Debates of March 9th, 1999

Federal-Provincial Fiscal Arrangements Act

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

Madam Speaker, I thank the member for Frontenac—Mégantic for his question.

He is right in his comment about Toronto's homeless. But I made a distinction between those who are ill and those who are homeless.

I want to be very clear that I did not say all of those people who are homeless in motels. I said those people who are living and sleeping in sleeping blankets on the street. There is a dramatic difference and I want the record to show it.

I also want to say to the member that his comments are constructive. I think he is right on the money. If there is one thing I have learned to appreciate about members of the Bloc Quebecois is that they are very sensitive to issues that tend to be for those who do not have a voice.

I obviously totally disagree with the hon. member's views on trying to divide the country, but we all know that issue is coming to an end. Separatism is almost dead. But I totally respect his views on speaking out for those who do not have a voice and I will continue to fight within our team to make sure we are more sensitive.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Madam Speaker, I want to take issue with the hon. member for Broadview—Greenwood on a number of points.

No one in the House would disagree that there is a need to take care of those less privileged. What we disagree with is creating an institutionalized welfare state in certain provinces by virtue of handouts from the federal government. By doing this, we are entrenching the dependence of these provinces on these equalization payments. What we should be doing is focusing on how we can make have not provinces have provinces.

Since 1957 when this system of equalization payments was created, I would ask the hon. member how many of these provinces have permanently gone from have not provinces to have provinces. There is not one that I am aware of.

We establish a baseline where those provinces that are making less and have less than the other provinces are supported, as well they should. That is fair. However, to engage in the equalization payments that we have now, a system that is unfair and divisive, is something that does not bring the country together but rather separates it.

A fairer measure would be to establish a baseline on which those provinces are not able to manage. They may have fallen on hard times or their economy is not doing as well as it should and their people are suffering. They are able to get handouts from the federal government so that they can share in the same privileges as people in the rest of Canada. That is fair and that is what Canadians stands for. However, to redistribute wealth on some arbitrary level is not fair.

My province of British Columbia is one that constantly gives money to the have not provinces. We do not mind doing that because people in British Columbia care. What they do not want is to give money to provinces that are not have not provinces and have no demonstrable need. There is a convoluted formula made by the federal government where money is redistributed based on the essence of that formula rather than on the need of the people in that province. We need to focus on human need.

Not only do we need to focus on human need but we need to focus on two aspects of that. Everybody in the House would agree on supporting individuals who cannot take care of themselves. That is what is good about Canada. We do not tolerate individuals who, as the hon. member mentioned, are living on the streets through no fault of their own. They may be psychiatric patients who are not well taken care of by the system we have and we want to take care of those people.

We also want to ensure that the people who can take care of themselves have the tools to do that. Investment in the tools and capabilities of individuals to help themselves, as we should be investing in the tools and capabilities of provinces to take care of themselves, is what equalization payments should be all about. That is not taking place.

The auditor general chronically and eloquently gives the federal government and indeed all of us constructive solutions on how we can enable individuals and provinces to be more effective caretakers of themselves. Is this listened to? No, it is not. Despite the fine efforts of the auditor general he is simply not listened to.

The hon. member for Broadview—Greenwood, the finance minister and other members on the other side know very well those suggestions are constructive but they, like their predecessors in government, have turned a blind eye to the constructive interventions of the auditor general, interventions and solutions that if implemented could dramatically increase the federal government's role and also greatly improve the provinces' roles and capabilities.

The public may not be aware but a minuscule part of the auditor general's report is ever listened and an even lesser amount is ever implemented, which is a profound tragedy. What we need to do is focus on solutions. What should the federal government be doing with equalization payments? The first thing is focusing on how we can give people the fishing rod to fish for the food to take care of themselves.

There are a number of things that can be done. The first thing is deal with the oppressive tax regime we have. This is not something that is just insular but affects our country and its ability to function and be competitive internationally. The hon. member knows this.

This is coming from members of the Reform Party, from other parties, from the public, from other countries and from independent think tanks. They are all saying the same thing. Canada cannot compete because our tax regime is too high, too complex and too oppressive. We can fix the problem. Until we fix the problem, businesses in Canada will be unable to be the best they can be. Let us fix it.

Many constructive solutions have come from this side as well as from backbenchers on the other side such as a flat tax, increasing the basic minimum, decreasing the tax regimes, decreasing the maximum amount and the amount people on the bottom pay.

If we were able to do that we would have more money in the hands of the poorest of the poor. Many would be off the tax roll. The stimulus to work and strive and work harder would come back into the Canadian economy and the high oppressive tax rate that seeks to support the underground economy would be lessened.

If we were able to do that, no longer would we see the best and brightest in our country move south of the border. No longer would we see as many companies going belly up. No longer would we see companies going south of the border not because of a free trade agreement but because they cannot compete when their tax rates are 33% higher than in the United States.

No longer would we see Canadians who love their country asking how they can justify staying in Canada when their income is 44% lower after taxes in Canada than in the United States. They do not go south of the border because of a love of the United States. They go because that country provides them with the greatest ability to be the best they can become, to use the tools and talents they have acquired in the Canadian education system to be effective contributors to an economy. Why do we not change that around so that Canadians can stay in Canada and contribute to our economy?

The longer the government persists in supporting this tax structure, the longer we will see an erosion of our country not only from an economic point of view but from a social perspective.

The more people off work, the greater the demands on our social programs because the greater the erosion of the individual soul, the greater the incidence of psychiatric problems, depression and substance abuse. Interpersonal relationships are eroded in those circumstances. Furthermore, by keeping the tax structures high, we actually decrease the revenues that go into the government's coffers.

Former Prime Minister Mulroney, I believe in 1992, actually decreased the tax rates for a short period of time. What happened? Money came into the public coffers at an increased amount, which meant more money for social programs, more money for research and development and more ability to decrease the tax structure some more. What did Mr. Mulroney do after that? He started on an orgy of taxation. He increased taxes, and as a result moneys went down that came to the public coffers.

Therefore the increased tax rates we have today are harmful on the rich but they are more harmful for those who are poor and underprivileged because they erode the tax base, they erode the power governments have to invest in the programs to take care of those who are most underprivileged. This means less money for health care, less money for education, less money for pensions and less money for support programs for those who are retired and cannot take care of themselves.

Constructive solutions have come from the House and from outside the House. Members from across party lines are literally begging the government to listen to the solutions and implement them.

This is not rocket science. The problems Canada faces are faced by other countries. Look at the Nordic experience. Many Nordic countries have a very large socialist bent, a bent we historically have had.

They came to the realization that they are harming people in their countries, especially those who were most underprivileged. By maintaining the high tax rates Sweden was gutting its own economy. As a result it was forced to drop the tax rates and right now there is a healthier economy.

Look at what happened in Great Britain. The highly oppressive tax regime it had was choking the life out of its economy. The rich do not have to worry. They will just leave. They can manage. It is the poor and the middle class who do not have a choice who are hurt the most by this system of oppressive taxes.

It is a myth that lowering taxes will somehow benefit the rich at the expense of the poor. That is bunk. Lowering taxes helps, above all else, the poor and middle class. Furthermore, it can be used to strengthen the social programs we have today.

I implore the ministers across the way to take the experiences of the people in this country and also look at the experiences of other countries, first world nations like ours, that have had similar experiences and have found solutions to their problems.

Another thing the government needs to look at are rules and regulations. When everyone goes back home, to our communities, when we speak to business men and women, what do they say? Beyond taxes, the oppressive rules and regulations choke the ability for them to compete, to actually work.

These rules and regulations are a gordian knot and we need to take a sword and cut it. Good rules and regulations are useful. Bad ones are not. We have this propensity to ask what rules and regulations should we construct now rather than asking what we should do about rationalizing the rules and regulations we have, finding out what we need and getting rid of what we do not. We do not do that.

A very useful project or action by the government would be to commit soon by saying let us take a look at the rules and regulations that the feds have implemented in every single ministry. Look at the rules and regulations and rationalize them. Get rid of the ones that are not necessary and keep the ones that are.

The next thing to do is that ministers bring together their provincial counterparts, sit down at a table and say we are not leaving here unless we decide what we each do best. In other words, ensure that the feds do what the feds do best, that the provinces do what the provinces do best and separate out those rules, regulations and responsibilities.

The longer we maintain the complex and oppressive regime we have now of overlap, when the left hand does not know what the right hand is doing, the longer we maintain a very costly and inefficient system. Remember that with every rule and regulation we have, every time we institute something it may have a benefit but it also has a cost. We have to measure out what the opportunity costs of those are. We have to determine whether the implementation of this rule or regulation is for the betterment of the public and whether that implementation outweighs the cost that will be incurred not only by governments but by the public. In effect they are one and the same.

I implore the government to do that. We have been requesting that for a very long time. It would take strong and innovative leadership to do that but that is a challenge I lay at the feet of the government today. It needs to do that now. Failure to do that is a costly omission that will continue to oppress our economy.

Another thing we have to look at is research and development. I compliment the government over the last two budgets in putting forth money into research and development. It is indeed a good thing. It is one of the pillars of our economy.

A better thing to do is to enable companies to have the money to do that. If companies are to have the ability to engage in research and development, they need the money in their pockets to do so. They want to do it but they cannot. Again it goes back to our tax structure.

The government can also experiment with innovative measures to provide tax credits to companies that engage in research and development. It is very important. I look at the experience south of the border. The government needs to look at what the U.S. is doing to give its private sector the ability to engage in research and development.

Let us look at a micro example, California. We as a country have to do move with the changes in our economy. In many cases we have to move from an economy that is largely resource based to something more. California had a problem. In the cold war it was a primary manufacturer of armaments. It was very important to its economy. California's population is about the same as Canada's.

After the cold war concluded the need for armament went down dramatically. It was faced with a crisis of adaptation, how to adapt to the situation in the short term. California did it through some very innovative measures. I encourage the government to look at them. California is now a world leader in high technology, pharmaceuticals and the service industry. I encourage the government to look at examples like California to see what role government should play in terms of enabling Canada as a nation to move from resource based industries into something else.

I also encourage the government to look at experiences in other countries in various regards. I take one example that is close to my heart because my riding has a large population of fishermen. Fishing, as we currently know, has taken a large hit. We will never be able to go back to the system we had before. Let us look at an innovative way of dealing with that. Rather than pouring money into make work projects for fishermen to clean up areas, projects that give them no long term capability of earning revenue, let us look at ways to give them long term skills.

Norway is a world leader in fish farming. It is not like what was done in southeast Asia which has been very destructive to its environment. We have a superb ambassador in Norway; she is very competent. Perhaps we could use our embassies to find what is best in the countries they are in and to feed that intelligence to our country and our leaders. We could discover innovative ideas these countries are employing that will help Canadians.

Many things that have been done in other countries can be employed here. We do not need to reinvent the wheel. The fish farming experience in Norway is something that could be employed not only on the west coast but also on the east coast.

Equalization payments, as I said before, have at times further institutionalized the welfare state in certain regions of the country. We need to be able to give these regions the tools to take care of themselves. Newfoundland is one example of an area that has been devastated in many ways. There is not a lot there, but there are things Newfoundland can do.

We need to look at ways to give the people of Newfoundland the tools to take care of themselves. We should not support areas or regions where there is simply no way the people will survive because the resources and the ability to work are not there. They should be convinced to go into areas where they can work, where they can earn money. They should be given the tools and the resources to make the move, to make the change so that they get off the national welfare rolls and create a way of providing a stronger future for tomorrow.

In closing, I raised a number of points. We do not support the bill because the equalization system is archaic, inefficient, and does not get to the heart of the problem. I encourage the government to look at the ideas that have been put forward by my colleagues in the Reform Party and members in other parties. It should listen to them, adopt them, and use them for the betterment of Canada and Canadians.

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

Mr. Speaker, I rise on a point of order. We seem to be outnumbered by the pages. Do we have a quorum?

And the count having been taken:

[The Acting Speaker (Mr. McClelland)]

We have a quorum.

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

Mr. Speaker, I listened to the remarks of the member for Esquimalt—Juan de Fuca. I thought they were insightful. I especially agreed with his notion of comprehensive tax reform. There was not a sentence in the part of his speech that dealt with comprehensive tax reform with which I did not agree.

We should understand and the people of Canada should understand how the system works in terms of moving a government to change its ways. All members have been here for almost two years. In the fall as we led up to the budget preparation period we did not have one opposition day with any tight focus on comprehensive tax reform.

My remarks are intended to be constructive. I was hopeful, when a number of additional members from the Reform Party came here during the last term knowing that they had a huge commitment to comprehensive tax reform, that would be one of the centrepieces of their strategy in trying to mobilize debate and the will to take on the huge problem of changing our cumbersome tax act, which is inefficient and does not work any longer.

It is important to suggest to members in opposition that it is not enough for one, two, three or four members to speak to comprehensive tax reform as the member did. As I say I agree with every sentence in that regard, but we have to mobilize at least 100 or 140 members in here.

[An hon. member]

That is what we are trying to do.

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

I am doing my best on this side of the House but it is a heck of a lot tougher when in government to move the will of the system. Challenging the government is a core responsibility of the opposition side. I hope the speech of the member for Esquimalt—Juan de Fuca is the beginning of a long, focused and forceful debate from the opposition on comprehensive tax reform.

He will find there are probably about 25 or 30 members on this side of the House who share the notion that what we need more than anything now is to fix the rotten tax act.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I thank the hon. member for Broadview—Greenwood for his insight. He has been as leader in tax reform in the House. I know members across the way would be very interested and very open to having members from this side, in particular our finance critic, the member for Medicine Hat, work with them on establishing tax reform. In fact the member for Medicine Hat has worked for a very long time in putting forth constructive solutions to the government on how we could fix it.

I challenge the government, members of the public, members of the private sector and companies out there to send their constructive solutions to the Prime Minister and the Minister of Finance on comprehensive tax reform. As the member for Broadview—Greenwood mentioned, I look forward to bringing together a group that has the ardent ear of the Prime Minister, that will listen and act on the constructive solutions which will be placed before it in the very short term.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I appreciate the opportunity to engage in this debate. It has been interesting today because I think we all recognize that what is happening here is not good enough.

In general there is an inadequate explanation from the finance department to parliamentarians of what we are voting on today. Most members do not understand how the equalization system works. I rather doubt that most government members know how it works. Yet they will be told how to vote and that is what will happen.

I have a question for my colleague who gave a very good intervention that has to do with the debate between him and the member for Broadview—Greenwood. The member for Broadview—Greenwood said explicitly that he was a passionate interventionist. That is a quotation from Hansard yesterday. He said the same thing today. He said he believed in intervention and believed in it passionately.

The equalization payment system takes through taxation money from people in all provinces and distributes it to seven provinces. The result is that the federal government, by intervening in this way, lands up taking money that is paid by poor people in one of the three have provinces and distributing it per capita to people who are very well off in the have not provinces. We have a government intervention that effectively transfers money from poor people to rich people in different parts of the country.

[An hon. member]

Oh, come on.

[Ken Epp, Reform, Elk Island, AB]

That is accurate. The member opposite is questioning this point. I have studied it. I have been up to my ears in equalization. This actually happens. It is a fact because equalization is based on a per capita computation.

I would like to give my hon. colleague from the Reform Party who just spoke an opportunity to reinforce in the mind of the member from Broadview—Greenwood that not all government intervention goes in the right direction.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I thank my hon. colleague from Elk Island for that intervention. Intervention can be done in two ways. It can be done with a view toward the needs of the people involved or it can be done in a way that can be destructive. Intervention should be done on the basis of true need. Every intervention has an opportunity cost. The cost, as I mentioned in my speech, is money.

If we are to intervene, will that intervention benefit the Canadian public or cost us more than the actual intervention? We do not disagree with equalization, but we disagree that equalization must be done on the basis of true need. We cannot do it under some complex formula which nobody understands. Rather, the intervention has to take place on the basis of the need of the people, not on the basis of the fact that we want to somehow equalize all the provinces. That is very destructive and in fact counteractive in the long term.

We need to ensure that whatever moneys will be spent by the federal government will help individuals in need and, more important, will help them help themselves.

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I rise on a point of order concerning an amendment that was offered to the House earlier this day by the hon. member for Kings—Hants which asked that we refer Bill C-65 back to a committee of the whole.

I respectfully submit to the Chair that this is impossible. Bill C-65 was considered by the Standing Committee on Finance and not by a committee of the whole. While the authorities make it clear that if otherwise in order an amendment may be offered at third reading that would recommit the bill, there is no possibility indicated of proposing an amendment to commit a bill to a committee that never considered the bill in the first place.

Such is the result of the motion offered to us today. In other words, a bill cannot be recommitted to a committee that never considered the proposition at all. That is what the amendment offered to the House earlier this day purports to do.

I verified earlier this day whether I could rise on a point of order now notwithstanding the fact that the Chair had received the motion. I have been informed that it is in order to bring it nonetheless because we have not yet arrived at the stage where the motion is actually put. That will occur only at the end of the debate.

I wish to draw attention to citations 731 and 737 of Beauchesne's to support my argument. Section 731 refers to amendment on third reading:

When an order of the day for the third reading of a bill is called, the same type of amendments which are permissible at the second reading stage are permissible at the third reading stage with the restriction that they cannot deal with any matter which is not contained in the bill.

In other words, we cannot introduce a new proposition. Citation 737 of Beauchesne's says in part:

Any member may move to recommit a bill for one of the following purposes:

(a) to enable a new clause to be added to the bill when the House, on report, has passed the stage at which new clauses are taken.

In other words, we have passed report stage and at third reading the purpose would be to try to get that back in.

(b) to enable the committee to reconsider amendments they had previously made.

The committee had not previously dealt with any amendments so this is not applicable in terms of reconsideration. In any case, all this applies only to a motion that is recommitted to the original committee that had received the original proposition.

My point is what occurred today does not satisfy that threshold and therefore the amendment, I contend, is out of order.

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

Mr. Speaker, I rise in response to the arguments put forward by the learned government House leader and to respond most directly to his arguments. I suggest the words “recommit” in this instance and “referred back” can be construed much the same.

More important, I think the intent of the word here is to refer back or recommit to a stage of the proceedings as opposed to the inference that it is a reference back to the actual committee.

In any event, we are suggesting that the original ruling is in order, a ruling made by Mr. Speaker. You are essentially being asked by the government House leader to sit in judgment of yourself or to overrule yourself. We all know that you are very able and no one is questioning your ability. You are being asked to be a court of appeal for your own ruling.

The more important instance here is that this intent is to go back to a stage as opposed to sending it back to the finance committee. The intention here is that it is to go back to committee of the whole. The reference in Beauchesne's 737(1) is:

A bill may be recommitted to a committee of the whole or to a committee by a member moving an amendment to the third reading motion.

I suggest this is very much in order and that Mr. Speaker's original ruling was the correct one. Therefore I want to also indicate this is not a dilatory motion. It is not the intent of the mover of the motion or the party of the mover of the motion that this be dilatory or that this hold up the bill. That is not our intent. We want the provinces to get their money.

We want this equalization bill to pass through the House. I suggest further that, as a result, this will not add time to the mix. This would be voted on at the same time as the main motion.

Mr. Speaker, your original ruling I suggest was the correct one. In your wisdom, I think you ruled correctly on the original occasion when this was before the House. I encourage you to re-embrace that original ruling.

[The Acting Speaker (Mr. McClelland)]

I certainly thank the hon. member for Pictou—Antigonish—Guysborough for his vote of support. I assure him also that this will not be the first or the last time I will be reconsidering something I may have done or said. I am used to that.

I was given prior knowledge that this point of order was to be raised. It was considered by the Speaker and also by the Clerk who is far more learned in these matters than any of us assembled here with the possible exception of the government House leader and the hon. member for Pictou—Antigonish—Guysborough.

I have consulted with the Clerk and I want to make it clear that the Chair did not rule on the amendment this morning. The amendment was accepted but I did not rule on it.

The government House leader has very correctly pointed out that the interpretation of Beauchesne's is that it would go back to the committee from whence it came. Therefore the amendment as presented this morning is not in order.

Committees Of The House

[Peter Adams, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I rise on a point of order. There has been consultation among the parties.

I think you will find unanimous consent for the following. I move:

That a research officer of the Standing Committee on Environment and Sustainable Development be authorized to travel to Sherbrooke, Quebec, from March 11 to March 12, 1999, for the purpose of participating in the conference: “À l'aube de l'an 2000: Vision d'avenir en environnement” (The Dawn of the Year 2000: A vision of the Future in Environment).

(Motion agreed to)

The House resumed consideration of the motion that Bill C-65, an act to amend the Federal-Provincial Fiscal Arrangements Act, be read the third time and passed.

Federal-Provincial Fiscal Arrangements Act

[Dick Proctor, NDP, Palliser, SK]

Mr. Speaker, it is a privilege to participate in the debate on Bill C-65 regarding equalization. This is the essence of what makes Canada Canada.

Earlier today on this main motion the House heard from the NDP finance critic, the hon. member for Kamloops, Thompson and Highland Valleys. He is a very hardworking MP who had requested, in preparation for this debate, to hear from provinces as to their views and comments on the new equalization formula. I do not believe that in his remarks this morning the hon. member had time to refer to that except in passing. I would like to speak about how Saskatchewan sees this proposed reform on equalization.

The formula is that a maximum of $5,431 per resident to fund public service is the essence of the equalization formula. From Saskatchewan's perspective, the net effect will not be terribly significant. Saskatchewan wins in some areas and loses in others or, as an acquaintance from Australia once said, what they win on the merry-go-round they lose on the ferris wheel.

However, on the whole the revision is seen to be positive. For example, for the year 1999-2000 the province of Saskatchewan's entitlement may increase by about $3 million. This of course depends on the range of economic variables, particularly the price of oil futures.

Just as an aside, the World Bank outlook for commodity prices is not very encouraging for the next decade or so, and Saskatchewan is a resource based province that depends largely on the export of primary resources as are a number of other provinces. This impacts very significantly on whether Saskatchewan is a recipient province or indeed a have province. It has been in both categories from time to time.

The Minister of Natural Resources had suggested that Saskatchewan would be receiving a significant upturn in equalization and offset the 40% share of the province's entry into the agriculture income disaster assistance program. This is simply not true. I have mentioned $3 million for 1999-2000. The maximum calculation by the province's minister of finance would be $45 million over five years as a result of this new formula. It would barely cover the proposed cost for Saskatchewan for the agriculture income disaster assistance program for one year.

As a second aside, I want to again be on the record to talk about the basic unfairness in the AIDA program. Provinces are being asked, requested, forced to pay up to 40% for this income assistance when at the same time states such as North and South Dakota, Minnesota and Montana are not asked to pay any sort of money to help farmers on that side of the 49th parallel because their contributions are being paid by the national government in the United States. Here the provinces are requested to kick in 40%.

It is simply not fair to expect a small province like Saskatchewan, or Manitoba for that matter, both of which have high proportion percentage of the arable land base and a relatively small percentage of the population, to fund that kind of program.

On the equalization program itself, as I have indicated, Saskatchewan is in favour and is also in favour of moving to a ten province standard rather than the current five province standard. We believe this would advance the goal of providing quality programs at reasonable costs. We also favour a shorter transition period of probably two years rather than the current five years.

It is important for all of us to keep in mind that equalization is to maintain a relatively level playing field in terms of ability to provide programs and services. Generally speaking the payments go up to an individual province when its revenues are experiencing a decline.

As I have indicated, Saskatchewan has a particular interest in the work done on resource bases and takes the position that recognition of the higher cost of producing so-called new oil would represent an improvement. It is important for Saskatchewan and it is also important for provinces such as Nova Scotia and Newfoundland. A move away from the volume of production to the value on for example forestry would not represent a step backward in any way.

Overall the objective of equalization is not to get every last cent out of each of the have provinces. As I have said before, it is to ensure that all provinces offer a reasonably comparable level of services at roughly comparable levels of taxation.

The program has to be equitable and fair in order to function effectively which means it has to work both ways. Saskatchewan's position is that a change to a value based measurement on forestry does represent an overall improvement.

There is one thing in particular that some provinces such as Manitoba and Saskatchewan are opposed to. That is the changes to the equalization formula for the lottery base. The proposed changes would unilaterally impact on provincial policy decisions. To expand on that, I would use this argument. The choice not to introduce VLTs, which will have a large impact on entitlements, is a policy decision which therefore should not impact on the determination of fiscal capacity.

The government I believe has taken a different approach to this. It has included the new gaming as another new tax base. The argument is that this approach will increase Ontario's fiscal capacity and therefore benefit equalization payments to recipient provinces. A discussion at the finance committee did focus on the fact that Manitoba's population is one of the lowest participants in lotteries and gaming and how this particular low revenue source may be a factor in lower equalization payments for Manitoba. We would question the inclusion of VLTs in the new formula.

However, overall and in conclusion, the NDP caucus members present support Bill C-65 on third reading. It is a step in the right direction, but the important thing is to recognize and realize that it is certainly no windfall for the seven recipient provinces.

[The Acting Speaker (Ms. Thibeault)]

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 Cypress Hills—Grasslands, Rural Municipalities; the hon. member for Winnipeg North Centre, Tobacco.

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

Madam Speaker, I would like to hear the comments of the hon. member for Palliser on a couple of things that I picked up on in his speech.

One is the question of the formula. He mentioned several times things that he found good or bad in the formula. I would like to get his party's take on something that has certainly been running through my mind for a long time. That is, it would be very expeditious to simply base the equalization payments on the per capita GDP in each province and not get involved in any way in all this convoluted arithmetic. If we know where the GDP of a province is low and where the GDP of a province is high, we shuffle money from the haves to the have nots. We do not have to go through all this. It is becoming something like the Income Tax Act, totally unintelligible. I would like the hon. member's view on that.

My other question is perhaps a little more difficult because it presumes that the formula is the be all and the end all.

I would like to know what effect that specific land claim settlements will have on the equalization formula with the infusion of federal money to buy the land and the gross distortion of the municipal tax base by the creation of these new reserves. Will this, through the formula, create discrepancies or inequalities that we may not be aware of?

[Dick Proctor, NDP, Palliser, SK]

Madam Speaker, I thank the member for Cypress Hills—Grasslands for his two questions.

With regard to why we do not level the formula out and do it on the per capita gross domestic product, I would probably be the last person in the House one would want specific advice from on creating a formula.

I have listened to a lot of the debate today on the formula and it seems to me that it is not terribly relevant. A formula is calculated. When it was first started in the 1950s equalization was based on three variables and now we are up to 33.

I have been involved with fund raising and revenue sharing and sometimes we get into very complex formulas. It is like getting behind the wheel of a car. I do not necessarily have to know everything about how the motor functions but I know where the key goes, and where the gas pedal and the brake are. What is important is that we have a formula that is overall fair to all of the provinces, both those that are recipients of financial largesse and those that are paying. Perhaps the government would be in a better position to answer specific questions on what the formula should look be.

It is the same with the land claims settlement. I cannot comment on what impact those settlements will have on equalization payments in the future.

[Angela Vautour, NDP, Beauséjour—Petitcodiac, NB]

Madam Speaker, I have a question for my colleague about reserves and land claims. Would he agree that if the first nations had not settled and given us their land, that really we would not have the land?

[Dick Proctor, NDP, Palliser, SK]

Madam Speaker, very clearly that is the case. It is important when we are discussing land claims settlements that we recognize that. European and American settlers who came to what is now Canada, and my ancestors fall into the latter category having come from Virginia during the war of independence, did not treat our native peoples well. They were pushed off the land or into poor patches of land. Now it is time to redress those historic endemic problems and I think we are trying to do that the very best way we can.

I agree with my colleague from Beauséjour—Petitcodiac that this is something this parliament and indeed provincial and territorial legislatures will have to deal with, with dispatch and with a great deal of sensitivity today and tomorrow.

[Bill Matthews, Progressive Conservative, Burin—St. George's, NL]

Madam Speaker, I want to make a few general comments on Bill C-65, an act to amend the Federal-Provincial Fiscal Arrangements Act.

I must say at the outset that I have listened very intently to the hon. members for Broadview—Greenwood, Esquimalt—Juan de Fuca, and Palliser. I found their remarks on this topic to be most responsible and very interesting. After listening to those three hon. members speak, I wonder why we do not find solutions more readily in this House of Commons and why the government of the day does not listen more to what hon. members say about taxation issues and the other issues facing our country.

I come from the province of Newfoundland and Labrador. I have listened with great interest to a number of speakers today. They have talked about equalization, the fairness and the unfairness of equalization. Newfoundland and Labrador has a great desire to be a have province. I remind some of my friends from the west that all of the western provinces were not always have provinces. So the wheel turns and the wheel turns slowly. Some day, please God, Newfoundland and Labrador will be a have province and Atlantic Canada will be a have region.

We have great resources. We have a great natural resource base, as great as any in the country. The province I come from has oil and gas resources. We have a growing oil and gas industry. We have forestry resources. We have one of the richest mineral discoveries in the world at Voisey's Bay which we hope will be developed someday for the benefit of all of Canada but more so for the benefit of Newfoundland and Labrador.

The greatest resource we brought into Confederation when we joined in 1949 was our fishery resource. About 20 years ago the export value of fish products from Newfoundland and Labrador was about $3 billion. Imagine what that value would be today in 1999 dollars. Of course we are sad to say that successive governments of Canada mismanaged our most important resource. Our groundfish stocks have been practically eliminated and our people have paid a great price.

We can be a have province. It will take very good management decisions on our fishery from now on in to bring that back. We are going to need good decisions on our oil and gas, on our minerals and forestry and so on. We are struggling to become a have province.

I have listened intently to what people have had to say here today. I have listened intently to the equalization debate over the last number of years. What strikes me most about the equalization debate is that yes, we have resources that we are developing in Newfoundland and Labrador but unless we change the equalization formula accordingly, we will always be a have not province. If the federal government is going to knock us back dollar for dollar, for every dollar we get from Voisey's Bay when it is developed, or from our Terra Nova oil field when it is developed, then we are never going to be a have province. These are the concerns of the people of the province I represent. They are my concerns.

Unless there is going to be a significant and substantial change, we are never going to get to the level of other affluent provinces, such as the provinces of our western friends. We have to keep this in mind when we come to this great chamber and debate what should be truly national issues. It is not a regional issue or a provincial issue; equalization is a national issue.

I listened to the three speakers before me. They talked about this great country of Canada, about how caring we are in this country. Yes we are, or some of us say that we are. Sometimes that takes a lot of tolerance, understanding and patience.

I say to all hon. members that the best thing we could do in this chamber, the 301 of us who are here, is to go to the other provinces, the other regions of this country, meet the people and understand their problems and their issues. Then we would all be better versed to stand in this place and make constructive suggestions about equalization, about tax regimes and about every other issue that affects us as Canadians.

I find too often in this chamber that people bring their own provincial or regional perspectives and biases to the debate. Most times it is not out of general concern for all of Canada and all Canadians. Those were the few general remarks I wanted to make.

I have to say that have I found the debate to be very professional today. There was some great debate between government and opposition members. However, I want to go on record as saying that if we are truly Canadian, and if we come here to espouse a truly Canadian perspective, then let us try to better understand the needs of all Canadians because there are regional differences and regional disparities that still exist big time in the various provinces of this country.

I suggest to my friends from the west that they go to the east to gain an understanding of those problems. I suggest that they not bring western Canadian remedies to the House of Commons which they think are in the best interests of eastern Canada. On the other hand, we should not come here thinking that we know what is best for the west when we do not. I say that with all due respect. Too many times in the last 18 months or so I have heard too many western Canadian solutions for eastern Canada when the people who are proposing them do not truly understand eastern Canada. They do not understand its people, its solutions or its issues.

Let us be tolerant, let us be considerate and let us be ever mindful that all of the provinces which are now affluent, well off and have provinces were not always have provinces. Provinces today which are have not provinces could very well in 10, 15 or 20 years be have provinces, and those which are have now could very easily become have not. Let us not forget that can happen in this great country. Hopefully we will all be caring Canadians, we will be caring parliamentarians and we will do what is in the best interests of all Canadians.

[Randy White, Reform, Langley—Abbotsford, BC]

Madam Speaker, it is rather sad that the individual who just spoke would talk about the west like that. We are all in this federation together. I think he is somewhat missing the point.

Some people in the west wonder why there are people from Atlantic Canada, Quebec and Ontario going to the west on a western alienation committee to determine and tell them how they should feel. There is too much of that in this country, blaming one or blaming the other.

People who stand in the House to talk about the equalization index or any other issue should have the right to do so. They are not just here to talk about their own individual constituency, they are members of parliament who are here to talk about the federation as a whole. I think the member should respect that. It is unfortunate that he does not.

I ask the hon. member whether he thinks the equalization index in total is reasonable when we have three provinces trying to equalize for the other seven. How is that ultimately going to work given that, for instance, Nova Scotia, with its gas and oil, is coming around to an economic boon? I suspect that Newfoundland is coming around in terms of Voisey's Bay, possible oil production, mining and those kinds of things.

Is it not reasonable to expect that this equalization index would have to change one of these days and that it should not have been brought into the House by this government which had five years to bring the issue here and is now in a damn big rush to have it dealt with in the last few days before it needs it?