Debates of Feb. 15th, 1999

Federal-Provincial Fiscal Arrangements Act

[Denis Coderre, Liberal, Bourassa, QC]

When we hear the members opposite whining, it is obviously because the truth hurts.

Why do over 75% of Quebeckers identify with this beautiful country called Canada? Because they have understood that, since we have introduced social programs and equalization payments, Canadians have enjoyed an exceptionally high standard of living, making Canada the number one place in the world to live. This is because of the system of equalization payments.

They cannot take that away from us. Members should get out and visit the average person. They should get out into the real world once in a while. If they talked to real people, they would realize that it takes action to resolve problems.

[Pauline Picard, Bloc, Drummond, QC]

Not the same people as in our province.

[Denis Coderre, Liberal, Bourassa, QC]

That hurts them because, once again, Quebec is receiving not just its fair share, but more than its fair share. I would like to see it receiving less because, if Quebec received less, it would mean that its economy is in better shape.

The day Quebec receives less in the way of equalization payments under this bill it will be because the economy is improving, not because cuts are being made. This will be settled within three years with a provincial election, when the Parti Quebecois is dumped and we have Jean Charest as the premier of Quebec.

In the meantime, allow me to simply state that this bill is an essential one, because it will make it possible, despite the abominable administrative policies of the provincial government, in the hospitals and in all health services, to look after the interests of the population. We say to the people of Quebec, for as long as there is a Liberal government in Ottawa, and for as long as they have Liberal MPs in Ottawa to represent them, they are in good hands and we are going to look after their problems.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Madam Speaker, last Saturday night was one of the few times I had the opportunity to sit down and watch television. I watched the performance at Maple Leaf Gardens. The players of the 1930s, 1940s, 1950s and so on were honoured. They looked back at the achievements of the great players who gave their hearts to Canada's national sport. They had tears in their eyes and were so very proud of their accomplishments.

I wonder what will be the record of this government when we look back at the 35th and 36th parliaments. The government has set a record which is a shame to democracy. The Liberals shut down this House 35 times in the last session. No other Government of Canada has come near that number. The government has said 35 times that it does not need the opposition or as one of my hon. colleagues just said, it does not even have to consult the opposition. We are barely into the 36th parliament and the Liberals have shut down the debate in this House 11 more times. That is a record no government should be proud of.

It really hurts me to sit here and listen to the hon. members opposite make certain statements almost bragging about their care in hospitals. A growing number of people will die before they get emergency hospital care in this country. That is not a highfalutin statement, that is a fact. This government has come in a total of 46 times and said it will shut this House down.

What is the record of the government? Going back to the 1930s, the 1940s and the 1950s we had some great hockey players. What will be the record of this government? It will be known as the most undemocratic procedural government in the history of Canada. Nobody can deny that.

I heard an hon. member say that the government gives out this money with no strings attached. My question is, what is in this bill that will prevent the government from making the same bookkeeping manoeuvres as happened just a few months ago in the Newfoundland election when all of a sudden it got rid of its deficit? What is in this bill to stop that procedure? Nothing. What is in this bill that will absolutely ensure that the government does not intervene during the life of this bill to pull strings just to suit itself? Absolutely nothing.

The government has had five years to come up with this, not five weeks and not five months. And today it has moved closure on a bill which has not really had any discussion in this House. That is Liberal democracy. This is not good planning. The one thing it does show Canadians is that this is government arrogance at its worst. Most people on this side of the House have not had an opportunity to provide input on the bill. This practice is very dangerous. It is a growing practice opposite and an extremely dangerous practice for any government in a democratic society to use.

What will happen if closure is exercised as much in the next four years as has been done in the past four years? There will be no point in any member of the opposition even sitting here, absolutely none. There will be no point in members getting on their feet and debating an issue because the government will say it has the right to use this procedure and it is going to use it. I heard that this afternoon. And use it the Liberals have done. Forty-six times they have said “The opposition does not count. We are not going to listen to them. We are not even going to have a debate on it”. That is where we are at with this bill.

If equalization works, why are there still seven have not provinces? I draw attention to my own province. It is rather interesting. A member of my family recently had a commercial trucker haul two loads of grain to the terminal. His bill for the trucking was in excess of $500. The amount of money taken off was over $1 a bushel for freight. When we analysed it we found that in my province we probably pay more money to the government opposite in federal excise fuel tax per capita than any other province. I heard the only member of that party from my province say that we will not get any more back from the federal excise tax because we are a have not province.

The rationale the government uses when it takes out millions of dollars is simply “We cannot give back even 20% of the excise taxes taken out of the province because it is a have not province”. That is the rationale being used.

I watch as our highways go to pieces. The rural roads are being completely ruined. After the millions of dollars the federal government has taken out, what guarantee does this bill give? At any given time a minister could decide that 48% of all the federal excise tax will be spent in a region of Canada and the people who really need the roads will get 3%. This bill does not correct that deficit and the Liberals bring about closure so we cannot have a debate on it.

Because of the policies of this government and because it told the people we had to get rid of this freight rate and so on, people are leaving my province like never before. They are saying that this government continues to tax them and the amount of money they are getting in return is not equal in any way. Three per cent has been the most in the last four years.

Will this bill ultimately stop political patronage? Every member on the government side of the House says no. What they are saying is “We will use this bill and we will use these payments the same way as we have used them in the past. We will use them to throw money into any region of Canada we want to, as long as we can buy money with that money that is going out”. That is what has happened and that is what is going to continue to happen.

This bill is more complex than the government admits. This bill is going to committee and we know what will happen in committee. The bill will pass all the way through. Opposition members will have motions but they will not be heard. We might as well tear our papers up now because the government is on the same old course it has been on 43 times before: shut down the opposition; shut down any criticism; “let us decide where we can put the money the most”.

I found out from reading the paper that there is a little bit of skulduggery going on like there was on the toll highway in New Brunswick. Somebody is going to be bidding on highway 407 in Ontario. Has anyone else heard about that? It is these types of things. When my friends from the maritimes stand up to discuss the toll highway the government responds to them in complete mockery.

I am not very proud to stand here and say that I condemn the government. I am not very pleased to know it has used closure 46 times. After one day of debate, it is a smack in the face to democracy and the people of Canada should realize it.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Madam Speaker, I quite enjoyed the previous speaker's remarks. I have had the opportunity to examine the debate on this legislation. Generally speaking despite the complaints that closure is forthcoming, the debate has been of a fairly high order.

I particularly congratulate the Reform Party because it is touching some genuine nerves of concern. One of the concerns in this whole concept of transfers from the federal government to the provinces is that of giving money to the provinces with no strings attached.

The equalization program involves $8.6 billion being transferred to various provinces. When that is added to the Canada health and social transfer annual payments of some $12.6 billion, the total is $20 billion being transferred to the provinces by the federal government.

The difficulty I have is that traditionally the federal government has so respected provincial rights that it has not demanded any real transparency or accountability from the provinces in terms of how this money is spent. The idea is that both transfers are a provincial tax subsidy. They lower the taxes a province is required to charge in order to provide the same standard of social and health services that might be found across the country. The whole idea is, as we recognize in the Constitution, that the provinces have the right and the privilege to provide for the basic care of their citizens. There is controversy now that suggests the federal government should not be involved in any issues pertaining to setting standards or ensuring the type of programs have at least a reasonable quality all across the country.

When we come to the origin of this equalization program, it is to give some sense that no matter where Canadians are in the country they have the same opportunities to a minimum level of programs. This is so we are not in a situation where people in Newfoundland are at an enormous disadvantage in the types of social services provided to them when compared to people in Ontario.

We have a very peculiar situation. On the one hand we are asked to give the transfers because we want to see national standards, and on the other hand the instruments of transparency and accountability are not there. We cannot be absolutely certain that any of the provinces is using this money for the purpose intended. It is the same for the Canada health and social transfer. It is in the end simply a subsidy to the provincial taxes so the provinces will not have to raise them as high as they might ordinarily have had to and they will not have to take the flak. The whole idea is that the federal government is there for the provinces to blame for high taxes. We see this theme coming from the Reform Party all the time.

The member for Portneuf who is here for this part of the debate made the observation that Quebec is owed the money. I found that quite amusing. He basically said “Quebec is owed the money. Give us the money and keep giving us the money until we declare sovereignty”. And that would be the end to that.

I say to the member for Portneuf that Quebec would probably not be a have not province if it were not for the fact that Quebec governments over the last 20 years successively and even to a certain extent the Liberal governments have pursued an agenda of nationalism that has dampened investment in Quebec, particularly in the Montreal region. Montreal was the engine of the economy. At one time Montreal was a rival to Toronto. Since this whole thing about sovereignty really took root in Quebec there has been a flight of investment. It is not just a lack of investment, there has been a flight of investment. It is no wonder that the province of Quebec wishes to continue to receive its share of equalization programs and its share of the Canada health and social transfer.

Earlier the member from St. John's said that equalization transfers should continue to come to Newfoundland even if Newfoundland develops new resource wealth. It should continue to get 100% equalization transfers even if it enlarges its tax base as a result of the development of Voisey's Bay, Hibernia and other projects in Newfoundland.

This is the same type of difficulty as what that member was asking. He said give us our tax subsidy no matter what our resource income is. Give it to us because we would prefer that the federal government be blamed for charging high taxes than the provinces. In some respects, certainly in the sense of the Canada health and social transfer, this is precisely what we hear in my own province of Ontario.

In a way we may be looking at this equalization program in the form we see it for the last time. The whole of society is now moving to a position where Canadians in every province are asking their governments to provide a high level of transparency and accountability so that the people of those provinces can see that the money is being spent wisely and well.

The reason this is very significant is in the context of the recent social union talks, ten premiers signed a letter with respect to how health spending would be undertaken. The key element of those negotiations was the principle that if the provinces were to receive money for social and health programs from the federal government the provinces should be in control of the programs. But the provinces had to undertake to put in instruments of transparency and accountability so that all Canadians, including Canadians in those provinces, could see that the money regardless of where it is coming from is spent on the programs it is intended for.

I see one of the members of the Bloc Quebecois shaking his head. I point out that the province of Quebec is to be one of the provinces best able to meet this requirement because that province happens to have one of the best freedom of information acts of any province. There is no reason why the member should shake his head because it is precisely the type of program he should support. If I had my way I would like to see the federal government adopt some of the provisions that exist in Quebec with respect to privacy and access to information.

There is no reason why Quebec or any other province should be opposed to better transparency in the application of equalization payments. If we are to transfer $8.6 billion a year or $12.6 billion, a sum total of $20 billion, I agree with my Reform members opposite that we should be calling for better levels of transparency. Perhaps it is a little premature right now because this legislation has to go forward in order to get the money in train.

This bill is not cast in iron. There are opportunities two or three years from now to look at it again and to make amendments that require better levels of transparency and accountability. All of us on all sides of the House and speaking for all Canadians would agree that is what is required.

[Mike Scott, Reform, Skeena, BC]

Mr. Speaker, I appreciated the comments of my friend in the Liberal benches. I am always interested in hearing his comments. He usually has a very erudite way of putting things. He had some valid points to make.

I am very disappointed that we are dealing with time allocation. Even with a government that has a legislative agenda bereft of ideas and initiatives, it is beyond us to understand why it needs the hammer of time allocation to ram this thing through parliament without proper debate. One can only assume that it does not want any more scrutiny on this bill than it absolutely has to because it is afraid of what Canadians will think of it.

Today my colleagues have talked at length about a flawed process that has led to a flawed deal. This is not just about a flawed process right now, it is a process that goes back to the beginning of the whole notion of equalization and how the formula for equalization was to be drawn up and used.

For example, when I was elected in 1993 one of the first private member's bills I brought to the House of Commons was a bill that would require that revenues based on hydroelectric sales be included in the equalization formula and calculations. Those are not included. Some provinces, for example my province of British Columbia, the province of Quebec and other provinces, derive significant revenues from hydroelectric sales. That is not included in the equalization formula. Those revenues often flow directly into the coffers of the provincial government. As we know, many provincial governments own many hydroelectric installations. I cannot believe the Government of Canada would not take into account this massive influx of revenues based on hydroelectric sales.

As many of my colleagues have pointed out, the cost of production in many provinces is not taken into account. For example, in my province of British Columbia the cost of production in tree harvesting is not taken into account. What this leads to is a distortion based on this convoluted formula that is all about political manipulation and delivering political objectives. It has very little to do with true equalization.

The New Democratic government in British Columbia is in the process of taking B.C. from a have province to a have not province as we speak. So I have to be a little careful. We may be in need of some equalization in British Columbia one of these days unless we do something about that government.

The current equalization formula is full of inherent contradictions and inconsistencies. This delivers a distorted and easily manipulated formula which invites political interference. We have seen that recently. My colleagues have been referring to it all day. We saw it with the Government of Newfoundland and the things that took place prior to the last election in Newfoundland. There is no doubt or question that succeeding federal governments have used equalization as a political lever to gain political advantage in different parts of the country at different times. Because it has been used as a lever of political interference and political advantage, it is inherently unfair. The overall effect is really unfair for most ordinary Canadians. Equalization is reflected in provincial tax rates. Have not provinces can maintain lower tax rates than have provinces and still deliver the same services to their citizenry. Because lower tax rates benefit high income earners the most, the net effect of equalization under the Liberals is that poor families in rich provinces subsidize rich families in poor provinces.

I will repeat that because I think it is a really important point. Poor families in rich provinces subsidize rich families in poor provinces which is exactly the opposite effect that equalization is supposed to bring about, I submit.

Government interventionist programs, in particular where they are not well thought out or not properly rationalized, tend to have unintended consequences. Let us call it the law of unintended consequences. These almost always are unfair.

If we think of it, a poor family somewhere in Ontario, British Columbia or Alberta is subsidizing a rich family somewhere in one of the other seven provinces. That is an unintended consequence of this bill. It is inherently unfair but it is what comes when we have a politically manipulated, artificial equalization system that is there largely for political ends and purposes rather than for a real attempt at equalization of incomes across Canada.

After decades of unfairness and the unintended consequences that I have talked about, because this policy has been in place for decades, we would think the government would be willing to look at a new idea, something different, something that completely breaks away from the past because the past is demonstrated as a failure over and over again. But no, the government cannot. It stands with its back toward the future, gazing serenely at the failed policy fields of the past and it thinks if it could just tinker with it a little, if it could move these few words over here and change that clause over there, it would somehow turn this all around and make it fair, make it equitable and make it work.

Frankly, I think that is the main reason why the government does not wish to have any more scrutiny or debate in the House than it has to with time allocation. It does not legitimately want to have the average Canadian taxpayer exposed to its own failures.

I suggest that it is these kinds of government interventions that are inherently unfair, that are premised on political advantage and not on truly trying to do the right thing which lead to divisions in this country. It is one of things that drove me to politics. I was annoyed by the continued manipulation of the federal government and how that affected me as a taxpayer in British Columbia and how it affected my family, my friends and my co-workers, how it affected all British Columbians. It was one of the reasons I got into politics.

I never had any intention of being here. I never had a lifelong wish to be a member of parliament. I never graduated from high school with a burning passion and desire to be a politician. I came here because of this kind of nonsense.

I cannot for the life of me understand why the Liberals just do not get it. They just do not want to face reality. They just do not want to face the fact that what they have cobbled together years and years ago, tinkered with and played with over decades is not working and is driving Canadians to distraction. It has driven me to politics. It is the kind of policy that is in part responsible for the creation of the Reform Party of Canada.

I would argue that the Liberal government has not demonstrated any capacity for change. I do not believe that with this administration we will see any new ideas come forward. It has a legislative agenda that is almost barren. Yet it does not want to give it full and proper debate in the House of Commons.

When the Reform Party forms government and we have a Reform administration, we will have real change to equalization so that the provinces that are really in need of equalization will get it. We will not end up with the ludicrous situation where seven out of ten provinces are called have not provinces. I suggest that is patently ridiculous.

[The Acting Speaker (Mr. McClelland)]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Acadie—Bathurst, Employment Insurance; the hon. member for Regina—Lumsden—Lake Centre, Royal Canadian Mounted Police; the hon. member for Burnaby—Douglas, East Timor; the hon. member for Vancouver East, Poverty; the hon. member for Wild Rose, Aboriginal Affairs.

[Pierre De Savoye, Bloc, Portneuf, QC]

Mr. Speaker, I was not intending to speak this afternoon, but with the inanities—there is no other word for it—put forward by some of my colleagues, no doubt in good faith—I would not cast aspersions on their good faith—I must rise and correct a number of things. This debate could be very technical, but the remarks that have been made are not technical but demagoguery.

Among other things, they are saying that Quebec would not be in a situation of having to receive transfer or equalization payments if its economy were in a better state. And then, without further explanation, just like that, they say “Well, that will come later, once sovereignty has been gotten rid of”.

The Canadian Confederation was born in 1867, 132 years ago. Quebec was born 400 years ago. In the 132 years since Confederation, Quebec has never been as rich as Ontario. It is not alone in that. The maritimes, the Atlantic provinces were flourishing financially some 100 years ago.

Institutions in Halifax, New Brunswick and Prince Edward Island were doing well. But the decision making centres moved to Ontario, as if by magic, by some miracle, and Toronto started expanding. So, why is this?

Is it because the people of Toronto, the people of Ontario, are particularly smart and those in the Atlantic provinces and Quebec less so? Is it because we are not good at business? Is it because we have not been blessed with Ontarians' special know-how? Absolutely not.

It is because the federal system in which we live has deliberately and systematically made sure that the rules favour Ontario.

I will give a very simple example, one mentioned several times by the Prime Minister here in the House: calls for tender are designed to favour the lowest bidder. So, when the government does most of its buying here in Ottawa and Ontario, naturally the closest suppliers have a better chance of putting in the lowest bid.

How could someone from St. John's, Newfoundland, bid on supplying office furniture here in Ottawa? There are all the transportation costs to factor in. But the folks in St. John's, Newfoundland, pay taxes just like us. The federal government uses these taxes to give Ontario businesses a leg up in the manufacture of goods or the delivery of services. That is the fact of the matter.

The so-called poor provinces are not poor because the people who live there are less innovative, inventive, entrepreneurial, courageous or intelligent; they are poor because the system siphons off money to the centre of this nation, of this confederation, or in others words here to Ontario, and compensates for this by paying out, as a sort of apology, transfer payments and equalization payments. Our money has been stolen—stolen is a big word—our money has been made off with and taxed, and instead of getting it back in the form of goods and services purchased, we get it back in the form of kind generosity, charity, transfer payments.

Transfer payments are not charity, it is a return of the taxes we have paid, which ought to have come back to us in the form of job creation but instead take the form of payments to the government in order to provide services to the population.

There is something seriously wrong here. My colleague here pointed out that contracts are being awarded in Ontario without bidding, up to $150,000 a shot. This is a considerable amount of money, which would enable businesses in the Atlantic provinces, in Quebec and elsewhere—the prairie provinces for instance—to get people working with the tax money that they pay, instead of seeing it go to pay for federal propaganda.

[Denis Coderre, Liberal, Bourassa, QC]

You are opposed to mobility.

[Pierre De Savoye, Bloc, Portneuf, QC]

When the hon. member for Bourassa singles out the sovereignist movement as one of the causes of our economic problems, he is totally wrong. For several years—between 1985 and 1993 or 1994—Premier Robert Bourassa had control of Quebec's destiny. His was a federalist Liberal government. In the course of that period, Mr. Bourassa managed to cut jobs in Quebec by a net figure of 1,000 jobs. On the other hand, when the PQ government came to power, first under Mr. Parizeau and now with Mr. Bouchard, it created over 100,000 jobs in a shorter period of time.

The problem is structural. It arises from the fact that the Canadian federation is based on the impoverishment of the provinces surrounding Ontario, with Ontario getting the biggest slice of the pie. It has been that way for 130 years, it continues, and so long as we remain in this system, there is no way out.

So, it is time to stop telling us that transfer payments are charity. All we want is what we are entitled to, nothing more, nothing less. But the bottom line is that the only way to put an end to this dispute, this gross misunderstanding, is for Quebec to acquire its sovereignty and have full control over its entire economy.

[Peter Adams, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, the member of the Reform Party who spoke previously said that revenue from hydro power is not equalized and is not included in the equalization formula. Once again the member is wrong and the party is wrong. It is included in both those ways.

I have a couple of comments for my colleague from the Bloc. We on this side have certainly stressed that anyone who knows anything about the equalization program knows that it is not a form of charity. This equalization program, through which moneys are transferred from parts of the country that are technically at that particular time so-called have provinces to the other parts, is designed to make the country more efficient. It is not a form of charity.

As I have said earlier today and as others have said, there are all sorts of flows from one province to another province. British Columbia benefits from the maritimes. The maritimes benefit from British Columbia. Saskatchewan benefits from Newfoundland. Newfoundland benefits from Saskatchewan and so on. It is not a form of charity.

With respect to the Bloc member's remarks about Ontario and places on the periphery of Ontario, I heard him say that in some way people asked for tenders on contracts and the nearer bidders had some great advantage. There are parts of Ontario which are a two day drive by truck, if it is a truck type contract, from where we stand today or a day and a half drive from Toronto. The main population of the province of Quebec is a five hour drive from Toronto and an hour and a half or a two hour drive from Ottawa.

On this business of where is the periphery, if we think in some way where the centre of gravity of the population of Canada is, it is in southern Quebec and southern Ontario. If people have concerns about being on the periphery perhaps they are elsewhere. Those things are beside the point.

I remind members and people watching the debate that what we are discussing today is the equalization program, the program under which moneys each year are transferred from some parts of the country to other parts. This equalization program is one of the cornerstones of the way we share wealth in Canada and of the ways in which we make Confederation work.

We are debating it now because every five years the way we do this is subject to major review. That review involves all the players, all the provinces, whether they be have or have not. In this case the discussions have been going on for two years and the decisions have to be made by March 31. We are doing it now with a view to establishing what this program should be like this year and for the next five years. It has to be done by March 31, which is why we are going through this trouble.

The thing that shocks me is that I hear literally combined opposition from the Reform Party and the Bloc. It concerns me. I think there should be criticism. That is the purpose of the debate. We should air all these issues. Members come from every part of the country. They have had the opportunity to talk to their provincial colleagues and hear what they think and what they have said during the two years of negotiation. They can come to the House and present those views.

What I sense is that we have here two parties that are not interested in the effective running of Confederation. I think that is because they underestimate the nature and the strength of the wonderful country we live in and the way that it functions.

What we have is unique. Perhaps there is one other jurisdiction which could be compared to it. We have the strongest decentralized democracy in the world. We have strong, however we define strong, provincial governments and regional governments. Even our territorial governments are becoming stronger and stronger year by year, giving their people a voice in their regions and in the country as a whole.

This decentralized democracy, our Confederation, is one of our great strengths. It is based on all sorts of things. One is our Constitution. Another is constant flows in federal-provincial relations. At the present time we have the social union, an agreement to which the premiers and the Prime Minister have just agreed. It is the latest round in how we should run Confederation in those particular respects.

I like the fact that mobility was emphasized this time. There are advantages to having regional governments, but that should be balanced against having proper flows of students, workers and others between different parts of the country. There are huge benefits from Confederation.

The regions can benefit from the strength of the whole. A recent very simple example of that is that the federal government has just put every elementary school and high school on the Internet, many years before that same situation is achieved in the United States.

I accept the fact that elementary and high schools are under the jurisdiction of the provinces and territories. No one objects to the fact that the only government in the country that could very quickly modernize our schools and get them onto the Internet is the federal government.

That is an example of the parts benefiting from the whole. The resources of the whole can be brought to bear on this small but very important thing in an area by the way of traditional provincial jurisdiction.

The whole can also benefit from the parts. In some ways the members from Quebec, for example, describe the equalization as charity and feel somehow beholden to the centre, but the flows are in both directions.

In this country we had the huge advantage when health care came in of having one province, Saskatchewan, that had implemented a universal health care program, had run and tested it. I have no doubt it made mistakes and modified it so that when the whole country came to the idea it might want a health care system all it had to do within its own jurisdiction was look at one part for a working model already tested that the whole country could take.

We know, despite the problems there have been in recent years, the success that health care program has been. I suggest there are many other examples of the whole benefiting from the parts and I can discuss those at another time.

This equalization program is one of the cornerstones of this country. It has played a major role in defining our wonderful federation. The equalization ensures that all provinces have the resources needed to provide reasonably comparable services to Canadians no matter where they live. My colleagues have stressed that.

Equalization is an unconditional federal payment. Once the money is transferred the provinces can use it any way they wish. Given the time constraints, that this must be decided by the end of March, I urge all members of the House to support this legislation.

[Chuck Strahl, Reform, Fraser Valley, BC]

Mr. Speaker, we are getting close to the end of this debate today because unfortunately we are experiencing time allocation by this government. This is the 46th time the government has time allocated a bill in this place since I have been here, 46 times it has said debate is a bad thing in this place, it must be shut down.

It can be seen why. It is such a small bill involving only $43 billion in transfers to the provinces over the next five years. The government has had five years to prepare for this bill. What has it ended up with? It has no draft legislation to show to us ahead of time, no academic input into potential changes or improvement, no committee investigations or public input as to whether people want to keep the old system or the new system or some changed version. There has been no debate in the House.

There will be $43 billion in transfers over the next five years and we are allowed one day of debate. That is a shame and it is a shame we will come to the end of this debate. People watching should know that at the end of today we will have a vote on this and it will be rammed through. My prediction is that the Liberals will win the vote, as they usually do, and they will say no debate because that is the way it should be.

It reminds me of a debate in British Columbia a few years ago when Bill Bennett went on the road. Colleagues from British Columbia will remember. When he went on the road the rallying cry was not a dime without debate because the government had arrived at this stage where the arrogance set in to the point where it said it is only $43 billion, let us have one day of debate and shut it down. That is what we are experiencing here today.

Equalization is an important issue. It is, as has been mentioned on both sides of the House, a cornerstone issue for many Canadians and many provinces that want to see some semblance of ensuring the people who live in a province that is going through some tough times or that does not have the revenue its needs deserve some chance of equalization so they can enjoy something close to the same services other Canadians enjoy. I have no problem with that. That is not a bad theory if that is the initial theory you are going to head off on.

I only have this 10 minute slot to talk, but not about the equalization payments per se because that is not really the big problem, that is not what gets under people's skin so much. The problem is that it is all the other inequities, the inequalization payments that occur day after day in the departmental spending and in the program spending of this government.

Why is it that when the fishermen are denied the opportunity to fish on the east coast the government puts together the TAGS program, a social benefit program amounting to $3 billion for east coast fishermen, but on the west coast the federal government does not even allocate 10% of what is allocated on the east coast? That is called an inequalization program. It is not equal for both fishermen. Both fishermen are unemployed, both are in their coastal communities, both need some assistance to adjust to whatever the new reality of the fishery minister might be. Instead what happens? Ten per cent for B.C. compared to Atlantic Canada.

What happens when the government allocates the CIDA contracts in this country? CIDA contracts are not part of the equalization program but why is it that when the CIDA contracts come through, British Columbia gets 3% of those contracts although it has 10% or 11% of the population of the land? The CIDA contracts are worth hundreds of millions of dollars a year and the majority of them go in this case to the province of Quebec. What is going on? Why does 3% go to B.C. while the lion's share goes to Quebec? That is not part of equalization. That is an inequality payment.

That is why from the beginning the Reform Party has maintained in its policies that programs should go through a regional fairness test. That is not so the west gets more, heaven forbid, but so that each region knows it will be dealt with fairly in terms of social programs and other government spending. It will not be allocated based on who you voted for last but on regional fairness. That is the way it should be done. That is true equality.

I went to a hockey game a while ago. There was a big brouhaha from the government. It was trying to decide how it could help out the hockey teams in this land. It is interesting. In one way the government did help. It gave some direct assistance to the Ottawa Senators and its establishment and to the Montreal Canadiens. They got Canadian logos and Canadian government advertising in their arena. It cost hundreds of thousands of dollars a year. But where did they not get any help? Calgary, Edmonton and Vancouver. Not a single sou went to help out with any advertising. Again, is it fair that one group gets it and another does not? It is not fair. It should go through a regional fairness test. If you are going to promote the Government of Canada in hockey arenas and if you can believe anybody thinks that is a good idea, then certainly it is as good an idea in Vancouver as it is in Ottawa or Montreal.

The federal government spent to $2 million to promote Canadian athletes going to Nagano. I do not think that was a bad idea. We should be proud of our athletes. I do not mind. I would rather give the money to the athletes but even so we promote the Olympics. Why were over half the ads placed only on French language television stations in Quebec? Why do half the ads go there when only a quarter of the population is there? How much did my region of the country get? Where is the regional fairness test? It is not there. It is part of the inequality of the federation that is not addressed.

I do not even want to get started on what happened to CFB Chilliwack plans in my own riding.

Why is it that land is frozen in a state of suspended animation while fairly new buildings start to crumple? It has been four years now since they have turned the heat off and walked away. No development can take place. No industrial work, no sale to local developers, no land to the natives, nothing. It is just frozen.

Why? It is in British Columbia. After all, we do not even have an land forces base in the entire province of British Columbia. Regional fairness would dictate that British Columbia should somehow be just shunted aside.

The problem with the equalization payments is not the equalization payments but all the other boondoggles that the federal government is involved with. Why is it that when we dealt with the child pornography case a week ago in this place, the government said the child pornography case only applies in British Columbia. The law is still really good in the other nine provinces. So if the pedophiles go free it will only be in British Columbia. So don't worry, it is only in British Columbia. That is part of the attitude on that side of the House.

They came two weeks ago to my riding on a western fact finding mission headed up by somebody from Winnipeg, I think, which to them is as far west as one can go. They do not realize that the Rocky Mountains are not the end of the country, that there is actually another province there. They came out to my riding and said the following what about the future of the CFB Chilliwack lands?. The response was does your member of parliament know that it has been closed? This was said by the secretary of state for women's issues. They said to her in a very kind way yes, he does know. Yes, he has been fighting for fairness for our region the same as any other.

When the Liberals come to town and say by the way, sorry about this, we didn't even know it was closed, people in British Columbia are saying that the issue is not just about equalization, it is about the unequal treatment of some portions of country often based strictly on who one votes for. That is not the way to run a country and not the way to bring regional fairness. It is the way to create inequality. If that was the object, the Liberals have succeeded masterfully.

[Lynn Myers, Liberal, Waterloo—Wellington, ON]

Madam Speaker, I am pleased to rise in the House today to debate this very important issue.

Certainly the residents of Waterloo—Wellington and indeed Canadians no matter where they live have a great interest in this matter.

The equalization program is an underlying value of what it means to be Canadian. It is a cornerstone of the country, one which people recognize and rely on in terms of what it means to be Canadian. It is a sense of sharing, caring and ensuring fairness across Canada.

Over time and through history the equalization program has indeed played a major role in Canada and it can be argued has played a major role in defining our federation. I suspect and Canadians know our federation is stronger as a result, our federation is better off as a result and our people have benefited as a result. As a result of that, Canada has gained tremendously and I think that is important to know.

I also want all members to know that it is important that we act today to deal with this matter. We have had a deadline to meet and as a result are using time allocation to ensure that we meet that deadline of March 31.

I am not surprised the Reform Party and the Bloc do not support the equalization program. It is not surprising because both parties, quite frankly, do not want to see the federation work. Rather, both are committed to seeing that Canada does not work. That is really a shame but it is the reality of what we have here not only in the House of Commons but in Canada.

The equalization program ensures that all provinces have the resources they need to do what Canadians, wherever they live, want in terms of reasonable and comparable services. This is done so that hopefully they do not have to resort to higher levels of taxation than in other provinces. While this does not always happen it certainly is a goal and a laudable one at that.

I should also point out that the equalization program is an unconditional federal payment. This enables provinces to use the equalization program as they see fit and as they wish. That too is an important point.

Seven provinces receive the equalization program: Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, Quebec, Manitoba and Saskatchewan. They all qualify for this very important payment. That is something that bodes well for the country as a whole.

The proposed legislation, which is excellent I might point out, will renew the equalization program for a five year period, beginning April 1, 1999 to March 31, 2004. The basic structure of the equalization program will however remain as it, but the bill before us includes changes to ensure that it continues to measure the ability of provinces to raise revenues as accurately as possible.

These improvements will increase the cost of the program by an estimated $242 million. These changes too will be phased in over the five year period. As a result of extensive consultation, which I believe underscores the fact that our federation works, the bill will change the ceiling and the floor provisions to protect against greater fluctuation. This was done co-operatively and in a fashion and spirit in keeping with improving the federation for the benefit of all Canadians wherever they may live in this great country of ours.

The bill renews the provincial personal income tax revenue guarantee program for the same five year period I spoke about. This is a key and important provision. It protects those provinces participating in the tax collection agreements from any major revenue reductions that may be caused during the course of a year by changes in federal tax policy, as an example. This is worthy of our attention and clearly something in the best interest of the participating provinces.

Finally I want to outline that the budget tomorrow will provide new estimates of equalization. We all know that in the 1998 budget it was projected that equalization would amount to $8.5 billion in 1998-99. Official estimates showed an increase to $8.8 billion as released in October.

The federal government recognizes that the country we live in is continually changing. That is the reality of the Canadian community. It is also a fact that we must change if we are going to survive as a society. The federal government will continue to watch over the interests of all Canadians.

I want to simply say by way of conclusion that the legislation recognizes the importance of working co-operatively and in the best interest of all Canadians wherever they may live in Canada. It is legislation of great importance which underlies our commitment to making Canada work for all our citizens. It is worthy of support and I would certainly ask all members of the House to support it accordingly.

[Diane Ablonczy, Reform, Calgary Nose Hill, AB]

Madam Speaker, today we are debating Bill C-65, an act to amend the Federal-Provincial Fiscal Arrangements Act.

Any time we hear the word fiscal it means money. When we talk about money we mean our money as Canadian taxpayers. Governments have no money of their own but they certainly make free with the money that we work to earn. This involves large amounts of the money earned by hard working Canadian taxpayers. That is the reason it is a very important debate.

However, the government has decided to cut off debate on the spending of billions of dollars of taxpayers money under the bill. For some reason it feels that a mere day of debate is more than sufficient to explore the ins and outs of a very large expenditure of money. Naturally the opposition disagrees vehemently with this as well it should.

The whole reason we are here is to enact laws and to administer the affairs of the country for the benefit of Canadians. It is very difficult to do that job when government keeps cutting off debate and saying that it will do whatever it will do. It does not really want to be confused with any facts or any suggestions for improving the course of action that it has already decided on.

This topic not only is very important because it will be spending a great deal of money that we worked to earn. It is also at the very heart of our federal system. It involves the transfer of financial resources from the federal treasury, which is filled up by our taxes, to the provinces to allow them to deal with their responsibility to provide social programs and services to Canadians.

These transfers not only include the equalization payments but also the payments to support health care, education, EI payments from the EI fund, regional grants and a host of smaller programs. The total transfers from the equalization component are close to $9 billion a year. With all the other transfers to support social programs it is at least three times that. We are talking about a very important element of the way our federation works.

One of the best resources I have found is a booklet by Paul Boothe, Professor of Economics at the University of Alberta, called “Finding A Balance: Renewing Canadian Fiscal Federalism”. This was produced in October 1998, just a few months ago. It is very current and a very scholarly and lucid examination of the whole area of financial transfers within the federation. I commend it to anyone who is trying to understand this complex and difficult area.

Equalization is an important principle which makes the federation work. It is a principle to which the official opposition, the Reform Party, is committed. I make this point clearly and unequivocally. Those who propose improved administration of equalization are often attacked—and we saw that this afternoon in the House—by those who lack the vision and courage to make needed improvements.

It is because the principle of equalization is so vital to a vigorous Canadian federation that we in parliament must ensure co-operation in a fair and effective process. Equalization directly affects the security of important social programs such as health care and education. Equalization directly affects the level of income left in the hands of Canadians and Canadian parents and families to meet the needs of our children.

Here is a little background on equalization. Before Confederation most of the provincial revenues came from customs and excise taxes. With Confederation it became the exclusive purview of the federal government to levy customs and excise taxes. Therefore the provinces did not have the money they needed to provide key services to their citizens that they were responsible to provide under the Constitution.

Under an important recommendation from the Rowell-Sirois commission in 1939 it was agreed that the federal government would institute a system of national adjustment grants for poorer provinces and that general transfers would be made to ensure that the provinces had enough revenue to fulfil their constitutional obligations without undue taxation. These formal equalization payments began in 1957.

As many speakers on this side of the House have put forward, the transfers in support of services to Canadians have become an increasingly complex patchwork impacted by a multitude of diverse political and economic purposes. The results, the transparency and the understandability of the whole area of the federation have become unnecessarily unfair and complex.

Today, for example, the provinces have access to per capita revenues equal to the potential average of five provinces to raise taxes, and this is based on 33 different tax bases. With that simple explanation we see how complex this whole area has become.

To make equalization work clearly and equitably every province would need the same kind of tax system, but of course that is not the case. They are all different. What the federal government has done, what the legislation does, is impose an artificial hypothetical tax system trying to blend tax systems in 10 different provinces on 33 different levels and obviously a real mess results.

The auditor general has criticized the whole process. In his 1997 report he looked at only one of the 33 elements, property taxes which raises almost a quarter of the equalization payments. He pointed out that property tax rates vary from province to province. Property assessment methods vary even between municipalities, let alone provinces. Property assessments are infrequent and done in different years. The auditor general said that it was just a guessing game.

In 1997 the finance department acknowledged this problem which was brought before it by the auditor general. It promised to do something about the problem. In fact here is a quote of a promise it made to the auditor general:

The department expects to address this issue as part of the current equalization renewal process.

Here we are smack dab in the middle of the “current equalization renewal process”. Does the bill say anything about the matter of property taxes and their calculation and how they are factored into the equalization payment? No, it does not.

Yet Liberal members opposite have the colossal nerve to stand in this place and say that this is a wonderful piece of legislation, that it is just ticking along fine. After a few hours of letting the opposition bleat about it, it will go forward exactly as they envisioned, even though they have not kept a key promise made to the auditor general.

A number of such problems in the equalization process are not addressed in the legislation. My colleagues have been very eloquent in pointing out some of the anomalies and the ridiculous variations and variables in the way the whole program is delivered on behalf of Canadians. It is a key program. It is important to the proper working of our federation.

I urge the House to examine the systemic changes, the changes to our equalization system, needed to deal realistically with the tax system and the difficulties that have been pointed out. Let us build a better country through reasoned debate on these issues rather than simply sweep them under the closure carpet and move on with mere tinkering.

[Murray Calder, Liberal, Dufferin—Peel—Wellington—Grey, ON]

Madam Speaker, there seems to be a problem with members of the Reform Party on the other side of the floor. Of course there is always a problem with them. We are talking about social responsibility and every once in a while we have to redefine and describe for the Reform Party what the word social means.

Equalization payments are one of the cornerstones of Canada. This country is a family. The children of the family that are better off than the ones that are not take care of each other. That is one of the things that has made this country unique worldwide.

I listened to today's debate and a number of points need to be clarified. Questions were asked by members on the other side of the House which I want to do my best to answer.

I have heard over and over again why time allocation? One question that would lead into that is what does the bill do? The legislation amends two programs covered by the Federal-Provincial Fiscal Arrangements Act, equalization and the provincial personal income tax review guarantee. Both programs expire on March 31, 1999. Today is February 15, which means a month and a half from now we have to have something in place because these other two programs are going to expire. There is a good reason right off the bat. Also, our flag is 34 years old today. This is the importance of what we are talking about.

The bill before us is designed to extend the programs from April 1, 1999 to March 31, 2004. We are basically establishing a five year review. There is nothing wrong with that. Things change in this country on a yearly basis, so why would we not have legislation in place that we can renew and review on a regular basis? Five years seems to be a very good basis to set it on. That will allow the equalization payments to continue to be made and revenue guaranteed payments made as required.

There are a number of points that the bill proposes to change in the equalization programs. I will consider the three most important points.

One ensures that the changes in the measurement of fiscal capacity, that is the provinces' ability to take and raise revenue, are provided for in the renewal and will be phased in over a five year period. It also amends the floor and ceiling provisions that protect provincial and federal governments from large and unexpected changes in the equalization entitlements.

Finally, it will amend and clarify the list of provincial revenues considered in measuring eligibility for equalization payments. That is in addition to the amendments to the act. The regulation will change and make adjustments to the measurement of the provinces' relative revenue raising capacity from different tax sources.

Another question I heard was how did the federal government decide on the contents of the equalization renewal package? This is something the opposition should listen to. The answer is that the federal and the provincial governments established priorities for the renewal in early 1997. This is not just something the federal government came up with. It is something we came up with in conjunction with the provincial governments. It is another example of how the government tries its best to work with all the provinces to get the best deal possible for the whole country.

I talked about family, and that is what it is all about. This is the government doing its best for the family of Canada.

The proposals for the changes to the equalization program will have an anticipated cost of around $48 million in the budget year 1999-2000. That will rise to $242 million when it is fully phased in in the budget year 2003-04. That is being put forward after extensive review of the issues with the provinces and the territories at the official and ministerial level. Again, there is extensive review with the provinces and the territories. We are not just doing this on our own. We talk to them and find out what is the best way they think we should be doing it and we come to a compromise.

My colleague across the way from the Conservative Party just does not understand that. He just does not get it. One of the reasons he is in the fifth party is because he just does not get it. If the hon. member would listen to what I am saying here, I will try to answer some more of his questions.

Another question I have heard here in the House today is why are the changes being phased in rather than being implemented immediately. The phase-in of changes is proposed in order to dampen the distributional impact across provinces over time and also to ensure that federal and provincial fiscal planners have sufficient time to adjust to the changes in a predictable, manageable way. We are not going to say “There it is guys, deal with it”; we are saying “Here it is, it is coming. This is how we want to change this after consulting with you”. It gives the provincial ministers of finance a chance to adjust to it. It is a good old-fashioned family way of doing it. It is logical.

I have heard other general questions today as to how equalization works. It seems relatively straightforward. Equalization transfers are determined on the basis of a legislated formula.

First, the amount of revenue that each province could raise if it applied national average tax rates is calculated for revenue sources that provinces and their local governments typically levy. The program currently includes around 30 tax bases.

Second, each province's overall ability to raise revenues from these sources is compared to that of the five provinces making up a representative standard, an average. Those provinces are Quebec, Ontario, and Manitoba for the member across the way.

[An hon. member]

The member who likes the millennium fund.

[Murray Calder, Liberal, Dufferin—Peel—Wellington—Grey, ON]

That is right. And Saskatchewan and British Columbia.

If a province's total revenue raising ability falls short of this standard, its per capita revenues are raised to the standard level through the federal equalization payments.

[Peter Adams, Liberal, Peterborough, ON]

I see.

[Murray Calder, Liberal, Dufferin—Peel—Wellington—Grey, ON]

That is the way it is, and the member for Peterborough understands it now.

[Peter Adams, Liberal, Peterborough, ON]

If I can understand it, anybody can.

[Murray Calder, Liberal, Dufferin—Peel—Wellington—Grey, ON]

He is a Liberal and he is a very smart MP. I can understand why he clicks into that so quickly.

If a provincial government's total revenue raising ability exceeds the standard, it obviously does not receive the equalization. There we have that nice flat line where the ones that are making more, like Ontario, the industrial heartland of Canada, to the provinces that are experiencing problems, like Newfoundland, each one of those governments can come up with good solid government within their province and put forward good solid programs like all the 10 provinces in Canada do.

Another question is how do we produce new estimates of equalization and when do receiving provinces receive payments. I do not have enough time to go into that so I will have to leave that to the next time we speak on this.

[Jim Abbott, Reform, Kootenay—Columbia, BC]

Madam Speaker, it is very interesting to listen to the Liberals go on and on and on trying to explain around the issue of time allocation.

The reality nonetheless is that in the 35th parliament the Liberals used time allocation 35 times, 32 time allocation motions and three closure motions. This is the same group of Liberals who while on this side of the House decried this kind of anti-democratic, dictatorial bullying tactic by the government of the day.

In this the 36th parliament, there have been 11 time allocation motions. It is quite unconscionable. It speaks to the management of the affairs of this House. The fact that this Liberal government is incapable of giving the House adequate time to put forward the concerns of the people of Canada over issues like this one is completely unacceptable.

It is a management problem of the affairs of this House that has created this situation. We are being bullied into voting on second reading of this bill by 6.30 tonight. This is after only one day in the House. After only one day we have to vote.

The expiry date was no surprise. The expiry date of March 31 has been a known quantity for five years. Why could the Liberals not have managed the affairs of the House in such a way that we would have had an opportunity to debate this matter perhaps last fall or at least get it out into the open? We are not talking about nickels and dimes here. We are talking about countless billions and billions and billions of taxpayers' dollars.

The previous speaker, after having used the lame excuse that there is an expiry date that has to be met as an excuse for the time allocation, said that everything is fine because in fact there is a government to government decision making process. There again, that just shows the mentality of this government. It does not realize it has a responsibility to come to this House, to come to the members of this House.

I represent approximately 87,000 people in the southeast corner of British Columbia. I should have a voice in this House and be able to speak on this bill in an intelligent way on behalf of the people in my constituency. The debate should be full and free flowing, hopefully with the government listening and taking some direction from the people whom I represent as I speak for them.

Instead what is going on is the Government of Canada is getting together with Brian Tobin and his government, getting together with Glen Clark and his government, getting together with Mike Harris and his government, so everything is fine because the governments have negotiated this. The reference to this place, the reference to the House of Commons, the reference to parliament is inconsequential. Parliament is being treated as a rubber stamp by this government.

[Stan Keyes, Liberal, Hamilton West, ON]

Oh, nonsense.

[Jim Abbott, Reform, Kootenay—Columbia, BC]

The member says “Oh, nonsense”. How else then, if we are not being treated as a rubber stamp, does the member explain the fact that we have had a one day time allocation on this and debate will be chopped off?

The management of this House works on the basis that the House leader and the government know they can whip their sheep into line. The sheep just stand and bleat on cue and the legislation gets through. They know that is what is going to happen.

I was very appreciative of the member from Kamloops, a long time member of this House, an NDP member I should point out. He stood and said that he believed in the principle of the bill. He found a tremendous number of difficulties with the legislation but he believed in the principle of equalization to the point that he would recommend to his colleagues that on second reading, which is where we are right now, the NDP vote in favour of the bill passing to committee whereupon they could take care of the very serious problems that are in the legislation.

I mentioned that I have a very high regard for the member, but clearly he has a lot more faith in the parliamentary process currently in effect as stipulated by the Prime Minister and this government than I do. In fact, if the government is going to be treating the House of Commons as a rubber stamp in this way, how can we have any confidence?

Let us take a look at some of the realities that have already been mentioned by a few of my colleagues. I do not believe that anybody has mentioned the interprovincial transfer of wealth for example in addition to the equalization program. I will state this again very clearly and very slowly so that the members can understand my English. I will go one word at a time and tell them that the Reform Party is in favour of the concept of equalization. We do see it as being one of the distinctives of being Canadians.

I hope all members caught that because that is a statement of fact as to where the Reform Party is coming from.

However, to equate our rejection of Bill C-65 in principle, to equate our rejection of the tinkering around the edges that Bill C-65 constitutes, to our somehow not being in favour of equalization is something that only a Liberal mind could create I am sure.

Let us touch back on employment insurance. On employment insurance in Canada in the so-called have provinces, people contributing to that, the individual workers or the corporations, for every $1 that they contribute to that they get pennies back out. That is a statement of fact.

Newfoundlanders, on the other hand, under that program as it is presently constituted, for every $1 that they contribute get more than $3 back and so it is ranging down from Newfoundland, which is the most extreme, on down. The point being that equalization is not the only interprovincial transfer of wealth.

The major problem with this formula is that it does not take into account all the examples that my colleagues in the Reform Party have pointed out where there has been and continues to be a transfer of wealth from the so-called have provinces to the so-called have not provinces.

It has been pointed, and it is worthy to remind members, that we have a situation, for example, in my constituency where the average per capita income is probably significantly less than the average per capita income of say Vancouver or Victoria just because of the type of constituency with a rural based economy, where we have families of four or more earning $20,000 or $30,000 a year. Those families are having money transferred to families in Newfoundland and in some of the maritime provinces that are earning over $100,000 a year. This is the reality of the formula as it is presently constructed.

I know this may be the third or fourth time that I have said this but it seems to be going over the heads of my friends on the Liberal side. The Reform Party believes in the concept of equalization because it is distinctive of Canadians that we do look after each other. This is one of the things that we embrace as a nation and certainly one of the things we embrace as a party. However, Bill C-65 simply tinkers around the edges, creates more confusion, creates more problems and, in effect, creates inequality when it is called a bill on equalization.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Madam Speaker, I rise on a point of order.

I would like to seek the unanimous consent of the House to move a motion to the effect that this House urge the government to place at the Prime Minister's disposal a long range executive jet aircraft of the Global Express type produced by Bombardier to be available when he is called upon on short notice to represent Canada at major national and international events.