Madam Speaker, my hon. colleague from Saskatchewan happens to be, by the way, the MP for my parents and from the area where I grew up. We actually have no differences. Because of the limitation of time I only had 20 minutes and I could not really get into the details of that. I was saying that. The one quote I read actually specified that provincial governments could even use it to reduce their provincial tax levels if they wanted to, total unfettered use by the provinces. Yes, I am totally in agreement with that.
It is interesting also that a number of witnesses appeared before the committee on Bill C-65. One of them was Dr. Boothe from the department of economics at the University of Alberta who held that view very strongly.
I do not know whether I am permitted to do any free advertising here, but there is a book available. I know I cannot display it because that would be considered a prop, even worse than the flag, possibly. There is a book written by one Dr. Dan Usher. He is a member of the economics department at Queen's University.
He gave us a very good presentation in our committee. Dr. Usher's book is entitled The Uneasy Case For Equalization Payments . He addresses both the question of the principle of equalization and the question of the formula. Many speakers said that we should base it on per capita income, average per capita income across the country, and that for those provinces which are sufficiently low on a per capita income provide some sort of rebate to the provinces to equalize it. In other words, it would top them up a bit so that they are not substantially disadvantaged because they live in a very poor province.
Those issues require a long term debate. That is why I would like to see the government do something. In the report I mentioned, the government said that we should discuss it, have a longer term, come up with a white paper and have some technical input. We just barely got started in committee and it was done because it was rammed through so fast.
I could see after we started that the debate should probably last a couple of years. We could hear from different academics, those people who think about these things, and think the thing through. Let us analyse it. Let us look at the different options. Let us choose the best one.
I anticipate that the next round of negotiations will come about in another five years. It has to be done every five years. Perhaps by then we would be ready to bring in a new equalization formula which is open, which is transparent and which provides for accountability.
At the beginning of my speech I said the taxpayers in my province, because they are not eligible for equalization grants, have a very large interest in making sure that their money is properly spent and well accounted for. It cannot be done with this legislation because the formula is convoluted.
In the finance committee I asked a witness how many people in Canada knew how the formula worked. He looked to his left and his right, because he had two or three officials with him, and said “We are all at the table here but I am not sure they all know exactly how it works”.
That is not right. We cannot have accountability to taxpayers when we have that kind of formula. They try to figure out, for example, with the new legislation what is the fiscal capacity of a province on lottery revenues and on gambling revenues. It has many variables. It has to do with how much money is available. It has to do with the psychology of the fact that very often people who have less money available are more likely to spend money on lottery tickets for that little glimmer of hope. It has to do with some people who have a deep philosophical conviction with respect to gambling and will not participate in it, so we get into the psychology of it.
Does this group that determines the equalization payment really think it can get into the heads of the people in Manitoba and determine why it is they are not buying enough lottery tickets? If they did they would have this much income and therefore would be cut out.
Does my hon. colleague know that the province of Manitoba will lose in equalization entitlements under the act about $50 million? There are other areas where equalization entitlements go up a bit, so the grand difference to Manitoba would be about $37 million. However it will lose $50 million. It would be getting $87 million if it were not for the fact that it is penalized because the people of Manitoba are generally too smart to buy lottery tickets. That is unconscionable.
That is the type of thing we have to get our heads around and solve in the great problem of equalization. I recommend this book by Dr. Usher to every member of the House and certainly to every Canadian who is interested in this subject.