Madam Speaker, I enter this debate from a rather different point of view. So far we have heard all kinds of criticisms of the bill. I have some of those to advance. But I would like to underscore the Reform Party position that we do support the concept of equalization payments from the richer provinces to the poorer provinces. I underscore that we do this and the kind of reforms we are considering in the whole business of equalization payments.
It is one thing to suggest that there have been five years of consultation among provinces, that there have been five years of discussion about the various amendments which have found their way into the proposed bill before the House. Whether or not that actually happened I do not know. The important thing I do know is that within less than 48 hours of consultation in the House and open debate we will be forced to make a decision.
I do not know what else went on behind closed doors. We have to accept that hon. members opposite are telling us the way things were. One thing is also true: we in the House have a responsibility to reflect upon those kinds of amendments and to think carefully about them.
Lest anyone misinterpret or misrepresent what the Reform Party stands for, let it be abundantly clear that we support equalization payments. We would like to suggest some reforms and changes that could be made which are not found in the current legislation.
Reform believes in a system that is open to all Canadians and uses a different, simpler basis for comparison. That is part of the issue. It should be a different, simpler and a more accurate and more honest comparison of people. Rather than micro managing equalization, which the current legislation and program do and what the proposed legislation maintains, we should use a simple indicator to determine who gets what. This is called a macro formula.
A shortfall in per capital provincial GDP as an indicator might be a good basis for comparison that would not require arbitrary definitions and an army of bureaucrats to apply them. That is a fundamental issue and one that we should address very carefully. It is this kind of thing that we should have concentrated on and debated in the next while. It is one thing to have a bill proposed to us, but is there nothing else that could be done?
There is a lot that could be done. Using such a macro formula would eliminate the incentive for provinces to adjust their tax bases in inefficient ways to qualify for more federal money. We cannot adjust an entire GDP.
Under a single indicator system equalization would be more focused on the provinces that need it most. It would be hard to argue that we have seven have not provinces in Canada. Canada is one of the richest countries in the world. That is abundantly clear. All we need to do is look at the population figures to see how many people have come into Canada compared to the number of people who have left Canada. In the last 25 years there has been no mass exodus or out-migration from Canada.
By focusing benefits more on the poorer provinces the federal government could reduce overall taxation, leave the money in people's pockets and thereby increase economic efficiency. That is what we are all about. Any province that experiences reduced payments would receive special financing to ease the transition. These ideas are worthy of discussion. They have been discussed. My colleague from Calgary—Nose Hill indicated that and quoted from a particular study.
It goes on from there. I will get very specific on what has happened. In the current situation the average Canadian family is a net contributor of $3,500 to the federal treasury. A family in Saskatchewan pays $2,700 and an Alberta family, more than $6,000. On the other hand the average family in Newfoundland gains $7,000 per year.
To reduce this kind of unfairness the Reform Party has proposed a new Canada act. In this act we call for two basic reforms: first, an equal treatment of all citizens with per capita grants to provinces for shared cost programs and, second, a single equalization grant based on a macro indicator of per capita provincial GDP compared to per capita national GDP. If that is the kind of focus to which we would address ourselves we would be moving forward. We would be taking into account the changes that have taken place in Canada and the changes that have taken place in the world around us.
May I draw the attention of the House to a couple of things that have happened in Canada in terms of the GDP. I want to compare population increases and decreases to the GDP. We will look at the last four years, 1994 to 1998. We find that Canada had a net increase in its population of 4.35%. Newfoundland had a decrease of 5.5%, Ontario an increase of 5.3%, Alberta an increase of 7.7%, British Columbia an increase of 9.03%, and Yukon an increase of 5.3%. Those are the provinces with the greater gain.
Let us compare the gain relative to the GDP in those provinces. Here is what we discovered, using the numbers for 1993 to 1997. Prince Edward Island had an increase in its GDP of 19.9%, Ontario an increase of 19%, Saskatchewan an increase of 23.6%, Alberta an increase of 26.07%, and British Columbia an increase of 16.96%.
If we begin to compare the increases in GDP in this four year period, compared with the population shifts that have taken place, we recognize very clearly that there is an unfairness built right into the formula which currently determines the amount of the equalization payments. That unfairness needs to be eliminated.
The formula is so complicated that it takes an army of bureaucrats to compute them and it makes it almost impossible for anybody to understand exactly how it works. I dare say a lot of people who put forward these amendments do not recognize or understand fully the implications that will take place in their particular provinces and the country as a whole.
We need to recognize as well that the composition of population has changed dramatically. We do not have the same kind of population composition in Toronto today that existed there 20 years ago. All we need to do is look at the changes in retail marketing that have taken place in those marketplaces to recognize those that have not changed with the times are experiencing very serious financial difficulties at this time.
That is exactly the kind of thing we as a country need to address. We need to recognize that the composition of our population has changed. It has shifted from one part of the country to another part of the country.
We in British Columbia are now experiencing a major shift of populations into the province. If we compare the increase in GDP in British Columbia and the GDP increase in Ontario or in Alberta, we discover that the GDP has not increased nearly to the same degree in British Columbia as it did in these other provinces.
This should tell us something. In fact it tells us a lot. If the government is determined that one part of the country shall be preferred over another part of the country, indeed the formula can be adjusted in such a way that it can be politically manipulated so that it will grant to some and take away from others.
What does it do? What has happened here is really interesting. If we take, for example, the people in Prince Edward Island and Newfoundland, they have had a 20% increase over and above what they pay into the revenues for Canada. The program services they receive are 20% more than they contribute into the treasury. In Alberta it is the other way around.
In Alberta there is a 9% decrease in the amount of services and product the people get and the money they pay in. In other words, there is a deficit in the government services received by Alberta people and there is a surplus in Newfoundland.
Perhaps there should be some of this sort of thing, but it is interesting that this happens to people at the lowest end of the income bracket. These are $20,000 to $30,000 people who get 9% less in government services in Alberta and get 20% more in Newfoundland. That is unfair.