Debates of March 2nd, 1999

The Budget

[Ronald J. Duhamel, Liberal, Saint Boniface, MB]

Mr. Speaker, I have three points to make. I would have hoped my colleague from the Conservative Party would have been a bit clearer and more precise than my colleague from the Reform Party.

Over nine years the Tories let the debt climb to almost $600 billion; they almost tripled it in nine years. When we came into power in 1993 the debt was $190 billion. It took us about four years to get it down to zero. He wants to forget that, but I will not let him forget and neither will my colleagues.

With regard to the TPC he should know that we are following the interim report very closely. We want to make sure that we respond in an appropriate kind of manner. I assure my colleague that we will do so.

With regard to the overall investments in science, research and technology, this is good news for all Canadians: young Canadians and people who want to stay in Canada. This is good news for Manitoba. This is good news for every province and each of the three territories.

I hope my colleague will stand and applaud the government's decisions in that area as well as decisions in other areas such as gradual tax reductions which will accumulate and will translate into significant savings. We are not pie in the sky. We will not promise something we cannot sustain and then have to remove. We will do it step by step and we will get there just like we did with the elimination of the deficit.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, while the Tory members and the Liberal members are arguing with each other about whose to blame, I can categorically say that they are both to blame for the sorry state of affairs in Canada today. I will be sharing my time in debating the budget with the member for Winnipeg North Centre.

Since the Liberal government came to power 500,000 more Canadian children have slipped below the poverty line. Those figures are shocking.

In the budget we are debating today the finance minister announced $300 million for the national child tax benefit. I know there are some members from the government who will argue that this was a noble gesture, but we have to say it is one that does absolutely nothing to address the fundamental flaws in the benefit systems, namely that it is not indexed to inflation and it does nothing to assist the poorest of the poor, kids and parents who are on welfare.

This last policy is in keeping with a continual bashing of poor people by this government and the government before it. It is really abysmal that the last time a federal budget increased support for families on social assistance was in 1985.

Deindexing of the child tax benefit means that the value of the child benefit declines in real terms by 3% each year. It really allows the government to get away with saying that it is actually increasing dollars to kids in working poor families while knowing full well that those dollars will be recouped. It is part of a culture of deception, a culture that has been cultivated by the finance minister and by this government. This budget fails Canadian children again.

This budget also fails the homeless. The federal budget is a national disgrace on housing and homelessness. Not a single penny has been allocated for new spending and this means no new social housing units this year and no money for homelessness initiatives.

A serious federal response to this disaster requires money to be put on the table. This budget was the ideal time for the federal government to show us it is ready to take on this issue.

In January and February of this year I visited large urban centres and smaller communities across Canada to see for myself the consequences of deliberate public policies that leave Canada with the dubious distinction of being the only industrialized country in the world without a national housing strategy. What I saw, what I heard and what I experienced shocked me and should shock the finance minister, as the issue of growing poverty and homelessness becomes even more visible and more tragic as more people die.

In every community I visited I was struck by three basic issues, the lack of adequate incomes and high rents that drive people into poverty, the impact of the lack of new social housing construction, and the desperate need to improve and maintain the standard of low income market housing starts.

This budget was an opportunity for the finance minister to recall his own words in 1990. I will recall those words for him. Then in official opposition as chair of the Liberal Party's task force on housing, the now finance minister condemned the Tory government for doing nothing while the housing crisis continued to grow out of control: “The government sits there and does nothing. It refuses to apply the urgent measures that are required to rebirth this deteriorating situation. The lack of affordable housing contributes to and accelerates the cycle of poverty which is reprehensible in a society as rich as ours”.

Three years later the finance minister steamrolled his own report and in its place introduced a budget that slashed all federal funding for the creation of new social housing. That single act alone meant that 75,000 new social housing units that had been targeted for construction were never built. This was a decision that has now denied tens of thousands of families the right to decent and affordable housing.

This budget comes at a time when Canada is facing one of its largest national disasters in its history. The big city mayors, the city councils of Toronto, Vancouver, Ottawa-Carleton, Nepean, over 400 organizations and 1,200 individuals have recognized the homelessness crisis in Canada as a national disaster. However, in no way does this budget even begin to address this disaster, thereby condemning hundreds of thousands of people to struggle in misery, even risking death, without federal relief.

This budget also comes at a time when the Prime Minister has been invited numerous times by the mayor of Toronto, the Toronto Star , the Toronto disaster relief committee, and the leader of the NDP to tour the disaster in the city of Toronto and to see with his own eyes the destruction it has wrought on Canadians.

Even though it is the Prime Minister's responsibility to review the disaster that is the direct result of his government's policies, he has not apparently had the time nor the commitment to do this.

Maybe if the Prime Minister or the finance minister saw the crisis firsthand like I have done, they would be moved to action. Anything less, and this budget is much less, is a devastating shame.

The budget also fails Canadians on health care. Let us put the so-called health budget in perspective. Liberal cuts to the Canadian health and social transfer since 1995 now amount to $21.5 billion. More than half of that was in health care funding.

This year the budget puts back only $2 billion, not exactly the cause for celebration that we have been led to believe. Members of the government keep repeating $11.5 billion. That is what they want us to remember about this budget.

What they want us to forget is that $11.5 billion is spread out over five years and only puts back half of what has been taken out. It gets worse. We will not get the ongoing benefit of the $11.5 billion because it is not cumulative.

By the end of the next five years, only $2.5 billion will have been permanently added to the transfer. It is like a wage bonus instead of a wage increase. It is a one time fix that really leaves us no further ahead.

In fact, the federal share of health spending is not going to change significantly either. This is a real measure of what has happened in terms of public policy around health care.

When medicare began, the federal-provincial ratio was 50% federal dollars and 50% provincial dollars. When the Liberals came to power, the federal share dropped to 18%. Now it is down to 11%.

In five years after this so-called reinvestment in health care, we will only be back up to 12.5%. We have to ask how much clout will 12.5% buy with provinces that are sliding toward two tier health care.

Overall this budget, despite being characterized as a good news budget, actually widens the gap between the rich and the poor. Information from the National Anti-Poverty Organization has made it clear that if we look at two single people, one earning $15,000 and one earning $100,000 and apply the so-called tax relief measures in this budget, in actual fact the gap between their incomes will actually increase by $658. It is very clear that this budget is actually increasing inequality.

On education as well this budget gets a failing grade. I was at a community college in Vancouver, Langara Community College, just the other day talking to students. They asked me whether there was anything in this budget that would help students with the incredible student debtload they have.

I searched high and low. I went through every page. There is not a single item in this budget that will assist students in Canada who are now reeling and suffering from high tuition fees and student debt.

Even the Canadian Council on Social Development gives this budget an F, a failing grade, when it comes to post-secondary education.

This budget has also failed unemployed workers who are still suffering from the massive cutbacks to the unemployment insurance program while the $20 billion surplus sits there.

We want to say to the government that this budget has failed Canadians who are most in need. I heard a Liberal member earlier talk about the sacrifices that have been made.

There are people in my riding of Vancouver East who are still hurting, who are still unemployed, who are still on the street, who are still suffering from high student debt. There is nothing in this budget that will help those people.

[Gordon Earle, NDP, Halifax West, NS]

Mr. Speaker, I want to first of all congratulate and commend my hon. colleague for her very relevant remarks on this budget.

She mentioned the gap widening between the rich and the poor. She talked about how this budget affects those who are most in need.

A small community in my riding of Halifax West, a black community called Upper Hammonds Plains, is adjacent to a large water supply which is the water supply for Halifax and Dartmouth. The water supply runs right past this community. In fact, land was taken from this community to make this water supply available.

These people do not get water. Seniors, young people, people within the community cannot get water unless they pay an astronomical price to hook up. Yet this budget could have resolved that kind of problem by putting money into an infrastructure program that would enable a project to go ahead to give water to this community.

This is another example of how this budget has not really dealt with the very real problems of people within communities that are necessary to be dealt with in order for people to progress.

Would the hon. member agree that programs of this nature should have been included in the budget programs aiming at the homeless, seniors, young people and so forth?

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, it is true that one can go to any community in Canada and see very critical situations where local communities have devised the solutions that are necessary but which lack, in many cases, the federal resources such as an infrastructure program. The Federation of Canadian Municipalities has been calling for a nationally shared infrastructure program to do exactly the kinds of things the member describes.

I also visited communities in the far north of Manitoba with my colleague from Churchill. These communities basically had people living in homes with no sewage or water hook-up. It is unbelievable to think that this still exists in Canada today.

I would agree with the hon. member that these kinds of basic necessities are things that should have been addressed not only in this budget, but because of the massive cutbacks that we have seen since 1993 we now have a crisis situation in many of these smaller communities and certainly in the larger cities as well. We still see people who are trying to get by even without the very daily essentials of shelter, water, adequate housing, adequate income, food and so on.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, I congratulate my colleague from Vancouver, who toured the country and who has seen first hand how this government has hurt the homeless.

The EI changes mean that 800,000 Canadians no longer qualify for benefits. How many children go to school hungry? British Columbia has lost $1.8 billion in EI benefits over the last four years.

What impression did my colleague form in touring the country? I would like to know if the comments I heard about employment insurance were similar to those she heard, both from those who no longer qualified for EI benefits and from the homeless.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, in our travels across Canada and looking at emergency shelters, talking to activists and people living in shelters or on the street, I talked to them about homelessness and housing. My colleague talked to unemployed workers who were suffering because of the EI cutbacks. We heard much the same thing. I talked to unemployed construction workers who were living in emergency shelters because their last unemployment insurance cheque had run out. They were now waiting to go on welfare because they had no housing.

Surprisingly, I also talked to employed construction workers who were living in emergency shelters in Toronto. They found the rents were too high for their low wages. Because they were involved in short term work, they knew they would not qualify for EI and would then face with a situation where they could not afford adequate housing because of the unaffordable rents.

The cutbacks to the EI program are directly contributing to the increase in poverty and homelessness in Canada. If anyone does not believe that they should visit a shelter and talk to people to find out what the reality is.

[Judy Wasylycia-Leis, NDP, Winnipeg North Centre, MB]

Mr. Speaker, I am pleased to have this opportunity to speak on the 1999 federal government budget which I and my colleagues believe is increasingly being recognized more for its usefulness as a public relations tool than for its substantive impact on the lives of Canadians.

I want to begin by following up on the comments made by a colleague of mine, the Liberal member for Saint Boniface, who tried to suggest that it was perfectly legitimate for this government to spend $3.6 million advertising this budget on the grounds that it was providing some sort of public service to Canadians. I would urge all members across the way to look at the ads, listen to the radio ads and tell me where there is any element of public service. It is absolutely clear that the expenditure of $3.6 million does nothing more than provide a public relations exercise for this government to deal with its political crisis. It is sheer propaganda. There is no public service in those ads.

I ask the question: Is it not obvious that these ads are necessary because the government failed to convince Canadians that this truly was a health care budget? Is it the case that Canadians, and particularly Manitobans, are seeing through this government's propaganda and in fact recognizing that the Liberals are putting back a little bit of what they took out of our health care system and acknowledging that we are in this crisis today in large measure because of Liberal government policy to begin with?

My question today and every day will be: Will the government put all of the money that is available for health care into patient care and not into propaganda?

There are two criteria by which one must address any federal budget. The first is to ask the question: Does the budget serve as a road map for achieving the stated objectives and goals of the government? The dilemma for the government is: How does it map out a strategy if it has not been able to recognize the critical nature of the health care system or to recognize its own responsibility and culpability in the chaos that we are now finding in our health care system right across this country?

I do not need to remind my colleagues in the House that it was just a couple of months ago that members on the Liberal benches stood in the House and suggested that there was not a crisis in our health care system. They ridiculed members in my caucus and, by implication, all Canadians who were raising concerns about the crisis that we were finding in health care systems from one end of this country to the other.

There is no question that all across Canada—and Canadians know this—years of federal neglect and cutbacks have taken their toll. But the fact that the Liberal government felt compelled to come up with a so-called health budget resulted from the cries and pleas of hundreds of thousands of Canadians who faxed, who wrote, who spoke out, who yelled from the rooftops about the impact of federal Liberal decisions on our health care system. It was only with constant public and political pressure, and a relentless stream of individual horror stories, that the government finally was forced to at least acknowledge some of the problems at play in Canada's health care system and to put some money back into health care.

The other criteria by which one must analyse any federal budget is to ask whether the budget seeks to improve the lives of Canadians. How does it shape the economic and social realities of its citizens? The main purpose of a budget is to show Canadians what are its values, what are its priorities and it makes political choices based on those priorities and values.

When a government then chooses a tax break of $8,000 for a millionaire and does nothing for a single parent on social assistance, it shows that its values are fundamentally one sided. When it engages in incredible hoopla about a health care budget but fails to address the long term survival of Canada's health care system, it shows that the priorities of the government are shortsighted and politically motivated.

Canadians have now had a chance to look closely at this so-called health budget. In their reflection I think they bring to mind that old saying “If you are starving you do not refuse a meal”. The fact that there is money for health care is certainly an improvement after years of cuts. I will acknowledge that and my colleagues have acknowledged that. Health researchers have indicated that they are pleased there is some additional money for them. Nurses, although still worried about how they will survive in their jobs, have acknowledged that at least the government is prepared to spend a little money to look into the problems of the profession.

However, after all is said and done, it is clear to Canadians with every day that passes that there is very little in this budget to ensure the preservation and strengthening of medicare in this country. There is absolutely no attempt to look at and address the root causes of ill health and there was not even a signal that this government is prepared to keep up to its promises around a national home care plan and a national drug plan, both of which are desperately needed in this country today.

What is so striking about this budget, when we strip away all the hype, is just how little it offers. This is truly a lesson in underachievement. It may solve the Liberals' political crisis, but it does not come close to solving the Canadian health care crisis.

If there ever was an opportunity to take dramatic steps to set things right after the damage this government has done, this was it. The deficit was gone and enough surplus money was there to make a difference. But instead, by holding back, Canadians will have to wait five years just to return to where they were on health care in 1995.

Let us for a second put the health budget in perspective. Liberal cuts to the Canada health and social transfer since 1995 now amount to $21.5 billion and more than half of that is in health funding. This year the budget puts back only $2 billion, not quite the cause for celebration we have been led to believe.

Members of the government keep repeating $11.5 billion. That is what they want us to remember about the budget. What they want us to forget is that the $11.5 billion is spread over five years.

It gets worse. We will not get the ongoing benefit of the $11.5 billion because it is not cumulative. By the end of the next five years only $2.5 billion will have been permanently added to the transfer. It is like a wage bonus, instead of a wage increase. It is a one time fix that leaves us no further ahead. Where does that put us in terms of the federal share of health care spending in this country? Where does that put us from the days when it used to be 50:50 federal-provincial cost sharing? Where does it put us in terms of when this government took over in 1993, holding an 18% share of health care spending in this country? At the end of five years this budget, by all accounts, will get us up to 12.5% of all health care spending.

I remind all members opposite of the advice of their former adviser, Tom Kent, who said that it is absolutely imperative as a starting point for the federal share to get as quickly as possible up to 25%. Only then will we have the ability to ensure that medicare is preserved, strengthened and enhanced.

The government has made a small step toward accepting the blame for the health care crisis that it has contributed to. There is some repentance in this budget.

Our challenge to all members of the Liberal government is to develop policies, think creatively and pursue noble goals around actually preserving our medicare model. It will not happen at this rate. The private control of health care is increasing at a rapid rate. Members across the way, especially those from Ontario, will know what has happened to the home care system in that province and how big, private owned American companies like Olsten are taking over the health care system.

I urge members opposite to join with us in preserving medicare and ensuring that the principles of medicare are applied to the whole continuum of care.

[Gordon Earle, NDP, Halifax West, NS]

Mr. Speaker, I commend my hon. colleague for her very important remarks concerning the budget.

One important point that she raised with respect to the budget was, as a measurement, one should ask the question: Does it seek to improve the lives of Canadians? I think that is a very important point. We know that over the past number of years the government has been taking a very close look at equal pay for work of equal value. There have been a lot of studies and negotiations and a decision was rendered in terms of certain occupational categories to show that the people in those categories were not being paid properly and yet the government insists on not correcting that situation.

I did not see anything in the budget which would work toward improving the lives of those Canadians who have been underpaid, a lot of them female in a lot of the categories. I did not see anything in the budget that would help to improve the lives of those Canadians.

Would the hon. member care to comment on my observations in that regard?

[Judy Wasylycia-Leis, NDP, Winnipeg North Centre, MB]

Mr. Speaker, I appreciate the question from my colleague. It is a very important issue.

One has to ask the question: How can this be called a health care budget when there is nothing in it to deal with the economic and social disparities in our society which contribute to ill health, disease and poor quality of life? How can it be fathomed, this being a federal health budget, when we have third world conditions on reserves and when a reserve such as God's Lake Narrows in my province of Manitoba has just reported 12 cases of TB? That certainly is an important issue that the government has failed to address. There must be a focus on disease prevention and health promotion.

The other issue my colleague raised concerned economic disparities. As the gap grows between the rich and the poor and those at the low end of the wage scale do not see any benefit and are not able to improve their quality of life or even their ability to survive on a day to day basis, how does that affect their health? We know from study after study that money may not buy happiness, but it certainly does buy health. We know that when one's income improves, one's health also improves.

Our concern with the budget is not only its failure to acknowledge that, but that it actually worsens the situation by not dealing with unemployment, by not dealing with wage inequities, by not dealing with homelessness, by not dealing with poverty and by not dealing with deplorable living conditions on and off reserves in the country. This government is actually contributing to ill health and the spread of disease in the country and it is not doing one thing to build a healthier society over the long term.

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

Mr. Speaker, I will be sharing my time with the hon. member for Cambridge.

I take this opportunity to compare the content of the 1999 budget with the results of my pre-budget consultations. In doing so I challenge the opposition's thesis that this is a budget which ignores the priorities of Canadians and does not address the concerns and issues facing Canadians today.

During August, September and October I held numerous meetings with various groups of constituents, including local business representatives, community activists, a local Rotary chapter, members of the Women Entrepreneurs of Canada and an arts focus group.

In addition, I solicited input for the budget from constituents through my summer householder and I received numerous calls and letters with additional suggestions.

At all of my consultations I distributed two budget charts. One chart clearly demonstrated that for the 1998-99 financial year the interest payment was estimated at $44 billion. Moreover, the chart also clearly indicated that an operating surplus of $47 billion existed prior to the interest payment.

Budget chart number two analyzed interest rate sensitivity and showed how significantly the interest expense increased with minor increases in interest rates. An increase from 7.2% to 7.5% triggered an additional charge of $1.7 billion.

I am pleased to report that my consultations produced the following results.

First, paying down the debt was the recommendation most often made. Virtually everyone thought that some form of action was necessary. Many constituents felt that paying down the debt was the best way of reducing future interest expenses. Constituents also noted that our current debt level leaves us vulnerable to a recession and rising interest rates.

Second and on the other hand, very few argue that debt reduction should be the government's singular priority. Most felt that we should be able to reduce debt and address one or more other needs. A close second to paying down the debt was restoring funding to health care with increased emphasis on preventive and home care approaches. The great majority called for the federal government to restore the health care component of the provincial transfers. Constituents specifically noted the reduction in the number of hospital beds, the waiting time for emergency treatment and that the waiting lists for surgery had become intolerable especially in the province of Ontario. Constituents also felt that the health care system needed more innovation and flexibility.

A week or so before the budget I met with a constituent of mine, Mr. Sam Dionofio, a member of the executive committee of the volunteer board of the Heart and Stroke Foundation. He encouraged me to support funding for the Canadian institutes of health research which in turn would greatly enhance cardiovascular and cerebrovascular health research. He advised me that the Canadian institutes of health research represents an opportunity to greatly expand Canada's health research efforts and Canadian productivity. It would ensure that our health research capacity is strengthened relative to the changing global environment and he urged me to note that health research represents an investment in our future and economic well-being. While debt repayment was also cited as a priority the previous year, this year health care priority and health care spending showed a marked increase as a concern by my constituents.

Third and interestingly enough, there was no widespread call for major tax cuts but a reduction of almost every tax was more or less mentioned once or twice. However, most constituents felt that if the government were to cut taxes, the greatest consensus was for general tax relief for low income people. Other tax changes included cutting employment insurance premiums. I was delighted to see that the top priorities of my constituents were also the top priorities of the government and that they were addressed in the 1999 budget.

The 1999 budget takes action on three fronts. First, it maintains sound economic and financial management. Second, it invests in key economic and social priorities. Third, it provides tax relief and improves tax fairness.

The budget acknowledges that strong economic growth and a reduced debt burden better enable the government to fight tax relief and thereby make key investments. This is why the 1999 budget confirms that the era of deficit financing is over and that the government will continue to deliver balanced budgets or better again this year, in 1999-2000 and 2000-2001. This will be only the third time since Confederation that the federal government has been deficit free for at least four consecutive years.

The budget goes even further. It acknowledges that another key issue for any nation is its national debt. Last year Canada's debt to GDP ratio saw its largest single yearly decline since 1956-57, from 70.3% to 66.9%. In the current fiscal year of 1998-99 it should still fall to about 65.3%. By 2000-01 the debt ratio should be down to just under 62%. This progress on debt reduction brings with it real bottom line benefits to Canadians.

In 1995-96 when the debt to GDP ratio was at its peak, 36 cents out of every federal revenue dollar went to paying interest on the debt. Last year with the debt ratio dropping, the portion of each revenue dollar servicing the debt fell to 27 cents. What does this mean to Canadians? It means that we are freeing up moneys to strengthen health care, access to knowledge, to provide needed tax relief, to fight child poverty and to invest in a more productive economy.

The government is committed to keeping the debt to GDP ratio on a downward path. A key element of this strategy is a debt repayment plan.

The government will continue to present a fiscal plan which will include a contingency reserve as a buffer against unexpected financial pressures. The current plan contains a contingency reserve of $3 billion each year. When that contingency reserve is not needed, such as last year, it will go directly to paying down the public debt.

Second, I wish to address the budget's investment in key economic and social priorities by investing in health care, research and innovation and other key areas to improve Canadians' ability to work and to improve their quality of life. Action to sustain and strengthen health care is a key priority of this government and a central initiative of the 1999 budget.

The budget announced that the provinces and territories will receive from the federal government an additional $11.5 billion over the next five years specifically for health care. This funding marks the largest investment this government has ever made. This investment is helping our provinces deal with Canadians' concerns about health care, waiting lists, crowded emergency rooms and diagnostic services.

However, the commitment to strengthening health care does not stop there. Among other things, the budget announced that the federal government will further invest in research and health problem prevention. Specifically, funding for health research and innovation was increased by $500 million. Of these moneys the budget set aside $240 million to support the Canadian institutes of health research, the innovative proposal developed to integrate health research relayed to me by my constituent, Mr. Dionofvio. The proposal was wholeheartedly supported by the Heart and Stroke Foundation.

Last but not least, the budget also invests $287 million to improve efforts to prevent health problems from occurring. One of these initiatives includes $75 million to the Canadian prenatal nutrition program to help high risk pregnant women to have healthy babies. In the past the Women's Health Centre and the Parkdale parents primary prevention program at St. Joseph's Hospital in my riding have been beneficiaries of this program which, in turn, has benefited new born babies ensuring that they have a healthier start in life.

I conclude by quoting a statement made by the Minister of Finance when he visited my riding in November: “We understand where our priorities lie. We will balance the books and we will pay down the debt, but we will do so much more. This great nation is more than a balance sheet”.

I believe that the 1999 budget not only attains the goals noted in the Minister of Finance's statement but it also embodies the spirit of that statement. We are building today for a better tomorrow.

[Myron Thompson, Reform, Wild Rose, AB]

Mr. Speaker, I have a couple of quick questions for the hon. member.

Yesterday Stats Canada came out with a report that said personal incomes grew last year at one of the fastest paces of this decade. We applaud that. But it still was not enough to keep up with the even faster rate at which governments are pulling money out of Canadian pockets.

I would like her to respond to what Stats Canada has said. Also, in 1993 when we came to this parliament it was announced that we had to do something. There were 1 million children living in poverty. Now we have 1.5 million. These miracle workers over there have not solved that problem. Will this be the budget of budgets that will take care of those difficulties? I would like her response.

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

Mr. Speaker, I thank the hon. member for quoting me some statistics. I would like to quote him some statistics as well.

It seems that in 1998 453,000 jobs were created. Another 87,000 jobs were created in January. Unemployment is down to 7.8%. I submit that the plan put in place by this government in the last budget and since 1993 has been working. The statistics prove it.

With respect to child poverty, this government is to be commended for what it has done. In the 1997 budget $8.5 million was put into the Canada child tax benefit. In last year's budget there was another $8.5 million for a total of $17 million. In the 1999 budget there is another $300 million for low income families and children.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, I have great respect for the previous speaker from the Liberal Party and I have a very simple question.

Does the member know how much was in the EI surplus or how much is in it and can she tell the House, in her opinion, where it is?

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

Mr. Speaker, I thank the hon. member for his question. I have the same great respect for him as he has for me.

I point out to my hon. colleague across the way that there is no surplus. I suggest the member look at the budget sheets we have. Income goes in under the consolidated revenue fund and expenses are made. There is no surplus fund. There is no reserve fund. I believe the media feed these things that are not true. It does not exist and has not existed since 1986. One of the concerns noted by my constituents is to bring EI rates down and they have actually come down.

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Mr. Speaker, the hon. member mentioned in her dissertation the effect that interest rates have on the deficit and the paying off of the debt and the deficit. Is the member aware that the Canadian Bond Rating Service has criticized the last budget as being heavy on spending and light on tax and debt relief? In fact, that could reflect an increase in interest rates and this government obviously would then have to pay more money in order to service the debt.

I would like to have the member indicate what the long term plan of the government is to retiring that debt. We see a contingency fund of $3 billion that will be used to retire the debt only if it is not used for something else. Perhaps the member would like to answer those two questions regarding interest rates and the contingency plan.

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

Mr. Speaker, not being an economic expert I cannot really comment on the bond ratings. One of the things this government is trying to do through our debt payment plan, which I noted during my discourse, is reduce the debt to keep interest rates down. That is the way to keep them down.

One of the fears mentioned by my constituents was that by not paying down that debt, by not paying attention to that debt, we will have a problem and we will be subject to interest rates going up. The interest rate sensitivity is important and it is also equally important that we continue to pay down that debt.

Again, I think this plan of action the government has speaks for itself: 7.8% unemployment and more jobs created in this country than in any other G-7 country. I submit the Minister of Finance is on the right track.

[Janko Peric, Liberal, Cambridge, ON]

Mr. Speaker, I am pleased to address the budget tabled on February 16 by the hon. Minister of Finance.

I begin by congratulating the hon. minister on his sixth budget. This is a budget that once again confirms that the era of deficit financing is over. This is the second year in a row for a balanced budget. The minister should be particularly proud of his accomplishment given that this has not been done since 1951-52. The Minister of Finance also deserves credit for listening to Canadians and for his strong leadership on this issue.

This budget incorporates many suggestions made by constituents from my riding of Cambridge who are members of my community advisory council. In particular, the minister has listened to their suggestions about how to address the health care crisis, the need for greater accountability in health care and the need for tax relief.

When the Liberal government took office in 1993, we inherited a $42 billion deficit and in just four years we had moved to a $3.5 billion surplus. Today with another surplus we are starting to see the results of the deficit battle and we are working to improve the quality of life for all Canadians in three key areas, health care, knowledge and innovation, and tax relief.

The first and the largest investment, I should say reinvestment, is in our health care system. Medicare is one of our most cherished social programs. It guarantees to all Canadians regardless of their financial means equal access to high quality care services based on need, not ability to pay.

As members of my community advisory council have told me, the number one priority of our health care system should be to heal people. In order to do that it is vital that we identify priorities and spend resources responsibly. That is why this budget announced that the provinces and territories will receive $11.5 billion. There will be a $3.5 billion immediate one time supplement with a remaining $8 billion to be provided over the next four years. This is an investment to help provinces, and communities like Cambridge, deal with immediate health care concerns, waiting lists, crowded emergency rooms and diagnostic services.

The commitment to strengthen health care does not end there. The 1999 budget also announced that the government would further invest about $1.4 billion in health information systems, research, first nations and Inuit health services, and health problem prevention.

Of course good health and effective health care are much more than an issue of hospitals and clinics. Canadians want and deserve to know how their health care dollars are being spent and with what results. They want more accountability. This budget will help to deliver that by investing nearly $330 million in health information initiatives such as building a national health surveillance network to electronically link laboratories and public health offices across the country; by establishing a Canada health network, accessible by computer and telephone; and by providing better reports on the health of Canadians and the functioning of the health system.

Further, this budget invests $287 million to improve efforts to prevent health problems from occurring. These initiatives include: the Canada prenatal nutrition program; modernizing and strengthening the federal food safety program; improving the management and control of toxic substances in the environment, in food and in drinking water; continuing to explore innovative approaches in the area of rural and community health; and combating diabetes.

This budget also makes a significant $550 million cash infusion into funding for health research and innovation.

I have already outlined the government's significant investment in health and medical research. The budget also takes additional steps to promote knowledge and innovation with a $1.8 billion investment over this fiscal year and the next three years. Included in this $1.8 billion will be an additional $200 million for the Canada Foundation for Innovation to support world class research infrastructure in the areas of health, the environment, science and engineering; $60 million to establish one smart community demonstration project in each province; $60 million for the GeoConnections initiative; and an additional $90 million for the networks of centres of excellence.

The final two elements of this budget's investment in knowledge and innovation are especially relevant to many businesses in my riding of Cambridge. This government understands the benefits of investing in knowledge and innovation.

The third most important element of the 1999 budget is tax relief. Our government is committed to substantially reducing taxes as and when we can and in the fairest way possible. This budget proves that. However, we must not forget that for tax relief to be permanent, it must be affordable and not jeopardize the soundness of Canada's finances. As resources become available, the government will provide as much tax relief as possible. This will occur year after year with each budget building on the progress made this year and the years before. This is the responsible way.

Canada is doing well. We are deficit free. Our unemployment rate while still too high at 7.8% is the lowest it has been since 1990. We are outpacing the rate of job creation in any other G-7 country: 368,000 jobs in 1997 and 453,000 in 1998 and there are additional measures in this budget that will continue this trend.

We are staying the course. We are investing in key national priorities such as health care, job creation and tax relief. We are continuing to pay down our national debt. We are providing a balanced approach to government and fiscal management and Canadians are starting to see the results.

[Gordon Earle, NDP, Halifax West, NS]

Mr. Speaker, the hon. member in his comments made reference to the many suggestions received by his constituents prior to the budget. The hon. member who spoke before him made the same comment. I certainly want to commend them on that very important aspect of a parliamentarian's work, that is, consulting with constituents and getting that kind of input.

I notice that certain statistics were cited about jobs that were created. We all know that statistics can be interpreted and phrased in a way to say what we want them to say. I tend to look at what is really happening in the area.

When I look at my riding of Halifax West and in other parts of my province, I see industries closing down. The Volvo plant was shut down in Halifax which put many people out of work. In Cape Breton there is the Devco situation and the phasing out of the mine which is putting people out of work.

We end up with a vicious circle. People are out of work. I do not see in the budget any real commitment to have a plan to offset those kinds of disadvantages. We get a circle where people become unemployed and it is difficult for them to get EI because the criteria are much more strict than it used to be. It is difficult to get training. This perhaps leads to health problems, depression, family breakdown. We are right back to needing additional health care and additional services to carry on to meet the needs of the people who suffer from being unemployed. Any money that was put in to this great health budget is very quickly eaten up, to the point where we are worse off than we were before if we do not tackle the industry problems and those kinds of issues.

I ask the hon. member, what is being done? What concrete measures have been taken to offset the kinds of problems I cited that lead to unemployment and a downturn in the economy in my area?

[Janko Peric, Liberal, Cambridge, ON]

Mr. Speaker, I want to thank the hon. member for that question.

I remember that way back my community of Cambridge was considered to be the shoe industry capital of Canada. The shoe industry died out and the high technology industry moved in. Only five years ago the unemployment rate was 11.2% and today it is 7.8%, but it is still too high. Fortunately for my community the high technology industry is growing and prospering. I understand the situation is not the same in other parts of the country.

With this fiscal approach to economic growth, I believe that the private sector will continue to create jobs. Hopefully jobs will be created in the hon. member's community as well.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, would the hon. member not admit that what the federal government has done over the past five or six years is to download its responsibilities for Canadians in various social services to the provinces, and because of the belt tightening by the federal government the provinces have now had to download their responsibilities to the municipalities?

I do not believe there is a municipality in Canada that has not suffered from a lack of provincial funding in terms of municipal services. The provinces turn around and say that it is because of a lack of federal funding for the various concerns, whether it be infrastructure, education or health. Would the member not agree that that was basically the premise of the federal government?

Would he not agree that the $7 billion for this year alone taken from unemployed workers and employers who also pay that premium, money that does not belong to the federal government, is really the basis for the surplus of this budget?

[Janko Peric, Liberal, Cambridge, ON]

Mr. Speaker, before I was elected, I worked in a factory in the automotive industry. I contributed to the unemployment fund. I was lucky that in 25 years I did not draw from that fund for a very long time.

Maybe the member remembers the fiscal situation of this nation in 1993 and can compare it to the situation today. He should recognize there is a confidence among Canadians in this government.

I do not want to point fingers at any government of the past 30 years. We as a society enjoyed life and handouts, but the time has come when we cannot afford to hand out and spend, spend and spend. Today we have to be fiscally responsible and accountable, not just to ourselves but to our children and their children.

[Jean Dubé, Progressive Conservative, Madawaska—Restigouche, NB]

Mr. Speaker, before beginning, I would like to inform you that I will be sharing my time with the hon. member for St. John's West.

I rise today to voice my disappointment, and that of the people of Madawaska—Restigouche, in the most recent federal budget. The government's intention was to pull the wool over Canadians' eyes, but most of them have seen through it to what the government really had in mind.

The chronic unemployment problem in a number of this country's regions remains unchanged. The excessive tax burden remains unchanged. The battle against poverty remains unchanged. The issues around proper use of the employment insurance fund remain unchanged.

And if this is supposed to be a health budget, as the government expects us to believe, I would like to have it explained to me how restoring funding to its 1996 level can be a cause for celebration for the Liberals. Since 1993, the Liberals have cut only 9.4% in government program expenditures, while they have slashed 34.2% from transfer payments for health.

In other words, 57.5% of program cuts made by the Liberals have been made at the expense of the old and the sick. Hospitals are short-staffed and waiting lists for treatment continue to grow. The provinces cannot improve this situation unless there is a real reinjection of federal funds into the health system.

What did this government offer them, in its budget? The Liberals will reinject $11.5 billion into provincial transfers for health care and education over the next five years. Of this, $3.5 billion will be paid immediately in the Canada transfer for health and social programs as a one time additional payment, and the provinces can use it up within the next three years.

The votes accounted for in 1998-99 will be placed in trust until the CHST legislation is passed. It is a shell game. The other votes will be paid out in stages. The floor is raised to $15 billion and will stay there.

Despite all the Liberal fanfare, spending on health care will reach only 1996 levels. The financial commitment over five years contains no indexation mechanism taking inflation and demographic changes into account leading to an annual increase of some $3 billion for health care costs, totalling $80 billion annually.

An overall plan is needed to get the health care system working again. Unable to establish priorities and a long term plan, the Prime Minister and his Minister of Finance have managed to balance their budget on the backs of workers, the poor, the sick and the old.

They are now trying to care for the sick, left through their fault on a waiting list, by putting a band aid on them. Workers and Canadian businesses were hoping for more of a break in this federal budget. Unfortunately, all they got was the usual Liberal rhetoric. The government is going to take away $3 and give them back $1, for their own good.

It is as though the government thinks that it can fool Canadians and that Canadian workers and businesses do not understand that the money now being spent by the government is coming out of the EI fund.

In this regard, the Minister of Human Resources Development seems to be seeing the light. A few weeks ago, the Journal de Montréal reported what the minister thought about the EI fund. In a burst of frankness, he admitted that the $20 billion surplus in the fund was actually an illusion because it had already been spent. He expressed his doubts about how the fund had been used and recommended that there be a public debate on the issue.

Although they are only a beginning, I applaud the minister's reflections and hope he has the courage to defend them in cabinet, because the pillage cannot go on. The Liberals continue to think that they know better than Canadian taxpayers how to spend the money the latter have earned by the sweat of their brow. The government can increase the basic personal exemption by $500 and look for praise, but the reality is that it could have done much better.

Since the 1997 election campaign, my colleagues and I have maintained that the basic personal exemption could be increased to $10,000, instead of the meagre $7,131 proposed by the Minister of Finance and his government. This would have given all Canadians some long-awaited tax relief and would have meant that 2 million low income Canadians no longer had to pay income tax. These 2 million Canadians could have breathed a little easier and put more food on the table. If raised to $10,000, the basic personal exemption would have left a single person with $700 more, and a married person or single parent with $1,500 more. What a pity that this will not happen.

The federal government's hike in Canada pension plan contributions in 1997 will add $120 in taxes on the Canada pension plan in 1999. Net social security taxes have increased $60 in 1999. Because the improved basic personal exemption takes effect only on July 1, 1999, an individual with an income of $39,000 will have to pay $3 more in federal taxes in 1999. And the federal government calls this a tax decrease.

The government is refusing to lighten the tax burden that is crushing Canadian workers and making the Canadian economy less competitive. High taxes penalize initiative, are a hindrance to job creating investment and encourage highly skilled Canadians to move on to greener pastures.

Indeed Canadians have not been duped by this smoke and mirror budget. What has been handed down has fallen short on what was needed for low income Canadians, taxpayers and workers. Canadians can take heart, however, that some of their elected officials are listening to them and are willing to offer them the much needed relief they deserve.

Unfortunately they will have to wait another few years to tell the Liberals just what they think of their so-called good news budget. Meanwhile, we as Progressive Conservatives will continue to listen, to consult and to put forward positive solutions in terms of economic development, taxation relief and social programs.

[Gordon Earle, NDP, Halifax West, NS]

Mr. Speaker, the hon. member used a term that was quite relevant when he talked about the budget being a smoke and mirror budget.

I say that because I think about the very practical problems which could have been addressed in the budget, one being support for Halifax's bid for a piece of the pie with respect to becoming a superport. Here we are on the brink of making history. We stand at a point where we can benefit not only the Atlantic area but all of Canada by Halifax being properly supported to win the bid to handle the post-Panamax ships. Yet there is nothing in the budget that made any real commitment to that.

The closest I have seen was just the other day in an article in the paper saying that the federal minister promised support if metro won the bid. I do not feel that businessmen go on the if prospect. If there had been a firm commitment stating some amount that was reasonable and tangible—surely we have experts who can figure out exactly what it would cost for our port to be upgraded to handle these ships—we would stand a much better chance of gaining that bid. Other areas have done it. I think New York has put a price on what it would cost for it to fix up its harbour but we say we cannot do so.

Does the hon. member agree with me that the budget has been very deficient in nailing down concrete specific action which would encourage economic development not only in Atlantic Canada but right across the country?

[Jean Dubé, Progressive Conservative, Madawaska—Restigouche, NB]

Mr. Speaker, I thank my colleague for his question. He hit it right on the nose when he said the government had no plan.

Certainly with the recent closure of Devco in Nova Scotia one would have thought the Liberal government would have had a parallel plan like we did when the base was closed in Summerside and the GST centre was opened.

Unfortunately the long term plan of the government is not in place and there was no announcement for these workers. The superport would certainly have been great compensation for this closure.

We can look at the budget and what it says about the $11.5 billion for health care in the next five years. It is an important factor. The member has probably heard a lot about it in his own riding. People are on waiting lists, waiting for serious operations. Nurses and other workers are overworked. The $11.5 billion in five years will take us back to the point where we were in 1996.

We must take into account the aging population and inflation. Just to show how the government's long term plan works, $3 billion a year times five years is $15 billion. Since 1996 we have had a very large shortfall, but certainly the government has no long term plan. Unfortunately that is the case for Nova Scotia as well.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member referred to the cash transfers that we outlined in the budget. I think he misspoke himself with regard to the $3.5 billion which is presently available to all provinces. It has been paid into a trust to permit that very thing. They are not separate.

Is the member aware of the tax point consequences with regard to overall health transfers to the provinces? Is he familiar with those and that in fact the amounts he is talking about have not taken into account the increase in tax revenue the provinces are getting because they have taxing authority?