Debates of Feb. 8th, 1999

Federal-Provincial Fiscal Arrangements Act

[The Acting Speaker (Mr. Thibeault)]

I would ask the hon. members to listen with me to what the hon. member for Saint-Hyacinthe—Bagot has to say.

[Some hon. members]

Oh, oh.

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

Do you know why they are talking and laughing across the way? Because they do not want us to dispel a myth arising from remarks that are sometimes so tendentious as to be deceitful. That is why they are raising their voices. They do not wish to hear the truth.

As I was saying, equalization payments are established per capita for each of the provinces, which is understandable.

Initially, in 1957, they said that each Canadian, from coast to coast, should enjoy consistent public services without crippling cost to the provincial governments. So equalization payments were used for this purpose and calculated on a per capita basis.

Seven provinces currently receive equalization payments, and Quebec is not the one receiving the most. Payment on a per capita basis is the basis of the program. This year, Quebec received $536 per capita.

Newfoundland received $1,743 per capita, or three times what Quebec received. Let us also look at New Brunswick. And in terms of figures, the Minister of Human Resources Development is not so qualified, because he cannot differentiate between 38% coverage and 62% coverage. He mixes up the figures. His figures are also a little tendentious.

So, New Brunswick received $1,322 per capita, again nearly three times what Quebec receives.

[An hon. member]

And Ontario?

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

Ontario does not get any.

The Minister of Human Resources Development is doing the right thing by leaving to go to work. I would advise him not to write a book, but rather to work for the unemployed he has left on their own for the past two years. It will be more advantageous for everyone.

I submit that, taking a province such as Quebec with the second largest population in Canada and multiplying the number of people by $536 gives an impressive total. The principle of equalization payments, however, is to calculate per person. I have done a few quick calculations, and if Newfoundland had Quebec's population, with its level of equalization payment per capita, it would not get the $3.9 billion Quebec does, but rather $12.736 billion. In other words, a total of four times as much in equalization payments as Quebec, if Newfoundland had the same population as Quebec.

It can be seen that it makes no sense to say that Quebec gets $3.9 billion, or 47% of the equalization payments. No, no. Equalization is calculated on a per capita basis, not a lump sum. If Newfoundland had as large a population as Quebec, it would get three times as much in total equalization payments.

Now a little trip to the west, the land of Reform. Let us look at Manitoba.

[An hon. member]

Two out of four.

[An hon. member]

And what about British Columbia?

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

British Columbia does not get any.

[An hon. member]

And what about Alberta?

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

Madam Speaker, it is none too bright of those on the other side to start making such remarks when a very serious matter is being discussed. They are being totally demolished by the Reform and do not want to hear any arguments in favour of the equalization payment system. This seems illogical. Sometimes the Liberals exhibit no logic whatsoever, particularly the Liberals from Quebec.

As I was saying about Manitoba, if Manitoba had a population of 7.3 million instead of the 1,141,000 it does have, it would get seven times as much in total equalization payments as Quebec. One can fiddle about with figures like that, but the main point is that there must be a fundamental respect of an act or of a program.

This equalization program has been established on a per capita basis, for the people the members across the way are supposed to be serving. But instead of serving them, they are laughing and saying any old thing. I would be ashamed if I were in their shoes. It would not be a pretty picture if residents from the riding of Beauce saw their member of Parliament act like a clown in this House. They would go back to their riding and condemn such behaviour.

With respect to the reputation of members of the political profession, when we look at polls and see politicians ranking dead last in terms of credibility, it is because of attitudes like this.

[Claude Drouin, Liberal, Beauce, QC]

Madam Speaker, I rise on a point of order. The member for Saint-Hyacinthe calls me a clown while he stands there and quotes wrong figures. I would like to know which of us is the real clown, and I wish remarks like these were not allowed to be made in this House.

[The Acting Speaker (Ms. Thibeault)]

I would ask the member for Beauce to choose his words carefully in referring to fellow members.

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

Madam Speaker, through you, I ask the member for Beauce not to call me a liar, as he did in stating that the figures I gave were not the right ones. Let him check, let him do his job. The Liberals from Quebec should do their job and take it a little more seriously. They will see that the figures I gave were the real ones, the right ones. These figures came from their own colleague, the Minister of Finance and member for LaSalle—Émard.

As I was saying, we must be very careful with figures. We must review the principles behind equalization. Since equalization payments are calculated on a per capita basis, any comparison should also be made on a per capita basis. On that basis, Quebec does not benefit from equalization payments any more than the other provinces do.

If one insists on making statements such as the ones we heard from the other side, to the effect that Quebec is spoiled when it comes to federal transfers, then one should provide the whole picture. If one claims that Quebec receives more in equalization and social transfers payments than the other provinces, one should also say something about federal investments in Quebec over the past 30 years and about the procurement of goods and services in Quebec. If those Liberal members did their homework, they would defend Quebec rather than begin by saying we are whiners. One has only to look at the data—and the data come from Statistics Canada, the Department of Finance, and the Department of Public Works and Government Services—to see that, since 1961, Quebec has never had its fair share.

For example, in terms of federal fixed capital investments, in the past 30 years, only 18% of total federal investments were made in Quebec. Yet, Quebeckers still account for one quarter of the Canadian population. Given our demographic weight and our contribution to the federal government's revenues, we should be entitled to at least 25%.

The figures on the procurement of goods and services are not jokes of false data. They can be checked. In fact, all the figures that I am presenting can be checked. It is simply a matter of not being so lazy and really going to check them. In terms of the procurement of goods and services, we have had only 18% since 1961, more than 35 years ago, while Quebec accounted for more than one quarter of the population then and accounts for one quarter of it now.

If we look at the whole investment picture and procurement of goods and services, Quebec has a shortfall of $2.4 billion a year. This is productive and job creating spending. This $2.4 billion in spending on goods and services from businesses could help create 45,000 jobs in Quebec if it were properly and fairly distributed to Quebec. If the federal government had acted fairly, an extra 45,000 jobs could have been created in Quebec. That is a lot. The unemployment rate in Quebec with these 45,000 jobs would be 1.1% lower. That is significant.

These figures can and should be verified. It is true that, if we look at only part of the problem, we could indeed say that Quebec receives $1 billion more a year in equalization payments and employment insurance than its demographic weight would justify. We are not ashamed of that, especially since if the federal government had made these fixed capital investments, and if we had had our share of federal government procurement of goods and services in Quebec, we would have made up this billion dollars. We would not need the extra equalization payment, employment insurance benefits or social assistance. We would even have had an extra $1.4 billion to play with.

The federal government could keep the additional billion dollars it pays us over and above our demographic weight, if it returned to us the $2.4 billion it owes in job creation investments and in procurement of goods and services from Quebec businesses. In politics, two things in particular are important.

There are a number, in fact, but there are two in particular: honesty and moral integrity. Moral integrity, as in providing accurate figures, and intellectual honesty demand that you look at the picture as a whole, and not just say that Quebec receives equalization payments. Yes, Quebec receives equalization payments, as do Newfoundland, Prince Edward Island, Manitoba, Saskatchewan—

[Claude Drouin, Liberal, Beauce, QC]

Ontario.

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

The members opposite are laughable. But I am not going to take the bait because it is not worth it on these small points.

The overall picture has to be presented. Yes, it is true that Quebec receives more social band-aids, because its levels of poverty and unemployment are perhaps worse than they would have been if the federal government had treated Quebec fairly for the last 105 years.

As I said earlier, we are mentioning this not to complain but to set the record straight and to put the debate in proper perspective. Furthermore, the Leader of the Official Opposition just made a thinly veiled suggestion that this is one national standard Quebec finds to its liking.

I did not want to get into the federalist argument that, as the spoiled child of the Canadian federation, Quebec receives more than its share of equalization payments. Given what we have been hearing for weeks from the other side, and what I heard just minutes ago from the leader of the opposition, I have no choice but to direct my presentation on Bill C-65 to that aspect of the matter.

Getting back to the bill, in the days to come we intend to go into further detail on certain aspects of the review of the equalization payment system, on certain parameters such as the demands brought to the table over the past 10 years, not just by Quebec but by a number of provinces, particularly those relating to the way property tax is handled. We are going to address these further in committee.

We already have a meeting scheduled this week with people from Finance, in order to go still further into the technical aspects that are different. There are, for instance, differences from the formula used in the past five years. We are going to continue our efforts and will be making recommendations to our party based on the final outcome of this.

In the meantime, I would ask my Liberal and Reform colleagues to take a look at equalization payments. It is not all that complicated, a matter of taking an hour or two to read some very well prepared documents. Some are summaries, while others are a bit more complex. One can have a good grasp of the principles of equalization payments even without the latter, however.

There is nothing magical about equalization payments, nothing arbitrarily determined. The process is one of negotiation, based on parameters that are highly technical but can be verified in all the provinces of Canada. It is being rather lazy intellectually to say “The system must be torn up, got rid of, dumped. We must start all over again, reform the whole business”.

In my view, the federal taxation system is not all bad. It contains some things that are understandable, and the equalization payment system may be one of them.

I thank my hon. colleagues for their attention.

[Nelson Riis, NDP, Kamloops, BC]

Madam Speaker, I will be splitting my time with the hon. member for Regina—Lumsden—Lake Centre.

I listened with interest to the previous speakers and, on principle, we in the New Democratic Party support the principle of Bill C-65 on equalization. It is the ultimate form of an attempt by governments to level the playing field on crucial issues of social spending.

We all like the idea of level playing fields. We do not like different playing fields or uneven playing fields. We now have a level playing field for social programs, and equalization is a step in that direction, where the three have provinces, British Columbia, Alberta and Ontario, are not included but everybody else is.

Newfoundland will receive $1,648 per capita; P.E.I., $1,340; New Brunswick, $1,154; Manitoba, $898; Quebec, $521; and Saskatchewan, $232.

Looking at the history of this issue and the long lists of the per capita entitlement of provinces over time since equalization was first brought in, we notice something about the province of Saskatchewan. This province moves in and out from being a have province some years to being a have-not province in other years. Every other province is consistent. British Columbia is a have province, Ontario is a have province and Alberta is a have province. All of the other provinces are have-not provinces, but Saskatchewan is different. It comes and it goes. We wonder what is behind these statistics until we factor in which party forms the provincial government. By and large, it works like this. The people of Saskatchewan elect a Conservative or a Liberal government. It gets into financial and economic crises and then the province of Saskatchewan needs equalization payments. It qualifies.

Then the people elect a CCF-NDP government and everything is back in order again and Saskatchewan loses its status. Then the people elect a Conservative or a Liberal government which screws up the economy again. Basically it is a history lesson. Liberals and Conservatives screw up the economy and the CCF-NDP governments get it all back in order again. It is a reflection of the province qualifying or not qualifying for equalization payments. There is an interesting history lesson in these statistics.

I want to reflect on a view that was previously stated. We are talking about one sector of this whole issue of equalization, which is an umbrella for attempting to be fair. Yet sometimes when it comes to health care the government has been very unfair by unilaterally slashing beyond anything reasonable the health care system to cause irreparable damage to that sector.

We would be hard-pressed to find a single Canadian who does not say that our health care system is in disastrous shape because of the Liberal government. There are some people who will distinctly say that some provincial governments are involved, which is true. Ontario is involved. But by and large the slashing and hacking and the damaging records have been caused by the Liberal government in Ottawa.

I was shocked when we added up all of the costs of health care to find how much the federal government actually pays. I remember the old days when it was 50:50. We all remember the good old days when the federal government said it was an equal partner in this marriage. It said that it was an equal player and for every dollar spent it would pay 50 cents, that it would pony up, and it did. That was the way it was supposed to work. It was a family of the federal and provincial governments and the federal government paid 50%. It was a nice balance. That was the way it was supposed to work.

However, over the years that old playing field just about tipped upside down. When we add up all of the costs of health care, 30% is paid privately. There is nothing about dental work, eye glasses and so on, which is all part of health care. Sixty-one per cent is picked up by the provincial governments and the federal government picks up 9%. That is a real embarrassment. The Liberals should be hanging their heads in shame. They should be apologizing. They should feel sorry for what they have done and they should rectify it.

Let us understand that when we talk about equalization, which my party has supported from day one, we cannot look at it in isolation. It is important that we acknowledge that while the government has devastated health care, it has now come forward with a revised Bill C-65 which, on principle, my party supports.

Casino revenues are now taken into account with respect to the provinces' abilities to raise revenues, which makes sense because of the way the country is going. I do not want to comment on casino taxes or anything of that nature because I got into trouble doing that the other day.

The bill also reflects the value of harvested timber as opposed to the volume of harvested timber. It is fair to say that the province of British Columbia has some of the highest quality wood in the world. I do not know if it is the highest quality wood in the world, but possibly it is. This measure is fair. Some of the other provinces harvest a lot of timber as well, but it is of a slightly different quality.

Also we acknowledge that the cost of obtaining new oil is much more expensive than old oil. I know that old oil and new oil is a favourite topic of yours, Madam Speaker, but it is something we have to deal with.

At this point we, as well as some of our friends to the right, consider this as being a bit of serious tinkering. We have to take this more seriously. We have to see it in terms of the context in which we consider all of the fairness of this. My friends in the Reform Party reminded us about that little adjustment just before the Newfoundland election, which we all noticed and thought was interesting. Our friend Brian, from a previous life here, will have a chance to balance his books. Nevertheless, we have to get much more serious about how we develop this kind of policy.

Let us consider how the social union was struck. There were 11 middle aged, white men stuck away in the Prime Minister's residence playing poker with social policy: “I get this. You get this. I get a bigger share than you. No, your share is bigger than mine” and so on and so forth. They cut a deal. Mark my words, what we do not know is what part of that deal was left unstated. The Prime Minister said to premier X that if he bought into the deal they could make arrangements about X , Y and Z a little later.

We all agree that policy making in a crucial area such as health care or social policy ought not to be done by a few guys sitting in a secret meeting, cutting a deal over dinner. That is not the way we should develop public policy. Unfortunately that is the way it is done. That is the way the state of affairs has progressed.

My friend from Regina is going to be making a number of comments more specifically regarding his province. At this stage we in the New Democratic Party support in principle the issue of equalization. We have some obvious concerns which will come up during the committee's work on this legislation.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Madam Speaker, I am pleased to share my colleague's time speaking to Bill C-65, an act to amend the Federal-Provincial Fiscal Arrangements Act.

Equalization is a principle which provides certain revenues to provinces that are deemed to be at a disadvantage from provinces that are in an advantageous situation economically and financially. This is a concept that I heard the Liberals, the Tories and the Reformers talk about with respect to different issues. For example, when it is the large international oil companies that want tax breaks, the Reformers and the Liberals talk about a level playing field for the international oil companies.

An equalization bill is a good example of a level playing field. It provides revenues to those provinces that are unable to provide basic government services to their people because of various economic disparities. The concept of equalization to ensure that consistent benefits are paid to various provinces that require them was enshrined in the Constitution when it was patriated in 1982.

There are some interesting issues in this bill which I want to address.

The first one that comes to mind is that each province which is a have-not province, seven out of ten, have a different per capita formula. For example, Quebec receives $521 per capita in equalization payments from the have provinces and from the national treasury. Nova Scotia gets $1,209. For Manitoba it is $898. New Brunswick gets $1,154. Newfoundland gets $1,648. P.E.I. gets $1,340. But Saskatchewan, which has more miles of roads than any other province in Canada even though we only have one million people, only gets a per capita grant of $232.

It is quite interesting that Quebec has 7,100,000 people and gets $521 per person. Saskatchewan has just over one million people and gets $232 per person. We in Saskatchewan have national transportation commitments that Quebec does not have even though we have less than one-seventh its population. Of course we get only one-third of its grants per capita. I raise this in the House and with the government opposite as to why that inequity would be.

I can see that perhaps with P.E.I. and some of the smaller Atlantic provinces that have had a long tradition of being reliant on federal government revenues. It was appropriate for the Liberal government in Ottawa and sometimes from time to time a Tory government to provide those moneys to elect provincial governments in Atlantic Canada.

I would like to monitor that and see what happens down the road, in spite of this particular initiative, when an NDP government gets elected. That may happen very soon in Nova Scotia. I want to make sure that the money the government is giving to Nova Scotia now is similar to what it will get when it becomes an NDP government.

On the other hand, we have heard my colleague from Kamloops, Thompson and Highland Valleys make reference to the fact that when there is an NDP provincial government, as in Saskatchewan for example, we are there to clean up the mess of the former Liberal-Tory-Reform coalitions which have made every effort possible to bankrupt our province. The people tossed them out and elected an NDP government and we end up cleaning up their mess. Not only are we a very modest recipient of fiscal arrangements but on occasion we have been a have province and we have shared revenues that have been derived from good management with other provinces that require that assistance.

We see some key changes in this equalization agreement. My colleague made reference to casino revenues. I will make reference for example to the resource revenues which will reflect the value rather than the volume of harvested timber. This again benefits Quebec. British Columbia, with a very high quality timber, is not affected at all because it is a have province. But it provides a little extra money for Quebec and perhaps it needs it. Perhaps the provincial government would be better suited to manage the economy and balance its budget rather than continue to have huge deficits.

There is an issue which is very important to Saskatchewan right now. My province of Saskatchewan is experiencing an agricultural crisis. Farmers are desperate to get their crops in this spring. They have no revenues to do that.

We have some very significant problems in agriculture, not because of a local management problem, but because of an international situation which has arisen. European and American governments nationally have funded and subsidized agriculture in their countries to a very large extent while Canadian governments are eliminating subsidies for agriculture altogether.

I am not saying subsidies are the answer, but when a federal government abandons its farmers, farmers in Canada end up suffering even though we are providing most of our products for export while the European farmers and American farmers are the recipients of huge subsidies from their governments.

The Liberal government has cut the Crow benefit which was a transportation subsidy. It has taken $340 million a year outside of our agricultural economy. Now the government is saying it wants the Saskatchewan government to chip in 40% for an agricultural program to help those farmers who are in need.

Agriculture is not something we benefit from locally in Canada. We export a vast majority of Saskatchewan's production to other parts of the world that require food. This is a national agricultural situation. Actually it is international in nature when it comes to subsidies, yet the Liberal government says it is not going to provide any assistance to these farmers unless the province comes up with 40% of the funding.

The government is offering only $450 million for all of Canada. Saskatchewan might get 40% of that in a particular year. That may amount to $5,000 or $6,000 per farmer which will not make any difference in terms of substantially improving their position to put a crop in this spring. The government has to consider that.

Over and above equalization, or maybe including the equalization, there should be some consideration that foreign governments are subsidizing their agricultural base. We should provide some reciprocity for Canadian farmers to make sure they are not put out of business.

The Liberal Minister of Natural Resources, the member for Wascana, is from Saskatchewan. He has said that Saskatchewan's equalization benefits are being increased because of the problems of lower income in agriculture and a substantial decline in resource prices and that the Liberal government is going to give us $3 million this year as an increase in equalization.

The minister has said that Saskatchewan should be able to put that into its agricultural program. Yet he does not understand that we are not being asked to put in three million bucks. We are being asked to put in $45 million to $60 million this year alone. But he is going to help out by taking $340 million out of our economy from the elimination of the Crow benefit, giving us $3 million back and saying “good luck, this is a real good economic program for farmers and for western Canada”. The farmers in western Canada have seen enough of this shell game being undertaken by the Liberals to trick farmers into believing the Liberals are actually doing something for the economy.

Manitoba is in an even more desperate situation with this equalization bill. Manitoba is slated to lose $37 million over five years. This accounts for 18.5% of Manitoba's overall revenues, not the $37 million, but the total equalization payment. I believe provincial officials are very upset about this. They are opposed and are asking for amendments in the next go around.

What is more disturbing than all the issues I have raised is that the Reform Party goes on record as saying that it does not support equalization. It does not support a level playing field for the provinces and regionally based economies. Reformers do support a level playing field for Conrad Black. They do support a level playing field for the oil companies that are international in nature. They do support a level playing field for their large corporate friends, but they do not support equalization for provinces and regions that require equalization assistance from our national treasury.

I call upon the Saskatchewan and Manitoba members of parliament from the Reform Party to stand in this House and say they oppose the Reform Party's view that equalization is bad and it will not support equalization payments to provinces that require them.

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

Madam Speaker, I have a couple of comments.

The hon. member made reference to the situation in Saskatchewan. I reiterate that I do not want the hon. member to give the illusion to those individuals watching this program that there is a different formula for Saskatchewan. The equalization formula is calculated one and the same. We end up with different results because of the varying capacities and abilities of provincial governments to raise taxes. There is no inequity there.

The hon. member made reference to the fact that Quebec has a higher per capita rate than does Saskatchewan and that somehow that is unfair. If we go down that road and if I follow the logic of the hon. member, the have provinces that do not get any equalization are being treated unfairly. He said that Saskatchewan has a lot of roads so it should get more. Quebec does not have as many roads but it has a lot of ports. Saskatchewan does not have ports. Should we follow that line of thinking? Then we get on to the whole subsidization issue.

The member made reference to the amount of the increase in equalization. He did not think it was very much. Will the hon. member go back to Saskatchewan and tell the people that he does not support an increase in equalization payments for the province of Saskatchewan?

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Madam Speaker, it is good that the hon. Liberal member has raised the issue of ports. This is another sore point for farmers in Saskatchewan. Farmers, through their revenues and income, have supported the ports of Canada. If we did not have ports, we would not be able to ship our grain outside the country.

Farmers are sick and tired of the Liberals continuing to download to them all of the costs that are on the shoulders of the Liberal government. For example, when there is a strike at the port in Prince Rupert, on the coast, or up in Churchill, who pays for the costs of demurrage or for the delay in getting the grain to market? It is not the Liberal government or Quebec. It is the farmers in Saskatchewan, the farmers in western Canada who pay for this.

I am quite appalled that the Liberal parliamentary secretary would say that farmers have nothing to do with the ports of this country. I ask the hon. member to go to Saskatchewan, Manitoba or Alberta and talk to the farmers. Ask them about the federal government which is responsible for the ports, which cannot deliver our grain to market because the workers are not paid adequately and have to use job action to get a fair rate of pay, ask the farmers who pays for all that. It is not the Liberal member of parliament from Ontario. It is the farmers from Manitoba, Alberta and Saskatchewan who pay for those ports. I am glad the member raised this issue.

My sense is that Saskatchewan, because of its involvement with the equalization formula and which supports the concept of equalizing payments, would be remiss if it did not take advantage of an equalization formula which includes resource revenues, which are now down in price and therefore the revenues are down and equalization kicks in. This is something which is fairly important.

Part of the reason that our farmers have record low net incomes this year is not because we have equalization payments. Incomes are low because they are spending a lot of money in ports and other parts of the country to get their grain to market and the Liberals are downloading the costs to the farmers.

I ask the member opposite to go to his Minister of Finance before the budget and have the Liberal government change its policy as it applies to farmers. Rather than have farmers pay for all of the transportation costs, all the labour costs and all the port costs, perhaps the federal government should undertake responsibility in a financial way to help them out in that regard.

I thank the member for raising that issue.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Madam Speaker, it is with pleasure that I rise today to speak on the equalization renewal package.

The equalization renewal package on the surface is positive for most of the beneficiary provinces receiving equalization payments, with the exception of Manitoba which will receive less money as a result of these changes.

In general, the suggested changes include changes in the treatment of general and miscellaneous sales tax, lottery and gaming revenues, forestry revenues, mineral resources, miscellaneous provincial and local tax revenues and also gasoline and fuel tax, hospital and medical insurance premiums, oil revenues, natural gas revenues, payroll taxes, property taxes and sale of crown leases. These are some of the changes that are in the calculation of equalization which are taken into account in this new package. I am going to focus on a couple which I do have some concerns with.

One is on the lottery and gaming revenues. The government is moving to treat casino revenues similarly to lottery ticket revenues. Previously only the lottery revenues were considered. I have concerns with this for a couple of reasons.

One is that casino revenues often bear significant social costs to the provinces, with respect to the costs to health and social programs. In Nova Scotia I have seen the impact of the casinos in Halifax and Sydney. Frankly it is my own personal belief that unless casinos are successful in attracting people from outside a particular area, there is extremely high social costs in terms of gambling addiction. In some cases there has been loss of people's entire monthly incomes. There are costs to families in the increases in things like spousal abuse and marriage break-up.

Health costs are provincially borne costs. These changes would effectively mean that the federal government would be considering more casino revenue than it had previously. Thus provinces would be penalized for their casino revenue. I would argue that in the future casino revenues, when considered and balanced against the negatives, the social costs and the health costs, are dubious at best in terms of their benefit and their sustainability in the long term.

I have some concerns about that particularly in light of the government's irresponsibly slashing health care and the CHST since 1993 to the tune of over $6 billion. I would argue that it is short-sighted to consider these casino revenues. From a long term perspective the sustainability of that revenue stream is questionable and the benefits are at best dubious.

There are some concerns from our provincial counterparts relative to natural gas revenues, for instance offshore natural gas revenues and offshore oil revenues for some of the provinces affected. Be it Nova Scotia or Newfoundland, the opportunities for Nova Scotians, Newfoundlanders or Atlantic Canadians to bootstrap themselves into some level of prosperity in the 21st century is largely contingent on these revenues. We should be very careful not to create through changes in equalization a clawback that effectively eliminates and reduces significantly the benefits from the steps forward being made by these provinces.

We have to be very careful that in our haste to respond to the critics of equalization we do not eliminate the basic goals of equalization, that is to enable provinces and citizens in have not provinces not just to compete but to succeed in a global environment. I would argue that those natural resource revenues are pivotal and very important to those provinces.

We have to recognize the importance of equalization within Canada. It is a cornerstone of Canada's social policy. It is something we should be proud of as a country. It is difficult to take a country of some 30 million people spread out over a massive geographic land mass and try to create some semblance of equality of opportunity.

While there are people who will be critical of everything that has been done by previous governments, I would argue that one thing we have done in Canada that is quite unique and quite extraordinary is to create at least some semblance of equality of opportunity in almost every corner of the country. That is something we should be proud of.

I grew up in a rural part of Nova Scotia, in an area where there was not a significant level of opportunity but where there was a sound education system and a health care system that worked, albeit the health care system has been gutted in recent years due to draconian cuts from our federal counterparts. The quality of the education and health care system helped to equalize the opportunity for me and for other Nova Scotians. We are not looking for and no Canadian should believe in some type of policy that promises equality of outcome.

In the past governments have made the mistake of trying to protect regions of the country from the risks of the future. In doing so with successive social program spending and reinvestment there have been times when governments, in trying to protect for instance Atlantic Canadians from the risks of the future, have unwittingly prevented Atlantic Canadians from participating fully in the opportunities of the future. That is something we have to be very careful of.

We should be equally careful that we do not capitulate to the critics of equalization who claim somehow this is a handout that is unjustified and unfair to any Canadian. Equality of opportunity is something that makes Canada unique. We should treasure it as Canadians and be prepared to defend it.

It is important to recognize as well that the federal government has a leadership role to play in creating equality of opportunity across the country, but equalization does not go far enough. I am talking about the federal government taking a leadership role in some of the issues that are within provincial jurisdiction but where the federal government could play a role in working with the provinces to ensure better quality services.

In the last federal election our party had as part of its platform a call for national testing in education. Recognizing that is in the provincial jurisdiction, the plan we called for was actually an optional plan that provinces could opt in or out of. It would at least raise the bar across the country where parents in any region of the country could demand and ask to know why their student or child did not test well relative to a student in another area, or why the education system was failing one area of the country and succeeding in another area.

Parents, students and everyone in Canada want to know where their education system stands up. It is not equalization or strictly a financial area but it is a leadership area that the federal government could play by implementing and working with the provinces to develop a system of national testing such that we could see an increase in the quality and excellence which could be provided by primary and secondary education systems across Canada.

We need to take a serious look at federal programs, for instance the millennium scholarship fund. Before the government even had a surplus, when there was just a vague whiff of a surplus, it chose to invest $2.5 billion in the millennium scholarship fund.

These types of programs are in some ways difficult to argue with because it is money for higher education, but we should be looking very carefully at the design of these programs. First, we should not increase tensions on a federal-provincial relations perspective. Second, these programs should be designed in such a way as to reflect not just where Canada is now and where Canadians are now but where Canada is going and where we want Canadians to go in the future.

I will give an example of the wrong-headedness of some of these policies. The millennium scholarship fund is not available for students going to private career colleges. I participated recently in a conference on education. One of the things I learned at the conference was that the wave of the future in post-secondary education, and quite possibly in secondary and primary education, would be in implementing more private programming and more private delivery of what was previously a totally public service.

Private post-secondary education is outgrowing and outpacing public post-secondary education around the world. This is a global phenomenon. Yet in Canada a scholarship program that was recently developed does not reflect the realities of where we are now and where we are going in the future in a global context.

We must be very careful to recognize that federal policies and more money are not always the answer. We have to be rigorous in providing the types of programs and investments that Canadians want and need. That takes a little more vision than we are seeing from the government on a number of these issues.

We would also like to see a more concerted effort on the part of the federal government to work with the provinces in bringing down interprovincial trade barriers, one of the structural impediments to our global competitiveness and our productivity as a country. Interprovincial trade barriers are an area that can actually inhibit and prevent the growth and success of our provinces and Canadians in various regions. These trade barriers need to come down.

I am talking about equalization of opportunity, not strictly equalization payments. This is very important because we cannot simply depend on money to solve the problems. We must recognize that equalization payments are a way in the short term and in the mid-term to equalize opportunity, but we have to work nationally and provincially with our provincial counterparts to create policies, economic development strategies that are rooted in the free market. We have to recognize that the free market is only sustainable if all citizens have access to the levers of the free market. This means a sound education system, a sound health care system, and the ability for people to bootstrap themselves and become successful. This will take more than simply equalization payments.

Our party is having a conference on February 23 in Halifax called “The New East”. The name came from the phrase the new west. I found when travelling in Alberta a sense of buoyancy and optimism that is very encouraging. There is a sense of self-reliance and opportunity that is leading the way. We want to see equality of opportunity, that level of opportunity and access to economic growth available to all Canadians. “The New East” conference will provide us with ideas for sustainable strategies that will provide in the future the types of free market based policies which will give opportunities for Atlantic Canadians to participate in the same level of economic growth that other regions have had in the past and will have for the foreseeable future.

It is not simply a matter of Atlantic Canada moving forward because of increased revenues in offshore oil or gas. We now need to move forward and take those opportunities we have had in offshore petroleum or other resources and invest significantly in the type of knowledge based infrastructure we need in these regions to enable us to succeed in a global knowledge based society. That again is a strong education system. It is also recognizing some of the global trends in information technology, for instance, the death of distance as a determinant in the cost of telecommunications—

[The Speaker]

I do not want to turn off the microphones too late, so I thought I would intervene now. The hon. member still has five minutes left and will have the floor for that length of time. That will give him a little better chance to summarize at the end.

At this point I would like to proceed to Statements by Members.

Multiculturalism

[Sophia Leung, Liberal, Vancouver Kingsway, BC]

Mr. Speaker, I am very pleased to announce that there will be a celebration of multiculturalism week in British Columbia in my riding of Vancouver Kingsway on February 20. It is a community celebration organized by my office and the Vancouver Society for Immigrant and Visible Minority Women.

Vancouver Kingsway is a very culturally diverse riding. This event will bring together Canadians from all cultural communities to share and discuss their ideas and concerns with their member of parliament.

Agriculture

[Lee Morrison, Reform, Cypress Hills—Grasslands, SK]

Mr. Speaker, it is common knowledge that a farmer receives less than 8 cents for the wheat in a loaf of bread.

Last night I calculated that farmers receive about $1.20 for all components of a first class roast beef dinner. Middlemen take the rest, but they are pikers compared to government.

After freight and handling deductions, a Saskatchewan farmer receives $3.15 for a bushel of malting barley from which about 300 bottles of beer can be produced.

Federal and provincial taxes including GST on that beer would be about $165 or 52 times what farmer receives. Yet the government does not realize that its great milch cow known as the farming industry has to be fed from time to time. Farmers need emergency assistance and they need it now.

Genie Awards

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, on Thursday, February 4 members of Canada's film industry gathered to recognize and celebrate our country's cinematic achievements at the 19th annual Genie Awards.

Each year the Genies bring together more than 1,500 key film professionals and crafts people from across Canada to honour, celebrate and promote the talent and the accomplishments of the Canadian film industry.

On the eve of the approval of a feature film fund for Canadian producers, we witnessed the success of such films as The Red Violin , Last Night , as well as A Place Called Chiapas . These films demonstrate what can be achieved with a clear vision and the support needed to turn the dream into reality.

I congratulate both the nominees and the recipients. Their dedication to their craft has not gone unnoticed. Evenings such as these highlight the importance of the Canadian film industry and showcase its talent.

Citizenship And Heritage Week

[Raymonde Folco, Liberal, Laval West, QC]

Mr. Speaker, this week is Citizenship and Heritage Week, and the people of Laval West, Quebec and all of Canada are celebrating their common attachment to this country's ongoing history and to their Canadian citizenship.

After the native people, came the French, then the English and then people from the world over. People and cultures from all over have therefore helped build Canada. Our country is not only among the best countries to live in, it is an example of democracy, tolerance and brotherly co-existence for the whole world.

We Canadians of every origin are proud of our country and we will show it with all our hearts throughout this week, which concludes on February 15 with National Flag Day and Heritage Day.