Debates of Feb. 17th, 1999

Privilege

[The Speaker]

I wonder if the hon. member would limit his statement to what he said before. His motion is much broader than the one I ruled on. I would like him to consider including in his motion that he was indeed assaulted in trying to get into the building where he was to perform his duties. If he will limit it to that at this point until I can consider the other points that have been brought up I would accept that as a motion. Would he consider doing that?

[Jim Pankiw, Reform, Saskatoon—Humboldt, SK]

Yes, Mr. Speaker. Is it sufficient to say so moved?

[The Speaker]

Yes, it is. That is the easy way to do business around here. In my judgment it is a prima facie case and this will be referred to the appropriate committee and the other three will be held in abeyance until I can get more information.

[Jim Pankiw, Reform, Saskatoon—Humboldt, SK]

Mr. Speaker, I move:

That the matter of the molestation of the hon. member for Saskatoon—Humboldt earlier this day be referred to the Standing Committee on Procedure and House Affairs.

[The Speaker]

Is the House in agreement that this particular issue be referred to the Standing Committee on Procedure and House Affairs?

[Some hon. members]

Agreed.

(Motion agreed to)

Government Response To Petitions

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

Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to nine petitions.

Regional Development Banks

[Denis Paradis, Liberal, Parliamentary Secretary to Minister for International Cooperation and Minister responsible for Francophonie]

Mr. Speaker, pursuant to Standing Order 32(6), I have the honour to table, in both official languages, the 1996-97 report on Canada's participation in regional development banks.

Petitions

[Christiane Gagnon, Bloc, Québec, QC]

Mr. Speaker, I have the honour to present a petition signed by 3,330 inhabitants of my riding of Québec.

They are calling on the government to form a parliamentary committee to look specifically at what Canadian parliamentarians can do to reduce the gap between the rich and the poor.

[Paul Bonwick, Liberal, Simcoe—Grey, ON]

Mr. Speaker, I rise today pursuant to Standing Order 36 to table a petition signed by my constituents of Simcoe—Grey as well as concerned Canadians from all across our country.

These individuals are automotive technicians employed at car dealerships. As a condition of their employment they are required to purchase and maintain several thousand dollars worth of automotive tools. At the present time their professional tool investment and expenditures are not tax deductible, unlike many other professions that require similar expenditures.

These tool purchases do not generate any extra tax credits and therefore the petitioners request that parliament redress this taxation policy, amending the applicable legislation to allow current and future technicians to deduct their investment in automotive repair tools.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, pursuant to Standing Order 36 I am pleased to present this petition on behalf of a number of Canadians including from my own riding of Mississauga South on the subject of human rights.

The petitioners would like to draw to the attention of the House that human rights abuses continue to be rampant around the world, including countries such as Indonesia.

The petitioners also acknowledge that Canada is internationally recognized as the champion of human rights. Therefore the petitioners call upon parliament to continue to condemn those countries responsible for human rights abuses and also to seek to bring to justice those responsible for such abuses.

Questions On The Order Paper

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

Mr. Speaker, I suggest that all questions be allowed to stand.

[The Acting Speaker (Mr. McClelland)]

Is it agreed?

[Some hon. members]

Agreed.

Motions For Papers

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

Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.

[The Acting Speaker (Mr. McClelland)]

Is it agreed?

[Some hon. members]

Agreed.

The House resumed from February 16 consideration of the motion that this House approves in general the budgetary policy of the government.

The Budget

[Preston Manning, Reform, Leader of the Opposition]

Mr. Speaker, I rise to begin the debate on the 1999 federal budget.

My colleague, the hon. member for Medicine Hat, as well as other opposition members will focus on various particulars of the budget, in particular the defects for which the government needs to be held accountable of which there are many. We will also be constructive. The opposition will be presenting constructive alternatives in the areas where we feel the budget is deficient, particularly with respect to tax policy.

It is my intent at the beginning to focus on the big picture, that is the financial performance and the service record of the government not just for the last year but since it came to office, and what that record and what this particular budget mean to Canadians in the future.

As members know, this is the sixth budget that has been presented by the current finance minister. If asked to summarize the net effect of these budgets, not just this one but the cumulative effect of the six budgets, in one sentence it would be this: that under this government, Canadians are paying more and getting less. Canadians are paying more and getting less and despite all the rhetoric, despite all the spin doctors, despite all the public relations that accompanied the budget yesterday, the total tax bill paid by Canadians has increased yet again while health care services and other services have been cut. Under this government Canadians pay more for less.

With respect to paying more, Canadians hear all the glowing references in the budget speech and the public relations that accompany it with respect to the performance of the economy, phrases like “unprecedented progress”, “we have strengthened the sinews of our innovative and productive economy”, “we have equipped Canadians to succeed”. Most of these phrases and words have been tested by public opinion firms. They test the words, find out which words resonate best with the public and those words find their way into budgets. This is not something surprising.

But the rank and file of Canadians will be asking at the end of the day: if everything is so rosy, why do I not have more money in my pocket at the end of the month and why do I not have more money in my bank account? The answer to that question in one word is taxes. Under this government Canadians are paying more taxes than they have ever paid before.

I would like to take a few minutes therefore to elaborate on this one simple phrase “paying more” and to demonstrate from the figures that were tabled by the government yesterday how Canadians are, at the end of the day, paying more. Let me start with personal income tax.

At the end of 1993-94 when this government took office, Canadians were paying $51.4 billion in personal income tax for the year. At the end of 1999-2000, they will be paying $75 billion for the year, an increase of $24 billion or 46%, an increase of $650 for every Canadian. The bottom line is that Canadians will pay more income tax than they ever have before, 46% more in total than when the government took office. Canadians are now paying the highest personal income tax rates in the The government taxes its citizens more heavily with respect to personal income tax than any other government of the G-7. That has not changed as a result of this budget. The Liberal legacy is Canadians pay more.

Of course, this government is not content just to tax you when you earn. The whole idea is to get you when you are coming and going so the government also taxes people when they spend. We have the figures on the GST consumption tax, a tax the government solemnly promised to remove before it became the government.

At the end of 1993-94 when this government replaced the Tories, Canadians were paying $15.7 billion in GST per year. At the end of 1999-2000 Canadians will be paying $21.6 billion in GST, an increase of $5.9 billion or 38%. That is an increase of $156 per Canadian. The bottom line is that Canadians are paying more GST under a government that promised to abolish it than they have ever paid before, 38% more in total than when the government took office. When it comes to consumption taxes, Canadians pay more.

The government plays a shell game with taxes to try to make taxpayers feel better off. It announces with great fanfare certain tax reductions, such as the modest reductions in the employment insurance premiums, and then it says nothing about or even hides increases in other taxes such as the CPP increases that are inexorably taking more dollars from Canadians each year.

There are two ways to cut through the shell game. One is to elaborate on how the shell game is played with respect to particular taxes and particular expenditures. I hope some day the auditor general spends a whole day explaining that kind of shell game to the House. But the simplest way to cut through the shell game is to look at the total federal taxes collected from individuals and total tax revenues. Here the story is the same. Canadians pay more.

If we look at total federal taxes paid by persons, and this includes personal income tax, employment insurance, GST and Canada pension plan, at the end of 1993-94 the total of all federal taxes paid by persons for the year was $94.3 billion. At the end of 1999-2000 the total of all federal taxes paid by persons will be $131 billion, an increase of $36.8 billion or 39%. The bottom line again, and notice the inexorable conclusion that we come to by working through the numbers, is Canadians paying more in total federal personal taxes than they have ever paid before.

[An hon. member]

More Canadians.

[Preston Manning, Reform, Calgary Southwest, AB]

The hon. member says to be Canadian is to pay taxes. That is the Liberal definition.

Finally, if we put all this together and look at the total tax revenue of the federal government, as expected, we get the same story. Canadians paying more.

At the end of 1993-94 when this government took office, total federal revenue was $107.3 billion. At the end of 1999-2000 the total of federal revenues collected will be $149.4 billion, an increase of $42 billion or 39%. In other words, there is an increase in federal revenues collected per taxpayer, and this is the budget that was going to alleviate the taxpayers from the great burden of federal taxation, of $2,020 or 24%.

This government has become the richest government in Canada's history. The economy can grow by 3%, which ought to be good news for Canadians. But when the federal government's revenues grow by 8% what that tells us is that when there is economic growth, a disproportionate amount of that growth is not going to the people who produce it, not to the companies that produce it, not to the individuals who produce it, but to the ever present government and its taxation department.

The great record of Liberalism is going to be this for the 20th century: a well to do finance minister and a well to do prime minister running the richest government in the history of Canada, one that is collecting $409 million per day from the taxpayers of Canada.

I think I have made the case. I could go on, but the case is that Canadians pay more.

If Canadians were paying more but getting more in terms of better government or better services, perhaps the government would have a leg to stand on or at least be able to explain or defend its record. But the other half of the equation, the other part of the bottom line, is that under this government Canadians are not only paying more but are getting less. In particular, Canadians are getting less in the one area they care about most these days, health care.

Time does not permit me to deal with all areas of government activity in which Canadians are getting less value for their money, the areas in which the productivity of the federal government itself is declining. No one should have any illusions that part of the productivity problem in this country is the declining productivity of government itself, getting less for the taxes that are paid and the cost of government being tacked on to everything we produce and sell in the world market.

I will touch on five areas in which Canadians are getting less. The first is employment insurance, a big bill. According to the chief auditor for this program, the government has been overtaxing Canadians for employment insurance on average by 37% for at least five years and it continues to do so. Yet during the same time benefits have decreased and the government has proposed to return only a fraction of the accumulated surpluses to the employers and the employees who put it up in the first place. In other words, with regard to employment insurance people are paying more and getting less. They are getting less employment insurance. They are not getting the premium refunds they should be getting.

The second area is the Canada pension plan. Under the government's proposals for this plan, a huge area of expenditure and investment, CPP premiums will increase by 41% over the next four years. Notice there is not a word about the CPP in the budget. Yet at the end of the day the most Canadians can expect from this plan even after these increases is a measly $9,000 a year pension which is less than half the pension a young worker would get if those same funds were placed in an RRSP. With regard to CPP under this government people will pay 41% more and they will get less.

Third is military spending. Since 1993-94 the government has cut national defence spending. This is the department Liberals love to hate. The defence department is the one they do not mind cutting. They have cut it by over $2.4 billion per year in absolute terms but the cumulative effect of the cuts is about $7.8 billion. This has set in motion the downsizing of Canada's military and a deterioration in morale which has significantly reduced our military capability. Now the government is preparing to put about $175 million per year for three years back into the military but it is not implementing the other reforms necessary to render Canada's military more effective. With respect to defence spending Canadians will still pay more but they will get less.

The fourth area is Indian affairs. According to this budget the government is putting half a billion dollars into Indian affairs but the government has done nothing to ensure that much of the $4.4 billion it is already putting in is not siphoned off by lawyers, bureaucrats, politicians and consultants in activities that benefit everybody else except the rank and file aboriginal, particularly on reserve. While Canadians pay more we would argue that the rank and file aboriginal on reserve sees less and less of these funds. Canadians pay more but the ones who really need the help get less.

With respect to getting less, let us take a look at the area of health care. This is an area in which Canadians are most conscious of getting less while paying more. This is an area where there has been more spin doctoring, shell gaming and rhetoric than any other, but that cannot hide the ugly truth. When this government took office transfers to other levels of government, the CHST, the Canada assistance plan, the EPF and equalization, amounted to $27 billion per year. In 1997-98 under this government transfers had decreased to a cumulative total of $21 billion, a decrease of $6 billion per year or 22%. The negative effects of this cut in health care transfers are well known to all members of the House. They include the hospital closures, the thousands of doctors, nurses and health care workers leaving the country, the 200,000 Canadians on waiting lists and all the pain, anxiety and anger these figures represent.

Canadians were beginning to refer to the Minister of Finance, the Minister of Health and the Prime Minister as the Dr. Kevorkians of Canadian medicare. The government finally felt impelled to do something. So it decided to put $2 billion to $2.5 billion per year back into health care.

However, the spin doctors said that was not a very big number, $2 billion to $2.5 billion. They said you will not get a headline for a health care budget if you are talking about $2 billion to $2.5 billion per year. So they asked if it could be made bigger. Everyone knows what the spin doctors do when they get into something like this, they multiply it by something. So somebody said multiply it by three. Then some genius said no, multiply it by five. When we multiply it by five we would get a big number, up to $11.5 billion. This is the kind of math that goes on behind the budget.

Lo and behold we have an announcement by the finance minister that the government is going to put $11.5 billion back into health care. They say over five years very quickly so it does not get divided by five.

If you are to use cumulative numbers for spending increases on health care, you had better use cumulative numbers for the spending cuts on health care and social services to let people know what you are doing. Those numbers do not appear in the budget at all. I am sure the minister had them on a piece of paper and it fell out of the envelope on the way into the department. I am sure he was going to tell us all about them but they were not there.

So we have to do the math. We found that the government's cumulative cuts in the transfers for health and social programs are $21.4 billion by the end of 1999. Even if we put $11.5 billion back in there is a spending deficit. Canadians pay more and get less in health care, about $1,500 less per taxpayer than was spent in 1993-94.

Some hon. members are shaking their heads. They are looking around and talking to each other, saying this is confusing. Let me follow their train of thought. I can read their minds. The hon. members are saying that sometimes we are talking about the Canada health and social transfers and sometimes we are talking about the health transfers. If we say there is confusion, we say who is to blame for that. The government cynically and deliberately created confusion on that point.

When the government was cutting health care transfers it wanted to lump them in with the other social transfers so the health care cuts would be less visible to the public and the government would not get the blame. So when it cuts it mixes it in with something else. All of a sudden, now that it wants to increase it, it wants to make it explicit and visible again so the federal government can get the credit.

The auditor general is not going to be fooled by this kind of shell game and neither are Canadians. As I said earlier, I hope he devotes an entire volume in his next report to the shell game reporting that goes on with respect to the federal budget.

The bottom line of all of this, the unadulterated bottom line, the government's financial management since 1993-94, is Canadians pay $42 billion more taxes since the government took office, or $2,020 per taxpayers, and Canadians will get less, in particular $1,500 less per taxpayer, for health and other services. Pay more, get less is the legacy of the Liberal government in the dying days of the 20th century.

I got into this yesterday but the minister had spoken for an hour and 20 minutes and I could not get into this in any great detail to close off the debate. I want to elaborate on the point that Canada is becoming like old England. When the real king, King Richard the Lionhearted, was away on a crusade, a relative, Prince John, was put in charge. We quoted the little rhyme, “He wanted to be known as John the First but he ended up being known as John the Worst”. Why? Because with the aid of his henchman, the sheriff of Nottingham, he taxed his people to death. Under his regency the government got richer and richer—this is historically accurate—and the people got poorer services and poorer, period. In other words, it was a prototype of the Liberal government. Pay more and you get less.

They paid more and got less until a green clad reformer named Robin Hood assembled a group together, sort of a united alternative of Sherwood Forest, and Prince John's evil ways were restrained. However, that is another story I will save for another day.

Perhaps a little more seriously, it is worth noting that a little later Prince John actually did become king and the major landowners, taxpayers and business leaders, the barons and so-called magnates of the realm, staged a taxpayers revolt and made King John, the king of taxers, sign a humiliating document called the Magna Carta in which he promised not to overtax and abuse his subjects.

Finance ministers should take note of what can happen when taxpayers are pushed too far.

This weekend a group of Canadians will be meeting in this city to explore new ways and means of uniting Canadians to reduce the flood of Liberal taxation and the deterioration of health care under this administration. My hope is that convention will eventually result in a Magna Carta for Canadians that will free Canada from the pay more, get less policies of the Liberal government.

To complement that effort, my colleagues in the House will also use this budget debate to propose remedies to the current situation. They will propose ways and means of ending the shell game by making the government's financial accounting more accountable and more believable and transparent. They will propose reforms in health care financing and federal-provincial relations because the two are connected. They were not connected in the budget. They should be connected. The proposed reforms would put health and social service finances on a firmer foundation.

They will propose broad based tax relief greater in scope than anything this government has ever conceived so that in the end Canadians will pay less and get more.

In closing, I move:

That the motion be amended by replacing all the words after the word “that” with the following:

This House rejects the budget statement of the government because it is a continuation of the government's pay more get less policy which has savaged health care and burdened Canadians with high taxes thus undermining the productivity of the Canadian economy; and because this ever increasing high tax policy has significantly reduced the standard of living of Canadians and left the health care system in tatters.

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

Mr. Speaker, this sixth budget of the Minister of Finance of Canada is not only disappointing, it is very disappointing.

This morning's

Globe and Mail

was not shy about telling the Minister of Finance that he lacked imagination, that he lacked vision for a minister of finance and that he should make way for someone else with more vision and more compassion who is better able to manage the surpluses.

They also wanted a new minister of finance with greater transparency. In this regard, the Minister of Finance obviously lacked transparency from his first budget to his sixth in terms of releasing the real figures for public finances, for the deficit and for the surpluses.

One would have expected, and this is my first criticism, that those who helped put the federal fiscal house in order, those who contributed to first eliminating the deficit and then accumulating major surpluses in the Minister of Finance's coffers would be rewarded for their efforts.

Given a $12 billion surplus for the fiscal year ending on March 31, and given an anticipated surplus of $20 billion for next year—not the surpluses as they appear in the budget documents where, once again, the finance minister's figures are zero and zero, but the real figures which the Bloc Quebecois makes a habit of providing and which are accurate to within 5%, which is normal, unlike the finance minister's figures, which are off by 150%—one would have expected middle income families to enjoy meaningful tax reductions. After all, these are the people who have had to pay most of the $19 billion in new taxes imposed by the Minister of Finance since 1994, not to mention the GST increase, which brought in $5 billion in revenues.

This year, these middle income families, that is those earning between $30,000 and $70,000, will get a ridiculous tax reduction of somewhere between $150 and $300.

By contrast, the friends of the Liberal Party, the wealthy, those who have been enjoying preferential treatment from this government since 1993, will get a significant tax reduction.

If one's individual or family income is $250,000, one will be entitled to a $3,800 tax reduction this year, compared to between $150 and $300 if one earns between $30,000 and $70,000. Who is this budget for? Who benefits from it? It is the well to do, even though middle income families are the ones that helped the Minister of Finance generate the absolutely huge surpluses that he is hiding shamelessly from Quebeckers and Canadians.

We would have expected some consideration would be given the unemployed of this country, because the largest part of the contribution to the improvement of public finances comes from them. The Minister of Finance together with the Minister of Human Resources Development have used the employment insurance fund surplus of $6 billion annually for the past three years to improve public finances.

With there being significant surpluses, we might have thought some consideration would be given the unemployed. Nothing. Zero. On with the government policy of blithely dipping into the surplus in the employment insurance fund, harassing the unemployed and denying them their right to contest the decisions made at HRDC employment centres across Canada.

So they harass them, after they have already been hit with the scourge of unemployment, in order to create a significant surplus at the end of it all. We might have thought they would review the employment insurance plan so that not just 36% of the unemployed would be covered by it, which means that this plan no longer makes any sense. But there is nothing in this budget to help the country's unemployed.

We might wonder where the Minister of Human Resources Development was, because the Minister of Health and member from Ontario got funding for his department. The Minister of Industry, another member from Ontario, got some of the spending provided in the Minister of Finance's budget. The Minister of Canadian Heritage, who is also from Ontario, got money as well.

Where was the Minister of Human Resources Development, a Quebec minister and a Liberal? Where did he make his representations? What weight does he carry? He seems to be a featherweight, if the budget results are any indication.

The Ontario ministers got all sorts of things for their respective departments. Although Quebec and the rest of Canada agree that the EI fund heist, or surplus as it is called, designed to give the rich a tax break, should be stopped, and although there are country-wide demonstrations, and the Quebec coalition paid us a visit recently, the Minister of Human Resources Development does not have enough heft to ask the Minister of Finance to include humanitarian considerations and compassion in his budget.

With respect to health care, it is clear from this budget that something amazing happened between the time the Prime Minister met with the premiers and the time the budget was drawn up. The Minister of Finance and the government of the member for Saint-Maurice decided unilaterally to amend the federal transfer payment formula for health, post-secondary education—which is often forgotten—and social assistance.

Unilaterally, they decided that this year they were changing the rules of the game. Now, all of a sudden, federal health transfer payments would be based on population, rather than on the traditional shares.

Where were the Liberal ministers from Quebec? The unilateral change to the funding formula for health, post-secondary education and social assistance, but especially health, has put Quebec at a literal disadvantage. The government has just ensured that federal transfer payments to Quebec for health, post-secondary education and social assistance will decline over the next five years.

On the other hand, while government members from Quebec were asleep at the switch, government members from Ontario lobbied for and obtained transfer payments for Ontario; as a result, starting this year, of the $2 billion increase in transfer payments for health, almost $1 billion will go to Ontario, the richest province in Canada. Furthermore, if we look at the regional breakdown, $400 million will go to British Columbia and $300 million to Alberta.

It is clear today why the premiers of these three provinces have been staunch supporters of the social union. And when I say staunch, I mean super staunch. Just last night, Mike Harris, the premier of Ontario, signed again, before us, some sort of card—they would rather sign a cheque to charity, since that is how they do things—but Harris preferred to sign the social union agreement again because, as he said, “Ontario stands to gain”. It takes some doing.

Every time the finance minister does a good deed, it is to show himself off to advantage, as a minister and a potential candidate for the leadership of the Liberal Party of Canada, but we are used to that. That is what he did in the maritimes, when he negotiated an agreement to harmonize the GST and the provincial taxes. As a reward for playing his game and making him look good, he gave the three provinces involved nearly $1 billion in compensation. In Quebec, we are still waiting for our $2 billion in compensation, because we had harmonized the Quebec sales tax with the GST several years earlier. We are still waiting for the $2 billion.

He has got us used to that. He gives out what amounts to bribes to compensate ministers or provinces that come on side and promote the government's overly centralizing ideas.

We understand better now why the social union was so strongly supported by the premiers of these provinces. Today they get compensation in the budget. The compensation is $1 billion for Ontario in Canada social transfer, $400 million for B.C. and $300 million for Alberta.

Where were the government members from Quebec? I am thinking in particular of the Minister of Finance, who is also the member for LaSalle—Émard, the Minister of Intergovernmental Affairs, the Minister of Human Resources Development and the Minister of Immigration. That counts for something, but they are all featherweights, because, when it comes to Quebec's interests, they have shown with this budget that they have done nothing, that they have been asleep at the switch, to use a popular Quebec expression.

It hurt my ears yesterday and again today to hear these Liberal ministers from Quebec saying that Quebec benefited from equalization: “Hooray for equalization. There is $1 billion in equalization payment adjustment for Quebec”.

That is so sad. It is like saying that we in Quebec are destined to get the short end of the stick. That we should be happy with the social assistance they give us. But Ontario will get everything that promotes economic growth, job creation and wealth. But Quebec should be happy with band-aid solutions. Ontario will get economic growth and job creation. That is the message we have just been given.

And they applaud. The Liberal ministers from Quebec and the private members as well, all members of the Liberal Party of Canada, have just applauded equalization. What does that mean? It means they have just applauded the fact that there are additional equalization payments, when Ontario is enjoying wonderful prosperity, at all levels. We will come to that shortly.

It means that they are applauding the fact that Ontario's economic performance is stronger than Quebec's. That is what it means. It means that they are applauding the increase in Ontario's GDP and the drop in Quebec's. Honestly!

Where were these federal Liberal ministers and members from Quebec when it came time to draw up the budget? Why were they not telling the Minister of Finance that it was perhaps time to right the balance with respect to federal spending on goods and services in Quebec?

Statistics Canada figures in the Public Accounts of Canada show that Quebec loses out on $2 billion annually. This has long been the case.

Where were the federal Liberal party ministers and members from Quebec when it came to defending the fact that at least our demographic weight could have been taken into account when deciding on federal transfer payments for the procurement of goods and services in Quebec?

The same goes for research and development. And regional development, as well, where we have lost close to $600 million a year for the last eight years. Where were these defenders of Quebec? They were asleep at the switch. That is where they were. They are supposed to be defending Quebec's interests. They have just applauded equalization payments, but have done nothing to restore equity in the procurement of goods and services, in regional development and in R & D spending in Quebec.

This is what would pave the way for job creation. In Quebec, if the per capita criterion—they are good at selecting the per capita basis—was applied to federal expenditures on goods and services, and investments in research and development as well as regional development, if 24% of these transfers went to Quebec, instead of the current 13% to 19% depending on the item, starting tomorrow, we in Quebec would no longer be receiving equalization payments, we would be paying for the other provinces. That is what would happen if there were any justice in this country. That is the reality.

And caution must be exercised when talking about the $1 billion in equalization. Everything is relative in life. This amount was paid to Quebec because it was owed to Quebec. Because, in the past three years, a number of parameters in the equalization formula had been underestimated. A strict, politically unbiased and non partisan application of the formula actually sees Quebec receiving an extra $1 billion in equalization payments.

Since everything is relative, we are getting $1 billion, but $6 billion have been cut over the past five years. Over five years, the finance minister has taken $6 billion away from us. Now he is giving $1 billion back, And we are expected to applaud, especially since these are equalization payments? Give me a break.

It is like having our apartment broken into and $6,000 stolen. We catch the thief, who then gives $1,000 back. Should he get a hug and thanks? How about a bit of common sense, here?

The final point is the social union. This budget contains a number of new initiatives that constitute a direct encroachment on a provincial jurisdiction, namely health. They are describing these intrusions in terms of the social union, the agreement that was signed by all the provinces in Canada, except Quebec.

In his budget speech yesterday, the Minister of Finance mentioned that, under the social union, they would create health police, a supervisory body to monitor hospital emergencies, provincial performance, the number of doctors, general practitioners and specialists required.

There is also an incommensurable number of new initiatives that are total duplication of what the Government of Quebec is doing. We did not agree to the social union, but, as the Minister of Intergovernmental Affairs said, we have just had it stuffed down our throat. The government has started the disaster, one of the dreaded catastrophes related to the social union.

There is $1.4 billion in new initiatives. We did the calculations. At least $400 million of this is pure loss, as it represents administrative costs. This is $400 million they might as well have dumped in the garbage, because it will not help relieve the pressure in emergency rooms or help people who are sick and waiting for an operation or something else or improve the system and the health care networks across Canada.

Do you know what this $400 million means? It means we could have done extraordinary things for the sick. Recently, with only $20 million, the Quebec minister of health, Ms. Marois, managed to set aside $3.2 million in incentives for hospitals to manage emergencies more efficiently. With this same $20 million, she was able to open 830 additional beds, for one month, for those on hospital waiting lists. And, still with this same $20 million, she hired 900 people for one month to provide direct health care.

Do you know what Quebec could have done with the $400 million in administration costs that is simply being written off, Mr. Speaker? If our share had been based on our population, that is, one quarter, if we had been given an additional $100 million for health care, do you know what we could have done with it, Mr. Speaker, given what Ms. Marois had already accomplished with $20 million? We could have put $12 million into measures to reduce crowding in emergency rooms. We could have opened an additional 3,320 beds to help the sick, not federal bureaucrats. We could have hired 3,600 health care providers.

If the Minister of Finance had not juggled the surplus figures, he could have delivered everything the leader of the Bloc Quebecois, myself as party critic and all members of our party called for during the Quebec tour and during the finance committee's Canada-wide tour.

First, there could have been substantial tax cuts for middle income earners, the very folks who have helped clean up the nation's finances. Second, the provinces could have been given the full amount of the cuts, $6 billion, to their transfers for health, post-secondary education and social assistance. There could also have been a full review of EI accessibility and benefits.

All that could have been done if we had been given the true picture. But since we were not, everyone remains under the impression that we could not afford it. Actually, we could and still can in the coming year. It is a matter of political will and a matter of transparency as well.

Therefore, I move the following amendment to the amendment:

That the amendment be amended by striking out all the words after the words “Budget statement of the government” and by substituting the following:

“because it does not significantly lower income taxes for middle-class persons; maintains the cuts to the Canada Social Transfer announced in the 1995 budget; imposes on Quebec the Social Union Agreement; penalizes Quebec by unilaterally imposing a new transfer formula for health care; makes new encroachments into the health care field; and uses money confiscated from unemployed persons in order to lower income taxes for more prosperous persons.”

We are going to fight this budget.

[The Acting Speaker (Mr. McClelland)]

The hon. member for Saint-Hyacinthe—Bagot had moved an amendment to the amendment. The Chair will take it under advisement and get back to the House shortly with a ruling.

[Mac Harb, Liberal, Ottawa Centre, ON]

Mr. Speaker, I was somewhat surprised to hear the hon. member make unfounded allegations which are very far from the truth.

For the benefit of the House and of Quebeckers, I would like to point out a few things.

First, equalization, which was expressly designed to eliminate regional disparities, will greatly benefit Quebec. For example, over the next five years, Quebec will receive a $1.4 billion cheque, which it did not even anticipate. This $1.4 billion given by the federal government to Quebec is almost equal to the province's annual deficit.

Moreover, over the next five years, Quebec will receive 78% or $566 million of the $722 million in new funding that comes from technical improvements to the program.

Also, when it comes to total transfers, including the Canada health and social transfer and the equalization program, the figures are impressive.

Over the next 13 months, Quebec will receive $2 billion, that is 48% of the $4.2 billion allocated to the provinces. It will also receive $5.9 billion, or 30% of the $19.6 billion. Finally, Quebec will get 29% of all transfers, even though it only accounts for 24% of Canada's population.

The hon. member should congratulate the Liberal members from Quebec for their work, along with their colleague, the Minister of Finance, and the Government of Canada. He should applaud them for their good work and for meeting Quebeckers' needs.

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

Mr. Speaker, if I were a member from Ontario, I would applaud. My colleague is from Ontario, and it is the sure winner.

But if Quebec costs Canada so much, why are you doing everything possible to keep it in this federation? If it costs too much, you could be saving hundreds of millions, maybe billions, from what you say.

I would remind my colleague—we will be more serious—of his remarks. He mentioned 29%. All right, let us say 29% with equalization payments, but he is mixing apples and oranges. That makes for a real slop. They do not understand anymore either, and that is why they keep running the same tape each time.

But let us look at the 29%. Does the member know how much of the cuts the Quebec finance minister has had to cope with in five years? He would not know that. Ontario is the winner. It is obsessed with the extraordinary gains it has made with this budget.

In Quebec, however, we have taken 39% of the cuts. That is not bad, when they talk about 29% in equalization payments. Yet we always got hit, when the time came to cut, with 39% of the cut. However, when it is time to distribute, the percentage drops. So, the truth has to come out too.

Promoting jobs and economic growth for Ontario is fine. All the Ontario members are in favour. In Quebec, it would be promoted too if we did not have doormat members asleep at the switch whenever it comes to making a budget that promotes Quebec. I think things would go a little better for Quebeckers and especially for Quebec's unemployed.