Debates of March 15th, 1999

Supply

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I believe that, indeed, the euro was created, among other reasons, to strengthen the monetary policy and the world situation vis-à-vis the United States, the U.S. dollar and the possible fluctuations of the exchange rate.

Take, for example, what George Sauras did to the pound sterling. Over a period of just a few days, he was able to get the value of the pound sterling to go down by gambling on that value. Today replacing these 11 European currencies by the euro provides increased protection against this type of speculation.

We are not here to examine this issue, but to ask that a committee be set up to undertake that task. As we demonstrated today, in the past, speculators could gamble on 11 different currencies that have now been strengthened by creating a single new currency, the euro. These speculators will have to look around to find a currency that is not as strong and as economically important. They will be able to gamble on that currency and, perhaps, create more problems for it.

Given that all these other currencies have now been grouped together and are better able to protect themselves against such speculation, it is likely that these speculators will turn their attention to the Canadian currency and will target our dollar.

This is an issue which the committee could examine. I suggest to the hon. member that he should submit this issue to the committee. Said committee will determine if the Canadian dollar is indeed strong enough to withstand international speculation. If it is unnecessary, as in the case of trade rules, why is Canada such a fervent supporter of the WTO? We might put this question to my colleague.

Together, the various countries in the world can stand up to the United States in the case of a trade dispute. Could Canada withstand speculation over its dollar, given that the Europeans will perhaps consider going elsewhere? That question could be raised in committee.

Now, how financially and fiscally independent is Canada from the United States?

What is the extent of this independence when we look at the curve since 1950? When 80% of our trade is with the United States, how independent are we in trade terms from them?

In 1993, and during the last election campaign, in 1997, the Canadian government said “In terms of foreign trade, we will open our market to other sectors of activity, toward Asia, Europe and Africa”. In the meantime the curve of trade with the U.S. continues to climb.

We are economically dependent on the U.S as well as commercially dependent on them. We must make sure that we are prepared for potential speculation and for a potential change in direction in relation to them. Perhaps a study on the subject could help us prepare for an increase in the value of the Canadian dollar, for potential speculation on it.

This is the question my colleague from Charlesbourg is trying to answer by asking parliamentarians to assume their responsibilities. However if Liberal members wish to disregard their responsibilities when they vote, the people of Canada will know about it.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I think one of the biggest features of our currency and its value today has to do with uncertainty. A lot of the uncertainty has been created by people across the way.

The Bloc motion alludes to the desire of the separatist movement to copy the European Union. As we know, European countries have come together to create a common currency. I think it is appropriate that we ask ourselves why they did that. Basically the reason is that they wanted to lessen their sovereignty because their history has not been a happy one.

We can think of the two world wars and how nationalism devastated some of those economies. People who have travelled to Berlin or Warsaw have seen that most of the buildings date from the 1950s. It does not take a lot of thought to realize what the sovereignist movement in Europe has done. The people have said they are trading sovereignty for economic growth and stability. They want to come together to have a common currency. As other speakers have mentioned, there are 11 independent countries. The thought process is quite different in Europe than it is in North America.

We talk about currency as if it is unique. People have traded in coins. Indeed in this country we have used beaver pelts. Seashells have been used in other places. These things only represent a modicum of the exchange between people. The important thing is the value of the trading relationship.

Members of the Bloc seem to think this is entirely in reverse, that somehow exchange rates influence productivity. In fact productivity and the underlying economics that exist in the country reflect the exchange rates, not the other way around.

I will deal with the issue of a Pan-American monetary union.

Other members have alluded to the reality that within the North American structure economic forces are divergent. We know that our neighbour to the south dominates the economy of North America.

I looked at the Canadian Almanac today because I was interested in what the comparative economic relationships would be in North America. The GDP of the province of Quebec is about $185 billion. That represents approximately 20% of Canada's GDP. The U.S. GDP, on the other hand, is something like $6.740 trillion. These figures do not include Mexico. Quebec's economic strength just within the United States and Canada would be less than 2%.

Do these people really think they are going to have some say about currency evaluations when they would only have 2% of the economy in the Pan-American relationship? I doubt that. I think we all know fundamentally that if we entered into an agreement like that we would not be controlling the foreign exchange of currency calculations, it would be someone in Washington.

It seems odd to me that separatists would actually bend themselves out of shape. Now they want to give up their sovereignty movement and make themselves simply a fiefdom of the United States.

Why do we have our own independent foreign exchange rate and currency? It allows us to manage the economy. The exchange rate actually represents the underlying economic forces. It allows us to adjust foreign exchange rates to deal with certain shocks that occur in the economy.

Right now we are living through a period in which commodity prices are depressed in world markets. Unfortunately Canada is very susceptible to that because a significant portion of our economy is related to commodity pricing. Commodity pricing has changed through global forces which are quite often beyond our control. Russia has been dumping commodity prices and the demand in southeast Asia has also declined. These have all had an impact on commodities in Canada.

Governments have choices. Do we change our foreign exchange rate, our internal currency, or do we try to maintain an artificially high exchange rate? I would suggest, in the wonderful fairyland of the Bloc, that if it had an American currency, suddenly that economic tool would no longer exist. The only ways one could adjust for economic forces would be through unemployment and high interest rates.

This is a commodity based economy to some extent, but in the same almanac it was interesting to see the breakdown of the province of Quebec and how the GDP figure is arrived at. It basically stated: primary manufacturing, electric power, mining and pulp and paper. Quite frankly, those are all commodity based industries.

What members opposite are proposing is to adopt a Pan-American currency, the result of which, under our current economic conditions, would be increased unemployment in the province of Quebec and increased local interest rates. On top of that, it would also reduce their sovereignty.

I find it quite incredible that this is the debate that the Bloc has brought forward to us today.

It is strange to have this kind of misguided approach to foreign exchange. I was also surprised to find that the Conservative Party supports this.

I think back to the history of this country, of John A. Macdonald, the building of the great railway and the national dreams. What has happened to them? They have become so demented along the way that we are now accepting a separatist agenda to reduce Canadian sovereignty at the behest of our big brothers to the south? It is a sad day indeed for the House of Commons when we have to go that full circle.

Speaker after speaker from the Bloc has given us an economics 101 lesson. I find it quite incredible that somehow we are in bad shape in this country because of our foreign exchange rates.

I was greatly pleased to go to the unveiling of the KPMG book that everybody has been talking about recently. It states that Canada is number one in the world with respect to its competitive position. Yes, foreign exchange is part of that. They say that at a 79 cent dollar Canada will start to lose that competitive position.

These people are suggesting that somehow we enter into a monetary union, the net effect of which would be that we would lose our competitive position that we now have, and at the demise of the province of Quebec I might add. From sector to sector, from the software sector to the high tech sector, Canada has been rated as the number one place in the world to do business. I do not think we want to give up that competitive position just at some whim of the Bloc which is totally misguided. It does not even seem to suit the Bloc's own agenda.

We should be celebrating the fact that the Canadian economy is robust. It has the opportunity to be competitive in world markets. I would encourage all members of the House, including those in the Conservative Party, to stand up four square and object to losing our sovereignty and losing our ability to make our own economic decisions.

[Pierre De Savoye, Bloc, Portneuf, QC]

Mr. Speaker, this does not make sense. First of all, the member says that, if we had the same currency as the United States, Quebec would have no input into monetary policies.

Quebec forms 25% of Canada, and we already have no input into Canada's monetary policy. Is the member making fun of us? We had no input into the Constitution or the social union agreement. We never have any input. This will not change in an American context.

Now let us look at the facts. Canadian businesses already have bank accounts in U.S. dollars. Why? Because there is a tremendous amount of trade between Canada and the United States, to the tune of $1 billion a day. What country is the United States' largest trading partner? Is it Japan? Not at all. Is it Great Britain? Absolutely not. It is Canada, and 55% of Quebec's exports go to the United States.

Our businesses here in Canada already work in U.S. dollars. They try to stabilize uncertainties due to fluctuations by buying what is called future contracts on the value of the U.S. currency. We already have a highly integrated economy.

So, Mr. Know-it-all over there, holder of the absolute truth, who refuses that a committee of the House of Commons be struck to consider these issues, really does not know anything at all and above all does not want to know anything.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I do not think it would take a lot of intelligence to realize we do not start studying something which means the demise of our own economy and of our own constituents. The member talked about what he believes to be the fact that somehow the Quebec people have no say in monetary policy. I would like to point out the obvious. Some of the directors of the Bank of Canada come from the province of Quebec and Quebec does have a say in how we arrive at monetary policy.

We deal in foreign exchange relationships all the time. As a matter of fact I was surprised to learn the other day that the largest flow of American dollars outside of the United States is not in Canada but in the Soviet Union. People are using the American dollar as a source of foreign exchange in world denominated currency. That does not mean we have to be part of that hegemony of the American system. In fact foreign exchange conversion is quite healthy and quite easily done.

A lot of countries thought the American dollar was so wonderful that they were going to peg themselves to the American dollar and this would create stability within their own economies. We do not have to think back further than Southeast Asia and the Indonesian crisis and so forth and of countries which were unable to make it. Brazil just devalued its currency. Countries could not maintain that support level because it was artificial.

The reality is that if countries cannot adjust the foreign exchange rate domestically, someone will do it for them by the loss of jobs, by high interest rates. It would be a brutal and costly tool to inflict on their own population.

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

Mr. Speaker, listening to the hon. member's comments, I wish to clarify our party's position on this motion. We are supporting this motion.

We believe this is an important issue that deserves discussion by members of parliament. Economists are discussing this issue as we are here today. They have been discussing this issue for months. I suggest that there are probably bureaucrats in the Department of Finance who are discussing this issue. As their elected officials, we owe Canadians at least that amount of respect to discuss the issue in this House.

I spoke to the reasons I am personally opposed to a common currency at this time. They are many of the same reasons the hon. member articulated. His party was the same party that opposed free trade in 1988. His party in the 1993 election in which he was elected opposed the GST. We cannot take the Liberals seriously.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, it is odd that the opposition from time to time comes out and says “Is it not a terrible thing that you whip your caucus?” This man just said he disagrees with his own party's support of this motion yet he is going to stand up tonight and support it. Where does that put him?

[The Deputy Speaker]

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 Yukon, Aboriginal affairs; the hon. member for Winnipeg North Centre, The budget.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, this is not really a debate about monetary policy. My colleague from Durham came closer to the truth when he mentioned words like sovereignty in this debate. This is really a debate about national identity and the preservation of national identity.

As far back in time as money began, in the ancient city states of Greece, money represented and contained on it the images of the state. Usually on one side was a god or goddess and on the other side, some symbol of the state. In Roman times, the Romans put the effigy of Caesar on their coinage. They used that effigy to establish their identity throughout the civilized world at the time, all of the Mediterranean. In about 100 AD a coin with Caesar's head on it could be found anywhere, even in Britain. That coin said Rome.

Money still conveys that image. It still has that purpose. No country knows that better than the United States of America. The Americans know full well that when their dollar is circulated around the world, it says to the world “We are the most powerful country in the world”. It also says “We are successful. These are our values”. As the member for Durham mentioned, in the Soviet Union the real money of commerce is the American dollar.

Earlier this year I was on holiday in Belize. Belize is a small English speaking country on the shoulder of the Yucatan Peninsula in Central America.

Belize uses the Belizean dollar. It looks identical to the Canadian dollar, complete with the Queen. On the reverse of the Belizean dollar, the paper currency, there is a scene of Belize. Nevertheless, when it is flipped over, the Queen can be seen. It is similar to a Canadian bank note. I suspect that the Belizean dollar is actually manufactured in this city. Of course, the Canadian authorities print money for many countries around the world.

In Belize things can equally be bought with the Belizean dollar or the American dollar. I suggest there already is a pan-American currency in use everywhere in the western hemisphere and that is the American dollar.

In any store on Sparks Street paying in Canadian currency is fine, but paying in American currency is fine as well. We already have precisely the kind of pan-American currency that is proposed by the Bloc motion.

In Europe there is a long tradition of national independence, especially in France and England. The arrival and the power of the American currency in Europe has caused great concern and distress. Particularly France is concerned about losing its national culture, symbols and sense of identity to a kind of American hegemony worldwide.

This sentiment is echoed worldwide, the fear that the United States will establish its values everywhere. We have reason to fear that because global television now penetrates every corner of the world. English and American values are dominating the cultural message that is going out across the world.

One of the few things we as national identities have left to preserve our sense of self is our money. I was absolutely mortified and distressed in the 1980s before I ever became an MP when the previous government, the government of Brian Mulroney, came along and changed the Canadian currency, changed it to make it more neutral, less patriotic, less Canadian.

When I was young, as a paper boy I can remember the first time I obtained my own earned money. Collecting door to door I would be given a one dollar bill or a five dollar bill. Money in those days had scenes of Canada. I remember as a child looking at those bills and thinking that is my country.

Mulroney came along and as part of this whole pandering to the Quebec nationalists, the Quebec sovereignists, Mulroney tried to take away many symbols that represented Canada from things like our postage stamps and our money. I suggest that if we, and when I say we I mean all of us, French-speaking Canadians and English-speaking Canadians, want to preserve a sense of who we are, whether we think of ourselves in one region or another region, then we have to preserve those few symbols that are left to us as Canadians.

I suggest that in no independent country of Quebec is there ever going to be a currency that could survive for more than two weeks. Even in the proposition of independence was the suggestion that a separate Quebec would adopt a Canadian currency.

If that is the rule, that Quebec separate, alone or together, cannot have anything better than the American dollar bill to represent the French-speaking fact of this country, then how long would that French-speaking fact survive? It would not survive because the Americans are not tolerant of the nature of this land. The nature of this land is this beautiful country that includes two very strong linguistic cultures. That has no part in the American plan.

I see members of the Bloc Quebecois smiling. If they were to go to France they would hear the French talk about the Americans and the dominance of the English language in France, of Disney World and all the symbols of the United States that are invading France. The French understand how necessary it is to protect their country with its own symbols.

I suggest there is a reason for the Euro. It was recognized in Europe among those 11 countries that if they were going to survive not just as an economic entity but as a sovereign entity against the American cultural power, they had to have their own currency.

What is behind all of this is not monetary policy because it really has nothing to do with that. We are in a global economy. This really has to do with images, symbols and a sense of ourselves, be we Canadians or Albertans.

[Lorne Nystrom, NDP, Qu'Appelle, SK]

Mr. Speaker, I think the member said “be we Canadians or Albertans”. I think Albertans are Canadians as well.

That being said, I agree with what the hon. member said in his speech today. I just want assurance that the Liberal Party will not change its position.

I remember back in 1974 when Liberal leader Pierre Trudeau campaigned against price and wage controls against Bob Stanfield from Nova Scotia and the famous line “zap, you are frozen”. He won a majority government and all of a sudden in came wage and price controls.

I remember the famous GST debate when the predecessor of the Reform Party, its hero Brian Mulroney brought, in the GST. Who campaigned against the GST? The Liberal Party. It is in power. I just checked today and the GST is still there. The Liberals changed their minds.

I also remember a famous free trade debate once again brought in by the Conservative Party. I see free trade is still there. The Liberals changed their minds.

Will the Liberal Party to be a chameleon from here to eternity or can we trust that what the member is now saying will remain as Liberal policy for at least the next four or five years?

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, I am delighted to inform the member that since 1993 with this Liberal government, backbench Liberal MPs have been fully engaged in helping to create policy. I can assure him that through committee, through caucus, we will set the government on the right course, protecting our national sovereignty.

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

Mr. Speaker, the chronicle by the previous speaker is so accurate. All this was of course set out in the red book, which is almost as red as some of the government members' faces whenever these inconsistencies are brought up.

I think the hon. member does raise a very good point when he talks about the actual issue here being sovereignty. It is not so much sovereignty. The Bloc, in fairness, has brought this motion forward to examine the issue, an issue that is taking place everywhere else in the world and, as previous speakers have indicated, something that is very likely going on right now in the Department of National Revenue. The issue is not necessarily about sovereignty today. It is about examining something that needs to be looked at.

We want to make it very clear. I do not know if there is some hidden agenda here that was alluded to by the hon. member. Perhaps we should beware the ides of March. The Conservative Party is not supportive in any way, shape or form of having a dollar tied to the Americans or having a common currency. We are supporting, however, looking at this issue further in a committee. That is the position we are putting forward.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, I submit that when a party supports a motion like this, it has to take whatever is behind the motion as well as the motion at face value.

It is very obvious in my mind that the question of money and the symbolic importance of money is very central to how we identify ourselves as countrymen. I caution the member that perhaps he has not thought of this aspect. I have raised this aspect and I had hoped in view of that he might consider how his party will vote on this motion.

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, I have been listening to the debate from the very beginning, and I think the last Liberal speaker gave us a very good illustration of the Liberal position. Liberals are stuck with symbols of the past, they are looking to the past, and they have a hard time getting involved in modern debates that are forward looking, because they feel threatened and they are afraid of coming to grips with their own identity.

In his remarks, the hon. member has never mentioned economic arguments or the impact on exports, which would make an interesting debate, or the transition to be made if we are to have a new currency. There is not a single economic argument in his remarks. His favorite words were pride, symbols, and value. That reminds me a lot of the debate on free trade.

Here is my question to the hon. member. Since he said that our currency represents his pride of being Canadian, his identity, the sense of belonging he feels when he looks at the Canadian dollar, could he explain why this proud symbol represents the Queen of England? Is that symbol of the past what makes him so proud of being Canadian? He is not even able to have on his own currency more proper symbols of Canadian culture.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, I cannot thank the member more for his observation because I believe absolutely that it is high time we changed those symbols. I would like on all Canadian dollars and all Canadian currency the symbol of the Canadian flag.

The hon. member is absolutely right. It is high time this country cut those symbolic ties to Britain and stood up for itself, Canada united, all of us.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, it is a pleasure to address the Bloc motion today which I shall read into the record so members and people watching this on television will understand what we are doing:

That, in the opinion of this House, a special parliamentary committee of the House of Commons should be struck in order to consider the possibility of Canada's participation in the creation of pan-American monetary union.

On behalf of the Reform Party, I think my colleagues do not have anything against the motion or do not have great concerns about this motion. It is well and fine to discuss this and send it to some kind of committee. That is not a problem at all. What I am concerned about is that in doing this we will start to take some of the attention away from the dreadful record of this government when it comes to the Canadian dollar. I will address that in a moment.

First let me address some of the pros and cons of having a pan-American currency. Many people have discussed this lately with the advent of the Euro. There are some good aspects and some bad aspects. The sovereignty issue is one of the biggest issues people are concerned about. Their concerns are very valid. The Canadian currency is a repository for many of our symbols. My colleagues in the Liberal Party have made some good arguments about that. That is fine. We acknowledge that that is a big issue.

Some of the pros of doing this, of having a pan-American currency, would be things like business issues. Some businesses have for a very long time been sheltered from competitive pressures because the dollar has been used as a buffer to protect them. All of a sudden that would be gone. They would then be forced to compete and improve their products and services. In doing that they would raise the standard of living of Canadians. That is one of the great advantages.

There are disadvantages too. We are in a country where so much of our GDP is dependent on commodity prices. We have seen this recently. If all of a sudden commodity prices go in the tank and the dollar cannot adjust for it, we run into a situation where we may have some dislocation, some unemployment and those sorts of things. We should have that discussion but it is not timely to have that discussion today.

The real issue today and the things we have discussed in the House of Commons in the last couple of days are the ones we should keep discussing. I am talking about this government's dreadful record in protecting the Canadian dollar under the system we currently have.

This is an important issue not because it is important that our dollar be at some particular number or figure but because where the dollar is tells us something about the state of the Canadian economy. Many people regard the dollar and the level it is at as a barometer of the health of the Canadian economy. We should become concerned when we see it fall to record lows. We saw that happen this summer. Frankly, it has barely budged from that point.

It was not long ago, in fact just a few years ago, when we had the current finance minister, at the time running for the leadership of the Liberal Party, rip the Conservative finance minister at that time, Michael Wilson, because the dollar had fallen below 80 cents. He said it would be a free fall. It would collapse if it went below 70 cents. Under this government it is at 65 cents. It is bad enough that the dollar has fallen. When our dollar is that weak it effectively means that Canadian families have to face a pay cut because they are now buying imports with those cheaper dollars. That in and of itself is a bad thing.

It goes beyond that. As I said, the state of the dollar is also a barometer of the health of the economy. When the dollar falls that dramatically and is so listless as it is today that tells us a lot about the policies of the government. It tells us a lot about the fiscal policies of this government.

Let us discuss some of those. We know Canadian productivity is absolutely in the tank. We have report after report drawing attention to this. We see the OECD issue a report that talks about Canadian productivity falling dramatically although at one point we were one of the leaders in the world. We know from companies like Nesbitt Burns that our productivity is in the tank. The industry department of the Government of Canada has pointed out that Canadian productivity is lagging.

As we know from economics 101, if we are producing less, not as much as other countries, if our productivity is not staying up there, we are not producing as much wealth and our standard of living is falling. That is one of the primary reasons why Canadians today feel hard done by. They do not necessarily understand all the arguments being made in this place today but they know they just do not have as much money as they used to have at the end of the month to pay the bills. That is a tragedy. This is not just an economic debate. It is a debate about the situation many Canadian families are in today.

Just before Christmas the industry minister revealed, perhaps unwittingly, the policy of this government when he said that high taxes aid productivity in Canada. That is what the industry minister, the would-be finance minister, said. The Reform Party, the official opposition, thinks the industry minister is off his rocker. We say that high taxes are one of the things that kill productivity in the country. We say that high taxes make us less competitive. We say that when you have high taxes you have a weak currency. That is exactly what we told the government again today.

The government's defence is to drag out a report done by KPMG consulting that states that the two biggest selling advantages of Canada when we try to promote it around the world to attract investment are low wages and a weak currency. Talk about trying to put the best face on a bad situation. It does not talk about how our taxes are so competitive and how we are attracting business that way, in the manner Ireland has done it over the past several years, or the United States, the U.K. or other countries.

The government trots out these arguments which at best would seem to be acts of desperation when it starts boasting that we have low wages. The fact that we have low wages may attract some business but my friends across the way would have to admit it is a third world argument. The people who are being paid those low wages are not very thrilled about it. They want to see wages going up.

We see this pattern over and over again where the government is faced with all this bad news and tries desperately to put some good face on it. It would take 100 Mary Kay beauty consultants to dress that argument up and make it look good. Canadians do not buy it for a second. They are tired of seeing their standard of living eroded, and they see it over and over again under this government. They see taxes going through the roof, they see a $580 billion debt and they intuitively understand that is connected to the state of the Canadian dollar and their eroding standard of living.

We ask the government to set aside the feeble arguments it has been making about Canada being attractive because we do not pay our people very well and Canadians are willing to work for peanuts. Set those arguments aside and address the issue head on and say we have a tax problem. Our taxes are 30% to 40% higher than in the United States.

[Jim Peterson, Liberal, Willowdale, ON]

Say don't come to Canada.

[Monte Solberg, Reform, Medicine Hat, AB]

I am being dressed down by the junior minister of finance, the selfsame member who dressed down homemakers the other day. Do not get me started on that. I do not think the minister wants to hear about that again.

We encourage the government to face this issue head on. Instead of getting engulfed in a debate about a pan-American currency, which is a fine debate to have at some point, let us address the things we can do something about to not only improve the productivity of the Canadian workforce and make our businesses more productive but to put more money into people's pockets, to reward them for the job they have done in balancing Canada's budget, to reward them for creating the wealth that makes Canada one of the greatest countries in the world to live in.

Those people should be rewarded. In so doing we will find that our dollar will start to strengthen. My friends in the Bloc, in the Liberal Party, in the Conservative Party and in the NDP would agree that if we ever had a debate on a pan-American currency and decided for some reason to actually proceed with a pan-American currency, it would be an awful leap to go from 65 cents Canadian to a full $1 and not have all kinds of dislocation as a result.

In the meantime, why do we not take some steps with the tools we already have to improve the strength of the Canadian economy and thereby the Canadian dollar? Why do we not start to cut taxes? Why do we not pay down the debt?

The government had a golden opportunity with the last budget. What did it do? It blew it. Instead of taking what would have been a very large surplus and using it to start to cut taxes in a meaningful way, it dramatically increased spending. Its spending budget was $104.5 billion. Instead of sticking to that budget it decided to go over budget by almost $8 billion.

If I were in the private sector and did something like that, I would be kicking stones down the road and without a job. However, each and every year the government goes over budget. It raised next year's spending projections by $4 billion. It goes on and on.

The government has the tools to begin to address the problem of a weak Canadian currency. It simply refuses to act. Despite all the rhetoric we heard from the finance minister when he was on this side of the House and pursuing the Liberal leadership, the government has the tools and it refuses to use them.

Now all of a sudden the spectre of a pan-American currency is raised as some way to get us out of this mess. We say that debate is much too premature. We do not need to have that discussion today. In fact, we think it takes the heat off government which for too long has delayed dealing with the issue of productivity and strengthening the dollar. We would much rather see it address this issue head on.

I have talked a lot about the failure of the government's record. It is a record it should be embarrassed about. I simply ask my friends across the way to not take my word for it. Let me quote from people who watch the performance of the government. Here is a March 5 press release from Nesbitt Burns:

Canada's poor productivity performance is the result of confiscatory and uncompetitive tax rates—and dramatic tax cuts are urgently needed in order to boast economic activity, job creation and income growth.

We have all kinds of quotes from the Conference Board of Canada, CIBC, Wood Gundy, and on and on they go, about the horrible performance of the government when it comes to productivity.

I will not only criticize. I will offer some concrete solutions on what to do about this problem. The first thing we should do is not get sidetracked on this debate about a pan-American currency.

The second thing we should do is take the surpluses we have and instead of spending them on all kinds of ridiculous programs, as the government does each and every year—

[Tony Valeri, Liberal, Stoney Creek, ON]

Like on health care and education.

[Monte Solberg, Reform, Medicine Hat, AB]

My friend across the way says “health care”. No, I am not talking about health care. I am talking about regional development grants which the government uses year after year despite the fact that the auditor general and many of the pro-business groups in the country find them completely distortionary and completely wasteful. They actually do much more harm than they do good.

Once we freeze the level of spending at $104.5 billion and reallocate money within that envelope toward higher priority programs like health care, we argue the government would be able to run up some large surpluses and use those to start the process of giving Canadians tax relief.

The government will argue it gave tax relief. If we look at the numbers and calculate the tax relief the government gave against the tax increases it brought in, we find that over the next three years Canadians will be $2.2 billion worse off. That is no solution. We need to have dramatic net tax relief.

That is why we are advocating $26 billion in tax relief, which would amount to $4,600 for the average single income earner with a family of four. This would be a tremendous amount of money left in the pockets of Canadian taxpayers. That money could be used to spend on things they want to spend it on. That would help our productivity. We need $17 billion to pay down the record high levels of debt in Canada today of $580 billion. We need to start paying that down.

Instead of getting into the argument about a pan-American currency, instead of trying to hide behind the very feeble arguments that we found in the KPMG report which came out the other day, we urge the government to face the issue head on.

It is time to give Canadians a break. They are the ones who balance the budget. They are the ones who produce the wealth in the country. Let us give them a break. Let us not continue to find ways to waste this money like the government always does, without fail. No matter what government it is, Liberal or Tory, it seems to find a way to waste it. Let us give that money back to taxpayers. They are the ones who balance the budget. They are the ones that deserve to benefit from the money going to the government.

[Pierre De Savoye, Bloc, Portneuf, QC]

Madam Speaker, I listened to the arguments of our Reform Party colleague and I was under the impression he agreed we should study the issue but then it became clear that he wished there were other priorities.

I would like the member to answer my questions. Recently, our dollar has been falling and this helped Canadian companies in the natural resources area to maintain their export levels. However, as the dollar falls, other businesses in Quebec and Canada see the cost of importing raw materials and finished products rise. Our economy is not just based on primary products. Our economy is more diversified. We have problems with the rate of exchange.

Let us consider hockey players, for instance. Earlier, another member talked about the symbolic importance of a currency for national pride. Now in our national sport, hockey, players want to be paid in U.S. dollars. I think something is wrong and we should ask ourselves questions.

Executives of large businesses also often ask to be paid in U.S. dollars. Why? Because our dollar can be worth 66 cents today and only 64 cents a year later. This represents a loss of salary of almost 3 to 4% for someone who is paid in Canadian dollars compared to U.S. dollars.

Let us consider the long term development plans of a business wishing to export to the American market in five years. How much will the Canadian dollar be worth then? Let us go back five years. Our dollar was worth 70 cents. It lost about 12%, but regained some of its value. How can we have long term export plans to the American market in those circumstances? We have problems.

There are many issues we should address and I will conclude on that. Should we have a common North American or pan-American currency? Should we have a floating dollar or a dollar on a par? Should we have new monetary instruments? The bottom line is there are solutions but we will find them only if we raise issues. This is why the Bloc Quebecois is suggesting that a committee be struck.

[Monte Solberg, Reform, Medicine Hat, AB]

Madam Speaker, I recognize and agree with many of the points my colleague from the Bloc has made. I think we need to have this discussion somewhere down the road.

I am concerned that in getting involved in this discussion the heat will come off the government for its disastrous track record when it comes to the Canadian dollar. The government has allowed the productivity of the country to fall because of its high tax, high debt policies. As a result we see the ability of many Canadian companies being in peril when it comes to competing around the world.

The way to fix this is not to let the government off the hook by becoming involved in some wide ranging debate about monetary union and that sort of thing. The way to deal with it is to go back and undo the disastrous policies of the government.

We do not need any more high tax policies. We have to reverse the trend to regulate the Canadian economy to the point where business almost chokes on the amount of paperwork it has to go through in the course of a day.

We are saying the emphasis is the bone of contention of the Reform Party. We need to put emphasis on fixing the fiscal policies of the country. Then we will see a stronger dollar and at that point have this debate in full.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Madam Speaker, the member for Medicine Hat connected the standard of living with the low dollar on several occasions in his speech. Would he not agree that the standard of living is actually tied to purchasing power as well as to the level of the dollar? As a matter of fact it is more tied to purchasing power.

All the member has to do is travel to Italy, England, any European country or Japan, for that matter, to find that the real cost of consumer goods, particularly essential goods, is far higher in comparison to Canada. I am talking about rent, foodstuffs and whatever.

This is probably the reason we are still considered by the United Nations as one of the richest countries in the world. Our standard of living is very high. Even though our dollar is low relative to other countries, its purchasing power in Canada is still very high.

The argument he presented, in particular with respect to the low dollar, does not hang together very well. What we are talking about is that when we have a low dollar relative to other nations it attracts investment in the country and encourages the buying of exports. It is a net positive thing rather than a negative thing.

I would like to pose a direct question to the hon. member on the suggestion that somehow the Americans would agree to set their dollar aside for some kind of pan-American special currency. Does he not agree that is pie in the sky, a total dream? The Americans are tough guys in the world when it comes to monetary policy, fiscal policy and economics, and there is no way they would ever give any time to such an idea.

[Monte Solberg, Reform, Medicine Hat, AB]

Madam Speaker, as the member knows, never is a long time. In a sense I think the debate is irrelevant. At this point we are far from being in a position where the Canadian public would even consider having a debate about it. I do not see the point of going down this road at this time.

The far more important issue, and the issue that is important to the pocketbooks of Canadians today, is the fact that our low productivity means we have a lower standard of living and that is reflected in a low dollar.

My friend has said that a low dollar is a positive thing. I say to him that if a low dollar is a positive thing we should hope for a 40 cent dollar, a 20 cent dollar, a 10 cent dollar. Then we could imagine how prosperous we would really be.

We heard about the KPMG study where the government is saying low wages are a great reason to come to Canada. The government should be bloody well ashamed of that argument. It is embarrassing to the government and to members across the way that they would trot that out as a reason for people to come to Canada. I hope they apologize.

[Peter Adams, Liberal, Peterborough, ON]

Madam Speaker, I rise on a point of order. As far as I am concerned bloody well is not appropriate language for the House of Commons.

I think you should rule, Madam Speaker, that the member is out of order and should ask him to apologize. We are on television. School is out completely in Ontario and in many other parts of the country. Children are watching this broadcast and I do not think bloody well is appropriate.

[The Acting Speaker (Ms. Thibeault)]

I would ask the hon. member to be very prudent in his choice of words.