Debates of March 10th, 1999

Federal-Provincial Fiscal Arrangements Act

[Grant McNally, Reform, Dewdney—Alouette, BC]

I hear harping from the member opposite, the member for Broadview-Greenwood, who made those comments. He referred to interventionist ideas and that big government has the solution to all problems, which is truly not the case, as has been played out in history.

I want to end on that note. The government is out of touch. The bill proves it. We offer a fresh vision and a new approach to dealing with the governance of the country.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, I appreciate the opportunity to respond to the member's remarks.

First, I would like to correct the record. The member stated that I was an interventionist. The reality is, and I say this to all members of the Reform Party, I am a passionate interventionist. Let us make sure we get that right.

The essence of why we are in the Chamber at the national government level is to intervene. We are not here to sit back and watch those who do not have a voice or regions of the country that need help and sort of let it go, let it happen, let the municipal politicians do it, let the provincial politicians do it. No. This is what a national government is all about. This is what the bill is all about.

I have to correct another reference that the member made in terms of my remarks yesterday. He suggested that I was not clear about the Government of Canada intervention and where or how it related to western Canada. I believe the member made that statement.

I want to be very specific. By the way, I include my own province of Ontario, but seeing as the member referred to the west I want to be specific. Every western province, whether it is British Columbia, Alberta, Saskatchewan or Manitoba, has benefited immensely by Government of Canada intervention.

It is time the Reform Party realized that is how we build a nation, by the national government intervening from time to time to embellish and improve the economy. For the life of me I cannot understand why the Reform Party wants to walk away from interventionism. To me, it is part and parcel of our daily responsibility in the Chamber.

Let us look at the national energy program. It is another example of where the Government of Canada intervened in terms of security of supply in energy, the Canadianization of our energy system and the conservation content of the NEP. Yet these Reform Party members were knocking it yesterday.

I could go on, but I want to make sure that when members of the Reform Party are quoting my remarks they understand exactly where I stand.

[Grant McNally, Reform, Dewdney—Alouette, BC]

Mr. Speaker, I understand exactly where the member stands. I was quoting directly from Hansard , from his comments. He reinforced them again today. He is saying that he is a passionate interventionist and asking why it is that we cannot see that is the right way to go. It is very clear why we do not see that it is the right way to go. It is because we fundamentally disagree with that philosophical approach.

The hon. member is saying “Don't worry, Canadians, don't worry, provinces of Canada, we have all the answers. We are the federal government. We are the big daddy”. That is the kind of thought he is putting behind his comment that the federal government is the one with the answers, that it has the answers and it has the resources. He fails to point out that the resources he refers to are the tax dollars of Canadians, their hard earned money. That is what those dollars are.

The hon. member brags about the national energy program. It sucked $100 billion out of Alberta to fund all kinds of other things that in many instances, not all, were wasteful programs.

The member and his government do not understand their approach and how it has alienated individual Canadians from coast to coast to coast, particularly in western Canada, in British Columbia, Alberta, Saskatchewan and Manitoba. Government members just do not get it. They think that sending out this rescue team from Ottawa, this western alienation team, will somehow solve the problem.

What will solve the problem is when we have the opportunity to implement the policies which reflect the positive direction we have for the country, or when the government starts to listen. I do not think the latter will happen because government members have had so much time here and continue to be deaf on issues.

We are willing to make a positive change for the future. I am hoping that members opposite will also be willing to do that.

[Norman E. Doyle, Progressive Conservative, St. John's East, NL]

Mr. Speaker, I am very pleased today to say a few words on a very important bill not only for the province of Newfoundland and Labrador but for all provinces that receive equalization payments. I believe there are seven provinces in Canada that receive them.

The provinces are very highly dependent on equalization to better their economic situation within the country. It is very important to have the bill fully debated today by all members, if for no other reason than to make the federal government fully aware of the impact of equalization payments on the seven provinces of Canada that are recipients of the equalization formula.

I was told that before the bill came before the House of Commons the province of Newfoundland requested some significant changes to the way the formula treats offshore resources, especially offshore oil and gas. The government, I am told, rejected that request by Premier Tobin and the Government of Newfoundland and Labrador. There really will not be any substantive changes made in the bill, probably a few minor housekeeping changes.

Once again the poorest province in Canada, the province of Newfoundland, will be penalized by the current equalization formula before it is given the chance to actually catch up to the rest of the country and to become equal to other Canadians.

This is what we are talking about today. We are talking about the opportunity that should be given to the have not provinces to catch up to other Canadian provinces that consider themselves to be have provinces. There cannot be any chance of a catch-up for Atlantic Canadians or for that matter western Canadians in provinces like Manitoba and Saskatchewan that also receive equalization payments as. There cannot be any opportunity given to these provinces to catch up.

There cannot be a chance for equality in the provinces unless there is some recognition given to the fact that the pool of money that will keep a province from starving is the same pool of money that will keep it permanently poor. Newfoundland has been in Confederation for approximately 50 years. In a couple of weeks Newfoundland will have been in this great country for 50 years and there is still no recognition of the one basic fact that the pool of money that will keep a province from starving is the same pool of money that will keep it permanently poor. That is the unfairness and the injustice associated with the way the equalization formula is written.

There will never be an opportunity for the provinces that receive equalization payments to be brought up to the same quality of life and the same standard of living that other Canadians enjoy. They will never have the opportunity under the current formula to reduce the horrendous unemployment problem in Newfoundland, which has an official unemployment rate of about 19.7%. That is a very serious situation indeed.

I am not saying that we should change the formula forever and a day. I am saying there should be some kind of arrangement worked out with the have not provinces which will see resource revenues clawed back on a more gradual basis. It is not to have the federal government take up all of the problems but to have these resource revenues clawed back on a more gradual basis.

Right now there is a 100% clawback on resource revenues produced by any given province. That is the basic unfairness for the poorer provinces. If the federal government wanted, it could change that to make it a bit easier for those provinces, especially in the Atlantic area, to become equal to the rest of Canada.

For instance, a Voisey's Bay development in Newfoundland could have its resource revenues clawed back on a 50% basis. The Sable Island gas field in Nova Scotia could be clawed back on a 50% basis to give Nova Scotia the opportunity to become a little affluent and raise its standard and quality of life. The federal government has within its power the ability to do that, but I do not believe that is going to be done.

In that way there would be an opportunity to bring some fairness to the current equalization formula and to bring the unemployment rate and quality of life to the receiving provinces up to acceptable standards.

A few months ago my private member's bill on Newfoundland's unemployment problem was selected and debated here in the House of Commons. The point was made by someone speaking in that debate that if we had a fairer equalization formula applied to Newfoundland as it relates to our offshore revenues, not only would the province of Newfoundland be better off but Canada as a country would be better off as well.

We have to consider the fact that we are members of this nation. Any province that becomes better off is a net contributor to our country. It makes it a bit easier to live within this country and makes it easier on the taxpayers within this country who would not have to continually be injecting funds into the have not provinces.

In the long run there is every reason for the federal government to want the provinces that receive equalization payments to be brought up to an acceptable standard. The federal government could rest a bit easier and would not have that kind of burden placed upon it.

We are all very much aware that the Canadian equalization program redistributes the wealth of this nation. Last year the province of Newfoundland received $975 million in equalization payments. This year she is going to receive approximately $925 million in equalization payments. It will be a reduction.

One of the reasons we are going to take a reduction in equalization payments this year is the population factor, the fact that so many people are leaving our province on an annual basis. It is of great concern to the province of Newfoundland that we have a tremendous out-migration every year.

One thing that determines the rate of equalization payments to a province is the population factor. The population of Newfoundland has gone down significantly over the last number of years. Over the past six or seven years we have been losing people at the rate of between 7,000 and 10,000 per year. That is quite a decrease in population for a small province like Newfoundland and Labrador.

If that kind of population decrease occurred in Ontario or B.C., it would not be a great big deal but it is devastating for a province like Newfoundland with a population of half a million to lose anywhere between 7,000 and 10,000 people a year. It is devastating not only in terms of losing some very good young educated people but because of that out-migration the province is losing equalization payments as well. That is a very big and important factor for the province of Newfoundland.

The one overriding concern is that the federal government will deduct dollar for dollar the resource revenues that a province receives. This will have the devastating effect of keeping that province permanently poor.

[The Deputy Speaker]

I neglected to inform the House at the outset of the hon. member's remarks that we are now into 10 minute speeches without questions or comments. The five hours of debate have expired.

[Jack Ramsay, Reform, Crowfoot, AB]

Mr. Speaker, I was very interested in some of the comments made with regard to Bill C-65. I would like to read from the Constitution, section 36(2) which states:

Parliament and the Government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

The principle of helping each other through difficult times is an integral aspect of being Canadian. It is something to be proud of. That is the way in which the country was built. Neighbour helped neighbour. We are now at the point where provinces help provinces.

I return to a comment made by the hon. member for Broadview—Greenwood with regard to his passion about the federal government intervening.

We have a rule book when it comes to relationships between the federal and provincial governments. That rule book is called the Constitution of Canada. It is wrong to intervene and violate the provisions of sections 91 or 92. That is where intervention ought to halt. It has not halted there. The government, through the use of its spending power, has intervened into the jurisdictions of the provinces of this country.

Our job as members of parliament above all else is to protect the Constitution of this country, the constitutional rights of every citizen and the constitutional rights of the federal and provincial governments as set out in sections 91 and 92.

Recently the appeal court of Alberta rendered a decision on the federal government's Bill C-68. Four of the five judges admitted that that federal piece of legislation encroached upon the provincial jurisdiction. Three out of the five said it was all right. What was their rationale to come to that conclusion?

If we read the judgment, they have accepted the doctrine that is enunciated by people like the renowned Mr. Peter Hogg who is a constitutional lawyer. What does he say that justifies that the only institution of this country that can protect the constitutional rights of anyone, including the provinces, is the courts? He said that if the federal government introduces a scheme under one of its authority heads such as peace, order and good government, and if it should overlap and encroach upon the provincial governments, it is okay.

With the greatest of respect to Mr. Hogg and to those who support that ideology, I completely disagree, particularly when the provinces do not give their consent for that type of encroachment.

When we look at the interventionist attitude of members on the other side, we ask where in the world did it come from. What they are saying, and I believe this is my understanding of what the member for Broadview—Greenwood was implying, is that if the federal government feels that a provincial government is not doing the best thing for its people in an area of pure provincial jurisdiction as provided for under section 92 of the Constitution of this country, it can intervene without the consent of the province.

The national energy program that practically destroyed the energy sector in Alberta was an encroachment upon the provincial jurisdiction of that province. The member is saying that that is all right.

One of the problems in this country is this thing called unity. We have problems because when the premiers and the federal authorities come together, they throw the rule book, the Constitution of this country, out the window. When we begin to accept and when our premiers begin to accept the encroachment of the federal government into the jurisdiction of the provinces without their consent, it creates tensions which develop feelings of alienation which lead to feelings and expressions of separation.

Members of parliament should be standing in this place to defend the constitutional rights of all citizens in this country and the components of Confederation, which are the federal government as well as the provincial governments.

The federal government sticks its nose into provincial areas unrequested. Yet it ignores those areas that fall under section 91, which is its jurisdiction.

What about interprovincial trade barriers? What about the fact that it costs the consumers of this country, our children and their moms and dads, $5 billion to $6 billion a year because the government allows interprovincial trade barriers to be set up and maintained. Under section 91 it is the federal government's jurisdiction to deal with that and it allows that kind of thing to go on. Why does the government not stay in its area of authority and let the provinces look after their areas? If this would happen, then the tensions that lead to disunity across this country would be eased.

When we want to set standards, let us do it in a co-operative way. Let the federal government negotiate and use the power of persuasion and common sense to say to the provinces that it is in everyone's best interests if we have a standardized health care system, or a standardized measuring system, or a standardized criminal justice system.

This bill opens the door for that kind of debate and intervention. I say to the government, to the people of this country and certainly to members of parliament that it is our duty and responsibility to ensure that we are not led down the garden path by ideologies put forward by extremely passionate interventionists, if I can use the term used by the member for Broadview—Greenwood.

The federal government can intervene in provincial jurisdiction with the authority of the provinces. However, we have had four provinces and two territories oppose Bill C-68 and other bills and the only institutions of government that can protect the constitutional rights of our provinces are the courts of this land. We, as members of parliament, cannot do it.

That was evident when Bill C-68 was debated and the aboriginal rights of the James Bay Cree and the Yukon Indians were being violated. The evidence was very clear that their constitutional rights were being violated and members of this House could not protect them. The only protection they had was from the courts of this land.

With the greatest respect to the Alberta court of appeal, we now have members on that appeal sitting on the bench saying “Yes, Bill C-68 intervenes into provincial jurisdiction, but that is all right”. If the government introduces a scheme under one of its authority heads and it overlaps into provincial jurisdiction that is too bad.

What I am suggesting is that when that begins to occur without the consent of the provinces and the other partners in Confederation then we are contributing to the disunity of this country. We are also contributing to the feelings of alienation that are all too high in some parts of the country. We feel it every time we hold a public meeting in western Canada.

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

Mr. Speaker, before I address Bill C-65 today I would like to thank the hon. member for Crowfoot for putting forward his grave concerns about how far this federal government is intruding into provincial jurisdiction. I think my colleague from Crowfoot did that very adequately, especially in regard to Bill C-68, but it goes further, as the member is well aware.

Interprovincial trade barriers are another strong case in point. The government refuses to look at the issue or even to address it. However, it is not only this government. We have become mired in this mess through not only this government, but through previous Progressive Conservative and Liberal governments from times long past, hopefully never to be repeated again.

Let us have a look at this bill. One of the things I find very contentious in regard to this bill is that equalization happens every five years. The government has had five years to study this bill. It is a large bill and it amounts to a large amount of money, yet the government decided that we would only receive three days' notice. There was no draft legislation. We were not allowed academic input. What bothers me most is that there was no public consultation.

I have news for government members. The people who pay the bills are the people who pay their wages. I know they do not believe this, although I have said it time and again, but the government has no money. It has exactly what it can gouge from the taxpayers of Canada. That is the only money it has and that is the money it uses. When it starts letting out hundreds of millions of dollars government members should be well aware of exactly what they are doing.

No one in this House is against helping those who need help, but most of us would agree that we should do it under a fair system, one that treats everything and everyone in this country equally.

Let us look at what we are talking about cost-wise. This program will cost an additional $48 million in the first year which will rise to $242 million by the fifth year, once the changes are fully implemented. Funding for the equalization program will increase by an estimated $700 million by year five.

We are not talking about small amounts of money, no matter what some members opposite have said. To me $700 million is a large amount of money.

I might add that I am from the province of British Columbia, which is a have province. I really have to wonder about that. Right now we have the highest unemployment we have had in many years in the province of British Columbia. The logging industry is in dire straits with massive layoffs. The mining industry is packing up and running, not only due to federal legislation but also greatly due to the provincial government that is in power in British Columbia today.

Speaking of the government that is in power there today, I want people in the House to know that it is an NDP government, the so-called caring and sharing government of the working people, which brings me to another concern I have with this bill.

The bills states that casino funds will be put into the mix. I want everyone here to fully understand what happened in British Columbia with regard to charities, with regard to bingo and with regard to gaming by an NDP provincial government. That government ripped that right out of those charities and now we are saying that we will go ahead and introduce it in this legislation.

I have a great concern that things might not all be on the up and up with some provincial governments with regard to where these funds will really go.

The hon. member from Newfoundland said that Newfoundland has a rate of 19% unemployment. That is high. I had the opportunity to travel to Newfoundland last year. I travelled across Newfoundland extensively. I know they are having tough times. British Columbia as well is having tough times. I cannot say that it is all the provincial government's fault. I would have to say that a great portion of it falls right here on the shoulders of members sitting across the way because of high taxation. We know that is what kills jobs. What kills entrepreneurship and what keeps businesses from staying in the country is the high level of taxation.

It is not hard to see where this government comes from. It is called tax and spend. I am not saying that the government has to go this route at all. However, if it would look at the simple facts, which countries around the world have tried and tested, and if it were to cut taxation, the level of government revenues would actually increase.

I say to members across the way, believe it or not. People start to create jobs then. They have a few dollars in their pockets to spend and it does not go into the government's pocket. I know Liberal members do not like to hear that. When it goes into the government's pocket that means the taxpayer no longer has it in theirs. That upsets government members terribly.

It is sort of like going back to the old days and knowing that if we could put something away for our retirement we would live far better in our elderly years. This government only thinks of one thing. The more it taxes, the better its members can live in their elderly years, not the taxpayer. I really have to wonder about that.

Let us look at the unfairness of some of this. Let us look at what the auditor general gave the government in 1997 to address. What has it done to date? Absolutely zip.

The auditor general said with regard to the equalization payments that property taxes vary from province to province. Property assessment methods vary between municipalities, let alone provinces. Property assessments are infrequent and done in different years.

The government is lumping this all in as one, but it varies. Bring it in under the provincial GDP. Let us open it up, have a look at it and discuss it. Do not give it to us for three days, after the government has had five years to study it, especially when it has done zip. Government members say “Here it is. Let's get at it”.

I know members on the other side of the House understand that this is the way Liberals have done business for years and years and years. However, on this side of the House the times are changing. Whether they like it or not they are coming into a new century.

Sooner or later, you will have to take off your shades and address these problems with your eyes wide open for a change. The people of Canada are waiting for you people to finally do that. They have been waiting and waiting and waiting.

Hopefully it will happen before all of you over there are in line for your old age pensions. Then maybe you will not find out exactly what a large portion of Canadians have to live with, high taxation.

I say again that there is nobody in this House from any party who I know of who is against helping those who need honest help. Absolutely nothing. However, let us look at this so that it is proper help and we do not keep ripping off the provinces.

I will say a prayer tonight in the hopes that the government will finally wake up.

[The Acting Speaker (Mr. McClelland)]

Before we go on to the next dissertation, I remind all hon. members to address each other through the Chair.

[Jim Gouk, Reform, West Kootenay—Okanagan, BC]

Mr. Speaker, while my colleague from Okanagan—Shuswap was speaking I heard voices opposite saying “Where is the solution?”

I will give those members some solutions which are a little different. I have to speak slowly because, first, I certainly do not want them to miss this. Second, it will be short and succinct. It is a new idea. It is my idea. This is not the party speaking, this is me as an individual.

First, staying with party general philosophy, we believe, as many Canadians do, that the federal government has its nose in so many things that it cannot do any of them, not even one of them, well.

The government interferes in areas of provincial jurisdiction. It gets involved in the daily lives of people from one end of this country to the other in an obtrusive manner. What is the solution to that?

First, it is to recognize that government only functions for one reason.

[An hon. member]

Can you not just say thank you?

[Jim Gouk, Reform, West Kootenay—Okanagan, BC]

Mr. Speaker, the hon. member totally, non-stop, throughout the speech of my colleague who spoke before me kept saying “Let's have the solution”. “Let's have the solution”.

Now I stand poised to try to give that to him, but his mouth is going so fast that he cannot get his ears into gear. That is probably why they cannot get these solutions.

There is only one justification for any government. That justification is to do for people those things that they cannot or will not do for themselves. That is the fundamental purpose of government.

If we go with that premise, then we start at the federal level and say that some things can best be done and need to be done at the federal level. There are also a lot of things that are currently being done at the federal level, sometimes exclusive of provincial government, but sometimes inclusive of provincial governments where there are overlaps. All governments need to reduce themselves to doing only those things which the people cannot or will not do for themselves. Then those items need to be brought back as close to the people they serve as possible, because after all we keep suggesting we live in a democracy. If we do live in a democracy, then we should also recognize that we as elected officials are not the rulers of people, we are the representatives of people. We are supposed to represent the will of those people.

How better to do that than make sure the services we provide them are provided at the closest level of representation possible so that people have the most input into that process. If the federal government would do that, reduce to doing about 20 things and make sure that it does them well and gets out of all the other things, it could reduce the size of federal government, transferring those responsibilities and duties to closer levels of government to the people. If it did that successfully then we could reach a point where we could return to the way this country used to be run where there was no federal taxation whatsoever. Taxation was at the provincial level.

That is the way this country started out. We had provincial taxation. The federal government of the day back during a world war said we need taxation to pay for the war effort. The government does not seem to realize the war is long over. Even with all that taxation revenue coming in and the war over, it has run up this incredible debt.

Governments are starting to recognize the folly of deficit finance. Governments at the provincial and federal levels are starting to recognize that. Let us keep it going. Let us get back to the point where we say that there are only certain things the federal government should be doing. Stop doing all the other things and give the responsibility back where it belongs to the provinces and possibly even closer.

If the government does that successfully then we can have taxation at the provincial level alone. Where then does the federal government get its money? It gets its money by billing the provinces a fee for services rendered. It bills them on the basis of the provincial GDP. There is the equalization, notwithstanding the truthful comments that my colleague from Okanagan—Shuswap made about what a disastrous job the current government in British Columbia is doing.

British Columbia is still potentially a very wealthy province. I suspect there will soon be a change of government in British Columbia. We can get ourselves back on our feet again. That means British Columbia, my province, will pay a little more for those services than some other provinces that do not have as high a GDP. As a B.C. taxpayer, I do not have a problem with that.

We are looking in the wrong direction in terms of these equalization payments of taking money away from everybody and divvying it up. Look at the taxation system. An individual making $8,000 or $9,000 a year pays income tax. They cannot live on the gross amount but they still pay income tax. The government says it recognizes that they cannot live on that. That is why we have different types of support type payments to help these people out. Then on what little money they have left the government charges them GST. Again it says that it recognizes that people with that low an income cannot afford to pay GST, so it created a GST rebate program.

Can people not see the folly of creating a bureaucracy that takes people's money away on one hand and then creating another bureaucracy to give them some of that money back, using most of it up in the collection and distribution process? It obviously makes much more sense to stop taking it in the first place if we know we will have to give it back. We can do that and solve the equalization problem, solve a lot of the taxation problems and solve a lot of the overlap problems by reducing federal government to only those things that need to be done that can best be done at the federal government.

Bill the provincial governments a fee for services rendered on a provincial GDP basis. That will be the equalization. We will have a lot more control in our province. In the province of Alberta, it would give a lot more control. Alberta is another very responsible province that seems to be running well.

Others can take a page from that. If they cannot run well in the province, the people have the closest access to do something about it. It seems when people come to Ottawa they forget they are here to represent people and take on a life of their own.

That is not official Reform policy but it is an idea that I have been talking about with people for a long time. I hope the few Liberals present will give that some serious thought as a possible alternative to maybe a kernel of a new idea. I know they will not change their entire line of thinking now on the basis of this but I hope it does plant a seed in the minds of some of those people and maybe in the minds of people who are watching this today to think there are alternatives.

We do not need to keep tinkering trying to make little tiny fixes on a system that clearly is not working. What we need is a new look at a new system. I believe if the Liberals honestly take a look at this and evaluate it properly they will find they have something they can better work with that is fairer for all Canadians.

I hope the Liberals are listening. They have certainly quieted down since I started talking. Let us hope that in addition to their mouths not working their ears have started.

[The Acting Speaker (Mr. McClelland)]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Halifax West, Transport; the hon. member for Acadie—Bathurst, Employment Insurance; the hon. member for Churchill River, Health; the hon. member for Beauséjour—Petitcodiac, Employment Insurance.

[Gerry Ritz, Reform, Battlefords—Lloydminster, SK]

Mr. Speaker, it is indeed a pleasure to have another opportunity to address Bill C-65, an act to amend the Federal-Provincial Fiscal Arrangements Act.

What we are really talking about is spending $43.5 billion over the next five years and this is really the only time this parliament will get a chance to talk about spending that atrocious amount of money. We might be sympathetic to a government that was in a big hurry to implement important legislation like this but all we see from this side of the House is a government frightened of making mistakes and, like a deer caught in headlights, it freezes and does nothing instead.

We on this side of the House certainly have no problem with the concept of equalization. Equalization grants have been held up as representing Canadian values and as the essence of Canada, supposedly the very stuff that makes us a country. Like many government myths, this one is so thick with rhetoric and misconceptions that average Canadians, the ones paying for and supposedly benefiting the most from this redistribution, are probably unclear what we are arguing about. Canadians are not sure how this affects them one way or another.

To them we can add just about every expert in this country and of course the bureaucrats in the finance department responsible for this complex, convoluted scheme. I believe they have forgotten what the object of equalization really is and are so busy inventing new calculations to hand out taxpayer money that they do not look at what they have done.

We know that section 36 of the Constitution calls for promotion of equal opportunities and a reasonable level of public services to all Canadians across the country. These are noble ideals. The Constitution does not define these terms or set out how these imaginary levels are to be reached.

Over the years the Liberals have applied this peculiar formula to the question. If it is simple, make it complex. If it is not working, it has to be a lack of program funding so add taxpayer money here. It will all get better.

The announcements made by the Prime Minister and the finance minister concerning the social union and equalization fit into this category of fiscal policy. If there are strains in Confederation it is because they have not layered enough bureaucracy on it. Is somebody still complaining? Throw some more money at them and they will shut up for a little while.

There does not seem to be any recognition that the money comes from the same taxpayer who is already paying into these provincial coffers or increasingly now paying user fees for all sorts of public services. There is no federal money versus provincial money, only taxpayer money. Everyone across the country can agree that governments are getting too darn much of it these days.

It is an established principle that whenever a government involves itself in an economic activity there will be distortions. We have to accept some of this no matter what we do. Even if we cut taxes, and I mean really cut taxes, not the shell game we see bandied about here, we know this will affect the behaviour of our citizens in different ways.

There is no such thing as no effect, only good or bad effect. It is sometimes difficult to predict what the outcome might be. Lower taxes tend to increase investment, savings and debt repayment, which are all good effects. It is also possible that people may go on a buying spree with that extra cash and fuel inflation or increase imports over exports, which is not necessarily good.

The most important consideration is that lower taxes put the freedom of choice back into the hands of Canadian taxpayers and that is a great effect in itself. The key to minimizing the distortions we see and the political manipulations in this program, making sure that what we are really trying to accomplish is actually happening in the real world, is to keep programs transparent and accountable.

Everyone should be able to understand how and why the program is set up and be able to make adjustments to changing conditions or to new information as they gather it. What does this government do instead? It adds layers of complexity and rushes a flawed package through parliament before anybody can really get a good look at it. Government members typically protest that they have consulted and studied but they conveniently ignore that there is a big difference between public debate and publicly available information. The public is not informed about the shortcomings of the equalization program and is instead flooded with empty rhetoric like the price of being Canadian, who we are as a nation, and helping the have nots.

When critics rise up to say the program is not doing what it is supposed to do, they are accused of not wanting to help the poor or of trying to split up Confederation or some other such nonsense as we have heard here lately.

If the government were really interested in helping Canadians make the best possible lives for themselves it would many things. The first thing it has to do is make sure it is not engineering an outcome it claims it does not want. All Canadians want their fellow citizens to have good and sustainable jobs, access to education and health care, to enjoy the benefits of living in one of the world's greatest countries. Make no mistake, they know it is only fair that their fellow citizens work just as hard as they do to get these things.

We are famous for our obsession with helping the less fortunate and I hope we never lose that impulse. I fear that if Canadians are constantly confronted with the fact that government programs are often counterproductive or so badly designed that money intended for the poor ends up in the hands of lawyers, bureaucrats, lobbyists and so on, anywhere but where it will do the most good, they will become cynical and lose faith in what government tries to sell them.

When we consider the size of the underground economy and the rate of brain drain out of this country, we can see this effect is already settling in. We all know what happens to some people who are given something for nothing. Most self-respecting people want to get off welfare but some take it as a subsidy for a lifestyle choice and remain in that rut for years. If you are being given money to continue to do what you are already doing, naturally you will continue doing it. Why not?

Why should we think provincial politicians will be any different? We know many of them have worked hard to investigate options for employment and new wealth. We also know they have clung to old industries or methods because it has been politically dangerous for them to make the tough decisions and because taxpayers from somewhere else are backstopping the expenditure.

I do not mean to point fingers anywhere in particular or at anybody. All provinces and all politicians have good and bad examples. I do not mean to simplify the historical reasons why one province or region developed the way it did. There can be many factors contributing positively or negatively at various times. We are discussing only equalization here, and there is no question that getting billions of dollars from somebody else's budget affects the decision making process, political manipulation if you will.

Bill C-65 adds complexity by roping in more revenue sources than were originally included. It tries to calculate gross values of resources without taking into account what it cost to generate those revenues in each province or region. It includes side deals to let Nova Scotia and Newfoundland play catch-up with resource wealth but squeezes mineral wealth into one category. It does nothing to address the fact that property taxes, one of the single largest sources of provincial revenue, are calculated differently not only from province to province but often within those provinces as well.

The last item is of extreme importance. Property taxes have the ability to kill investment as fast as any other factor. We have heard recently how our NHL teams are paying relatively high amounts and are suffering from this. Ontario has recently gone through a revision process and many businesses have found their property tax bills going up by hundreds of percentages. We saw that a short time ago in Saskatchewan. It really cut deep. This can kill a small business or a farm. High property taxes damage the construction industry and discourage development of manufacturing infrastructure. We see industry moving to the States.

What does Bill C-65 do? It actually rewards the provinces for high property taxes. When a government raises this tax it lowers its value but raises the entitlement of the government to more equalization money. It is counterproductive. Nobody raises taxes on the expectation of suffering a loss but we see governments doing this anyway and being rewarded for their counterproductive behaviour by the federal level of government.

We have already highlighted how the net effect of equalization is to hold tax rates higher than desired in the contributing provinces and allows receiving provinces to shift their tax bills in artificial ways to maximize those entitlements. In effect this means that lower income people in the so-called have provinces are paying extra so higher income people in the have not provinces can escape the real cost of subsidized programs. This is not really helping anyone. It is just a transfer of funds.

Some provinces can offer social programs whose costs are carried by other Canadians who have no access to those very programs. This is not equalizing anything for any Canadians.

The Liberals seem to twist this into some kind of cruel conspiracy, but they are wrong. I am sure they are more frightened that they will lose the ability to micro manage the economy and therefore lose their purpose as a governing party.

We can see why they come up with complex bills such as Bill C-65. The thing they fail to realize is that Canadians already vote with their feet on this. Brain drain is an excellent example. Industry moving to the States is another excellent example. My province of Saskatchewan is another great example. Our single greatest export is our bright-eyed youth marching off to Alberta and the States. After all, if we are one big happy country, why is it considered failed policy if Canadians decide to go where the jobs are? It is their right. They have to make a living. They have to go there.

How should equalization work? It must be transparent. All Canadians should be able to look at the mechanism and understand it. There is no way they will support it anyway. My party suggests the macro formula. It is very simplified. We would look at the province's GDP per capita, not at hundreds of little variables, and focus the transfers to the provinces where they are truly needed.

I find it difficult that my home province of Saskatchewan is a have not province. We are rich with agriculture, high tech manufacturing, resources and biotechnology. It has a very educated population. We export them and they head up companies all over the world. We have a long history of superdevelopment. When will that province take responsibility for its misdirected economic policies? Clearly not as long as someone else is paying the bills from somewhere else.

There are other federal systems around the world. Germany has a system where the wealthier regions contribute to a pool of funds that can be drawn on by the less wealthy regions. We have to see more flexibility in the way we work in this country. We do not see anything in Bill C-65 through the fog of rhetoric and complexity that is piled up here.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, I remind colleagues what the legislation is about. It is intended to renew the current five year equalization agreement which expires on March 31 of this year. It is a typical example of the government trying to rush things through at the last minute.

Specifically the bill makes technical amendments to the formula that determines equalization payments. It also maintains provincial income tax revenue guarantee payments for provinces that have tax collection agreements with the federal government. The legislation will allow those payments to be continued beyond the end of this month until March 31, 2004.

There would not be any need for equalization payments if the government took a position of encouraging the free market principle, that people will go where the work is, and started to enact policies which reorganized how people function within the country to build a secure future.

I have had people in my own riding say to me it probably would be doing the country a major benefit as a whole if we worked through the House to try to entirely remove the need for equalization payments over a decade or so. The present system that has been in place for 40 years has done absolutely nothing to solve the problems of inequality. It just keeps topping up the money and perpetuates a cycle of dependency, never, ever making things better.

Common sense tells us that if the money were left in the pockets of workers and companies in the provinces of Ontario, Alberta and B.C., which are the have provinces that contribute to everybody else, they would produce much greater economic benefits offering even more jobs and needing even more support services from the have not provinces that presently provide things like dairy products from Quebec and telephone centre services from the maritimes.

This is the same principle as the one which says that a dollar in the hands of an entrepreneur, a parent or somebody who gets to spend it in the private sector will be much more productive for the economy than the same dollar given to government.

Governments unfortunately always waste a portion of the money. They simply shuffle it around in the paperwork and it gets lost. It is quite obvious that maybe they collect a dollar in taxes but that dollar never reaches the recipient it is supposed to get to.

It must be obvious even to the most cerebrally challenged Liberal that some of the money collected in the taxes for the purpose of equalization will be lost. I do not know how much that is, but I would be surprised if it were less than 15%.

Wasting money is the government's special skill. I have an example that was sent to me by one of my constituents, a Mr. Jim Galozo, last week. He came to my office and gave me copies of advertisements that were placed by the federal government in the North Shore News on February 19, 24 and 26. They were full page advertisements that must have cost $10,000 to $12,000 each. There were only a few words on the page: “$11.5 billion more is a real shot in the arm for our health care system” and then “the Government of Canada”. This is a terrible waste of money as identified by my constituent. It is the type of waste of money that we see throughout the government. It is certainly there in the transfer of payments.

I know my constituent, Mr. Galozo, and all my other constituents do not really believe that the waiting lists a year from now will be any shorter than they are today. The problems will still be there.

No wonder B.C. voters get angry over these programs of equalization. All they see is waste and more waste. Frankly it perturbs them and puzzles them how we can be sending money to provinces when they have travelled there and do not see them as have not provinces.

My colleague mentioned Saskatchewan and the richness of what it can do for the economy. B.C. farmers are very disturbed by the fact that they are forced to take butter, cheese and dairy products from Quebec. The B.C. dairy farmers are not allowed to make butter or cheese. There is something wrong with that scenario. Nobody really believes that Quebec is a have not province. These are real problems that need to be addressed.

I see the Minister of Citizenship and Immigration sitting here on one of those rare occasions. She comes in for a lot of criticism in B.C. as well. She shows so little concern for the criminal refugee problem in the province that most people think she might as well be a cardboard cut-out.

The member from Coquitlam has said he has the ear of the Prime Minister, although I wonder when he has it whether it is attached to the Prime Minister. That seems to be a problem as well. While the minister of immigration is here, I hope she will take a serious look at the problems in B.C. which she could address if she really put her mind to it. I can see by the expression on her face that she does not have the slightest intention of doing so. Since we will get absolutely nowhere with the cardboard cut-out, I will continue with the bill that is in hand.

As I mentioned the have not provinces are listed as Quebec, Nova Scotia, Newfoundland, Saskatchewan, New Brunswick, P.E.I. and Manitoba. Manitoba will loose about $37 million by the end of the five year term. Ontario, Alberta and British Columbia do not qualify at all as have not provinces, so we are picking up the bill.

Does the government really understand how the people in B.C. feel? I am a member from B.C. and I know that there are other concerns from the other have provinces. Speaking for B.C., does the government really understand how B.C. voters feel when they have to pay enormous amounts of money, billions of dollars to the federal government, only to see it transfer to these other provinces that do not appear to be have not provinces?

British Columbians do not have any problem with assisting provinces that obviously need help to get out of a depressed economic situation. Reform has proposed in the past that the way to correct these economic problems is not to throw money at it the way the Liberals do and have done for 40 years under the equalization program, but to do things that actually stimulate the economy.

For example, in the last parliament the Reform Party proposed that one way this money should be spent is on developing meaningful infrastructure, not on the boondoggle giveaway patronage laden infrastructure the government runs. It would be the type of infrastructure that would, for example, build a freeway from the eastern part of Canada down to Boston. This would start to assist north-south trade.

Last week on one of my flights here I was sitting beside a lady from Halifax. She was telling me how important the amount of tourism from the United States is to her small craft store. I asked her if it would be helpful if there was a decent highway system that ran north-south to encourage tourism. She thought that it would be a great idea to put in a major freeway running through to Boston to get more tourism.

I mentioned earlier about how B.C. farmers are forced to take cheese and butter from Quebec when they are quite capable of making it in their province.

During the last provincial election in Quebec, the leader of the PDQ was on a radio show in Vancouver. The talk show host, Rafe Mair, asked him about his knowledge of transfers to Quebec. That leader of a political party in Quebec, the PDQ, said that Quebec did not get transfers. He had no knowledge of it at all. He did not even know there were equalization payments that came from B.C. and were transferred to Quebec. He seemed to be quite muddled.

In terms of basing equalization payments on the ability of a province to tax, Alberta should get a transfer payment if that is the logic. I wonder what would happen if Alberta tried to introduce a provincial sales tax. Since there is no chance of Alberta ever managing to introduce a provincial sales tax its ability to tax is reduced. Maybe it should be a have not province. The government should add the ability to add a PST to the other criteria on the list for equalization payments.

I would like to repeat that instead of constantly renewing these arrangements where we transfer huge amounts of money from one part of the country to another, we should be looking at ways of breaking the welfare dependency cycle that gets created by these payments. We should look at ways of tough love.

Maybe there should be a 10 year phase-out period where the provinces get their full transfer payments for 10 years but they have to be working on programs that get them off equalization payments. The federal government should do its best to assist them in making that happen.

[The Acting Speaker (Mr. McClelland)]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker (Mr. McClelland)]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. McClelland)]

All those in favour will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Mr. McClelland)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Mr. McClelland)]

In my opinion the nays have it.

And more than five members having risen:

[The Acting Speaker (Mr. McClelland)]

Call in the members.

And the bells having rung: