House of Commons Hansard #221 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.
Peter Adams LiberalParliamentary Secretary to Leader of the Government in the House of Commons
Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to two petitions.
Commissioner Of Official LanguagesRoutine Proceedings
The Speaker
I have the honour, pursuant to section 66 of the Official Languages Act, to lay upon the table the annual report of the Commissioner of Official Languages for the calendar year 1998.
Pursuant to Standing Order 108(4)(a), this report is deemed permanently referred to the Standing Joint Committee on Official Languages.
Bernard Patry Liberal Pierrefonds—Dollard, QC
Mr. Speaker, pursuant to Standing Order 34, I have the honour to table, in both official languages, the report of the Canadian branch of the Assemblée parlementaire de la Francophonie, as well as the financial report.
The report relates to the political committee meeting held in Cairo, Egypt, on February 23 and 24, 1999.
Albina Guarnieri Liberal Mississauga East, ON
Mr. Speaker, I have the honour to present, in both official languages, a unanimous report, namely the fourth report of the Standing Committee on Human Resources Development and the Status of Persons with Disabilities.
I would like to express special thanks to our committee clerk, Danielle Parent-Bélisle, and researchers Sandra Harder and Bill Young for diligently meeting all committee deadlines. I wish to personally thank all members of the committee for their tremendous collaboration and co-operation on the modernization of Canada's social insurance number system.
Sarmite Bulte Liberal Parkdale—High Park, ON
Mr. Speaker, pursuant to Standing Order 34, I have the honour to present to the House a report from the Canadian branch of the Commonwealth Parliamentary Association concerning the 48th Commonwealth parliamentary seminar which was held from March 2 to March 13, 1999 in Westminster, United Kingdom.
Ken Epp Reform Elk Island, AB
Mr. Speaker, these petitions keep pouring in. Today I have another 109 signatures on a petition that calls for fairness for families who choose to have one parent stay at home to look after their children instead of farming them out to others. There are 109 names, mostly from people of Sherwood Park and Gibbons, in the wonderful riding of Elk Island.
Peter Adams Liberal Peterborough, ON
Mr. Speaker, I rise to present a petition from citizens of the Peterborough area who are concerned about cruelty to pets. They point out that there is mounting evidence of a link between animal abuse and domestic violence, and violence against people in general, and that essentially the Criminal Code regards animals as property and offences against them as little more than property offences.
Therefore, the petitioners call upon parliament to work toward swift and effective action that works to modernize Canada's laws dealing with crimes against animals and that the penalties for such actions be made strict enough to act as a deterrent against such behaviour.
Gérard Asselin Bloc Charlevoix, QC
Mr. Speaker, pursuant to Standing Order 36, I am tabling in the House today a petition signed by 2,000 constituents in the riding of Charlevoix.
In the light of past events, the number of passengers and the amount of traffic annually at the Baie-Comeau airport, the petitioners ask Parliament for a reassessment of the safety criteria and the construction of a control tower or flight information station to ensure greater air safety.
Federal government cuts to regional airports must stop, because they jeopardize passenger safety.
Guy St-Julien Liberal Abitibi, QC
Mr. Speaker, I would like to table a petition from the Inuit community of Kangirsuk in Nunavik.
According to the petitioners, between 16 and 20 people are living in three bedroom accommodation. The Inuit are very upset at the housing conditions in Nunavik. They consider the situation intolerable. It is causing increased incidence of tuberculosis, infectious disease and social problems.
The federal government must honour its obligations under the James Bay and Northern Quebec Agreement as far as housing in Nunavik is concerned.
Inky Mark Reform Dauphin—Swan River, MB
Mr. Speaker, I am pleased to rise to present three petitions on behalf of the good people of Dauphin—Swan River.
The first petition asks the House to aid in the ongoing problems with young offenders in this country. Crimes committed by young offenders, such as murder, rape, arson and robbery, have increased in recent years and stronger laws have to be enforced.
Inky Mark Reform Dauphin—Swan River, MB
Mr. Speaker, in the second petition the petitioners request parliament to advise the government to mandate the Canadian Wheat Board to deliver its grain shipments to the port of Churchill, which offers the most advantageous cost to producers, and that it require purveyors to guarantee seamless car interchange between CN, CP, the Hudson Bay Railway Company and other short lines.
Inky Mark Reform Dauphin—Swan River, MB
Mr. Speaker, in the third petition the petitioners of Dauphin—Swan River request parliament to advise the government to summon a fit and qualified person, democratically elected by Canadian citizens residing in Manitoba, to take a place in the Senate of Canada whenever a seat becomes vacant.
Lou Sekora Liberal Port Moody—Coquitlam, BC
Mr. Speaker, I am pleased to present a petition signed by a number of Canadians, including those of my riding of Port Moody—Coquitlam—Port Coquitlam.
The petitioners call upon parliament to amend the decision to participate in NATO military action against Yugoslavia, to call upon our allies in NATO to cease their participation in the undeclared war against Yugoslavia and to support a peaceful solution to the crisis in Yugoslavia which is fair and acceptable to all sides.
The petition contains some 2,700 signatures.
Peter Adams LiberalParliamentary Secretary to Leader of the Government in the House of Commons
Mr. Speaker, I suggest that all questions stand.
Questions On The Order PaperRoutine Proceedings
The Acting Speaker (Mr. McClelland)
Is that agreed?
The House proceeded to consideration of Bill C-71, an act to implement certain provisions of the budget tabled in Parliament on February 16, 1999, as reported (with amendments) from the committee.
Budget Implementation Act, 1999Government Orders
The Acting Speaker (Mr. McClelland)
A motion in amendment stands on the notice paper regarding the report stage of Bill C-71, an act to implement certain provisions of the budget tabled in parliament on February 16, 1999.
Motion No. 1 will be debated and voted on.
I will now put Motion No. 1 to the House.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
moved:
Motion No. 1
That Bill C-71, in Clause 4, be amended by deleting lines 13 to 43 on page 3 and line 1 on page 4.
Mr. Speaker, earlier I was listening to the Parliamentary Secretary to the Minister of Finance, who was not pleased because we want to delete some lines in his minister's bill. But we are extremely happy to propose the deletion of these lines. We hope that all parliamentarians in this House will realize that our motion only makes sense.
Bill C-71 includes measures that are clearly inadequate, such as those designed to fight poverty, particularly child poverty. The legislation also includes measures that are outrageous. I will just mention the unilateral change in how the Canada health and social transfer is distributed among the provinces.
As for child poverty, one would have expected that, in this budget, the Minister of Finance and the whole cabinet would have shown a little more compassion.
There is some improvement with regard to the national child benefit. This is clearly not enough, given that the Minister of Finance could have taken that measure as early as last year, let alone this year, with the huge surpluses that are accumulating daily in the federal treasury.
Last year, that is during the fiscal year that ended on March 31, 1999, the Minister of Finance accumulated a surplus of $15 billion. He used almost all of that money to pay off part of the debt. The minister could have taken a more balanced approach. There is balance and there is balance; a balanced approach should also be taken to making choices about how the tax dollars of Quebecers and Canadians should be spent.
The Minister of Finance could have set aside a few billion dollars of this surplus of $15 billion, instead of handing it over to creditors who do not need it. He could have waited a few more months. He could have used this money to further increase the national child tax benefit.
Do people realize what this increase in the child tax benefit will mean in dollars for low and middle income families? It will put an additional $180 to $350 a year into their pockets. This benefit for Canada's poorest children is not a lot when compared to the substantial tax relief the Minister of Finance made available to top income earners.
Here is an example: the savings for someone earning $250,000 a year will be $3,000 a year starting this year and continuing in subsequent years. A child who probably goes hungry every day gets an additional $350 a year at most, while someone with an income of $250,000 gets a $3,000 tax break.
Did the Minister of Finance make the right choice? From the standpoint of equity, social justice, and compassion, it is the worst choice a finance minister has made in quite a few years.
Let me give the figures again: a surplus of $15 billion for the fiscal year just ended. This year, if the tax dollars continue to come in at the same rate, the Minister of Finance will have over $20 billion in the surplus at the very least. It seems to me that he could have made an effort. He could have kept back some of this money to help poor families.
This clown rises just about every day in this House to proclaim his desire to improve the lot of the most disadvantaged members of society and of the children of Canada who are living in poverty. He ought to walk the walk, not just talk the talk. For years we have been waiting for some action from this man, and none has yet been forthcoming.
It would have been very simple for him for several years, and this year even more so, to plug up the tax loopholes, as we have been promised every year since 1993. He had even told us that, in 1999, the famous family trust loophole would be eliminated.
We will recall that, in 1996, the auditor general had uncovered a scandal involving two family trusts with total assets in excess of $2 billion, which had been transferred to the United States without a single cent of tax being levied, a loss of some $600 million or $700 million in taxes to Revenue Canada.
Those trusts were allowed to escape. This year, the Minister of Finance promised that this leak and the tax loophole that made it possible would be plugged. This has not yet happened. The Minister of Finance has not yet done anything about the tax loophole which makes tax evasion possible for millionaires and billionaires, with his blessing, while Canada's poorest children get $180 a year from him.
This is unfair. It is not logical to see children going hungry, while tax loopholes are being maintained for millionaires. These loopholes save them hundreds of millions of dollars in taxes. To give a tax saving of $3,000 to those with an income of $250,000 and over but only between $180 and $350 to the poorest families in this country does not make any sense.
The Minister of Finance is also still talking about the tax reductions to middle income taxpayers. These, however, are not real. There is talk of broadening the base for GST credits, which is good news. But when one looks at what this means at the end of the day, given how much taxpayers are paying out, since ours is among the highest taxation levels in the world, this is all smoke and mirrors.
Let us see, since 1986, how Quebec and Canadian taxpayers have had to pay out because the tax tables and the entire tax system are not fully indexed.
Between 1986 and 1996, the fact that income tax on supplementary income did not take into account the increase in the cost of living, the GST credits did not reflect the change in the cost of living above 3% inflation, federal family allowances were not fully indexed as they should be, the child tax credit had to be paid back, all this and the fact that all Canadian tax measures are not indexed meant that between 1986 and 1996 average Quebec families paying tax to Ottawa—for a while yet, perhaps several years—paid $7,000 more than they should have paid had the tax tables been fully indexed.
Residents of Ontario subject to the same mechanisms as Quebec taxpayers paid $10,000 too much. Had the tax tables been fully indexed, we would have had this as net income in our pockets over a ten year period from 1986 to 1996.
The cup is nowhere near our lips. We are nowhere near substantial reductions in taxes, when our tax system systematically robs us because taxes are not indexed. This is the first thing the Minister of Finance should have done when he took office, had he been a little more dynamic and stopped watching the economy work for him and the provinces and the unemployed doing his work by eliminating the deficit and increasing the surplus. But he did not.
We have a lazy Minister of Finance, who lets things go as they will, but takes all the credit. He does not say that every year he creams off the employment insurance surplus, which represents several billion dollars.
We are now talking $20 billion that were literally grabbed by the minister from the fund. But he does not mention that. He does not mention that he starved the provinces, through the Canada social transfer, of cash needed to fund health, post-secondary education and social assistance. No, the minister says nothing on that score.
He does not mention that it is the unemployed, the workers contributing to the employment insurance fund and the provinces that did the job for him. He is taking all the credit. He is no doubt getting ready for the leadership race. This is outrageous. It is despicable to play petty politics on the backs of the poor, as the minister is doing, while taking credit for the sacrifices made by others. This is shameful.
As for the Canada social transfer, the Minister of Finance had a little surprise in store for us in the last budget. Without any warning, without informing anyone, he decided that, to reward some provinces, particularly Ontario, which was so quick to get down on its knees to sign the social union framework agreement, but also British Columbia and Alberta, he would give them a nice present, again without informing Quebec.
Ontario was probably in the know. Mike Harris reacted so strongly during the first few minutes of the budget speech, that he could not possibly not have known.
The minister offered these provinces to change the method, based on population, used to distribute the money from the Canada social transfer. The result of this was that Quebec lost $350 million annually, while Ontario got about 50% of the Canada social transfer.
My motion today seeks, among other things, to change the calculation method announced without warning by the Minister of Finance, and to revert to criteria based on the province's needs, as was previously the case.
Monte Solberg Reform Medicine Hat, AB
Mr. Speaker, it is a pleasure to rise and debate Bill C-71 today. I will start by addressing the amendment from the Bloc Quebecois.
I appreciate the concerns expressed by my colleague from the Bloc but I simply do not know of any fairer way of dispersing the CHST other than on a per capita basis. While I understand his concerns, I must disagree with him and say that per capita is the way to go.
Having said that, I certainly have grave concerns with Bill C-71. I think it is an example of the failure of the government to understand the real legitimate concerns of Canadians. To put this into context, I simply have to refer to the remarks by the Prime Minister that we read in the newspaper this morning. He said that Canadians did not need to have tax relief in a big way any time soon, that he would basically take his time reducing taxes and that what we really needed was bigger government. He said that we needed to spend more money on making government bigger.
I do not think I can find words to express how much I disagree with that whole approach that the government is taking. We see it again in Bill C-71 where we have a piece of legislation that is absolutely bereft of tax relief at a time when Canadians have made it very clear that we need to have tax relief.
I want to back up for a second. Last year we saw the government go about $3 billion over budget in its program spending; this year it was $7.6 billion roughly. At every turn, the government is taking steps to ensure that the surplus never gets big enough that there is money to actually give back to Canadians in the form of lower taxes. It is critical that starts to happen.
Across the hallway in the finance committee right now, we have experts from around the country who are coming to talk to us about the issue of productivity. Again, the government seems to think that we can make the country more productive by spending more on social programs and by having a children's budget in the next budget. We reject that.
We say that the way to make everybody better off, the way to make children better off is to start lowering taxes. If we do that, people will not only have more money in their pockets directly because taxes will have come down, but we will have all this increased activity in the economy. When that happens, there will be more jobs created, more people actually paying income tax and ultimately more revenues coming into the government for important things like paying down debt and even reinvesting in health care.
Government members seem to think it is a better approach to take that surplus. They assumes it belongs to them and not the taxpayers, which I think is crazy. It is standing on its head the idea of delegation to the federal government from the people. They take that money and spend it in a way they think is best, not realizing that 30 million Canadians have different priorities they want to spend that money on.
I emphasize the government's approach is wrong headed. The degree of tax relief it proposes to offer is of such tiny magnitude that it could not possibly have the impact it hopes it will have. It is a question both of direction and of degree.
I also want to refer to a red herring which the Prime Minister tossed out in his remarks as reported in this morning's newspaper. He said that we do not want to be like the United States and if our taxes are cut to the degree of the United States we will somehow be like the United States and have all the problems it has. I want to tackle those comments head on.
I reject the idea that prosperity is purely a United States phenomenon. It is ridiculous. It is a red herring. The Prime Minister is desperately trying to create the spectre of a U.S. style economy with U.S. style health care and all the things Canadians have made very clear they reject, simply so he can get out of lowering taxes.
I suggest to the Prime Minister and to the government across the way that it was not very long ago when we were the economic betters of the United States. We had taxes that were lower but still had our own country. We had our own set of values and we were not at all like the United States. We had prosperity that equalled and was even better than that of the United States. Why can we not have that again? I think we can. We can have our own priorities and be prosperous.
What does the government have against an improved standard of living? After all, the industry minister pointed out that our standard of living has fallen behind that of the United States. According to the industry minister our standard of living fell behind those of the poorest deep south American states of Mississippi, Alabama, Georgia and Louisiana.
The official opposition believes we can have prosperity and still be uniquely Canadian. Because we have low taxes we do not need to be exactly like the Americans. The Prime Minister is dragging this issue out so he can avoid the whole debate about tax relief, simply because he would much rather spend that money and have his bureaucrats and people in government spend that money as opposed to leaving it in the pockets of individual Canadians who desperately need it.
The standard of living of Canadians is being eroded every day. Canadians have made it clear they would like to see that money used to redress some of the inequalities in the tax system.
We had a debate in the House not long ago brought on by questioning of the junior finance minister by the official opposition. We pointed out that single income families were discriminated against in the Canadian tax code. We should be using that surplus to give some tax relief to single income families that are struggling to get by. They have seen their standard of living eroded. They want to give their children and ultimately their grandchildren a better life than they have had. I think that is exactly what all parents aspire to.
They will not get if if the surplus is used to build bigger bureaucracies, big social programs, and make government bigger at a time when government is full of waste and continues to misspend that money. Government is not omniscient. It does not know what people will use that money for in their individual private lives. People should be allowed to make those decisions for themselves.
For all their talk across the way about compassion, I must point out that we could be using that surplus to reduce the unbelievable levels of taxation on Canada's poor.
Believe it or not, the government takes $6 billion a year from Canadians earning less than $20,000 a year in taxes: every year $3.7 billion in income taxes and $2.3 billion in payroll taxes.
The Liberals talk a good game about cutting taxes and trying to help the poor but at the end of the day they tax the hide out of Canada's poor. That is unbelievable. It is time to reverse that trend. It is time to start to push up those basic exemptions a lot further than the piddling tax relief they obtained from the government in the recent budget. It is time to lower rates. It is time to eliminate the inequalities in the tax system to get rid of bracket creep, the inflation tax the government has profited by over the last several years at the expense of taxpayers.
Bill C-71 is inadequate. I do not think it addresses the priorities of Canadians. It continues to tax at ridiculous rates. It is time to reverse that trend and use that surplus to start to ease the burden of long suffering Canadian taxpayers.
Angela Vautour NDP Beauséjour—Petitcodiac, NB
Mr. Speaker, I was looking forward to speaking to report stage of Bill C-71. I certainly understand the situation my colleagues from the Bloc and those from Newfoundland are encountering with respect to transfers to the provinces. However we have to look at the issue in a broader way and use very understandable language.
It is very clear that poverty is increasing in the country. I do not think anyone could argue that. We have 500,000 more children living in poverty since the Liberals came to power. The Liberals are bragging that the country is doing better than ever. I certainly would not want them to start saying that we are not doing very well, because then definitely there would be a lot of people in trouble.
There is nothing in Bill C-71 to help the children living in poverty. The same children who were hungry before the last budget are still hungry today. That will not change unless the government changes its direction. Unfortunately we have an official opposition that is pushing the Liberal government to cut even further.
Earlier a Reform member referred to social programs as being a waste. I find that very unfortunate. I hope people who need social programs recognize what is being said in the House sometimes by the same parties that are trying to tell Canadians they care about what is happening to poor children.
Perhaps some in the House would like to talk about the poor bankers, but I would rather talk about poor children and the poor parents. My goal is to try to help the children and the teenagers who are living in great difficulty.
There are serious problems in this country. There are students who accumulate $40,000 in debt during four years of university. They have a mortgage on their home and have still not even found a job. Someone should talk with them and begin to give them some hope.
Since June 2, 1997, when I was elected, I have not seen much done to give hope to young people, to single parent families living on welfare or inadequate salaries. These people cannot afford day care.
If we look at what the Liberals promised in 1993, a national day care program was right up there. What became of this promise that was so important in 1993? They have had enough time to implement this program. But instead they decided to go after the surpluses.
And where did they look? In the EI fund, which belongs to employees and employers and which is there to help employees through periods of unemployment when times are tough.
The Minister of Finance is quite a creative fellow. The President of the Treasury as well is starting to take a pretty creative approach to the pension fund of federal employees. The two of them went after $25 billion in the EI fund and $30 billion in the pension fund respectively.
Questions are in order when people contribute to a pension fund and, overnight, the government can decide to lay claim to it and say that it belongs to all taxpayers. A look needs to be taken at who actually contributed to this fund.
When the government cut the EI program, the result was widespread poverty. Today the 500,000 children who are poorer than they were in 1993 have not benefited from a better economy. That is not true. It is a known fact that the ones who benefit from a better economy are the richest people in this country. The gap between rich and poor is wider than it has ever been in this country.
The decisions taken by governments have helped one group, the people who already had money, while causing suffering to many families. We see the results in our communities. We see the results of a lack of job creation. We see the lack of understanding of the situation in the Atlantic provinces, when we hear comments made here about those people not wanting to work.
The reality in our regions must be seen first hand. We live in regions where the jobs are seasonal. Last week, they were calling for 20 centimetres of snow down there, while people were going around in shorts here in Ottawa. The tourists wandering around Parliament Hill are not doing the same on the beaches of New Brunswick, at this time of year. We can still see ice on the beaches.
This must be understood: we live in a country of great diversity. This requires a strong central government with a desire to continue to help the entire country, not just the few richest provinces, which is what we are seeing today.
It is a great pity that we again had a budget that does not respond to the needs of everyone in the country, just those of a few provinces and a few groups. The rich get richer and the poor get poorer. Children who went hungry before the budget are still hungry, and will continue to be. One day, I hope, we will have a government with a conscience.
The Minister of Finance should visit food banks, as I did a month or two ago, and meet the families that have to rely on these food banks. We must get it out of our heads that people are just pretending that they need to go to food banks. Not too many people get up in the morning and muse about which food bank they will go to, to get their groceries.
The majority of people going to food banks need help. The Minister of Finance should have dinner in one of these places every now and then, instead of eating with his friends, the bankers. He might reconsider some of the decisions he is making.
The problem today is that too many people making decisions are associated with just one group. The Prime Minister put the Minister of Labour in charge of the homeless issue, but we have yet to see any related budget or structure. Very little action has been taken.
I am convinced the minister is prepared to do her job. However, she must be provided with the necessary tools to do it properly. I am convinced that, so far, she has not been given the resources she needs. She will not be able to do her job until she gets those resources.
I hope that, in the future, opposition parties will start looking after the interests of the poor in this country. This is difficult to do when the official opposition's goal is to lower taxes. But at what cost? Some provinces need help. Our party says that a tax reform is in order, because there are people who should not be paying taxes, while there are others who do pay taxes but should be paying more. We all recognize that, but we must also recognize that social programs are needed. We need to help those who are suffering. The $42 billion deficit has been eliminated.
Who paid off part of that deficit? It is the unemployed, the elderly and the young university graduates with debts of $40,000 or $50,000. It is these people who eliminated the $42 billion deficit. We must help them, because they are in need. Bill C-71 clearly does not meet the needs of all Canadians.
Scott Brison Progressive Conservative Kings—Hants, NS
Mr. Speaker, it is with pleasure that I rise to speak to Bill C-71, the budget implementation act.
I am going to address some specific and very important issues which I feel the budget has not addressed fully. Then I will speak in a more general sense about tax relief. The time constraint of 10 minutes does not allow for a detailed discussion of some of these issues, but I will focus on a few specific areas that I feel the government has failed to address.
The first area the government had an opportunity to address more fully was EI premiums. The government says that it has reduced EI premiums over a period of time, but the fact is it has maintained EI premiums at a rate that is significantly higher than the necessary rate of $2 per $100 contribution. That rate would be enough to sustain the EI fund even during an economic downturn.
The question that has to be asked is why would the government want to maintain a direct tax on jobs, a payroll tax that directly reduces the incentives for companies to expand and hire more workers at a time when we have unemployment rates in Canada at twice those of the U.S. Why would the government want to do this?
The government has slashed benefits to an extent that only 30% of those making EI contributions can actually withdraw or qualify for EI benefits when they are in need. At the same time it is maintaining unnecessarily high premiums to create a surplus that can help pad the government's books in other areas. The government is trying to make its numbers look better.
It is consistent with the government's actions in Bill C-78. That legislation will effectively provide the government a mechanism by which to access the $30 billion surplus in the superannuation fund. Again the government is trying to find any means by which it can pad its books, use the money for other unrelated spending and create a less transparent process, a more Byzantine and circuitous fiscal process.
The government hopes that Canadians will not be able to figure out what is going on with the federal budget process and that Canadians will not realize the degree to which a real tax cut, significant broad based tax relief, is possible in Canada. At the same time, this provides the government with the opportunity to spend more of Canadians' money on programs it deems are important.
There is the issue of the seasonal worker. In the finance committee we are talking about productivity issues. I would assert that the issue of the seasonal worker in Canada is one that should be incorporated into this discussion.
There was a time in Atlantic Canada when much of the workforce was employed seasonally, particularly in the fisheries, forestry, agriculture, and other industries which are inherently seasonal. The government through its changes in the EI program has effectively eliminated the opportunities that once existed for seasonal workers in Atlantic Canada.
The government thought that if it eliminated the potential for seasonal workers to draw EI, more of them would be working. I do not know where the government's leap of faith came from, but the fact is the result of its policy has been perversely to create disincentives for individuals who did work seasonally to work at all.
Currently these disincentives have been created for those who did work in seasonal industries in Atlantic Canada, Quebec or rural Canada. Those people did work at least part of the time and contributed. They are facing a direct disincentive to working at all. Many of them are on provincial social assistance programs.
This has caused an increase in poverty. This has caused increased strains on the provincial governments which are facing other cutbacks and now have to face a higher social burden because the government has tried to create this huge surplus within the EI fund to pad its books.
The issue of high marginal tax rates in Canada has to be addressed. I recently participated in the Canadian Tax Foundation's annual conference. The theme came up over and over again that our high marginal tax rates, particularly relative to those in the U.S., need to be addressed. While the government has tinkered a little bit around the fringes, it has failed to deal not just with tax reduction but with a more holistic set of tax reforms.
There has not been meaningful tax reform in Canada since the late 1980s under the previous government. This government is ignoring some of the significant issues we have, particularly the huge tax gap between Canada and the U.S.
Innumerable reports have provided information to the government on how to reform both personal and corporate taxes to create a more competitive environment, better productivity, less disincentives for Canadians who want to succeed here in Canada. The latest of these reports was the Mintz tax report that came out in June to which the government has not really responded. In all likelihood that report will collect dust because the recommendations are so good that the government is afraid to implement them. The political will is not there.
In 1994 Industry Canada worked with the Canadian Federation of Independent Business and other organizations to write the report, “Breaking through Barriers: Forging our Future”. It was a great report that addressed tax issues and regulations and all kinds of policies that should have been dealt with. Again, the government has shelved the report.
The industry minister said earlier this week that in the upcoming budget he would like to see 50% of the budget dedicated to productivity and 50% dedicated to lower taxes, the inference being that lower taxes have nothing to do with productivity. This is the same industry minister who said a few months ago that high taxes may help improve productivity because they would make people work harder. They would have to work harder to pay the burden of a bloated government.
Yesterday we read the Prime Minister's comments in the National Post that the so-called brain drain will not be reversed through lower taxes alone, that it would take the kind of positive actions we have already taken to foster economic dynamism. Effectively the Prime Minister is saying that only the government can create positive action and foster economic dynamism. The Prime Minister is still focused on a 1970s command style economy. He is ignoring the fact that true economic growth can only come through unfettering the Canadian public from an over-burdening tax system that continues to pummel productivity and continues to pummel initiative.
The Liberals still believe we can spend our way to higher levels of productivity and that somehow we can create initiatives through government that can somehow exceed the level of growth that is possible from the private sector.
It is interesting that one of the members opposite said “Let's hear it for Brian Mulroney”. I think he has an incredibly important point. Former Prime Minister Brian Mulroney reduced the deficit as a percentage of GDP from 9% in 1984 when it was at $38 billion in 1984 dollars to around 5% by the time he left office. He reduced government program spending growth from 15% to 0% by the time he left office. He implemented the free trade agreement, against the wishes of the Liberals of course, and the GST. By the way, I read recently the current finance minister's comments on the GST back when he was a critic, that the Liberal government would be tearing up and getting rid of the GST.
The fact is those were the types of policies and initiatives, the long term approach to very serious issues that Canada faced then, which this government should be trying to effect and produce now.
Instead of taking a crisis management knee-jerk reaction approach to issues, instead of using Liberal focus group and poll driven economics as opposed to true economically sound and rooted policies that will drive productivity and growth into the 21st century, the Liberals continue to focus on the short term politically palatable. They ignore what in the long term will provide the type of growth Canadians need in the 21st century. They ignore the types of initiatives that will actually generate a Canada that in the 21st century will be leading the world in productivity instead of being embarrassed by the fact that Canada continues to lag and is underperforming relative to the other economies.
I look forward to the comments of the other members.
Tony Valeri LiberalParliamentary Secretary to Minister of Finance
Mr. Speaker, I listened attentively to the parties' representatives as they spoke on this motion. With the exception of the mover of the motion and the Reform Party which spent all of five seconds on the particular motion, I do not believe there is very much support in this House for a motion that attempts to gut the equal per capita formula that is in place. That is in fact saying that what we are attempting to do in providing each and every Canadian with an equal amount of transfer from the federal government to the provincial government is somehow unfair. Essentially the Bloc is saying that it is unfair for the federal government to treat each and every Canadian regardless of what province they come from in a manner that is fair and equitable.
What we have done is eliminated the cap on CAP, a program and an initiative which was put in place in 1990 by the previous Conservative government. It limited growth of the CAP payments to Ontario, Alberta and British Columbia. Now that our fiscal situation has improved, this government is in a position to correct this inequity, which is what we are doing with Bill C-71.
All provinces, including Quebec, will get the same amount of money per person of the new CHST health money. It is only fair that Canadians regardless of where they live receive equal federal support for health and other social programs.
When the Bloc and the Government of Quebec cry foul, they are really distorting the facts to suit their purposes. The figure they talk about does not in any way include the new funds the Government of Quebec receives under the equalization program. When we count the equalization programs, Quebec will be getting 34% of the total increase in federal transfer payments announced in the last budget. That is quite a bit higher than Quebec's 24% share of the Canadian population.
I find it somewhat disturbing and obviously quite ironic that the Bloc would get up today and ask that members of this federal House support a motion that essentially says to Canadians that we do not want to treat them in a fair and equitable manner, that we do not want the federal government to transfer moneys to each and every province of this federation in a way that reflects their population so that an equal per capita amount of money is transferred. I find that disturbing.
I call upon members of this House to support the bill and to vote against this motion. Members would find it very hard to go back to their constituencies and say that they supported as members of parliament a motion in the federal House that said that we do not want to treat each and every Canadian in an equitable manner.
With that being said, there is not a lot more to say on the motion with one exception. The Bloc member said that there were unilateral changes made to the transfers to the provinces. I must correct that statement with some fact.
I point to the number of meetings over the past couple of years that our finance officials had with the finance officials from the various provinces and their counterparts. They dealt with all questions involving transfers to the provinces. At each of the meetings the subject of the CHST allocation among the provinces was raised.
At a meeting of ministers of finance last June the province presented a document proposing an amended allocation formula, whereby all provinces were to receive an equal amount per capita. Two methods were proposed and the government chose one method that was the fairest to the less well off provinces. The current legislation allows for moving in this direction and removing the disparities completely in the years to come.
I mention the equalization program because it is important to note that along with the technical improvements being proposed to the equalization program again Quebec receives more than its fair share in that respect as well.
I want to turn for a second to each comment made by the various parties so far. The Bloc talked about helping kids but did not feel that a transfer to the provinces was essentially responsible. I am sure members of the Bloc would not at this time be proposing, in their minds at least, that the government intervene in programs of provincial jurisdiction.
Transfers are a method of the federal government providing support to provincial programs, delivering social programs and helping children. I find it ironic the hon. member would say that the government has not been able to assist children in the province of Quebec when it has been increasing equalization payments. There are increases in the CHST allocation over five years. These moneys are within the control of the provincial governments that support and deliver programs which help poor kids in the provinces.
Bloc members also think the equal per capita formula was a gift to Ontario. For some reason they feel that treating each and every Canadian in an equitable and fair manner is a gift. I do not consider it a gift. I do not think many members of the House consider it a gift. I think members believe it is the very least government can do. The expectation of Canadians is that governments will treat each and every Canadian in a fair and equitable manner.
I suspect that motion will not receive very much support in the House, with the exception of members of the Bloc. I do not profess to know how they think. I think that is beyond my ability and probably the ability of most members.
I turn to Reform Party members who indicated that they did not feel anything was wrong with this part of the bill. However they felt other parts of the bill raised some concerns. The Reform member went on to say that big social programs were the focus of the government and made reference to the Prime Minister's remarks in the paper this morning.
I am not sure most Canadians would consider an $11.5 billion transfer to provinces for health care to be a return to big social programs. Essentially we have restored cuts that were made to deal with the deficit. We have indicated our commitment to continue to fund health care and to continue to provide transfers to the provinces. I do not consider health care and education big social programs. I consider them to be at the centre of what the country needs to continue to prosper.
Health care is a very important component of the country, as are education and skills training. Many high tech companies talk about skills training. If hon. members had an opportunity to look at the recent edition of Maclean's , they would see it talked about the recruiting methods of American companies, what Canadian companies need to do, and how Canadian companies need to compete and create that kind of work environment. I agree we need to participate in that domain. As a government we would do what we could.
We continue to say that a balanced approach will continue to provide health care and education, which certainly are priorities of the government, as is the tax burden which Canadians continue to shoulder. We have indicated that we will continue to reduce taxes. We have provided $16.5 billion over the last two budgets. We will continue to do more. However, we will not turn around tomorrow morning and put forward a $10 billion tax cut that will put us back into deficit. Canadians would not support that. We have indicated that we will continue our measured approach.
It is easy for opposition parties to say do it yesterday, but government has a responsibility to Canadians. Our responsibility is to ensure that we do not go back into a deficit and that we do not add to the phenomenal debt we had. We pay an exorbitant amount of interest on that debt. We need to continue to reduce it. We need to continue to reduce taxes. We will do so, but at the same time we will not jeopardize health care and education, which are Canadian priorities.
Very quickly I will turn to what the Conservative Party talked about in terms of EI. When we took office EI premiums were $3.30 per $100 of employment income. We have reduced the EI premium over $5 billion since coming to office. We will continue to provide a very equitable way of dealing with it.
I reiterate that Bill C-71 is crucially important for Canadians. It provides the tax relief for which they have asked. We will continue to do more as we continue to reflect Canadians priorities.
Rick Casson Reform Lethbridge, AB
Mr. Speaker, it is a pleasure to discuss the ongoing assault by the Liberal government on the Canadian taxpayer, this time propagated through Bill C-71.
The last time I rose in the House to discuss the budget I chronicled the failure of the government to adequately protect the environment. I told the House that despite the fact taxpayers were paying more, they were getting less in environmental protection. I told the House how the budget for Environment Canada had been so deeply slashed that the department could not even enforce many of its current regulations, never mind any future considerations. The House also heard of the failure of the government to take serious action to clean up the contaminated sites which spread like cancer across this beautiful country.
Today I will speak to the budget in a broader sense, outlining the harm the government's reckless tax and spend policies are having on our country.
When the Liberals came to power in 1993 the Canadian taxpayer was reeling from 30 years of excessive taxation. Like a punch drunk fighter, the taxpayer was dazed and confused after repeated blows to his after tax take home pay and the level of government service.
For year's the government sucker punched the taxpayer, nearly knocking him out with nickel and dime jabs, a 7% shot below the belt, an upper cut to health care services, and a resounding haymaker to the tax equality of single income families.
Each time the taxpayer was nearly knocked out, the government showered cold cash on his nearly lifeless body offering up a coal mine here or some cheap western gas and oil over there. No subsidy was too large, no project too small. They were all showered with cold cash, cash that came from the blood and sweat of that same taxpayer. Take it out of one pocket and give it back to another. So it went for 30 years.
However, when the Liberals came to power in 1993 they had a chance to change all that. They had a chance to clean up government. They had what we call a golden opportunity. They could have seized the moment and cut out government waste. They could have followed through on their promise to scrap the GST. They could have taken charge of out of control government departments.
Best of all, they could have revived the taxpayer. They could have given him the best health care that money could buy. They could have helped his family by streamlining the tax system. They could have promised him a future by fixing his pension plan. They could have given him a safe secure job through increasing national productivity.
Unfortunately the Liberal government blew that chance. Instead of reviving the taxpayer with the sweet smells of tax cuts, the government body slammed the taxpayer by dropping the Canadian health and social transfers by 31%.
These cuts in federal government transfers caused great distress across the country as the provinces had to scramble to make up for the lack of federal money. Hospitals were closed. Medical staff were let go. Emergency rooms were filled to overflowing.
Canadians heard stories of patients sleeping in the hallways because there were not enough beds. Patients were made to wait weeks, sometimes even months for surgical procedures. Wealthy patients often elected out of the Canadian system and fled to the U.S. where they could buy the care they needed. A two tier health system exists in the country today. Year after year the assault continued with the cumulative reductions soon totalling over $20 billion with no end in sight.
The government made a big deal out of the budget this year, boasting that it would increase government transfers to health by $11.5 billion. The Parliamentary Secretary to the Minister of Finance bragged that the budget was a well thought vision for tomorrow.
Let us have a look at what tomorrow will bring. First, we will notice the increase in CPP premiums coming off our paycheques. Under the government's proposals for the Canadian pension plan Canadians will see their CPP premiums skyrocket over the next four years.
Next Canadians can look forward to reduced after tax income, thanks to the government's refusal to fully index income tax brackets. This insidious tax is costing taxpayers hundreds of thousands of dollars as brackets fail to keep up with the pace of inflation. This is a way the government can increase revenues without seeming to increase taxes, but indeed it is. This discriminant policy places a disproportionate burden of the increase on the shoulders of those who can least afford it, the poor.
Canadians can look forward to a reduced standard of living vis-à-vis their American neighbours. High taxes and onerous regulations have stifled the Canadian economy and have driven many of our best and brightest educated at taxpayer expense out of the country.