Debates of Feb. 18th, 1999

The Budget

[Claudette Bradshaw, Liberal, Moncton, NB]

I hope that Premier Bouchard will invest $400 million, so that all the necessary initiatives can be implemented to support health care and fight child poverty in Quebec.

[Gary Pillitteri, Liberal, Niagara Falls, ON]

Madam Speaker, I welcome the opportunity to address this House and to speak to the sixth Liberal budget. The 1999 budget demonstrates the dedication of the Liberal government to advance the living standards of Canadians through the creation of well paying jobs, a robust economy and equal opportunities for all. All this has built an excellent health care system and a safety net for those in need.

In the last five years I have had the privilege of serving with the Standing Committee on Finance and to take part in the prebudget consultations held throughout Canada. The great number of Canadians who took time from their busy schedule to present their views had one thing in common, their strong desire to build better lives for themselves and their families.

Canadians wish to be part of a society that not only provides opportunities for everyone but that provides support when through no fault of their own Canadians need a helping hand. This government has listened. The results may be seen in the positive turn taken by the Canadian economy.

The unemployment rate has fallen considerably since the Liberals first took office. Now it stands at its lowest level in almost a decade. I am proud to report that my own riding of Niagara Falls and the Niagara area continue to grow and to prosper. Lately we have witnessed new developments like expansions of existing places of employment and many new businesses opening their doors. This in turn translates into jobs.

In the month of November alone, 13,000 more people were employed in the Niagara area. This means 13,000 more jobs than last year. According to the last labour force survey, 2,600 additional people were employed in the accommodation, food and beverage industry. The unadjusted unemployment rate dropped from 8.8% to approximately 6%. In Niagara 70 new businesses have opened since last spring, businesses that range from large chains and department stores to small entrepreneurs finding their niche in today's market.

Existing businesses continue to expand and are making large investments in their operations. This will not only ensure that employees keep their jobs but it will create new positions. An increase of workers in the agricultural sector has seen an additional 5,000 people gain employment. As a result of previous Liberal budgets, interest rates have declined substantially. An economist will say that low interest rates encourage both investment and expansion. We have wrestled to the ground. Now it is firmly under control. All the economist indicators are telling us that it will remain so.

Canada today enjoys a solid reputation as a low inflation country. What a difference from the beginning of 1994 when Canada's unemployment rate stood at 11.5%, when our country was faced with a $42 billion deficit, the largest in Canadian history, a large deficit that we were able to eliminate in just four years. This year for the second consecutive year the government has brought down a budget that is balanced. Not only that but in this fiscal year we will again balance the books.

This is the first time since 1951-52 that Canada has been deficit free for two years in a row. A surplus of $3.5 billion, the first surplus in 28 years, was recorded in 1997-98 and it went to pay down the debt.

Today Canadians believe their government can make a difference. Despite the progress we have made in balancing the books, we are not forgetting that the role of our government is to respond to the needs of Canadians. The role of our government is to help Canadians adjust to changes and prepare for the challenges that we all have to face in the new millennium.

During prebudget consultations Canadians voiced one main concern, the importance of their health system. They expressed to us the fear that the quality of care available to them would not be there when their loved ones would need it. These concerns had to be addressed. Here, once more, we have listened to Canadians.

While budget '98 was an education budget, budget '99 makes health the largest single investment this government has ever made. Since the elimination of the deficit in 1998 three-quarters of all new government spending has been focused on health and education.

With the provisions in the budget the provinces and territories will receive from the federal government over the next five years an additional $11.5 billion specifically for health care.

The Government of Canada has made major commitments to Canadians through Canada's new social union and the new measures announced in the 1999 budget.

Now Canadians will be able to see tangible benefits such as improved health care, better programs for our children and our young people.

We share the strong desire of all Canadians to have confidence in our health care system and to see that medicare will continue to meet everyone's needs well into the 21st century. Quality health care is a priority for Canadians. We all want to be reassured that the health care system is delivering accessible, high quality care in a timely fashion.

Canadians also want to know how and where their health care dollars are being spent. When medicare was first introduced our focus was on curing illness with doctors and hospitals. Now good health care is as much about preventing illness as curing it. We know we need to develop innovative ways to provide care in the home and community for people who are ill or who have long term health problems. Good home care will free hospital beds for those who need urgent medical attention.

In the last decade patients' needs have evolved, health care needs have changed and medical technology has had to keep pace with these changes. It is normal therefore to re-examine the way we do things to continue to provide all Canadians with a superior health care system. I believe that with this budget the Liberal government has shown its commitment to medicare.

This government will never allow a two tier system of medicine to take hold in Canada, one for the poor and one for the rich. Support and research are paramount to a good health care system.

The 1999 budget builds on previous Liberal government investments in research, knowledge and innovation by injecting $1.4 billion over the remainder of 1998-99 and the next three fiscal years.

This will expand and integrate research and innovation in health care. Moreover, this funding will allow us to continue exploring with the provinces innovative approaches to rural and community health care.

This budget builds on the Canadian opportunities strategies outlined in last year's budget. The investment of more than $1.8 billion over the remainder of this fiscal year and the next three years will support the creation of employment. It will strengthen research facilities, provide more opportunities for advanced research, develop new and better uses of the information highway and directly support employment, especially for our youth. This is a very important measure in this budget. It will tell many young bright Canadians, scientists, to unpack their bags and stay in Canada.

With the provisions in this budget the Liberal government has provided target tax relief. With budget '99 we begin to broaden tax relief, thus benefiting more Canadians. Our approach is very clear.

Tax reduction should benefit those who need it most, low and middle income Canadians. Tax relief should focus on personal income taxes and tax relief should not be financed with borrowed money.

The Canada child tax benefit has been enhanced by $300 million. This will extend benefits to modest and middle income families. Two million modest and middle income families will receive higher benefits and a portion of the benefits will be extended to about 100,000 families that currently do not receive it.

[Maurice Dumas, Bloc, Argenteuil—Papineau, QC]

Madam Speaker, I have a question for my hon. colleague from Niagara Falls, to whom I had the pleasure of paying a visit last summer. I must say that he has a wonderful vineyard and that he makes excellent wines.

Now, after the good wine, the sour grapes. Does he not find it unfortunate that the Minister of Finance did not put a single penny in employment insurance?

I realize that Ontario is a privileged province. Unemployment has always been lower there than in Quebec. In fact, it is a richer province.

Does he not believe that the Minister of Finance should have invested in employment insurance, which we still refer to as unemployment insurance?

[Gary Pillitteri, Liberal, Niagara Falls, ON]

Madam Speaker, I recall in 1993 in my area of Niagara Falls we had an employment rate of 14.5% and without any specific sector creating unemployment my area now has only a 6% unemployment rate.

It is not the government's responsibility to pay people to stay at home. It is up to the government to create the atmosphere so the private sector, individuals like me and my colleagues, can create the jobs. We do not need money to provide for unemployment. We need employers to create an atmosphere where the employer could make money and employ more people. That is the role of this government and that is the role for people we should be looking at.

[Rick Casson, Reform, Lethbridge, AB]

Madam Speaker, we keep hearing from the government side about how wonderful this budget was. The fact is many people in this country, after having a day to digest what they have heard, have come up with some different ideas. One is KPMG.

Trying to get through the smoke and mirrors is a problem with this. Some of the issues that were promised last year have been repromised. Some of the things the government is taking credit for now will not happen until next year. Some of the things the government is saying will create a savings of $300 or $400 will actually create a savings of $57. The fact is Canadians are paying more and getting less. We will keep saying that until they get the idea.

The member keeps saying how well his area has done. His area happens to be in Ontario. The other area in Canada that is doing well is Alberta. Most of the jobs created in this country have been in Ontario and Alberta.

If we count in the fact that the Canadian pension plan is going up and EI premiums are going up, which the government forgets to mention, I wonder if the member would like to tell us how much Canadians are saving after those two factors are figured in.

[Gary Pillitteri, Liberal, Niagara Falls, ON]

Madam Speaker, the government is not only dealing with statistics. It is dealing more with people. Basically when more people are employed they are paying more taxes. When more people are employed they are creating other jobs. This is where we beg to differ with members on the other side because they are only looking at statistics. We are trying to put a human face to it.

No one has told me to look at the unemployment rate and at how much tax we are paying. A lot of them come to me and say “Look at what I have around me”. There is more development and more people working and paying taxes. Therefore the whole economy moves much better and faster. They are not asking about the percentage of tax but what we have done for the people.

To some people it is only $1.20 or $1.30 more in their pockets, but it is a lot better than raising taxes.

[Christiane Gagnon, Bloc, Québec, QC]

Madam Speaker, I am pleased to rise today to speak to the budget. Last year at this time, when the Minister of Finance brought down his budget, everyone was shocked at the federal government's arrogant disregard for provincial jurisdictions, particularly in the area of education.

Today, with this new budget, we can hardly believe our eyes as the Liberal government openly sets out to invade areas of jurisdiction that do not belong to it and to duplicate what is being done already in the provinces, simply to ease its conscience. That is what it is doing in this budget and that is what we condemn.

We can hardly believe our eyes, but that will not stop us from saying how disastrous this budget is for Quebec. The worst part about all this is that the money belongs to us and is being used in provincial areas of jurisdiction. This is unacceptable. First they went after education, and now they are going after health.

[Pierre Pettigrew, Liberal, Papineau—Saint-Denis, QC]

Come now. It is not “our” money.

[Christiane Gagnon, Bloc, Québec, QC]

I am sorry, Mr. Minister of Human Resources Development, I know you think this is no the taxpayers' money. Everyone is paying—

[The Acting Speaker (Ms. Thibeault)]

Order, please. I must remind the hon. member for Québec to address her remarks to the Chair.

[Christiane Gagnon, Bloc, Québec, QC]

Pardon me, Madam Speaker, but would you be so kind as to tell the Minister of Human Resources Development to calm down.

[Some hon. member]

Oh, oh.

[Christiane Gagnon, Bloc, Québec, QC]

This is unacceptable. First they go after education and now it is health.

After cutting billions of dollars in transfer payments, after hamstringing the provinces, which were already cleaning up their finances and did not need this additional burden, and after causing an unprecedented crisis in the health care system, the Minister of Finance and his colleague, the Minister of Health, are stooping to a new low in arrogance and getting ready to impose their views on the health sector.

This strategy has been around for quite a while and is quite deliberate. The intrusions announced in the budget put into effect a long-standing plan to deliberately smother the provinces that do not generate enough revenue from taxes to take on their full responsibilities under the Constitution.

So there is a hidden agenda here. The President of the Treasury Board put it best in an interview to Le Soleil , on March 8, 1996, and we know that he makes numerous statements to the press. He said “When Bouchard has to make cuts, we in Ottawa will be able to show that we have the means to preserve the future of our social programs”. This is the real intention behind this government's long-standing strategy. This kind of reasoning speaks volumes about the Liberal government's agenda and priorities.

Federal cuts contributed to create a crisis in the health systems of provinces that had already been affected by the freeze on transfers imposed by the Conservative government. This government is taking advantage of the difficult situation in which it has put the provinces to impose all sorts of new encroachments.

In education, the latest encroachment by the Liberal government, with the millennium scholarships, certainly is a case in point.

Treating patients with red tape and statistics is strong medicine. Who is bearing the brunt of the finance minister's generosity? Who is being made to pay for this strategy by the Liberals? The unemployed.

The Minister of Human Resources Development should not be laughing today, because we know. We have toured the regions and we know how the unemployed have been ignored in this budget. The provinces have had to come to terms with this offloading of the federal deficit. It has not been a laughing matter.

[Pierre Pettigrew, Liberal, Papineau—Saint-Denis, QC]

Madam Speaker, I rise on a point of order. I wish to point out to the hon. member that I was certainly not laughing when she mentioned her regional tour.

[The Acting Speaker (Ms. Thibeault)]

I am afraid that this is not a point of order, but part of the debate. The hon. member for Québec.

[Christiane Gagnon, Bloc, Québec, QC]

Madam Speaker, I do not know why the Minister of Human Resources Development is so intent on interrupting my speech, but I can say that we conducted a regional tour on the impact of the new EI reform. Many unemployed workers have been overlooked in the new budget's strategy.

The entire middle class has been taxed so heavily that it deserved a break. Yet, in 1993, the Prime Minister was proudly dragging his infamous red book around and telling anyone who would listen that his government would not cut payments to individuals or to the provinces. It is there in black and white. A few months later, the Minister of Finance set the record straight and said that the next budget would contain deep cuts in funding to the provinces for health, social assistance and education. I am not making this up. This is what he said during an interview he gave the Toronto Star .

It is sad how this Minister of Finance juggles the figures and makes a mockery of transparency. I could give many examples.

[Odina Desrochers, Bloc, Lotbinière, QC]

He's a tinkerer.

[Christiane Gagnon, Bloc, Québec, QC]

The few words I quoted earlier show only too well how, since 1993, the Liberals have continued to feed the public increasingly rosy promises in order to blind it to an ever darker future.

What the budget is really saying is that some of the cuts will be reversed over the next three years. We were promised $42 billion by 2003, and now it will only be $33 billion. So they are still cuts. Before they talk about giving presents, they should make sure the people getting the presents are not left with a debt at the start.

The result is that the provinces will have to face cuts of $33 billion under Liberal management between 1994 and 2003, as opposed to the $42 billion in cuts they promised.

However, true to itself, the government never gives without taking away. This time, it is taking advantage of the difficult situation it put the provinces in to impose a whole lot more meddling. The millennium scholarships are a case in point. They put their finger on the sore spot and talk about fixing it.

After bleeding the provinces of billions of dollars for health care, the Liberals now want to spend hundreds of millions, a total of $1.4 billion, on statistics and paperwork. There will be $400 million in administrative costs.

All this money is going to go into reports on waiting lists and on the assignment of doctors. What has the federal government to do with all this? The Canadian Institute for Health Information will be spending $95 million over three years, and it will have the new task of providing periodic reports on the health of Canadians, the health care system, including waiting lists, doctor and specialist assignments and the most effective courses of treatment.

A national health surveillance network will be created. It will monitor the outbreak of serious illnesses and will provide an electronic link among laboratories in Canada. This represents an investment of $75 million over three years. It will give Canadians access to information on health issues from nutrition to colds and from breast cancer to diabetes.

Here again, how is all this money—millions of dollars, $75 million over three years—going to help people waiting for hospital beds? We will know how many are waiting, but I do not know how many we will cure.

The Canadian Institute for Health Information is another institution that will receive funds to report periodically on the health of Canadians and their health system, specifically on waiting lists, and the doctors and specialist assignments.

There will also be $115 million over three years for telehealth and home telecare pilot projects. This will overlap what CLSCs are doing. More duplication.

We must not forget accountability measures, all for the purpose of providing Canadians with better information. This will cost another $43 million over three years, so that Canadians are better informed about the results of federal health programs, in accordance with the social union agreement.

There is also the research and evaluation fund for nursing staff. The fund will be used, it is said, to seek solutions to the challenges facing nursing staff. We know the challenges they are now facing. An amount of $25 million has been earmarked to help nursing staff provide quality health care, and find ways of recycling existing staff and attracting new recruits.

The prenatal nutrition program is another example of duplication.

This new initiative in health care is a scandal because of the duplication and the mountain of paper and statistics involved. That is not the way to improve health care in the provinces, and we will oppose it.

They are taking another approach to health care in rural communities. In order to attract doctors to rural regions, the federal government plans to spend $50 million over three years as it gives us another glaring example of duplication.

What is the real intent of the government with this intrusion into health care? It is to centralize. When I was elected in 1993, the government was being criticized for its tendency to centralize and its failure to respect provincial jurisdictions. This will be another very unpopular budget in Quebec.

I can tell you what the Quebec minister of health can do with $20 million. She can invest $3.2 million to be distributed to hospitals with crowded emergency rooms. This also represents 830 additional hospital beds, the hiring of 900 people for one month, as well as the cost of ambulance transport and new equipment for emergencies.

There you have four measures with $20 million. One can only imagine what we could have done in the Quebec health care sector with the money the federal government is going to use to duplicate services, collect statistics and follow doctors around to see how they are responding to demand. We will therefore continue to condemn this federal interference in provincial areas of jurisdiction.

We know that the public has commented on the surpluses. Provincial governments, health and social organizations, the public, everyone agrees that the massive cuts in health care were responsible for some of the most difficult times the health system has experienced in recent years.

The saddest thing of all is that the federal government ended the 1997-98 fiscal year with a surplus of between $5 billion and $6 billion. It could therefore have achieved a zero deficit in 1997-98, without cutting so much as one red cent of social transfer payments to the provinces.

It obtained this budget surplus through cuts in the Canada social transfer for health, education and social assistance.

Then there is the misappropriation of the money in the employment insurance at the expense of the unemployed. Now six people in ten are excluded from employment insurance, which swells the employment insurance fund by $20 billion. Non indexation of tax rates brought in a lot of money too, billions of dollars. Tax rates and tax credits have not been indexed since 1986. So the middle class is again bankrolling the government's need for visibility and control.

Since they have been in power, the Liberals have dramatically chopped transfer payments to the provinces. In 1994, payments intended for the provinces were $18.8 billion. In 1997-98, they were $12.5 billion, that is, cut by $6.3 billion. And the government tells us it is being generous with this budget.

In 1994, the social transfer was, on average, $678 per capita. In 1998, it was only $386, and all the while health care costs were increasing because of population aging, the cost of new technologies and increase in the cost of medicines.

There is another impact as well raising the cost of health care. When a population becomes poorer, it eats less well and the quality of life decreases. That means also the stress resulting from loss of employment, because employment insurance is not an option. That is what that means.

People are distressed. They perhaps need more medical care. What does the government do in the new budget? It pulls the rug out from under the provinces and Quebec with the new way of calculating the Canada social transfer in health matters.

The federal government has reached its deficit objective. It has reached it and now it gloats. It wants credit for the fact that Quebec will eliminate its deficit. That is shameful. It has emptied the pockets of the provinces, and they will not have $7 billion to give the public health care, education and social assistance. That is what that means.

I will give the example of what happens because there is no indexation. It is the case of people who, in 1986, had two children and earned $25,800. With the increase in the cost of living, they earn $35,400 in 1996. That does not mean they earn more. Because the tax on the additional income is not indexed, they have $3,790 less in their pockets since 1986. Since the GST credit was not indexed, they have $944 less in his pocket. Since the federal family allowance is not indexed, it means $554 less. For the child tax credit, it means $602 less. The refundable child tax credit—I know it does not exist any more, but I am talking about 1986—means $1,157 less.

So people earning $25,800 in 1986 get $7,047 less this year, with a salary of $35,400. Members cannot say people earning $35,000 a year are in the favoured class.

And what about the $7 billion that came out of the EI surplus every year to lower the deficit?

I know that they do not like it when we talk about robbery in the House, but this was robbery of the poorest—

[The Acting Speaker (Ms. Thibeault)]

I would ask hon. members to be very careful in their choice of words.

[Christiane Gagnon, Bloc, Québec, QC]

That is a fine general principle, Madam Speaker. I am accusing no one.

From whom was this $7 billion taken every year? From the poorest members of society, those who had lost their jobs, who needed help the most. From SMEs, which create the most jobs but which are also the most vulnerable. As a result, fewer people are eligible for EI and are forced to turn to social assistance.

We know that not everyone can qualify for social assistance. An individual is not eligible if he or she has any income, however small. Therefore, when one of the partners in a relationship is working, it is clear that they will not qualify.

There is nothing for the poor, and a few crumbs for the middle class. This is a budget that favours the rich, three rich provinces, where the quality of life is perhaps better than in the poorer provinces, where fewer health services will perhaps be used, where there is perhaps less need for support.

And the Liberal government is talking about equity? What exactly is equity? The new CHST formula changes the rules of the game.

[The Acting Speaker (Ms. Thibeault)]

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 Bras D'Or—Cape Breton, Devco; the hon. member for Skeena, National Revenue.

[Tony Valeri, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, I listened intently to the comments made by the hon. member opposite. She continued to criticize and to chastise the federal government for investing and reinvesting in a shared responsibility in research.

I cannot help but point out my dismay at why the member would continue to criticize an investment in research which in fact would help Canadians and would help Quebeckers.

Researchers in Quebec have said after the budget that they welcome the moneys the government is reinvesting in research. It will help to improve the quality of life for Quebeckers and for Canadians. We have reinvestments in areas like telehealth and home care.

The member went further to criticize the prenatal nutrition program, a program where the federal government works with the provinces that works directly with the communities. That is working extremely well. If the hon. member has some criticisms or some way to improve that program, I would be willing to listen to her.

She talks about all this money being spent by the government and how there is no outcome. I want to point to one specific example in terms of the service delivery. We have done some research in service delivery to individuals who suffer from a thyroid condition and have been able to improve it and at the same time save money to reinvest in health care.

I do not understand why the hon. member wants to continue to treat Quebec in the way she wants to treat it. Why she does not accept that researchers in her own province are supportive of the additional money and want to continue to do good work to help Quebeckers and to help Canadians?

[Christiane Gagnon, Bloc, Québec, QC]

Madam Speaker, the Liberal member is not happy with my criticism of the budget.

What I said was that this budget fails to focus on those in the greatest need. One part of the budget deals with research. My criticism was about the budget as a whole and its impact on the public.

What I said was that research funding duplicates and overlaps existing funding. The federal government is going to spend millions of dollars on administration instead of putting them where they will help people who are sick and those on waiting lists.

I criticized the number of documents and statistics that are going to be produced, with no regard for what the public is going through. Right now, we need more hospital beds, less pressure in emergency wards, more ambulances, and faster transportation. We need to give provincial governments the money they were entitled to expect, rather than the mere $150 million for health care they received. They were expecting $500 million for health.

The member lacks compassion for those who footed most of the bill for lowering the deficit. That is what I was critical of in the budget. They always talk about what makes them look good. He took one aspect of the budget, rather than the budget's overall impact on the public.

[Monte Solberg, Reform, Medicine Hat, AB]

Madam Speaker, I congratulate the member for Quebec on her speech. The member is well known for her concern for the less well off in Canada and I think she made some very good points.

Would she care to reflect on something I came across in an newspaper today? A KPMG accountant took a look at some of the tax relief in the budget and discovered, lo and behold, that the tax cuts the government is reporting are nowhere near what they will actually be.

Let me talk about somebody who has a low income. According to the budget a single taxpayer with $20,000 of taxable income will save $178 from the last two budgets, but this accountant says that this year the savings would be $57 rising to $114. This is nowhere near the government's numbers.

Would my colleague be prepared to comment on the government's sleight of hand?

[Christiane Gagnon, Bloc, Québec, QC]

Madam Speaker, the tax system is indeed far from helping low income families, and we know full well that those most favoured by the budget are those earning $250,000 or more, whose taxes will be cut by over $3,000. In contrast, after sending in his tax return, the employee who made $20,000 this year will only get a $57 tax cut. That is what we deplored. This is a budget for the rich, not for low-income earners.

The hon. member is right. In our remarks on the tax tables, we pointed out that it will not result in a tax saving of hundreds of dollars for anyone who earns $20,000 a year.

Earlier, I told the hon. member of the Liberal Party that he was making a short-sighted comment on the budget as a whole and that the tax deductions provided for in the budget for people who earn $25,000, $30,000 or $40,000 are minimal.

Do you think that someone earning more than $250,000 and getting more than $3,000 back will put that money back into the economy? No, they are going to invest it.

Low-income earners would not use hundreds of dollars in tax savings to make investments; they would put the money back into the economy because these people often cannot afford basic commodities.

So, this budget favours the privileged and it could have been a little more sensitive to low-income earners.