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.
