30 p.m. on February 1 and February 2, the Chair shall not receive any dilatory motions or quorum calls or requests for unanimous consent for any purpose.

I believe there is consent for the motion which has been circulated to the whips' desks of all parties in the House.

[The Acting Speaker (Mr. McClelland)]

I have been asked to have the government House leader repeat that but I think we will dispense with repeating it.

This will be a two stage process. The first will be to seek unanimous consent for the motion to be presented and then to be adopted.

Is there unanimous consent for the motion as presented by the government House leader?

[Some hon. members]

Agreed.

[The Acting Speaker (Mr. McClelland)]

Is there unanimous consent to adopt the motion as presented by the government House leader?

[Some hon. members]

Agreed.

[An hon. member]

No.

The House resumed consideration of the motion that Bill C-302, an act to establish the rights of fishers including the right to be involved in the process of fisheries stock assessment, fish conservation, setting of fishing quotas, fishing licensing and the public right to fish and establish the right of fishers to be informed of decisions affecting fishing as a livelihood in advance and the right to compensation if other rights are abrogated unfairly, be now read a second time and referred to a committee.

Fishers' Bill Of Rights

[John Reynolds, Reform, West Vancouver—Sunshine Coast, BC]

Mr. Speaker, it really is a pleasure to rise and speak to Bill C-302. I commend the member for New Brunswick Southwest for bringing forth this bill. He is absolutely right in the fact that fishermen need more rights in this country. We only have to look at what government has done in the last 10 years on fisheries.

We have spent $4 billion on fishers. What has that got us? It has got us an east coast fishery that does not work, loads of unemployment and nothing positive in the future that we can see right now. What has it done on the west coast? It closed down coho salmon fishing last year.

Money does not solve the problem but consultation in the fishing industry would solve the problem. With this minister and ministers before him we have not had consultation with the fishermen, whether that has had to do with commercial fisheries or sports fisheries.

Members of the committee travelled all across Canada. If members of this House would read the report, east coast and west coast, they would see that the government has not consulted the fishermen in any part of the country. That is why a bill like this one is a very good bill. I would implore the backbenchers on the other side who have been speaking against this bill to read the reports written by members of the House, including the Liberal side, to see what the recommendations are. Those recommendations are in this bill. More consultation. Not just more money thrown at a problem. That will not solve the problem.

There are two examples of lack of consultation. The first is on the west coast in my own constituency. The minister wiped out coho fishing this year in British Columbia. This put a lot of people out of work. There was a great deal of sadness because we had a great run of coho but nobody was allowed to fish it.

A hatchery in my constituency a couple of years ago put some coho in Porpoise Bay. The minister had to lift the embargo of fishing coho and allow people to fish in Porpoise Bay because there were so many coho. The coho were going to spawn and if there are too many of them they lay eggs one on top of the other and a disease starts which could cause a real problem. There was fishing in Porpoise Bay for coho. That was not good planning by the government. The fishermen told the government the year before that it could not put a ban in that area.

Fishermen were also told that they could not seed the open ocean because, and these are the words of DFO, there are already too many coho out there. DFO said not to put any out there. Then what did DFO do? It banned the fishing because it said that there were not enough. That is the department of fisheries without consultation with the fishermen. This bill gives fishermen rights to consultation.

Another story concerns herring roe on kelp. This was not a native fishery. This was a fishery started by a man and his family who live in Lund, British Columbia. They built it into a fishery where they were getting $40 a pound for herring roe on kelp in Japan. Over the years some of his employees left and started up their own herring roe on kelp business because they had learned the business and wanted their own business. Over the years it dropped down to about $30 a pound, but it was still a very lucrative business. Four companies were doing it and making good money at it.

This government came along and gave one of those four people $2 million to buy the licence back. What did the government do with that $2 million licence? It gave it to an aboriginal group in British Columbia. The government said, “It is not a natural fishery for an aboriginal group but it is a good business so let's get you into it”. Since then the government has given away in excess of a dozen more licences in this area of herring roe on kelp to aboriginal fishermen around the province.

What has happened to the market in Japan? It went from $30 down to $20 down to $10 as the government kept on giving licences away for free.

The other three licence holders wanted to be bought out too. They said, “If you can buy out this other guy for $2 million, why won't you buy us out. There is not going to be any industry if you keep on passing out these licences for free to the different native bands around the province”. But the government said it did not have any money to buy them out.

The sad thing is this lack of planning, lack of consultation. The herring roe fishery is zero because the native bands are shipping it to Japan on consignment and the other people are going out of business. That is the lack of planning in this industry.

If we wonder why people get angry when DFO does not consult, how would any member of this House like to be one of those fishermen with the herring roe on kelp who are now having to compete against people who got their licence for free and can ship it to Japan on consignment? It is not right. It is not proper. We all should be voting for a bill like this one to allow the freedom and the consultation.

As I said, I commend the member for New Brunswick Southwest. His bill says that it endeavours to establish the rights of fishermen so that they are involved in the process of fishery stock assessment, fish conservation, the setting of fishing quotas, fishing licensing and the public right to fish. As well the bill would establish the rights of fishermen to be informed of the decisions affecting fishing as a livelihood in advance.

The example I just gave on the herring roe on kelp is a great example of why people should be advised in advance. These are people who put good money into their industry. They are not being advised.

It does not take a rocket scientist to figure out that fishermen have a problem in this country. What does the government do? It just throws money, $4 billion over the last 10 years. This has not solved one problem.

We need to move DFO out of Ottawa. Put a head office on the east coast for the east coast, and on the west coast for the west coast. We need to get these 1,200 bureaucrats out of the business. There is no fishing in the Rideau Canal. The fishing is on the east and west coasts. There are too many bureaucrats making too much money who have made wrong decisions. This is out of a report written unanimously by all sides of this House. It is being ignored by the minister of fisheries and it is being ignored at the peril of this country's fishermen. It is time for a change. We ask all members of the House to vote for this bill tomorrow.

[The Acting Speaker (Mr. McClelland)]

It being 11.55 a.m., the time provided for debate has expired. Pursuant to order made earlier this day, the question on the motion is deemed to have been put and a recorded division deemed demanded and deferred until Tuesday, February 2, 1999, at 5.15 p.m.

Business Of The House

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I rise on a point of order. There have been further consultations. Hopefully without re-reading the motion into the record, perhaps you could ask the House if it would now agree to adopt the motion read into the record a few minutes ago.

[The Acting Speaker (Mr. McClelland)]

Is it the pleasure of the House to allow the government House leader to present the motion?

[Some hon. members]

Agreed.

[The Acting Speaker (Mr. McClelland)]

Is it the pleasure of the House to adopt the motion as put by the government House leader?

[Some hon. members]

Agreed.

(Motion agreed to)

Finance

[Jane Stewart, Liberal, for the Leader of the Government in the House of Commons]

moved:

That this House take note of the 11th report of the Standing Committee on Finance presented on Friday, December 4, 1998.

[Maurizio Bevilacqua, Liberal, Vaughan—King—Aurora, ON]

Mr. Speaker, for all of us in the House of Commons, politics and government are about one thing: people. They are about helping them build better lives for themselves and their families, about helping them make their dreams work, the dreams they have for themselves and for their children: a better quality of life, a higher standard of living, a fair shot at a good job that pays well, and a society that gives them the support they need when they need it.

Making these dreams a reality has been our overriding objective since the government first took office in 1993. That is how we won the confidence of Canadians. The progress the government made in its first mandate earned it a renewed majority mandate in 1997. It is that focus on what matters most to Canadians that is how this government aims to keep the confidence and trust in the future.

A strong economy is the key to building a more secure society. For proof, all we need to do is remember the Canada of five years ago. The government faced a $42 billion deficit, the largest in Canadian history and it was growing. Unemployment was at 11.4%. High inflation and high interest rates were dragging down the economy in a big way. The debt to GDP ratio had been rising steadily for almost two decades. Taxes seemed to know only one direction: up.

Serious questions were being raised about our ability as a nation to maintain our cherished social safety net. Worst of all, we had lost our characteristic confidence in ourselves as a people and in our future.

In the past five years the government has shown what happens when we roll up our sleeves and get down to work. When we listen to Canadians as we did during our prebudget consultation hearings and when we work side by side with them, when we trust their courage and their willingness to make sacrifices, and when we reflect on values and priorities, what happens? Positive change occurs.

Five years ago the Wall Street Journal compared Canada's economy to that of a third world economy. Recently the Financial Times of London referred to Canada as the top dog of the G-7. The $42 billion deficit is now a $3.5 billion surplus. The debt to GDP ratio is on a firm and permanent downward track. In fact the Government of Canada has not borrowed new money on the markets for more than two and a half years.

Personal taxes in the last two budgets have been cut. They were cut by $7 billion in the last budget alone. Our inflation rate is at its lowest level since the 1960s. Our interest rates are also at the lowest levels in three decades.

Canada has enjoyed the strongest economic growth of the G-7. Even with the recent global turmoil, the International Monetary Fund recently forecasted that Canada would be among the G-7 leaders for economic growth in 1999.

Unemployment in Canada has fallen by almost 3.5 percentage points since we took office to its lowest level in nearly a decade. Last year our job growth was number one in the G-7.

Best of all, there has been a resurgence of optimism among Canadians and a renewal of confidence among Canadians that government can in fact make a practical difference for the better in their lives. This was evident during the prebudget consultation hearings held across the country.

A secure society is one in which people can count on their fellow citizens for help and support when they need it. If they lose their job, if they need income support in retirement, to give their kids the good start they need in life or when they are sick, compassion and sharing are deeply held Canadian values. They are reflected in some of our proudest national achievements: insurance for the unemployed, the Canada pension plan, supporting children in need and our universal medicare system.

Safeguarding these pillars of our society was a primary motivating factor behind the fight against the deficit and impressive work has been done to protect and modernize them.

To meet the needs of our new labour market, the government redesigned and refocused assistance to the unemployed, creating an employment insurance system aimed at helping people get back to work as soon as possible.

In co-operation with the provinces the federal government established a new child benefit to help low income families with children. By July 1, 2000 the federal government will be investing $1.7 billion in this initiative.

Working with the provinces, it also achieved an historic package of reforms that will guarantee the Canada pension plan remains on sound financial footing, even in the face of an aging population, increasing longevity and retiring baby boomers. The CPP will be there for future retirees. They can count of it. Securing our public pension system is something no other industrialized country has been able to do. Moreover, the success in saving the CPP combined with a balanced budget and a stronger economy have allowed the government to reaffirm its commitment to old age security and guaranteed income supplement programs.

Canadians have told us that access to quality health care is among their most urgent concerns. The government has listened. Since it was first elected in 1993 protecting our universal medicare system has been a top priority. As soon as the fight against the deficit gave the government financial room it followed the recommendations of the National Forum on Health. It increased the cash floor of the Canada health and social transfer from $11 billion to $12.5 billion. That means close to $7 billion beyond previously budgeted levels, over six years, will go to the provinces to fund health care, post-secondary education and social assistance.

Additional funding will permit the enforcement of the five principles of the Canada Health Act: universality, accessibility, comprehensiveness, portability and public administration.

The government has shown its openness to modernizing the health care system. In its first mandate the Prime Minister chaired the National Forum on Health which brought together Canada's wealth of talent and knowledge in the health care field to assess how the system could best respond to emerging health care issues.

The 1997 budget allocated over three years to implement key recommendations of the national forum: $150 million for the health transition fund to help provinces launch pilot projects to investigate new and better approaches to health care, including home care; $50 million to establish a new Canada health information system to give health care providers timely access to quality health information; and $100 million to boost funding for the community action program for children and the Canada prenatal nutrition program.

During our prebudget consultations Canadians from coast to coast stressed the importance of health care in their lives. They said that the government should continue with its strong commitment to health care. We believe that health care is a priority. In the upcoming budget we will strongly endorse measures to strengthen the health care system in Canada.

Maintaining a strong economy and a secure society in the new global, knowledge based economy requires that we invest within our means and in carefully targeted ways so that Canadians have the knowledge, the skills and the opportunities they need to prosper.

One of the key reasons the government fought so hard against the deficit was to regain our ability as a nation to make such strategic investments in our people. For example, the millennium scholarship fund will generate over 100,000 scholarships each year for low and middle income post-secondary students over the next decade.

The Canada education savings plan is another example. Our government is topping up new contributions to registered education savings plans, which are an enormous hit with parents saving for their children's future education.

Another example is the Canada foundation for innovation, whose $800 million endowment is being used to fund cutting edge research facilities in our universities and teaching hospitals.

There is the connecting Canadians strategy, the goal of which is to make Canada the most connected country in the world by the year 2000, with our own fast lane on the information highway. A key part of that strategy has been SchoolNet, which will mean that every one of our more than 16,000 public schools and libraries will be connected to the Internet by the end of the fiscal year. We will be the first major nation in the world to do this: ahead of the Americans, ahead of the British, ahead of the French.

Then there is the youth employment strategy which consolidated approximately $2 billion in new and existing funding for the programs and services that young people need to acquire skills and work experience, find jobs and build careers.

The measures that we are taking are important because we compete in a global marketplace. I am quite happy to see that as a nation we are getting ready for the challenges ahead. However, let us be clear: we are building on a solid foundation.

Canada is number one of the G-7 in home computer, cable and telephone penetration. We have the lowest telephone rates of the G-7, the lowest Internet access cost of the G-7, the lowest cost of doing information technology business of the G-7, the lowest software production cost in North America and we are ranked number one in producing knowledgeable workers.

Investing in R and D and the skills of our people, expanding educational opportunities, cutting taxes, investing in health care and reducing the public debt make perfect sense if we want to improve the standard of living of Canadians.

There is no question in my mind that Canadians want their political and business leaders to focus on improving their standard of living. They are quite tired of the turf wars that exist between levels of government. They are quite tired of the politics of finger pointing. They are not interested in that any more. They want results from their elected officials. They want results from their corporate leaders. They want a brighter future for their children. That is the focus which was quite clear when we travelled across the country listening to students and listening to people involved in R and D. We listened to our educators. In every city people told us that the standard of living is the issue on which we, as a society, must be focused.

Let us put an end to the era of confrontation. Let us build an era of co-operation, one in which people's standard of living and quality of life are key issues. This is not simply a debate that needs to be had in the halls of the House of Commons. It has to happen in the communities and in corporate board rooms because we all have a responsibility to improve the standard of living for Canadians.

One thing that is certain is that although in the past two years Canada has seen an improvement in its productivity, it has, like every other G-7 country, seen a decline in productivity. We need to improve that because productivity essentially means a better standard of living for Canadians. What can we as a government do? What is our role to enhance productivity?

I want to make sure people understand that it is in the context of increasing the standard of living for Canadians that the recommendations were made in the finance committee. Before we talk about the recommendations we made as a committee let us look at what the government has done to increase productivity in Canada. What kind of measures or channels has it used to make sure the productivity gains seen in the past two years continue?

When looking at the government policies that promote a higher standard of living, they can be broken down into fiscal and monetary policy, tax policy, support for education and skill development, support for R and D, social and labour market policies, trade policies and policy that understands there is a role for the marketplace.

When looking at fiscal and monetary policy and clearly understand that a stable macro economic environment with low inflation and lower interest rates can boost confidence in the economy, enhance productivity growth and boost employment, what has the government been able to achieve? There are a number of accomplishments we should take note of.

The federal deficit has been eliminated. The debt to GDP ratio is in a clear downward path. There has been substantial fiscal progress at both federal and provincial government levels, and we have the low inflation records of the 1990s. That is pretty clear, low interest rates, reducing the debt, reducing the burden on Canadians. What happens when we do that? We increase productivity and increase employment opportunities for Canadians and that is essentially what we heard throughout the country.

What did the finance committee have to say about that? We found a great deal of satisfaction on the part of Canadians when it came to these issues. When it comes to fiscal and monetary policy the finance committee recommended that the Government of Canada continue to use prudent economic assumption in the formulation of budgets, that assumptions about short term and long term interests continue to be set at 50 to 100 basis points higher than the private sector average, and that the minister alter the prudence factor as circumstances warrant.

The committee recommended that the federal government continue to employ a contingency reserve which has set aside $3 billion per year. At present the contingency reserve should not be used on increased program spending or tax cuts. The committee also recommended that the government continue to use two year planning horizons for the conduct of fiscal policy.

We recommended that the federal government establish a long term target for a sustainable debt to GDP ratio. We said that an interim debt to GDP target range of 50% to 60% should be achieved in this mandate.

Fiscal and monetary policy is one issue but what are the other contributors in achieving a higher standard of living? If we look at tax policy, taxes can affect the allocation of resources and alter the incentives to work, to save and to invest.

What has this government done, what are its accomplishments? We have seen the beginning of general tax relief, the national child benefit system to support working parents and the HST to reduce compliance costs. These are three of the measures.

While the world, in particular the group of seven countries, is spending a lot of time devising strategies for productivity, in a measured way this government is putting in place the types of policies that speak to the worldwide debate on productivity. In the past three years we have seen an increase in productivity, which I hope is a trend.

Does the finance committee feel the federal government should continue to cut taxes? Absolutely. We have made a number of recommendations in relation to taxes. Last year we called for the elimination of the 3% surtax. This year we call again for the elimination of the 3% surtax for all Canadians. We call for the announcement of a timetable for the elimination of the 5% surtax. We do that because these taxes were introduced as deficit fighting mechanisms. Now that the deficit is gone it is time for the minister to announce a timetable for further tax reduction.

As we did last year, we recommend that the 1998 budget measures to increase the basic personal amount and spousal amount by $500 for lower income taxpayers be increased by a further $200. That would bring to $700 the amount of additional income that can be earned tax free. The committee further recommends that this $700 increase in the basic personal and spousal amounts be available to all Canadian taxpayers.

I will discuss what the government has done to enhance productivity. We must make sure the people who work in our companies have the proper skill sets and education to do things better and quicker, that they can produce more, enhance and generate wealth for our companies and in aggregate for the country. Support for education and skills development gets more people into the workforce by boosting the employment rate. It helps people get higher wage jobs and achieve greater productivity.

Is this not essentially the type of society we want to build? Is the reason an industrially advanced country like Canada entered free trade agreements not because we wanted to compete and generate high paying jobs that require highly skilled workers? That is where our competitive advantage is.

Looking at education and skills development, what has this government done? There are the Canadian opportunity strategy, Canadian millennium scholarships, Canada study grants and tax relief on interest on student loans, the Canada education savings grant, the increased education and tuition tax credits, SchoolNet to give young students Internet access, increased funding for youth at risk who lack basic education and job skills.

This is what it takes to build a country. We need to invest in people. We need to create the economic environment where we as a nation and as a people can generate wealth.

Another key component of a productivity strategy must be researched and developed because it provides the innovation needed to improve production processes, thereby boosting productivity.

The government has moved on several fronts with the Canada foundation for innovation, technology partnership Canada, tax support for R and D, and networks of centres of excellence.

We need labour market policies that work so Canadians can work. They influence work incentives and facilitate workforce participation by removing barriers.

I remember this debate quite clearly when I was parliamentary secretary to the minister of human resources. I remember how we needed to modernize and restructure Canada's social security system so that it would serve our people well.

As a 1990s car cannot be fixed with a 1960s repair manual, the same thing is true of our social security system. We need to modernize it. I think EI reform did that.

Productivity is also impacted by our trade policy. What does trade policy do? It increases competition and allows countries to specialize in products they are good at making. There again the end result is a boost in productivity and competitiveness.

What has this government done in the area of trade policy? We have NAFTA. We are a leading player in the WTO. There are ongoing efforts to ensure the free flow of goods and services within Canada. These are characteristics of a government and a nation that are forward looking, that understand that the route to a higher standard of living is higher productivity.

Another very important component of productivity strategy is letting the market work. Regulation and subsidies can dampen market signals and distort the allocation of resources, inhibiting growth and inhibiting essentially productivity growth. Privatization can enhance and boost productivity.

There is a difference between individuals who talk about these things and governments that do. When we look at the government's record on the important component of increasing the standard of living for Canadians, we see that the government reduced business and transportation subsidies. We have had partial or full privatization of Air Canada, Petro-Canada, Canadair, De Havilland Canada and CN.

It is clear to me that the agenda of the government is working quite well. I heard this throughout the country. It is an agenda that looks to the future with a great deal of optimism. We have eliminated the deficit. We have lowered taxes. We have made key investments in education, research and development.

I am proud to be a Canadian. I am proud to be a member of the House of Commons. It is due to the recommendations of members of parliament that we have been able to build a society and an economy that work. Our next frontier is to work toward a higher standard of living, to secure that our children and our children's children will live in a better country than we live in.

[Preston Manning, Reform, Leader of the Opposition]

Madam Speaker, it gives me pleasure to enter into the debate on the report of the Standing Committee on Finance. My purpose will be twofold. I would like to make some comments on the report of the committee and then I would like to serve the broader purpose of offering some advice from the official opposition to the finance minister and the government prior to the finalization of the federal budget.

The official opposition has also consulted with Canadians with respect to their expectations in terms of federal finances. While we appreciate the consultations that have been conducted by the committee, we think that from our own consultations Canadians are much more specific on the expectations they have in mind.

In particular, Canadians are telling us and anyone who will listen that it is what the federal government is doing to our taxes and our health care that concerns us most. They expect the budgetary policy of the government in the next number of months to focus specifically on addressing their concerns in that area.

It is our view that the report of the committee and the statements to date by the government are not sufficiently focused on these priorities. Therefore, my colleague, the member of parliament for Medicine Hat, the official opposition finance critic, and a number of his colleagues have produced their own prebudget submission entitled “Taxes and Health Care: It's Critical”. That is being released today. I thank all those responsible for its development and commend it to the committee, to the House, to the finance minister and to the government.

The report has three emphases. First, it proposes a real, substantial tax relief package. For example, under that package a single income family of four earning $30,000 would receive an annual pay hike of over $4,000, not the pathetic $143 offered by the government.

Second, on the health side it not only proposes an additional $2 billion per year of reinvestment in health care but complementary measures to start putting the patient first in the rebuilding of the crumbling health care system.

Third, on the debt side it proposes a comprehensive debt repayment schedule designed to reduce the national debt by $19 billion over the next three years.

I turn to the report of the Standing Committee on Finance entitled Challenges and Choices . I do not want to begin by slamming the report or by dismissing its recommendations or analyses out of hand. Like many of us I think there is too much of that in the House.

It is not our intention to slam every effort or proposal that comes from the government simply because it comes from the government. I think the government tends to do that a bit: if it comes from the official opposition, particularly if it comes from Reform, it is automatically banned. Those attitudes on either side of the House cannot encourage debate. They do not earn the respect of the public and they are not very productive. We do not want to fall into the same trap.

With respect to the report we commend the committee for its extensive consultations. I commend the committee on the first chapter of the report which provides a summary of where we are financially and in relation to the economy and the performance of the government financially.

I commend the committee for devoting at least two of its eight chapters to the priority areas of health care and taxes. I also commend the committee for adopting some of the proposals of the official opposition, in particular the proposals for eliminating the 3% surtax, eventually the 5% surtax, and reductions in personal income tax.

When we think that three years ago the subject of tax relief was not in the government's vocabulary, we have to take some satisfaction in the House that the government is at least talking about it. We are encouraged by these signs of progress.

Having said that, I would like to point out two major deficiencies in the report. The first is that the report devotes an entire chapter to a prudent budget making process, chapter 3, and then omits the most important step in prudent budgeting.

Prudent budgeting begins with accurate, transparent, principled accounting and reporting of the government's financial position. Concrete measures are required to prevent the finance minister from playing a shell game with public finances and giving the appearance, rightly or wrongly, of cooking the books.

The shell game on taxes, for example, is that the government is taking $40 billion more per year in taxes than it was in 1995. It gives $2 billion to $3 billion per year back to the taxpayers and calls this token tax reduction tax relief and hopes the public does not notice the difference between what was given and what was taken. This type of rhetoric, this type of approach to presenting tax reduction fools no one. It increases public skepticism about anything said regarding tax reduction at the federal level.

The government also plays a shell game on spending, something that even the auditor general has commented on and gone further than commenting on: he will not sign off on the financial statements because of this shell game.

In the old days when the federal government was running a deficit it practised what is called back end loading. It tried to push costs, if there was any accounting way of justifying it, on to the next year to make the deficit look smaller.

Now that we are into the era of surpluses the government is practising front end loading. It is trying to pull as many costs as it can into the current fiscal year to make the surplus look smaller so that it is under less pressure to reduce taxes.

I pointed out on numerous occasions that if this was done in the private sector and the finance minister was the vice-president of finance of an oil company, he would end up making licence plates in some provincial penitentiary for practising that game.

The shell game is also played particularly with respect to the surplus. Everything is done now to try to make the surplus look smaller so as to reduce the pressure for tax relief. This includes spin doctoring of the projected surplus.

We find the initial projection of the surplus by the government was $10 billion to $13 billion. A series of press releases came out, particularly over the last couple of weeks, indicating why those initial projections were out of line and that probably it would be less and less and less. The purpose is to make this surplus appear smaller and, I am certain, to minimize public pressure for tax relief.

The official opposition therefore recommends that if the government wants to practise prudent budgeting Canada should follow the example of New Zealand and pass a financial responsibility act that creates a legal requirement for the government to produce financial statements in accordance with generally accepted accounting principles, specifies what those principles are in the legislation, and holds officials legally liable for violating those rules.

There is a second deficiency in the report which should be emphasized. It centres around the report's recommendation that the federal government enter into a productivity covenant with Canadians.

The word covenant is a religious term. I do not know whether the intention was to deify the government or to imply that the Minister of Finance would go up the mountain and return with two tablets of stone prior to the budget. If he does that, I hope the tablets will have something in bold print about thou shalt not steal and thou shalt not bear false witness. However that is not my main point.

The definition and elaboration of productivity in the report strikes me as curious. I spent 20 years in the private sector as a management consultant working with companies for whom productivity was a real term which was measured. They even developed computer models in the company to try to measure the development of productivity.

In this report the vague definition is used that productivity simply means getting better results with the same effort. It looks like it was written by a Liberal spin doctor, not by somebody responsible for productivity.

The definition of productivity that is used in the real world, in business, in unions and in the marketplace where people have to produce, where this means something and where they will be measured against it, is a ratio. Productivity is a ratio of the value of production over the cost of doing business. The cost of doing business is the denominator in that fraction. It includes taxes imposed by the government. Anything that increases the cost of doing business without increasing the value of production decreases productivity. It hurts productivity.

If the government wants to talk seriously about productivity and the productivity covenant with Canadians who are not stupid—there are thousands of people in my constituency who can define productivity better than in this report—it needs a clear definition of productivity that makes crystal clear the negative impacts of Liberal overtaxation on the competitiveness and the profitability of Canadian business and employment. I urge the committee to address that point. It fits in with public understanding of what the government is doing to our taxes.

I now turn to a bigger and broader framework than is contained in this report for analysing the government's financial position of what should be in the budget. When Reformers came to Ottawa in 1993 we had a four point list for fixing federal finances that is as relevant today as it was when we first came here: control and prioritise the spending, balance the budget, reduce the taxes and reduce the debt. It is pretty simple.

Five and a half years later under this administration only one of those matters has been dealt with. The budget is now balanced, but that was done not by controlled spending but mainly through revenue increases and offloading to the provinces. There still remains much to be done on the simplest fiscal agenda that is possible to get Canada's fiscal house in order. That is the thrust of our prebudget submission and our advice.

Let me take these categories one by one. With respect to controlling the spending, the federal government is still not doing it. In the 1997 budget plan the finance minister projected that government program spending last year would come in at $105.8 billion. He called his assumptions prudent, taking into account normal demographic and inflation changes. The problem is that when the final numbers came in, program spending for 1997-98 was $108.8 billion or a $3 billion spending hike. All the talk about spending control, all the talk about balancing the budget through cost reduction, and the first year into a surplus position spending escalated $3 billion over the estimate.

This year it is déjà vu all over again. In the same 1997 budget plan the finance minister projected program spending for this year at $103.5 billion. By the time his 1998 budget came out he had upped those spending predictions to $104.5 billion. Now, according to the most recent financial information, program spending is slated to rise even further, by 3.1% so far this year.

This means that if the finance minister follows last year's pattern and continues this year's already documented schedule of overspending, his spending is going to come in around $107.5 billion or another $3 billion over what he told this House it was going to be. That is spending control. What it reflects is a Liberal predisposition to spend and the need for even stronger spending controls.

What the official opposition recommends is really three things. First, to freeze program spending for three years at $104.5 billion to generate the surpluses necessary for real tax relief and debt reduction. That is not an unreasonable figure. It is the figure that the finance minister himself said was adequate for last year.

This does not mean that we cannot increase spending in priority areas. But during the three year freeze it means that can only be done by reducing spending in other areas. In other words, it forces the government to do what every household in the country has to do when there is not quite enough money and that is to prioritize. Why should we not do what millions and millions of Canadians in households and businesses are forced to do every year and every month?

The official opposition therefore recommends increases in both health and defence spending, but primarily from reductions in handouts to business, interest groups and government to government foreign aid. We propose increases in spending, but we would get the money by reducing spending somewhere else rather than adding to the deficit or adding to taxes.

Other members and the government may disagree with our spending controls and our spending priorities. That is fine. That is what we are here to debate. But if they disagree, then it is incumbent upon the government to set out its own spending controls and priorities which will still have the effect of generating the surpluses we need for tax reduction, debt reduction and health care reinvestment.

Let me turn to debt reduction. Again the federal government just is not doing it. We have a $580 billion federal debt. All we see is token debt reduction. Under this government Canada continues to spend almost 30 cents out of every revenue dollar on interest on the debt. That is a burden on the capacity to finance social services. We bleed ourselves white paying out over $40 billion a year and then we wonder why there is not enough money for transfers to the provinces.

It is a drag on productivity. The government says it is concerned about productivity. The greatest thing it could do about productivity is to get the debt burden down. If we work out its own calculation on its productivity, that $43 billion a year on debt service knocks the ratio out the window.

Lincoln once said that excessive debts were like rats gnawing at the vital organs and sinews of the state. I cannot for the life of me understand how the finance minister can sleep at night with $580 billion rats gnawing at the vitals of the Government of Canada. I use rats of course in a general sense, you understand, Mr. Speaker; not attributing it to any personality.

What the official opposition recommends is not rocket science. The problem here is not figuring out what to do; the problem here is to get doing it. We recommend, first, that a debt retirement sinking fund be established; second, that a law be passed to direct a portion of the debt to be retired each year; and third, that a schedule be established to reduce the debt. We recommend that the debt be reduced by $19 billion over the next three years and by $240 billion over the next 20 years. Let us get serious about debt reduction and the mortgaging of the future of the next generation.

I want to talk about real tax relief, and I will draw a distinction between token tax relief and real tax relief. I will draw a distinction between the shell game, where the finance minister pushes a shell that says a $2 billion reduction, a $3 billion reduction and tries to pull to the back of the table the fact that the government is taking $38 billion to $40 billion a year more than when it came here in 1993. I am not talking about the shell game. I am talking about real, genuine tax reduction that can be felt in the pockets of consumers and can be seen on the financial statements of businesses.

Let us consider the taxation record under the government.

Personal income taxes are up almost 38% and now account for 8.2% of GDP, up from 7% in 1993, for a 17% increase. Is it any wonder Canadians are struggling to get by? I have asked public audiences all over this country “Government income has gone up 35% to 40% since 1993. How many of you can say that your personal income or your family income has gone up 38% during that same period?” Not very many hands go up. There is a rumble through that audience that the government ought to take into account.

According to Statistics Canada taxes paid by the average Canadian household were 15% higher in 1996 than in 1992. Canadians pay 46 cents on every dollar earned toward taxes, while Americans, our greatest single competitor and the American labour market being the great drawing card to many of our young people right now, pay only 33 cents. In other words, as a percentage Canadian taxation represents 140% of the U.S. tax rate.

Government members cannot get out of this argument by saying “Oh, but we spend so much on health care”. The Americans spend much more than we do on defence. They wash each other out. It is not that simple. Our rates are simply higher, consistently higher, than those of our principal trading partner.

To put it another way, our personal income tax burden has gone up 136% in the past three decades compared with only 31% in the United States.

The federal government collects $11.2 billion from 7.7 million Canadians who earn $30,000 a year or less. We hear these great protestations of social concern from the government and the finance minister. He wrings his hands in public about child poverty and he wrings $11 billion a year out of families, with children, which make $30,000 a year or less. He sits in the House devising all kinds of programs to try to deliver some help to those families when the best help he could give them from a poverty standpoint would be to simply leave more dollars in their pockets.

Bracket creep is another area where the shell game is played. The minister stood in the House and told us how many people he would take off the tax rolls. That is the shell that is pushed to the front. What government members do not show us is the other shell which they pull to the back, the people who are being pulled onto the tax rolls through bracket creep. They outnumber by far the ones who have been taken off. More than a million low wage workers have been pulled onto the income tax net since the government took office. More than 1.9 million taxpayers were pushed from the bottom to the middle tax bracket and 600,000 taxpayers were pushed from the middle to the top bracket. That is the government's record on taxation. There is no tax relief. There is a consistent record of increased government revenues connected to increasing taxation.

In place of this token tax relief proposed by the government the official opposition proposes real, substantial, broad based tax relief. The proposals contained in the paper “Taxes and Health Care” include a reduction of $26 billion in federal taxes over the next three years, starting with a $7 billion reduction in employment insurance taxes, payroll taxes that kill jobs, and a $19 billion reduction in personal income taxes and capital gains taxes. If members work out the impact of these numbers on the take-home pay of a single income family of four making $30,000 a year, the family gets an annual pay hike of $4,628 under these tax relief reforms.

In case this is too complex for some of our colleagues, it is the intention of the official opposition to go across this country showing people what their take-home pay is under the Liberal tax regime, including the token tax relief measures contained in the budget, and what their take-home pay would be under these tax reforms. I do not think there is going to be much doubt as to which paycheque the public would prefer.

The finance minister plays the shell game and tells the government caucus that if it gives substantial, broad based tax relief the country will be back in a deficit position. Some hon. members actually believe that argument. That is simply not the case if one puts in place the other measures required to maintain the balance, such as the spending controls and the spending priorities referred to, the debt reduction measure that would reduce the interest on the debt, and tax relief that is substantial enough to stimulate economic growth.

If the government truly wants to enter into a productivity covenant with the Canadian people, let it be based on this proposition: that at Canada's levels of debt and Canada's levels of taxation, a dollar left in the pocket of a Canadian taxpayer, consumer or employer is more productive than that dollar in the hands of a federal politician or bureaucrat. That is a statement on productivity. It lies within the power of this parliament to increase the take-home pay of millions of individuals and families this year simply by substantially reducing the demands of the federal taxman. It lies within the power of this parliament to free up billions of dollars for future investment in health care and essential services by paying down federal debt now.

I therefore conclude by asking, by imploring, the Prime Minister, the finance minister and the 156 members opposite not to stand in the way of such noble objectives.

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

Mr. Speaker, I am pleased to speak on the report of the Liberal majority on the Standing Committee on Finance, which was tabled last December and suggests certain approaches with respect to the next budget.

The Liberal majority's report is a blatant piece of propaganda. It could have been—and was, I believe—written by the office of the Minister of Finance, so completely is it at odds with the comments we heard from individuals and from business and anti-poverty organizations in our travels across Canada.

What is more, the report touts the marvellous achievements of the Liberal government. This is a change from the reports produced by the Standing Committee on Finance over the last five years. They were mildly propagandist but this one is nothing but.

The report glosses over the nasty tricks and lack of consensus on such issues as the millennium scholarships. Nor does it make any mention of the fact that Quebec's opposition to this new Liberal government policy, this new intrusion into the education sector, is unanimous.

The report also refers to issues that never came up during this consultation, such as the famous productivity covenant. I do not know where this came from. Again, the likeliest source is the office of the Minister of Finance, who has the chair of the Standing Committee on Finance to do his bidding. This is the first time the committee chair has been nothing more than a puppet controlled by the Minister of Finance.

I was also appalled at the arrogance of this report on such issues as employment insurance.

I will quote the report of the Liberal majority, at page 55. Members are aware of the many problems with employment insurance, the increasingly limited access to it and the fact that fewer than 40% of the people contributing to it can now draw benefits. These benefits have shrunk in the past two years, since the employment insurance reform.

So what do we find on page 55 of the Liberal majority report? This is what we find, and I quote “The committee thinks that the phenomenon is misunderstood. The unemployed receive nothing because the system was not designed for them”.

Never have I seen or read such arrogant remarks in a Liberal majority report. So, even though statistics come out every week telling us what a total fiasco the employment insurance plan is, how it does not serve the interests of the unemployed in Quebec and Canada, the Liberals say the Quebeckers and Canadians who appeared before the Standing Committee on Finance do not understand the plan when it is the plan that makes no sense at all.

Another arrogant remark in the Liberal majority's report is when they say that the Canadians consulted want the Minister of Finance to continue his very prudent management of public funds.

The comments gathered across Canada are not self evident. On the subject of prudence, they do ask the Minister of Finance to be prudent too, but next above all, what Canadians across the country asked the Minister of Finance to do was to stop making up all sorts of stories, to stop saying things that do not make sense.

For example, as regards the surpluses, the minister was told to stop viewing Quebeckers and Canadians as gullible and to stop being off the mark by close to 100% in his forecasts. This cannot go on.

During that consultation, Canadians and Quebeckers asked the Minister of Finance to show greater transparency and honesty. Such comments were made by organizations from various sectors across the country. Honesty yes, but also accuracy, which is the very foundation of democracy and the basis of effective processes, such as the prebudget consultation process.

If the prebudget consultation is conducted while relying on falsehoods and lies, how can we expect the citizens of this country to have a clear mind and to propose sensible ideas based on the real figures?

How can we be expected, as lawmakers, to have a solid and credible basis to urge the government to make decisions, if the Minister of Finance is always fibbing about the state of public finances? He stated recently that the surplus—based on his own document, that is the last budget—would be somewhere between zero and three billion dollars, when in fact it will be in excess of six billion dollars.

The content of the Liberal majority report confirmed that we were right, last year, to have decided to conduct our own prebudget consultation. During the months of August and September, the Bloc Quebecois—led by its leader, the hon. member for Laurier—Sainte-Marie and myself as its finance critic—toured Quebec to hear the comments, ideas and suggestions of the people of Quebec regarding the content of the upcoming budget and the use that should be made of the huge surpluses collected by the Minister of Finance, primarily to score political points. We did our job.

What we heard is very different from what is found in the report of the Liberal majority. We look at the real issues. The people whom we consulted told us about the real issues. They said they had had enough of being told just any old thing by this government, of being told to continue to behave, to continue to make sacrifices, when the result of the sacrifices—far from seeing the benefits of these sacrifices, if we can believe the recent remarks by the Minister of Finance, they are not likely to see the benefits in the upcoming budget either—these people see the money saved on the backs of the most disadvantaged and the middle income earners reallocated to the most favoured classes. This is not normal.

Quebeckers and Canadians told us three things during these consultations. First, they said their first priority for federal transfers was to fund higher education, social assistance and most importantly health care.

They discussed the Saskatoon agreement. Remember that the agreement signed by all the premiers in Saskatoon provided two things, essentially: that the federal government stop cutting some $6 billion year in and year out in transfers to the provinces, and Quebec in particular, for health care, post-secondary education and social assistance, as it had set out in its 1995 budget.

They also called for the right to opt out with full compensation in areas of provincial jurisdiction. They asked that, if the federal government wanted another initiative there, provinces wanting to withdraw from a federal program in a provincial jurisdiction be able to do so with full compensation.

I think it is in the public interest to know what the Minister of Finance decreed in his 1995 budget. He decreed it once, but nobody mentions it anymore and nobody will mention it until 2003. We are making a point of putting it back on the table.

In 1995, the Minister of Finance decided that announcements of cuts to social programs, health care and education year after year were really unpopular. So, he said, “I will do it once, and it will be valid until 2003”. That is the plan for systematic cuts the Minister of Finance, the pretender to the leadership of the Liberal Party of Canada, set in motion in 1995.

Under that plan, every year, without any warning, provincial governments have to put up with an average shortfall of $6 billion in the areas of health, higher education and social assistance.

Based on the federal decision announced in the 1995 budget of the Minister of Finance, it was initially anticipated that, by the year 2003, federal transfers to the provinces for health, higher education and social assistance would be subject to cumulative cuts totalling $48 billion. During the 1997 election campaign, that position became so untenable—and the Bloc Quebecois contributed to this by constantly attacking the Liberal Party on this issue—that the Prime Minister of Canada announced with great fanfare that he would put back six billion dollars into social programs.

What he really meant was that, of the $48 billion that he had originally planned to cut between 1995 and 2003, $6 billion would not be cut. This meant that there would still be cuts totalling $42 billion, with annual cuts of $6 billion in transfers for health, for instance. These cuts have not been eliminated.

The premiers made it clear when they met in Saskatoon, that these are the cuts they want the federal government to eliminate. The government talks about giving back $6.3 billion to the provinces to finance their social and health programs, but what the provinces want is for the federal government to cancel the cuts mentioned in the 1995 budget until the year 2003. In their wisdom, the provinces told the federal government they were prepared to accept an arrangement, whereby the $6.3 billion they are requesting to offset the cuts in health, higher education and social assistance could be paid over two years.

The discussions were not about $1 billion but rather $6.3 billion. Since then, however, the federal government has gone to great lengths to allege that this $1 billion is a big deal, that it was the amount discussed in the negotiations, and that the government has a role to play in exclusive provincial jurisdictions like health. The Minister of Finance himself, in establishing the Canada health and social transfer, which combines all three federal transfers into one, stated its purpose was to give the provinces greater freedom to use their funds as they see fit.

The outcome of the negotiations concerning the social transfer and the provinces' demands on the basis of Saskatoon tell a completely different story. The federal government is intent on having a say in every decision on how funds are allocated, in spite of the fact that these funds belong to the provinces and that it could choose to give them back to the provinces for health, higher education and social assistance.

I think that, with respect to this budget, the Minister of Finance should immediately initiate a process leading to full compensation for all cuts made since 1995, thereby cancelling the cuts in health, higher education and social assistance.

People must understand that the problems currently experienced in emergency rooms must not be blamed on their provincial government, on the Quebec government, but on the federal government, which has left the provinces broke with funding cuts averaging $7.3 billion a year.

Nor are we interested in their bleating about the misfortune of the disadvantaged and the ill, as the Minister of Human Resources Development has done, when it is the Liberals that are behind the cuts and that will be maintaining them until 2003.

The people of Quebec told us about another priority they had, a real priority, as opposed to the crass propaganda in the Liberal majority's report.

When we consulted people throughout Quebec, which we did with the assistance of all Bloc Quebecois members, they told us that their other priority was a substantial cut in personal income taxes. Not in the taxes of the rich, of millionaires, or ministers, but of low-and middle-income taxpayers. These are the folks who helped put the fiscal house in order. These are the folks who, since 1995, have been footing the bill in one way or another, either through increased taxes—over the last four years they have been paying $20 billion more in taxes than they did in 1993—or through various cuts that affect them directly.

It is low and middle income taxpayers who are responsible for the improved public finances. They are the ones who should be reaping the benefits of the lowered deficit. They should be the first to enjoy tax breaks and relief in general.

They should be the first because middle-income taxpayers—who are defined as those earning between $45,000 and $70,000—face the highest taxes of all Canadians. They are the ones facing one of the highest tax rates compared with American taxpayers. If there is going to be tax relief, it should not be for millionaires or friends of the Minister of Finance. Nor should it take the form of a tax reform that would benefit international shipping companies such as Canada Steamship Lines, which is owned by the Minister of Finance. Nor will the taxpayer be helped by giving preferential treatment to the very rich, for example by allowing them to transfer millions, if not billions, all over the world in the form of family trusts.

This will be done by enacting a general lightening of the tax burden on two groups, the low and middle income groups. This can be done by fully indexing the tax tables. It can also be done by raising the minimum threshold, or in other words allowing people to earn more before they have to start paying income tax. This would help those with low and middle incomes.

In this consultation, we were clearly given a third priority—I am talking here of the true consultation, not the one that led to a Liberal majority propaganda report, but the consultations carried out throughout Quebec by the Bloc Quebecois—and that priority was improved employment insurance.

There was unanimity on this in Quebec. If I recall, during the prebudget consultations across Canada, people were also saying “It no longer makes any sense at all to have reformed the unemployment insurance program, changing its name to employment insurance, and to have severely cut back on benefits, so much so that fewer than 40% of people paying into the fund—everyone pays now—can draw employment insurance benefits”.

There are three ways of ending up with stupendous surpluses in the employment insurance fund, as we have seen over the past three years. The first is by maintaining employers' and employees' contributions to the fund at an artificially high level. The second is to successfully reduce access to the program. The third is to reduce benefits.

These are the three objectives of the employment insurance reform, which it achieves so successfully that every year we end up with a $6 billion surplus. These surpluses are generated off the backs of the contributors, that is, employers and employees, and the unemployed.

In recent weeks, they have gone so far as to exert pressure. This has happened in a number of regions in Quebec. I have seen it in Saint-Hyacinthe—Bagot as well. The officials at the employment centres are putting pressure on the unemployed, on those appealing decisions on overpayments. Pressure is put on them to subtly take away their right to appeal. This action is deliberate. The unemployed are being called and told not to appeal, there is no point. There is a limit to the harassment of these people.

Do you know why they are being harassed? Because the more they harass them, the bigger the surplus there will be to swell the popularity of the future leader of the Liberal Party of Canada, the Minister of Finance. That is awful. My colleagues and I discussed this at the latest caucus meeting. We are going to wage all-out war against these claims by a little mafia gang trying to intimidate the unemployed and take away their right to be treated fairly.

While things go awry with the employment insurance system, as things are a total fiasco, while everybody is criticizing the Minister of Human Resources Development, this gentleman is writing a book on his deep thoughts.

In response to our questions in the House, he answered all sorts of things making it clear to us that he was not on top of his responsibilities and that he did not know what was going on, but we did not know why. We thought it was a matter of intelligence. But now we know that he was writing his book, dashing off his deep thoughts.

He even had the nerve to talk about the disadvantaged in his book, when he actually had a hand in creating this situation where the unemployed, who no longer qualify for employment insurance thanks to him, find themselves marginalized. Do you know who this minister reminds me of? He reminds me of Lucius Domitius Tiberius Claudius Nero, commonly known as Emperor Nero. Nero set Rome ablaze and declaimed his sorrow as the city burned. I find it despicable.

What the unemployed see is a human resources development minister, who is supposed to be taking care of business and fixing a system that does not make sense anymore, out promoting the sale of his book and using his own intellectual resources, and probably departmental resources as well, to boost his popularity.

Under other circumstances, had he not had other responsibilities, one might have said he was provoking thought, but for a minister who has been doing a poor job since taking over his department, has been sharply criticized and is putting everyone in the street, to put his deep thoughts in a book as he did, is an absolute disgrace.

To conclude, we hope that Minister of Finance will show common sense in his budget and put any surplus to use in the interest of the public at large and not a select few.

We hope he will show respect for the unemployed and those who pay into the EI fund and show more respect than his Prime Minister did for the provinces that have had it with all this being done on their backs and having various conditions imposed on them as well.