Madam Speaker, I rise today to debate Bill C-65, an act to amend the Federal-Provincial Fiscal Arrangements Act.
A long time ago a universal question was asked in the biblical story of Cain and Abel: am I my brother's keeper. The answer from the Bible that permeates the social justice system of the western world is yes. Yes, we are our brother's keeper. We have a social and moral responsibility to see that the poor, the less fortunate and the weak in society are taken care of.
Therefore I would not argue that the equalization program is a valued part of the federal-provincial relationship. We have regions of our country that have found greater prosperity than others. They have long been termed the have and the have not provinces. Typically the have provinces have included British Columbia, Alberta and Ontario. The remaining provinces have been given the dubious title of the have not provinces.
As we know, the whole point of the equalization program is to ensure that there is a minimal level of service for all Canadians in all parts of Canada. My time will not be used to refute that premise. While all of us would agree that the premise of equalization payments has long been a part of the Canadian social make-up, the actual process leaves much to be desired.
The minister has shown a complete contempt toward the citizens of Canada, the auditor general and parliamentary procedure. In the auditor general's report the following point was made:
The Department of Finance ... could use parliament more effectively, soliciting advice from a wider circle of interested parties, rather than relying almost exclusively on the advice of a committee of federal and provincial officials.
This has simply not occurred. As my hon. colleague just pointed out, at the initial introduction of the bill there were only three business days in which to review the documents and to prepare for debate. Reform staff had to ask to receive a briefing from finance officials in order to determine the effects of the proposed legislation. This is not good enough if government is to work for the people.
The equalization program makes up 8% of all federal program spending. A program this large deserves more than just a superficial glance.
I would ask that a review of this procedure take place. The House is to be used as a forum for debate that brings in alternative ideas, constructive criticism and allows the Canadian public full access to the parliamentary process. I do not believe this has occurred.
The Department of Finance has had five years in which to prepare for the legislation. Every five years the legislation must come to parliament to ensure that parliamentarians and indeed all Canadians know what transactions have occurred between the federal and provincial governments.
The auditor general's final concluding remark was that the Department of Finance ought to devote more effort to its relationship with parliament. Parliament is the legislator for the program and the body to which the department and the minister are accountable.
He concluded that in their view this relationship could be used to the advantage of the department and for the betterment of the program. Plain and simply, this has not happened.
The Minister of Finance and his departmental officials have simply ignored the report of the auditor general in this regard. It is outrageous to think that a minister of the crown can so blatantly ignore the office of the auditor general.
One has to wonder if there is something else amiss. The Minister of Finance knew that the bill must come before the House for debate and final approval by March 31, 1999. Yet he introduced it only weeks before this deadline. The minister and his department have had five years in which to prepare legislation, and yet the House is now asked to rush it through. Unfortunately this happens far too often in this place.
My second point is with regard to the matter of fairness. Currently the equalization payment is made by calculations of 33 different revenue sources. This is an incredibly complex formula. Few people in government truly understand how it works.
The model looks at 33 tax elements of the economies of five provinces and tries to estimate how much revenue the province can raise in each category. For each tax element it then converts each estimate into a per capita figure, totals them and multiplies them by the number of people in the province to arrive at the equalization payment.
Ten provinces have 10 different methods of calculating property taxes, income taxes, resource values and all other calculations that make up the 33 different revenue values calculated in the equalization payment. Where is the fairness in that?
One of the greatest inequities that affects my riding of Nanaimo—Cowichan is the calculation of resources. While it is recognized that the value of the timber harvested in the province of B.C. is greater than that which is harvested in Saskatchewan, the cost of production is not taken into account.
Let us consider the following. According to the Council of Forest Industry the cost of building logging roads in B.C. in 1997 was $715 million. The cost of building logging roads has risen by 171% since 1992. The equalization formula does not take all this into account. This disparity will continue to grow. Simply the system is flawed.
My third major concern is the incentive to change. The way the system is currently structured there is no incentive to move from a have not province to a have province. For a have not province to increase its tax revenues means that it will turn loose a portion of its equalization payment. In general terms it is easier to accept money from outside the province than it is to raise it within the province itself.
The finance minister and his department have escaped much constructive criticism on this important issue by ensuring that the process is not transparent or easily understood. The more complex the system, the fewer the number of people who will understand it. The fewer who understand it, the easier it is for the Minister of Finance to subject it to political manipulation.
When a system is complex it is easy to be inaccurate and ultimately unfair. The system can be made much simpler. One such consideration would be to calculate the payments for the equalization program based upon provincial GDP. This would ensure that individual provinces cannot make internal adjustments and therefore add to the revenues from outside dollars. GDPs are not subject to adjustment.
Equalization payments should go to those provinces that require them the most. As one of the richest countries in the world, it is hard to believe that 70% of Canada's provinces are declared to be have not provinces. This simply boggles the mind.
Our system of equalization payments requires a major review and overhaul. At a time when Canadians are expecting to be rewarded for the pain and suffering endured under this government, and arriving at this stage of a balanced budget, this new equalization program will cost taxpayers an additional $700 million over the next five years. This to me does not appear to be sound fiscal management. This current program pits Canadians in one province against those in another. For all the government says, in reality this program is divisive.
As a whole, Canadians are known to be compassionate, generous and caring for one another. We have seen this time and time again during the past several years with ice storms in Ontario and Quebec and major flood disasters in Manitoba. Canadians all across the country reached out to assist other Canadians in need. They did it without being asked. They did it in their neighbourhoods and from afar because they believe that they are their brother's keeper.
The equalization program does not do this. Surely there are better ways to do business for all Canadians, but the finance minister has chosen an arrogant approach in the handling of this matter. With the inherent problems and inequities that still exist under this legislation, I must oppose it.