Debates of April 14th, 1999

Budget Implementation Act, 1999

[Grant Hill, Reform, Macleod, AB]

Mr. Speaker, there is a big problem in rural areas with the numbers of physicians and nurses.

They are not specifically money problems. There are equipment problems. In some northern hospitals the equipment is inadequate to meet the needs of patients and physicians alike.

There are other problems too. I toured Saskatchewan two weeks ago, and 50% of physicians come from South Africa. There are no more Canadian doctors in northern Saskatchewan. There are huge problems.

Is there a solution to the recruiting problem? People do not go up north. Those who practice in very difficult areas should be adequately compensated. I agree with the member, there are huge problems in rural areas.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, during the member's speech he referred to waiting times for certain procedures. I believe he talked about hip replacements.

I wonder if the member would simply comment that it is hospitals that have to deliver balanced budgets for their institutions. There is a restriction on the operating theatre time that they have, as well as on the amount that they have funded for prosthetic devices. Therefore, waiting times are not necessarily due to funding, but rather to other factors beyond—

[The Deputy Speaker]

The hon. member for Macleod has a brief response.

[Grant Hill, Reform, Macleod, AB]

Mr. Speaker, the member is correct. There is a whole host of factors concerning waiting lists. One factor is the amount of money available for the prostheses themselves. Another factor is the number of nurses and doctors available to do that.

The fact is that waiting lists in Canada are the longest they have been in history. I do not believe that is acceptable and I look for solutions from an individual like this who is actually constructive in his comments.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to speak to Bill C-71, the budget implementation bill. I want to begin by advising Canadians about the process.

Canadians know that a budget was delivered by the finance minister with a number of provisions, of which I will review a few. Preceding the budget there were substantial consultations with Canadians. I want to assure Canadians that there is much more to the budgeting process than simply finance officials determining how they might deal with the fiscal affairs of the country.

The Standing Committee on Finance conducts an annual budget consultation in which its members not only hear from officials as to the current fiscal state of affairs and apprise themselves of the current numbers, estimates and forecasts that are coming forward, they also go across Canada to each and every province and territory to consult with Canadians who wish to appear before the finance committee to have their say as to what priorities the government should have with regard to the next budget. That process starts to take place just after the House resumes from its summer recess.

During that process individuals, as well as groups and organizations, come before the committee. They are on panels. They have an opportunity to make their presentations orally and in written form. They also have a dialogue with finance committee members. There is often repartee where people are asked to elaborate further on some of the matters they have raised. There is no question, notwithstanding that people are asked to come before the finance committee to present their views on the national finances and our national budget, that many of the groups focus entirely on their own specific interests without putting them in the context of how they line up with the priorities of all Canadians.

It is a very difficult process that we go through. The committee is represented by all parties. In that process all parties have an opportunity to make comments, to question witnesses and to give the kind of input that I think is necessary to craft a report which ultimately makes recommendations to the government with regard to the options and opportunities which we saw in our budget consultations.

When we finish our cross-Canada consultations we also receive in Ottawa other expert witnesses representing major organizations, such as research organizations, health organizations and major national organizations on poverty. Poverty certainly was a very large component of the testimony that was received by the committee in its consultations across the country and indeed in Ottawa. Health care was very strong. I recall a very strong presentation about the significance of diabetes in terms of what we could do with regard to funding and obtaining measurable results to deal with the consequences.

There were also a number of economists. There were representatives from organizations like the Fraser Institute and the Caledon Institute of Social Policy who came to talk in a more macro way about the kind of direction we are going in with regard to estimates of growth and interest rates, with regard to the strategy of having prudent assumptions and of having a contingency for adverse economic fluctuations so that we would ensure the budget would be balanced.

All of these things come together in a very comprehensive way so that parliamentarians from all parties can come up with a report. That report, as I said, goes to the finance minister, to the finance department and in fact is available to all parliamentarians and all Canadians so that they can see the kinds of things that were gleaned out of the consultation process and the kinds of recommendations which flowed from those consultations.

The finance committee has had quite a good track record in terms of identifying substantive options and opportunities for the government, and the process, I believe, has served us well.

Have we articulated in our reports the budget as we might ultimately see it on budget day? No. There are always matters which come from other sources for the government to consider, but the consultation does serve Canadians very well.

I want Canadians to know that preparations are already in place for consultations for the next budget, which will begin in October. Canadians who wish to make representations to the government and to the finance committee with regard to the budget process are welcome to make inquiries and they can do that through their member of parliament.

With that by way of background, I simply want to highlight a few of the key budget themes or issues within the last budget to remind members and to remind Canadians about where we are.

The budgets which have been brought down since the government came to power in 1993 have built upon each other. Canadians will know that the year the government came to power the deficit, the excess of spending over revenue coming into the government, was about $42 billion. It was a very significant burden to Canadians. It has accumulated a large national debt which is still there to be dealt with.

By taking prudent steps, by making sure that the fiscal decisions of the government maintained its perspective with regard to balancing the needs of Canadians, as well as our need to get our fiscal house in order, we now have a balanced budget. We no longer have a $42 billion deficit; we have a balanced budget.

In the last few years, having balanced the budget, we have also had an opportunity to make sure that we continue to meet the social needs of Canadians, the health requirements, as well as to pay down real debt. Canadians will be pleased to know that the government is paying down its national debt each and every year, not only meeting its interest payments but also paying down principal payments, minimally at $3 billion a year.

As a result of these budgets there is some very good news. The best way to balance our books and to pay down our debt is to make sure that Canadians have the opportunity to have the dignity of work, to be part of the paid labour force. Indeed, 453,000 jobs were created in 1998 and another 87,000 jobs were created in January of 1999 alone. Our unemployment rate has dropped. When members came to this place in 1993 our unemployment rate was about 11.2%. Today it is 7.8%. It is at the lowest level since June of 1990.

We have had balanced budgets or better, which is expected this year again, and the government is committed to balanced budgets in the years 1999-2000 and 2000-2001. Canadians can be assured that fiscal prudence and proper fiscal management of Canadian taxpayers' money continues to be a top priority for the government.

We must live within our means. We must service our debt. We must pay down our debt. But we also must make sure that the fundamental needs of Canadians with regard to health, education, research and development, social programs and other things are met to ensure that Canadians are taken care of and live in the dignity to which they are entitled.

As Canadians know, we are also making major investments in health care. There will be an increase of $11.5 billion in transfers to the provinces and territories over the next five years, as was discussed by previous speakers. Breaking it down, support for the provinces in health care will be increased $2 billion in the current fiscal year, with a further $2.5 billion in each of the following three years.

We also propose to invest a further $1.4 billion over the remainder of this year and the next three years to strengthen our health system through research and innovation, and health information efforts to prevent health problems and improve services to the first nations and to the Inuit.

Canadians may have heard that recommendations such as report cards for our health care system have also come in. The health accord with the provinces is a major positive development on behalf of all Canadians, as is the social union which has the support of all but one province.

There are some major developments which actually complement and tie into the budget initiatives which I have outlined.

We are also going to invest over $1.8 billion for the remainder of the fiscal year and the next three years in support of the creation, dissemination and commercialization of knowledge and to support employment by building on the Canada opportunities strategy. It means going after more job creation to promote an environment with low interest rates so that companies will be able to enjoy an environment in which economic growth and expansion are possible and in which more Canadians who want the dignity of work will have that opportunity, particularly our young people who have experienced the highest levels of unemployment in Canada for some time.

With regard to these overall themes, over three-quarters of the new spending in the 1998-99 budget reflects two of the highest priorities for Canadians. What Canadians told us through our consultations and what they said directly to the Prime Minister, the Minister of Finance and their members of parliament was that they wanted increased funding for health care and access to knowledge and innovation. In other words, there will be education and the knowledge base will be built upon for Canadians to learn, to ensure that they, particularly our young people, are ready to take those jobs.

Canadians will also benefit from personal income tax cuts of $7.7 billion over three years, for a total of $16.5 billion in tax cuts in the 1998-99 budget.

Is it enough? Are those all of the things Canadians wanted? There are many other aspects that would be useful which Canadians are interested in promoting. However, we still have to maintain fiscal responsibility in attempting to deal with our significant priorities. We also have to continue to promote and stimulate other areas. As I said earlier, each budget has built on the one before it. We start to see the trend line. We start to see the rebuilding of our fiscal health, and fiscal prudence continues to remain the hallmark.

Others have talked about health care, so I will talk briefly about income taxation. It is an issue that is going to seize the House of Commons. It already has, to some extent, with regard to the taxation of families. It will also seize the House because there is a growing interest in income tax reform and in continuing to reduce the tax burden of Canadians.

In lay terms, to reduce income taxes for Canadians means that they will have more dollars to prepare for their retirement, to spend and to stimulate the economy. I recall in one budget it was referred to as a virtuous circle in which there are benefits.

In the 1998 budget there was a modest tax cut. There was a $500 increase in the personal non-refundable tax credit which went to Canadians who earned less than $50,000 a year. In the 1999 budget that amount was increased by an additional $175, bringing the total increase in the non-refundable tax credit to about $675.

In addition, that same amount was also extended in 1999 to the remainder of taxpayers in Canada who made over $50,000 a year. Non-refundable tax credits benefit all Canadians when we consider the combined federal-provincial rates. It means that the $675 is worth about 25 cents on the dollar of a non-refundable tax credit. It is about $170 in the pocket of each and every taxpayer. That is good news. It also helps to remove people who work part time or are low income Canadians from the tax rolls as a whole. Those numbers have also been significant.

The budget in 1998 began the process of eliminating the surtaxes. We have a 3% surtax and a 5% surtax. The 3% surtax was eliminated in 1998 for taxpayers with incomes of up to $50,000. In the last budget the remainder of that building process was to extend the elimination of that 3% tax increase or the surtax on Canadian taxpayers whose incomes were in excess of $50,000.

A couple of constituents wrote to me and spoke very strongly about the 5% surtax which continues to exist. These surtaxes were imposed as deficit elimination initiatives. Canadians know we have a balanced budget. They are now asking, since it is balanced, for the government to get rid of the 5% surtax. The taxpayers are quite right.

We have to deal with that 5%, but there will be some backlash in that regard because it will be seen as a tax break for the rich. It will be seen that the highest income earners will get a reduction or elimination of the 5% surtax which is applied against their federal taxes otherwise payable in excess of $12,000.

This generates for the Government of Canada about $650 million a year. It is a substantial item and to eliminate it in one fell swoop, or any of these items, would have put the balancing of our books on an annual basis under some pressure and likely in jeopardy. We must continue to balance our books and still be within our means.

Although it is little comfort to those who are paying the 5% surtax, they should know that the finance committee recognizes the need to address that. In our report we recommended the 5% surtax on Canadians be eliminated over a five year period by reducing it 1% each year. That has not happened but it does recognize the need for us to address it. It was $650 million that instead of being eliminated was put into the health care system. It was a choice to be made.

Although investing in our health care system benefits all Canadians, the 5% surtax was a deficit elimination measure that is still there. We have to deal with it and I know all members will have to come forward with a position on the appropriate way to address that $650 million. Because it must be eliminated, what is the fairest way to do it? What is the most timely way to do it and still maintain the priorities, the prudence and the balancing of our fiscal affairs? That is certainly something that will come before us.

In the 1998 budget there was a top up of $850 million provided with regard to the Canadian child tax benefit. This was good news for low income Canadians. We have had no shortage of inputs from Canadians with regard to child poverty and family poverty. The real issue is family poverty.

We invested an additional $850 million in the Canadian child tax benefit. We could not have done that and got rid of the 5% surtax of $650 million and maybe just put $200 million into the child tax benefit. The priority was to address low income Canadians who needed assistance.

There are priorities and trade-offs. There are decisions we have to make every year in every budget. We cannot do it all at once but we are moving in the right direction.

I suspect Canadians well know this was a health budget following on the heels of an education budget. I believe there is substantial support in this place. I hope we will look again at the priorities as we build on the fiscal renewal of Canada. I hope children and the family will have a significant place in the envelope of the next budget. I hope members will take the opportunity to work with the finance committee and to consult with their constituents to help us to identify the immediate priorities, the medium priorities and the long term priorities so all Canadians will benefit in the long term.

[Gilles-A. Perron, Bloc, Saint-Eustache—Sainte-Thérèse, QC]

Mr. Speaker, my colleague across the way mentioned income tax refunds.

I hope he knows that a taxpayer who makes on average $30,000 a year will get a $90 tax refund; divided by 365 days, it is not even enough to buy a cup of coffee.

Does he not believe that the best way to be fair to everybody would be to index tax tables?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am not sure I understood the member's question. If I understood him, he was referring to someone making $30,000 a year only getting a $90 refund. That is probably not the case.

If the withholdings or instalments were made there should be no refund. Someone who makes $30,000 a year, assuming it is a single person filing the tax return, would get a non-refundable tax credit of $6,452. If he had bought no RRSPs he would be paying income tax on about $24,000. Assuming a 50% provincial tax rate, that would mean the effective tax rate of someone at that level is about 25 cents on the dollar, so I would assume that someone would pay income tax of about $6,000.

I am not sure if I misunderstood but Canadians do pay income taxes. Someone who makes $30,000 a year pays about $6,000 in income tax or about 20%.

[Greg Thompson, Progressive Conservative, Charlotte, NB]

Mr. Speaker, the member referred to last year's budget as the education budget. I remind the House that was the same year 12,000 students declared personal bankruptcy because of their inability to get jobs and pay off their student debts. That was the year of the education budget.

This year is the year of the so-called health budget. The amount of money announced by the finance minister, although a substantial $11.5 billion which by anyone's imagination is still a lot of money, will only bring us back to 1995 spending levels by the year 2005. In other words, we will be 10 years behind by the time we catch up after the government having stripped $17 billion from that same budget. How does he square these numbers as a CA?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, sometimes I get a little frustrated with the presentation of members with regard to transfers. If members want to talk about the facts of health care transfers, they know that the cuts to the provinces were a lower percentage of provincial revenues than they were for the federal government. In other words, the federal government cuts to its own spending were higher than were asked of the provinces.

Members will also know that the National Forum on Health, an independent body, made the report that there was enough money in the system but the problem was how it was spent, the wisdom of spending money.

The member also did not say, and he should say, that the transfers to the provinces were not just cash. There are tax points. Even under the old system, as growth in the economy occurred and the provinces were able to generate more money through income tax revenue, the amount of cash was going down. We have to take into account how much the cash transfers would go down as a result of economic growth and increased tax revenues to the provinces.

There is no question that there was a cut, but the member will also have to recognize that the delivery of health care in Canada is through the provinces. We have provinces such as my own province of Ontario that decided to give 15% income tax cuts and at the same time cut health care.

Where are the priorities of the province of Ontario? I know the priorities of Mike Harris. Mike Harris wants to buy an election. He cut health care. He cut it badly. It reflected on services and I am not denying that, but the provinces have a responsibility to deliver health care and Mike Harris did not do it.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I too listened with interest. I think the hon. accountant has his numbers wrong. It is quite clear if we look at the actual numbers that the amount being restored is considerably less than the level before the Liberals took over in 1993. There was a substantial cut.

For the hon. member and his colleagues to continually rip into Harris in Ontario and Klein in Alberta for cutting health care is like whipping a guy because he is running in a race and his leg has just been cut off. They think that whipping him will make him run faster. It just does not work that way.

Originally the federal government financed health care to the tune of 50% of expenses. It has been cutting back, cutting back and cutting back. That happened under the Conservatives and it has been greatly increased under the Liberals. The fact of the matter is that while the government is still continuing to tax us more and more and more, it is giving back less and less and less to the provinces. The poor provinces with limited funds just do not have the money to put into health care.

If we take a province like Alberta, for example—and it is the same in Ontario—the actual component of what the province has put into health care has increased in the same length of time as the government was cutting its funding for health care. Then the federal government turns around and blames the provinces. It is unjust. Let the hon. member try to defend that.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member is incorrect. He said the provinces did not have the money to put into health care. Mike Harris cut income taxes at a cost to the provincial treasury of $5 billion. The cuts to Ontario for health care were under $1 billion. It is a matter of priorities. In Alberta the Klein government is running surpluses and it cuts health care.

Why is it that a province can choose to give tax breaks, run surpluses, cut health care and blame the federal government? The Reform Party is suggesting in the alternative budget to cut $9 billion from spending on health care. The only way Reformers will pay for the spending on health care is that they make a wild assumption that the economy will grow by 5% a year.

When members are in opposition they can say a lot of platitudes and make lots of promises without having to articulate exactly how they will pay for them or how they will be delivered. That is the difference. Canadians understand and I think they reflected their understanding in the results of the election in Windsor—St. Clair when the Reform Party did not even get its deposit back.

Canadians will not stand for this nonsense of playing with numbers. Let us always give them the facts and let Canadians have an opportunity to understand those facts and decide. As far as I am concerned members of the Reform Party continue to give half the story and only the story that suits their own purpose.

[Grant Hill, Reform, Macleod, AB]

Mr. Speaker, I do believe the hon. member is a member who does not mislead intentionally. I would like him to respond to this simple question.

The Harris government has put $1.5 billion more into health care than there was being spent in 1995. Would the member tell me how he can make that a reduction in health care in Ontario? It is not so; $1.5 billion more since 1995. Argue with that, if he will.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the fact is that we cannot have it both ways. Mike Harris is saying, “We've spent $1.5 billion more on health care than we did back in 1995”. That is what he is saying to the public.

However, $750 million of that was severance costs for nurses. I think he had to spend the same amount again to get them back. That is not delivering health care.

The reason that I say we cannot have it both ways is that if the member is standing in the House saying that waiting lists are up, health care is down, health care is awful because we have had these awful cuts from the federal government and yet the province of Ontario delivered $1.5 billion more in spending, how do we rationalize that we spent more but got less service? It has to do with the provincial administration of health care.

[The Deputy Speaker]

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 Sackville—Musquodoboit Valley—Eastern Shore, shipbuilding industry; the hon. member for Lévis-et-Chutes-de-la-Chaudière, shipbuilding; the hon. member for Vancouver East, justice; the hon. member for Yorkton—Melville, firearms registry.

[Paul Mercier, Bloc, Terrebonne—Blainville, QC]

Mr. Speaker, with your permission I will be sharing my time with my colleague, the member for Lévis-et-Chutes-de-la-Chaudière.

I am pleased to take the floor to cast light on what I consider to be some of the most troubling aspects of the federal budget of last February 16. Although my time is too short, I will begin by addressing the underlying trends of this budget, which are evidence of a growing desire by the federal government to invade areas of jurisdiction defined by the constitution as provincial.

Then I shall attack the myths being spread by the federal government about Quebec's receiving its fair share of Ottawa's spending, every year in every budget. To do so, I merely need to refer to the insufficiency of job-creating spending by Ottawa in Quebec on the one hand, and on the other the orgy of spending on federalist propaganda in Quebec, spending that is anything but job-creating.

The Martin budget confirms the Ottawa government's strong tendency to use its spending power to gradually centralize all power within its hands. The federal budget for 1999-2000 fits within a continuing trend which is most revealing of the long-term political objective of the Liberal Party of Canada. Some editorials have rightly described this as a political budget.

Once again this year, the federal government's spending power is being used as a Trojan horse in order to sneak into areas of provincial jurisdiction. After education, this year it is health care, and this time there is no attempt at disguise.

The Canadian Constitution ensures that health is an exclusively provincial responsibility. Yet this budget is taking away funds the provinces need to administer their health systems so that it can create bureaucratic monsters that will usurp provincial powers and duplicate programs. The obvious purpose of this is federal exhibitionism.

I was amused to hear my colleague from St. Paul's say ,in response to a question from my Bloc Quebecois colleague on social union, that health services were certainly a provincial matter, but the establishment of standards was a federal matter. I find that revealing. My hon. colleague considers therefore that the establishment of standards is a federal responsibility, while carrying them out is a provincial one. This is an original view of an area of jurisdiction.

In invading the health care field, the government did not trot out a single Trojan horse, it released an entire stable of them. These Trojan horses are the national health surveillance network, the Canada health network and the Canadian institute for health information. This last one is the most insidious, since it amounts to putting Quebec and the other provinces under guardianship in the area of health care.

The Canadian institute for health information will monitor, diagnose and provide treatment to these health care networks, unilaterally and against their wishes.

Furthermore, programs such as the research and evaluation fund for nursing staff, prenatal nutrition, rural community health and the telehealth pilot project represent very costly and totally useless Canadian flags planted beside Quebec government programs in these areas.

On the political level, it is remarkable that this slow job of sapping provincial responsibilities has produced no major reaction from the provincial governments, except that of Quebec. Despite the commitments the provinces made in Saskatoon, they signed the social union agreement without balking, selling the birthright of their jurisdiction for a plate of federal largesse lentils.

I come to the second part of my remarks. Ottawa has for years claimed that Quebec receives more than its share of federal budget spending. We must take the wind out of this statement once and for all.

First, let us talk about equalization. What is the equalization program? It is a federal initiative designed to compensate the relative poverty of certain provinces. Sure, we get money under that program, but why are we poorer in the first place? It is easy to find at least one reason. It is well known that, given its demographic weight, Quebec receives much less than it should when it comes to productive investments and the procurement of goods and services by the federal government.

Indeed, while Quebec accounts for 24% of the Canadian population, it always gets less than 15% of the federal money for research and development. By comparison, beloved Ontario, which accounts for 37% of Canada's population, gets close to 60% of that money.

This lack of productive spending is a fundamental cause of Quebec's relative poverty. Now, Ottawa is trying to justify its reduced social transfers to Quebec with this compensation under the equalization program. However, by its very nature, that compensation is absolutely not guaranteed in coming years. This strange calculation clearly sets a precedent which might later be used to justify the reduction of overall federal spending in Quebec. This will happen as soon as our province's economic situation changes, at which time Quebec will become a contributor instead of a receiver under the equalization program.

Like me, members probably wonder how Ottawa hopes to impress Quebecers with this budget. While we do not have the federal government's recipe to promote its visibility, we know those who are trying to use it.

We also know of some of the ingredients used in that recipe. There is the Canada Information Office, a propaganda tool with some $21 million to spend this fiscal, the Treasury Board, and the Department of Canadian Heritage, which have explicit instructions to bury Quebec deep in directives and programs all sporting bright red maple leaves.

How are we to explain that Ottawa spends close to 60% of its Canada Day budget in Quebec every year? Flags, flags, and more flags. They are the only thing the federal government gives us way more than our share of.

In conclusion, I would say that the reaction, or non-reaction, to this new federal budget in other provinces once again proves that there are two incompatible visions of government in Canada: Quebec's, calling for decentralization, and the rest of Canada's.

Quebec being in a minority in Canada, about the only option left for Quebecers is to choose sovereignty or go along with a vision of government at complete odds with what they believe in.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I am pleased to have my turn to address Bill C-71, which relates to certain provisions in the budget tabled in the House on February 16.

A budget can be labelled either good or bad, and this is, I believe, a bad one, because it contains some bad provisions. It can also be looked at according to what it should contain but does not.

As the member representing Lévis-et-Chutes-de-la-Chaudière, I can be excused for speaking of a matter of great importance to my riding, the Lévis shipyard, and for pointing out that this budget contains no additional measures relating to shipbuilding.

After a number of questions from us, mobilization of the unions and demands from the shipbuilding association, the Minister of Industry still maintains that there is, in his opinion, no need for additional measures.

But what is it that the industry is calling for? Not subsidies but tax measures, a loan guarantee program, consideration of leasing as a tax compensation, as other major industries are treated, including railways and especially aerospace.

In this budget, there is also a very glaring lack of new measures to create employment and to help small and medium businesses, although these are the main creators of jobs in the country.

In addition to not creating employment, this budget adds nothing to compensate for the cuts experienced by the regions, particularly those affected by seasonal unemployment. Obviously, each riding has faced cuts in this regard. In my riding, the cuts to benefits amounted to $20 million or $21 million a year. That had an impact on the economy. In certain ridings, however, in the more remote regions, which have seasonal unemployment, it was even worse.

We would expect that the government would set aside additional funds for these regions. Instead of doing that, it cut more than $100 million in the budgets for regional development, in the west, the maritimes and Quebec. It cut $27 million in Quebec in regional development. Real sensitivity.

Yesterday, I spoke in the House on the motion by the member for North Vancouver on western alienation over the money that comes from Ottawa, or the way this money is managed for the west. I not only mentioned the amounts allocated to regional development in Quebec—because I am most familiar with this—but I also noted certain anomalies.

For example, the figures I had for the first six months of 1998 indicated to me that the riding of Westmount—Ville-Marie in Quebec received the most money for regional development, an amount that is usually given for regions far from the major centres. The riding of Westmount—Ville-Marie is represented by the Minister of Citizenship and Immigration.

I note that in this period, the ridings represented by the Liberal members had, oddly enough, budgets 50% higher than those of other ridings in Quebec, regardless of whether they were represented by Conservatives or members of the Bloc Quebecois. That was fairly distressing.

In addition, there were cuts to employment insurance that permitted the creation of an employment insurance fund. If it were an independent fund, it would soon be worth $20 billion. That is a lot of money.

What takes the cake is to see the Minister of Finance use this surplus to solve his deficit problems, pay back part of the debt and use new money to intrude in provincial programs and jurisdictions, especially since the social union agreement reached with nine provinces.

In exchange for money, nine premiers out of ten gave up their claims and told the federal government “these are not your jurisdictions, but give us money”. Quebec did not sign that agreement.

The cuts that this government decided to make to the transfers to the provinces between 1994 and 2003 are of the order of $33 billion. This is not peanuts. But now the federal government has decided to put money back in the health sector, to the tune of $1 billion in Ontario and $150 million in Quebec. Ottawa also gave a cheque of $1.4 billion under the equalization program, but let us not forget that this same Liberal government cut $6 billion in the transfer programs for health, education and social assistance. To give back $1.4 billion after making cuts of $6 billion is not fair.

The hon. member for Terrebonne—Blainville spoke about something I wanted to mention regarding equalization and tax points. Since I do not have much time, I will not repeat the examples he gave, but I will say that this is not necessarily linked to the transfer payments, as a number of economists have shown. These are pre-established formulas and the Liberals have nothing to do with them. They were established through agreements a long time ago.

It is exasperating for Quebec to see that it is not getting funds through productive expenditures in the area of research and development, and the procurement of goods and services. I could start a war of numbers regarding taxation and equalization payments, as the federal and Quebec governments did.

Quebec commentators and those who know history will recall that, at first after Confederation, the federal government did not tax individuals directly, the provinces did. The federal government went about it indirectly through excise taxes and customs duties. This is how it raised money.

As provided in the Constitution in cases of emergency and for the sake of public order, during both world wars, the federal government asked the provinces if it could tax Canadians directly through personal income taxes. This was to finance the war, but once it had a taste of it, it got used to it and never went back.

It had reached an agreement with every province, except Ontario and Quebec, in order to continue taxing Canadians directly. Eight existing provinces had agreed. Ontario, which was reluctant, finally came on board after it was offered a very advantageous auto pact. Quebec found itself isolated, and since that time we have been the only province where individual taxpayers must file two returns, contradictory returns with provisions that sometimes cancel each other out.

During a referendum on sovereignty, we will have to make it very clear to people how urgent it is to repatriate all our taxes to Quebec so that we can spend according to our own priorities. Quebec has a distinct culture, and we do business in a distinct manner. The Civil Code is distinct. In every field we see, feel and act differently.

I conclude with the hope of being asked a few questions.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the Canada Health Act is the instrument which the federal government has to enforce health standards in this country.

There are five principles enshrined in the Canada Health Act. One is universality, which means that the health care system is for all Canadians. The second is comprehensiveness, which means that it will cover medically necessary health costs for all Canadians. The third is accessibility. it is accessible to all Canadians. The fourth is portability so that no matter where you are in Canada, no matter where you live and where you may travel it is going to be available. Finally, it is publicly funded, which means it is on a not for profit basis. That is why we do not have a two tiered system. We do not have a system for the rich and a system for those who do not have the funds. We have one system for all Canadians.

How the federal government manages to enforce those standards is by the cash transfer system. Before the CHST, under the old system we had established program funding. One of the programs was health care.

In Quebec's case, the combination of cash and tax points amounted to what it was entitled to based on the funding formulas. The cash portion in Quebec was going down and was expected to hit zero. I believe the cash amount going to Quebec would have been zero by the year 2005.

If that is the case, I simply ask the member, how can he argue that there were transfer cuts which were inappropriate relative to the Quebec situation?

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I have great respect for the member who just spoke. I worked with him on the Standing Committee on Health. He is a very caring person.

That having been said, I urge him to reread the Constitution. Under health, the wording is very clear: except for certain things, such as drugs, or the introduction of potentially diseased animals or plants into the country, health is recognized as a federal jurisdiction under the Constitution.

But for the rest, specifically health care administration, the Constitution is very clear that this comes under provincial jurisdiction. We are forever hearing that, because certain provinces were perhaps not operating exactly as the present federal government would have liked, it is important that all Canadians be treated the same.

This specious principle can be used to flout the Constitution. That is what is creating problems.

After slashing EI and making all the other cuts mentioned earlier, suddenly the federal government finds itself with a bit more money. With this money, which belongs to Canadian taxpayers, it wants to tell the provinces how to run their health care systems. This is unacceptable.

It is also unacceptable that the premiers of all provinces except Quebec agreed to the social union framework in order to get money. They renounced their powers and jurisdiction under the Constitution for money. I dare not use the word that comes to mind, because it would be unparliamentary, but I cannot help thinking it.

[The Acting Speaker (Mr. McClelland)]

It is my duty to inform the House that the time for questions and comments on the speeches is over. We will now go to 10 minute speeches with no questions and comments.

[Greg Thompson, Progressive Conservative, Charlotte, NB]

Mr. Speaker, this debate is reminiscent of any budget debate. It always amazes me to listen to the government side. The Liberals have this institutional memory but it is a very selective memory when they talk about what they have done in terms of the management of the economy.

Of course the Liberals refer back to the government I was a part of. They blame the ills of the world on that previous government. It is true that I was a member of that government. We did not do everything wrong and we certainly did not do everything right. But I remind the House that in the timeframe of the Trudeau era, between 1968 and 1983 when the Liberals left office, the federal debt increased by 900%. That is not a lot to be proud of.

The Liberals fail to mention another statistic. It is a memory lapse. It is a selective institutional memory I am speaking of when I speak of the Liberals. They forget to remind the Canadian public that program spending increased by 800% in that same time period. It is important to put that on the record.

The government does take credit for some of what it has done and maybe we could give it a little credit. It is talking about a balanced budget which at first glance is pretty good. No one will argue with that. It is something we would all like to see, and apparently we have one.

This really confuses me. When the Liberals talk about this balanced budget, they never talk about the $22 billion brought in by the GST. I know why. Because everybody sitting on that side of the House, with the exception of a few, were brought in on that promise to scrap the GST. What happened to that promise? I guess it got lost in the red book. I suppose the red books have been recycled and are now compost. Maybe they are growing tomatoes or something else with the remains of those old red books.

The Liberals conveniently forget that $22 billion. Where would their balanced budget be today without that $22 billion? They would be far short of the mark. I can even see some government members nodding in agreement.

There is another thing that is really interesting. Where is the $26 billion in the employment insurance fund? Does that show up somewhere in the books? My guess is that it does. The government is effectively taking it out of the hides of employees and employers. It is a hidden tax the Liberals are using to balance their books.

Every time I speak on budget measures in relation to the government, I am reminded of the old Mark Twain expression “lies, damned lies and statistics”. I always question into which category the minister's figures fit. It is probably the latter category. There is also the old expression that liars figure and figures lie. The minister is a master at manipulation of the figures. The truth is they have balanced the budget and they have done it on the backs of ordinary Canadians and on the backs of the provinces.

The Liberals take great pleasure in calling it the health care budget. The sad reality is that after putting back $11.5 billion, which is a lot of money if that is what they are putting back, over the course of the next four or five years, in the year 2005 we will be back to the same spending levels in health care that we were at in 1995. Can that by any measure be called a success or an accomplishment? I would not call it that. There is nothing to brag about in this budget when it comes to health care.

I have a clipping regarding the health care budget. It comes from the province that runs the Daily Gleaner . It was in the April 12 edition of the Fredericton Daily Gleaner . It refers to the 122 recommendations contained in a report for the long term recovery of the New Brunswick health care system.

There were 122 recommendations. Why so many? Because health care was destroyed in every single province. Because premiers like Premier Thériault in New Brunswick stood in silent agreement as funding was ratcheted away from health care. Now they are scrambling to pick up the pieces.

The premier is quoted as saying they cannot afford to do it. They cannot afford to do it because it is going to cost the little province of New Brunswick in the vicinity of $400 million.

A lot of that $11.5 billion that was announced as going back into health care, is going to pay off previous debt incurred over the last number of years since this government took office. It is nothing more than smoke and mirrors.

We have a crisis in the country and it is called health care. It is quite interesting that the Liberals call it the health care budget, but why not? Last year they called the budget the education budget. That was the same year that 12,000 students declared personal bankruptcy because of their inability to pay off student debt and get a job. If this is the same type of budget in terms of health care when compared to the so-called education budget, then it is going to have a very short shelf life indeed.

It does not stop there. Another difficulty we have in the Canadian economy, which all goes back to the budget and the management or mismanagement of the present government, is in terms of productivity.

We have the lowest rate of productivity in the G-8. That is not just me speaking. The government has been told this by a number of people, including Sherry Cooper who is the chief economist with Nesbitt Burns. If we do not believe her, how about Michael Marzolini who is the Liberal Party's own pollster? He says that Canada has the lowest rate of productivity among the G-7.

What is the difference if it is the G-7 or the G-8? Productivity in this country is extremely low and it is costing us. The only way we can compensate for that is with a low Canadian dollar, but that is not the way to do it. What the country needs is sound fiscal management. Unless we have that, our standard of living is going to continue to decline year in and year out, which it is doing.

The question we would ask ourselves is: What would happen in Canada if the Canadian dollar suddenly rose? I know where we would be. We would be in a heck of a lot of trouble, because the government has paid scant attention to productivity. We are relying on a low dollar to move our goods into the marketplace. At the end of the day, we are all going to be poorer because of it. There will be a day of reckoning.

The government does not want to talk about this. When it does talk about it, it tries to remove itself from its own very words, as did the Minister of Industry not long ago when he actually gave a speech and spoke about our dismal productivity levels in this country.

All I can say with the little bit of time I have left is that I am pleased to take part in this debate. I think what Canadians want is some real information from the government so we know exactly where we stand in terms of the Canadian economy, in terms of taxation and in terms of productivity.

Let us get real about some of those numbers. I see them always hacking away at that so-called inherited $42 billion debt. Let us talk about the 900% increase in that federal debt in the period when the Liberals were in power from 1968 to 1983.

[Paul Forseth, Reform, New Westminster—Coquitlam—Burnaby, BC]

Mr. Speaker, I will comment about the broad economic philosophy of the government as represented in the bill, and the themes of its economic measures by using the example of some aspects of the personal income tax form. For what we see helps us put into perspective what social attitudes underlie the bill before us today.

First, the big myth is that the Liberals are good managers of the public trust. They are not. It is a myth that they have presented balance to the country in their budgets? What myths. I challenge the media and the folks at home to check the numbers rather than the Liberals spinning machine. The Liberals have shown not to be wise managers of the public trust.

Specifically, to help with general understanding today about the appropriateness of the underlying philosophy of the bill, I cite the historical social attitude of the Liberals toward traditional families in the tax category where parents decide that one of them will forgo a working income to stay home and provide quality child care.

That social choice is denigrated by the government through its tax policy. It is expressed clearly, in the unashamedly unfair differences that it has given since at least 1993, and have deepened in each successive budget. The government's record is that it is not family friendly. Reformers have been talking about it since 1993, but the news media has finally woken up, so when we talk about it and make a point we are now getting it reported.

The finance minister was wrong when he said that his tax discrimination against one income, two parent families was a recent issue for Reform. The Reform blue book as far back as 1993 said:

The Reform Party supports a revision of the federal income tax regulations to end discrimination against parents who provide child-care at home—and—supports equitable treatment for one-income families with dependant children.

Our election platform of fresh start for the June 1997 election clearly included the desired changes on taxation for families. The Hansard shows that I spoke about it clearly in the debate for last year's 1998-99 budget, because by then the hurt against families was really getting deep.

We have been asking why the finance minister would not even admit in the House that his policy documents and budgets have delivered tax discriminations since his first budget in 1994. Why will he not change? Perhaps because he is a Liberal and the cabinet has a mindset of socialist engineering from another era that it cannot let go of. Belatedly, he has now sent the hot potato to committee. It will buy him some political time for now.

The insincere answers that we have received in question period from the finance minister on this subject is avoidance when he claims we Reformers voted against budget measures related to children. His falsity boggles. Reform has voted generally against the tax and spend habits of the Liberals, not specific child programs. We have voted against the lack of accountability in government spending.

The budgets continue to spend too much, therefore tax too much, and thereby the country still owes too much. It is about competence to govern. It is about fairness. It is about helping instead of hurting and equality before the tax law. It is about a Liberal mean-spirited view of the family as expressed in tax law, and about penalizing parents, like giving them a fine for having a traditional family child care arrangement. What hurts the most is that it does it openly and justifies it while it calls us on this side of the House, who have defended the family since coming here, as being just too negative.

The evidence is that the Liberal economic policies hurt people. The whole country knows it, and I am again reminding the House of this again today.

I ask: When will the finance minister provide the tax changes we are talking about today? When will he begin to help rather than hurt families with his tax discrimination? Roughly 82% of Canadians want the tax code changed to make it easier for parents with young children to have a parent stay at home. According to a November 1998 Southam-Compas poll, this is a very high priority for 42% of Canadians, a high priority for 23% and a priority for 17%.

The C.D. Howe Institute's latest report, entitled “Giving Mom and Dad a Break”, states:

Current Canadian tax policy affords no universal recognition of children. In effect, it treats children in middle and high-income families like consumer spending, as if parents had no legal or moral obligation to spend money on their care. This treatment is indefensible.

The balanced budget was achieved by squeezing the people: 76.7% of the balancing came from higher tax revenues; 14% from slashing health and social transfers; 7.2% from cutting transfers to persons; and a minuscule 2.1% by cutting federal spending itself. Where was the government required to live within its means instead of imposing on the weak individual taxpayer? Children are directly hurt by Liberal policy design.

In the 1999 prebudget submission called “Taxes and Health Care: It's Critical”, we proposed an alternate budget. It would include $26 billion in total tax relief and $19 billion in repayment of the national debt over the next three years; increased health transfers to the provinces by $2 billion a year; and an immediate $1 billion reinvestment in Canada's armed forces.

On February 2, 1999 the Ottawa Sun reported that “Sherry Cooper, chief economist for Nesbitt Burns, said Reform's proposals are realistic. This is feasible” she said. Cooper said “If spending is kept in line, the government should have enough money to fund both tax cuts and debt reduction because the surpluses are going to be huge”.

Parents know that the best child care program is a dad and a mom but sadly, commercial day care is the only child care option recompensed by the Canadian tax code. In her 1998 submission to Parliament's finance committee Heather Gore-Hickman, chartered accountant, found that only 16% of families with kids claim the child care expense deduction for commercial day care.

Roughly speaking, in 19% of families, both parents work full time but they either use informal child care, work out of home, or work flex time. So one parent is always at home. Twenty-two per cent of families have a second part time income while providing parent care. Over 33% of families have a parent providing full time unpaid child care.

According to the Fraser Institute in its pamphlet “Tax Facts Ten”, twoearner families earning $30,000 paid $3,492 in income tax, while a one earner family paid $4,317, or 24% more in 1995.

A report showed that a family earning $60,000 paid $6,383 in federal income tax; if a two earner, $10,300; if a one earner, a whopping 61% more.

The tax code of this government sends the message that private parenting has no public value and if chosen, families will be penalized. The suggested changes to bring fairness can be made. These policy problems are only the tip of the iceberg of an outdated Liberal ideology.

I have already cited how the administration is incompetent and how it hurts people and then runs from responsibility, how it fails to fulfil the public trust; but the capper of it all is that when serious policy problems are outlined by the opposition parties and then constructive alternatives are presented from this side to help Canadians, the smugness of the cabinet continues the old style Liberal way and they assert that they have all the answers.

The point is that the Liberals are part of a harsh culture that hurts family life, puts unreasonable pressure on families and poorly serves kids. Heaven help us when the next generation of children returns the favour to our culture. Just 38% of people voted for Liberals, and they still behave as if they had the divine right to govern with impunity and with little accountability.

The bill before us today is the implementation of spending intentions. This legislation is a big fuzzy housekeeping bill that contains a lot of feel good stuff. The Liberals have failed to simplify the tax code. They are announcing money they have already deleted from the taxpayers' surplus in previous budgets. They have failed to give Canadians what they really need, which is massive across the board tax cuts and smaller government.

I trust there will be some better economic policy thought on the Liberal side as a result of these debates. If there is not, we in the official opposition are ready and waiting to govern for the 21st century.

[The Deputy Speaker]

Perhaps we could call it 5.30 p.m. Is that agreed?

[Some hon. members]

Agreed.

[The Deputy Speaker]

It being 5.30 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's order paper.

The House resumed from March 4 consideration of the motion and the amendment.