Mr. Speaker, I thank you for this opportunity to rise on this debate and to discuss the equalization transfers.
Prior to the previous speaker, I was wondering who was the biggest whiner in Confederation, Mr. Bouchard or Mr. Harris. Having listened to the previous member I am inclined to think that the Progressive Conservative Party is the biggest whiner in Confederation. I cannot quite fathom how we should take $1 billion worth of transfer moneys given to the Government of Newfoundland and then heaven forbid they should actually raise their own funds, not call on the federal transfer and still complain. That strikes me as a perverse effect of equalization and one which I hope this bill in some measure addresses. We are all moving I hope toward self-sufficiency.
However, I do want to go back to the two people I consider to be the biggest whiners in Confederation, Mr. Bouchard and Mr. Harris. Each receives about $10 billion from the federal treasury. Both complain bitterly about running the independent little fiefdoms and both say they do not have enough money to live on. It reminds me of certain people who will remain unmentioned.
One hesitates to interject fact into the rhetoric that has been going on on the opposite side of the House, but the federal government raises about $150 billion to $160 billion a year. To most ears that sounds like a lot of money. But the first call on the money is by the provinces. The provinces suck up about $25 billion to $26 billion right out of the pot immediately. Then we add on to that number a further $9 billion approximately that goes into equalization. Before the federal government even starts to enter into any debt repayment, any programs or anything of that nature, 23% of its revenues are already transferred to the provinces to frankly spend as they see fit.
If I may be permitted a speculation, I am assuming that a bit more money in the next budget will be available for the provinces to spend as they see fit. I dare say there will be no correlation between whining and transfers of money.
These moneys are gone. They are virtually without strings. In some provinces they account for upwards of 40% of their gross revenues. In my province it is around 20%, in some provinces as little as 15%.
Ontario has about 40% of the population. I has about 45% to 50% of the gross domestic product. Ontario raises the revenue it gives in the form of tax revenues to the federal government which in turn redistributes it through the CHST and equalization. If one were totally parochial about this matter one would complain. But this is in fact the essence of being Canadian. This has been true since Confederation and I dare say will continue to be true for the foreseeable future.
This is called equalization which is in our country really a form of redistribution of wealth. I will address the House's attention to the actual money transferred. It totals something in the order of $8.750 billion, of which quite clearly Quebec receives the lion's share, $3.9 billion, just under $4 billion. The next largest recipient is Nova Scotia and, as the previous member alluded to, Newfoundland receives about $947 million, just under $1 billion. That is a great deal of money.
The formula by which transfers are made have become quite complex. I address the House's attention to the bill summary which purports to phase in the tax changes over the period from April 1, 1999 through to March 31, 2004. This is the reason for bringing some closure to this debate. These arrangements have to be made by the end of this fiscal year so that transfers between provinces are calculated on a formula which gives certainty to budgeting processes.
There is also a provision that adjusts the definitions of revenue source and revenue to be equalized. There has been some discussions in the House about gambling and how to treat gambling revenues as revenues being raised. Not all provinces are able to raise those kinds of revenues. There is also a change to the minimum and maximum provisions. Those are the three essential points of the bill, namely a change to the minimum and maximum payment provisions; a redefinition of revenue source and revenue to be equalized; and the phasing in from April 1, 1999 through to March 31, 2004.
In renewing the federal government commitments we are starting to look more carefully at the revenue raising ability of each province. Not all provinces are created equal. The bottom line is that at the end of the day the provinces that receive equalization will receive about $242 million additional over a period of five years.
Fortunately for both sides of the equation the provinces can now expect that their floor revenues will not be altered. Similarly, the federal government can reasonably expect that the equalization transfers will not go above $10 billion. This brings some fiscal certainty to the entire process which necessarily needs to be done so that all finance ministers in the country can plan appropriately.
The hon. Leader of the Opposition heaped abuse and scorn on the equalization process and said that it was essentially just so much politics. I remind the hon. member that this House talks about values. This talks about the values we are as Canadians. If there is a significant value after universal medical health insurance, it is equalization. Equalization is the transfer of moneys among provinces so that all Canadians are treated equitably. Arguably it is a hallmark of a civilized society.
I would like to quote the Minister of Finance on the very point of equalization:
Equalization is a cornerstone of our country—a program that we can all be proud of. It ensures that all provinces have the resources they need to provide reasonably comparable services to Canadians no matter where they live. This legislation will ensure that the equalization program remain up to date and continues to provide dependable federal support to the qualifying provinces.
That is a hallmark of our Canadian civilization. We as Canadians redistribute wealth so that all Canadians have a reasonable access to government services throughout the country. No person in Canada should be limited by his or her ability to access basic services simply because of geography. Geography should not be in question. It is a statement of a civilization and indeed of a civilized society.
In Quebec the total government transfers are $1,414 per person. In Ontario similar transfers are $824 per person. The average for all of the provinces is $1,150 per person. What disturbs me is in that process we do not seem to have a similar recognition of the role of the federal government in the lives of its citizenry. We transfer to Quebec something in the order of $932 per person on CHST and $536 per person on equalization for a total of $1,414 per person. Ontario receives only $824 per person on the CHST. Newfoundland, which is the province of origin of the previous speaker, receives a total of $2,495 per person, almost $2,500 as a point of equalization.
I do not know where the cutoff number is. Maybe we should ratchet it up to $3,000, maybe even to $4,000. Or why not just simply collect all the money, put it in one pot and divide by $30 million. There are points at which this is a rough form of justice but I would submit that it is a form on which all Canadians can count and all Canadians can expect that these numbers will be there for them over the course of time.
The average CHST per person is $853. The average of all the transfers is $1,150. Quebec does quite a bit better than the average on both numbers, namely the CHST number and the equalization number.
If Messrs. Harris and Bouchard had their way, as they pocketed their cheques—which I would submit are rather substantial cheques—they would simply say thank you very much—and I am not sure we would get that—apply for a seat at the UN and say it is all over, we are now 10 independent little countries.
I respectfully submit there is no sense of nationhood or nation building out of these moneys. We have 10 little emperors. Each has his hands on ridiculous amounts of money. They erect trade barriers which interfere with each Canadian's ability to move from province to province and to practise his or her trade. Then they wonder why Canadian productivity lags. I would submit that one of the most significant reasons Canadian productivity lags is the interprovincial trade barriers.
My son is planning on attending university next year. If my son applies to go to Queen's University, which is a university both you and I share, Mr. Speaker, he will pay a tuition rate which is a rate substantially less than he would pay to go to McGill. At McGill he would pay something in terms of double or triple the amount of tuition that he would otherwise pay at Queen's. Comparable universities; comparable education; comparable job prospects at the end of a degree. Yet the real cost for him, merely because he lives in Toronto, will be in excess of two to three times, residency costs aside. This is all because he happens to live in Ontario as opposed to Quebec.
This is unacceptable. This is an interprovincial trade barrier which needs to be addressed and has to be addressed. These are the kinds of things that kill our productivity and send us toward this model of 10 little fiefdoms with one tax collecting authority.
If I had any impact on the finance ministers of Canada, and that is somewhat dubious, I might ask some rather fundamental questions. How do these equalization transfers help build Canada? How is Canada better off at the end of the day once these transfers are done? How will Canadians know that their money is well spent? Strange question. How about a little accountability? Where is the transparency? Why are kids who go to university in one province having to pay two or three times more than other people in the same dorm? Is this on the social union talks agenda and if so, where is it going? Are we asking these rather fundamental questions as to what we are as a nation and how we back that up with money?
At one level this bill is about money pure and simple: $8.5 billion, write the cheques. End of story. At another level, this is about something far more profound. It is about our values and who we are as Canadians.
I like the value of equalization. It does however disturb me greatly that once we send the money off to the provincial treasuries, it seems to end up in this little fiefdom concept. The next stage presumably is the issuance of a passport.
The opposition said that we would put part of the money to the vision. I argue with great respect to the Leader of the Opposition that he and I have a very different vision of what this country is all about. I am not prepared to simply let the have not provinces slide off the table. I do not think that is what he is talking about. On the other hand I am not prepared to let the have not provinces continue on forever and a day not trying to husband their own resources so that they can be kept outside of this equalization formula. As I said, God forbid that the money should actually return to the treasury of the federal government.
I would urge members to support this bill and to demonstrate that this is a matter of values. I would urge members to articulate to themselves what this actually means in terms of equity among provinces. It is a hallmark of our Canadian civilization that we treat each other with civility and dignity. In my view this is a bill that goes a long way toward that.