Madam Speaker, I am pleased to speak to Bill C-71 this afternoon. This is a bill which addresses certain of the provisions contained in the 1999 budget.
A number of areas are involved; in fact, the bill has nine parts. In the next few minutes, I would like to address one of them in particular, which concerns tax arrangements between the federal and provincial governments.
As we know, the federal government collects taxes, lots of taxes. Not just personal or corporate income taxes. There is also indirect taxation, the sales tax, the famous GST. As well, through employment insurance, it collects another large amount, far in excess of what is needed to operate the employment insurance program.
In fact, when one sees all the tax and employment insurance collected by the federal government, one quickly realizes that the totals far exceed the budgetary requirements resulting from the federal government's responsibilities.
This is, moreover, what prompts the federal government to habitually and repeatedly, I am tempted to say sneakily, interfere in provincial areas of jurisdiction. The federal government spends money where it has no right to even be involved, instead of the provincial governments whose responsibilities these areas are.
The consequences are obvious. Individuals and corporations are being taxed excessively. Workers pay some 35% or 35% too much in contributions to employment insurance. In all this, we can draw a simple conclusion: the federal government should reduce its tax bases.
It is also clear that, in the agreements on transfers between the federal and the provincial governments, the federal government gives them money so they may assume their responsibilities in the areas of health, higher education and social services.
Very simply, what we realize is that, with one hand, the federal government recovers its money and, with the other, it gives it out, to a limited extent, to the provincial governments so they may assume their responsibilities.
There is only one justification for this approach, that of redistributing to the less fortunate provinces money collected from taxpayers in the more fortunate provinces so that each province may fully carry out the responsibilities under its jurisdiction in the areas of education, health care and social services.
This may have been the case in the past, but it is no longer so. In fact, in the budget brought down in February by the Minister of Finance, the concept of a redistribution according to need was dropped. Redistribution is now according to the number of individuals living in each province. That is what they call per capita redistribution.
If the money is given to each province on a per capita basis and not based on its relative wealth, then the federal government no longer has any reason to collect from taxpayers money it will give them back anyway.
Since health, education and social services come under the jurisdiction of the provinces, it would be much better to let the provinces themselves adjust their taxes according to their needs, instead of watching the federal government act like a Mr. Know it all and take it all and then try to redistribute the money.
About two weeks ago, I attended the Bloc Quebecois general council, in Rivière-du-Loup. We talked about tax issues, among other things. We discussed the Canada social transfer, which is of course mentioned in the 1999 budget, since the government just changed its nature by redistributing the money under an equalization system.
In one of our workshops, it was suggested that Quebec should let Ottawa deal with the Canada social transfer and opt out of it, but be compensated by getting the full amount of the goods and services tax. The GST revenues are more or less equivalent to the Canada social transfer. In other words, under that arrangement, Quebec would neither win nor lose from a financial point of view.
However, both sides would win in that the duplication of the tax collection process would be eliminated. In Quebec, rather than collecting both the GST and the TVQ, there would be only a single collection, and the total amount collected would remain in Quebec.
As we saw this morning, we often hear comments to the effect that Quebec benefits from the Canada social transfer and similar money transfers between the federal government and our province. This issue would become a moot point. It would no longer apply, since Quebec would no longer benefit—if you will—from the Canada social transfer, since it would get an equivalent amount through the GST.
But there is more. It will be recalled that, when the federal government implemented universal medicare just over 20 years ago, it agreed to share the cost with each province. But, over the years, the federal government has reneged on this arrangement, with the result that it now pays just over 10% of provincial health expenses.
The big problem with the federal government is that its promises are never good for very long. In fact, Ottawa's share of social transfer payments has dwindled over the years.
There is no denying that, if Quebec were to opt out of the CHST and keep the whole GST, it would be safe from further erosion of the CHST by the federal government because it would control its own GST.
There are a good many advantages to the formula put forward in Rivière-du-Loup during the Bloc Quebecois' general council. The first is that it eliminates double taxation from the outset. Taxes would be collected once in Quebec, and remain there. The Government of Quebec could then adjust the amount collected to keep pace with its socioeconomic and cultural needs.
The other advantage is that Quebec would be safe from the federal government's policy changes. The federal government would be able to play around all it wants with provincial transfer payments. Quebec would not have to worry because it will have opted out.
There are many who claim that transfers are a good deal for Quebec when, as they know very well, a per capita CHST would mean disgracefully disproportionate spending by the federal government on goods and services, and research and development. A per capita transfer would mean a 6%, 7%, or 8% increase in federal spending in Quebec, which is not what it is getting.
I see that my time is up. I could go on and on.