House of Commons Hansard #223 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.


Points Of OrderOral Question Period

3:10 p.m.


Denis Coderre Liberal Bourassa, QC

Mr. Speaker, I am not afraid to call a spade a spade. If the member says he heard things, he must have heard them, but if he wants us to identify every member who called somebody names as the member for Saint-Hyacinthe—Bagot and most members who are here did, we can do it. But we should not start playing that kind of game, we could be here a long time.

Points Of OrderOral Question Period

3:10 p.m.

The Speaker

Today, during Oral Question Period there was what I would call a lot of noise. Words such as emmerdant and emmerdé fused from both sides of the House. I believe we can use other words than those in the House of Commons, surely. Once it starts on one side, the other one follows. I would ask all members to be very judicious in their choice of words.

If indeed such words were used—I asked the hon. leader of the Government in the House to identify who did, but he did not name any member in particular—I would ask all members to please refrain from using them in the House of Commons from now on. Sometimes, even, members get very loud.

When we are in question period I would appeal to members not to use terms which just inflame us.

I did not hear the words. Members were not named. We will let it sit there. However, we come here every day for question period and it is up to us to conduct ourselves in such a way that these words are not even thought of being used. I would encourage members to do that.

The House resumed consideration of the motion that Bill C-71, an act to implement certain provisions of the budget tabled in parliament on February 16, 1999, be read the third time and passed.

Budget Implementation Act, 1999Government Orders

May 6th, 1999 / 3:10 p.m.


Jake Hoeppner Reform Portage—Lisgar, MB

Mr. Speaker, it is a pleasure to rise in the House. I will start my debate with a sentence that mentions Reform. I am sure my colleagues on the other side will listen.

We in the Reform Party have been after the government since 1993 to develop some foresight, identify some of the inevitable changes to agriculture and develop a plan to prepare our industry to meet these challenges head on and safeguard our farmers. Instead we got foot-dragging and inaction.

We pushed the government on its 1993 red book promise to decrease input costs and implement a whole farm income stabilization program. However, like so many Liberal promises, it was forgotten on election night.

This past fall the government even denied that an income crisis existed in agriculture and pointed to the NISA program as a suitable safety net for any disaster. Farmers know that NISA is just not designed for the type of crisis we experienced. By the time the Liberals acknowledged their mistake, it not only cost farmers severely but we lost a whole bunch of young farmers.

The Liberals stalled in coming up with a program and when they finally did come up with something, it was totally inadequate. They went through the motions of listening to people in the industry. Then they came up with something nobody asked for.

The AIDA program is poorly designed, costly to apply for and will not target the producers who need the compensation the most. What is more, when it was announced, the key details of the plan were missing. The government had enough time to study the problem and consult but it launched its program with no consensus with the provinces or farmers on how to implement it. It did not do its homework. It is widely recognized as a failure. It is not bankable, it is not providing relief.

Many farmers in my riding are not even bothering to fill out the application because it will not benefit them. The accountants tell them the cost of completing the form is going to be more than they will obtain from the AIDA program. That is how much Liberals care about westerners.

Look at the comparison when foreign governments were overfishing in Canadian waters. The Liberal minister at that time chased those foreign boats across the high seas and even fired a few guns. But when foreign governments attack our Canadian farmers with tens of billions of dollars in unfair subsidies, we get inaction and useless rhetoric.

Recently the Liberals struck a committee to travel in the west to try to understand why westerners will not vote for them. They do not understand that the answer lies in their own record.

This lack of foresight is so evident in our trade negotiations. One of the reasons for the agriculture income crisis is that the Liberal government dropped the ball in the last round of international trade negotiations.

Our negotiators agreed to a 15% reduction in subsidies to farmers, which is what everyone else was supposed to follow, but we reduced our subsidies by 85%. While the U.S. maintained 24% of its subsidies in a green box program, Canada only maintained 8%. Today European subsidies are providing farmers with an average of $175 an acre to grow a crop plus a $2 per bushel export subsidy in the event of a surplus. We created an unlevel playing field that is financially breaking every farmer in western Canada.

This is just a lack of anticipation and planning and this Liberal government has to take responsibility for it. That is why farmers will not vote Liberal. Farmers have no money left to tax. I heard the hon. member for Medicine Hat so appropriately recite that poem about taxation and it fits perfectly the bill of the western farmer.

On the whole, the government's high tax policy has undermined the productivity of the Canadian economy which in turn has reduced our standard of living. We have seen devastating results from the wrong-headed policies of this Liberal government and the Tories before it.

In 1970 Canada ranked number four in the world in terms of per capita income. In 1995 after 25 years of overtaxation and overspending our per capita income global rating fell to 12. Next year the average Canadian family will be paying $5,000 more in taxes than they were in 1993, and they were already overtaxed then.

Our finance critic has pointed out that our standard of living has fallen behind those of the poorest states in the U.S., such as Alabama and Mississippi. The downward spiral seems to be well established and there is an urgent need for a policy that will regain our standard of living and the stability of our economy.

Unfortunately the current government seems unwilling or unable to meet this challenge. The bill we are speaking to today is a prime example of how the government continues to overspend and still not reduce taxes.

I have heard a lot of complaints today about taxation and overspending. A lot of blame has been pointed in different directions, at provincial governments and federal governments.

We are getting to the point where we will finally have to blame Christopher Columbus for all the problems. The impression is that he was a Liberal. Why was Christopher Columbus accused of being a Liberal? When he started off from Spain, he did not know where he was going; when he got to North America, he did not know where he was and he did it on borrowed money.

Maybe that is where the fault lies because we do not seem to understand in this House that it lies with previous federal governments.

I remind taxpayers that an election is coming. Reform is on the move. No matter what the opposition says, we will be there in the next government and we will fix things properly.

Budget Implementation Act, 1999Government Orders

3:20 p.m.


Stéphane Bergeron Bloc Verchères, QC

Mr. Speaker, it is with a sense of duty that I rise in this House today to speak to Bill C-71. I am not doing it with pleasure because the measures contained in the budget being implemented through this bill are not very positive, particularly for Quebec, but I feel it is my job and my duty, as parliamentarian, to express my views on this issue.

Not much has changed since the tabling of the budget in this House, since the budget debate in this House and since the beginning of the debate on the bill before us today. It makes us wonder if anyone in government is paying any attention to the views expressed here by parliamentarians from Canada and Quebec, which views reflect the concerns, fears and expectations of the people.

For example, on the night the budget was tabled, I brought together in my riding office a number of socio-economic stakeholders from my riding to hear their preliminary reactions. Then, not wanting to limit this exercise to preliminary reactions, I invited these people to share with me, in writing, their concerns, their expectations and what caught their attention in the federal budget.

I take this opportunity to thank the socio-economic stakeholders who went to the trouble of spending a few hours in my riding office to listen to the budget speech and share their views with me on the impact of the budget's content. I also wish to thank socio-economic stakeholders who later went to the trouble of sending us their comments and suggestions on the budget.

If I may, I would like to list the following people: representatives of the Voluntary Self-Help Centre of Saint-Amable; representatives of the Chamber of Commerce and Industry of Varennes and of L'Envolée, the Voluntary Action Centre of Sainte-Julie, among others.

This being said, I would like to express some concerns I have been told of. After that, I will make my own personal comments, which are mostly based not only on my personal perception and my own analysis of the federal budget and on my political expertise, but also on the analysis done by my fellow citizens which have expressed their own views, namely through socioeconomic stakeholders who took part in the consultations in my riding.

We noted, among other things, the lack of measures and funds to support the community. We are well aware that the budget cuts made by the Liberal government since its election in 1993 have had a severe impact on provincial budgets, since there have been cuts to transfers for health, social programs and post-secondary education.

Consequently, provinces were also forced to make cuts. Finally, a part of the social mission of the Canadian state and the Quebec state has been passed on to community organizations in our respective communities, without giving them, as a counterpart, any financial or material or human resources that would have allowed them to cope with the increased workload governments forced on them because of federal cuts to provincial transfers.

Some concerns have also been expressed regarding the increase in the estimates for national defence. Some would argue that the living conditions of our military personnel made it necessary to index the estimates, to increase them substantially. It is amazing to see the government coming back after years of drastic cuts, particularly in the defence budget, and saying “our military personnel have atrocious living conditions and something has to be done to improve their standard of living”.

If the national defence budget had not been cut so drastically, perhaps the government would not have had to increase it again a few years later. There seems to be some inconsistency in what the government says.

I shall now make a few comments, if I may, on the measures announced in the budget for transfers to the provinces. As far as health care is concerned, I would like to read part of an article which speaks for itself. This article, written by Manon Cornellier, was published in Le Devoir Saturday, March 4, 1995. I quote:

“Ottawa is not planning on spreading the social program money based only on the demographic weight of each province” said Minister Marcel Massé during an interview. “It would be the worst possible situation for Quebec, so much so that it makes absolutely no sense to me that this could be the solution” said the minister.

There is also another interesting article that appeared as well on March 4, 1995, this time in La Presse. It was written by Philippe Dubuisson. I quote:

A new formula is supposed to be established for the distribution of federal funds between the provinces. The Minister of Finance, Jean Campeau, said the worst case scenario would be the distribution of social transfer payments on a per capita basis...But the federal minister, Marcel Massé, clearly indicated this formula would not be used, because it would penalize poorer provinces, to the benefit of Ontario, Alberta and British Columbia.

In view of these very clear and precise assurances given by the minister, we would have believed the government would maintain this position and would not have changed the formula to calculate social transfers to the provinces.

And yet, without warning, the government decided, during the months following this fine statement from the minister, to change the formula in such a way as to adapt at least 50% of provincial transfers on a per capita basis, to calculate them according to population.

This new formula was to be established over a period of 5 years. Provincial governments, including of course Quebec, prepared their budgets according to these announcements and to this policy the federal government had put forward.

However, in the last budget, the Minister of Finance suddenly announced he was unilaterally changing the formula. The government has announced that, instead of 50%, all of the social transfers will now be granted on an equal per capita basis and that not only will the new formula be applied to 100% of the transfers, but the transition will be made over three years instead of five.

This is totally unacceptable to Quebec, especially since the provinces that stand to benefit from the federal government's generosity are the ones identified four years ago by the President of the Treasury Board as the ones that would benefit from this new formula, namely Ontario, Alberta and B.C.

I just want to point out that, under this new formula, the have provinces of Canada will get the following amounts in addition to the transfers they would have normally received. Ontario will get close to a $1 billion increase in transfers, B.C. almost $400 million, and Alberta some $300 million a year, while Quebec, the second most populated province of Canada, will get a mere $150 million increase in transfers.

This is totally unacceptable. We saw the consequences yesterday in the budget brought down by the Government of Ontario. It is obvious that all the benefits coming from the federal government allowed the Ontario government to further reduce its taxes, thereby widening the existing gap between the current taxation levels in Quebec and Ontario. In turn, this will accentuate the difference in the rate of economic development between the two provinces.

In the best of cases, we could have understood the decision to use the per capita formula for health and education. But how can one explain the use of the same formula for welfare?

It seems to me that the transfer levels for welfare should have been based on needs, not on the number of inhabitants in each province. The number of welfare recipients should have been taken into account in the calculation of the transfer payments. But even in this respect, the federal government chose to use the per capita formula, putting Quebec at a great disadvantage because, as we know, Quebec has a proportionately higher number of welfare recipients than Ontario.

They would have us believe that a transfer payment of $1.4 billion, which is supposed to compensate for the current shortfall due to the new calculation formula, is a good deal for Quebec.

The comparison is biased. They are comparing apples and oranges. First, richer provinces like Ontario, Alberta and BC, will receive these additional amounts every year, while the $1.4 billion will not be a recurring payment. It will be paid only once, this year.

Moreover, it should be pointed out that this $1.4 billion is not a gift. It is only an adjustment on amounts owed to Quebec in the last few years. These amounts were owed to the Government of Quebec anyway, but so far the government has not been able to rely on this money to fulfil its obligations.

A few years later, the federal government pays up and says “This is compensation for money given to the more affluent provinces”. It is not compensation, it is money owed by the federal government. This shows, beyond any comparison, that Quebec is maintained in a state of economic subordination within this federal system, where economic development programs are, of course, far more generous for provinces such as Ontario than they are for Quebec; the federal government is generous with Quebec only when it comes to social welfare.

Let us talk about the per capita question. If we were to apply the same logic to structuring programs, to wealth-creating programs, to economic development programs, to job-creating programs, we would have a completely different picture.

Quebec, with almost 25% of Canada's population, receives only 15% to 17% of federal government research and development spending, goods and services procurement, and capital assets.

Had Quebec received its fair share of productive spending, it would probably not be receiving equalization payments, but making them to the have-not provinces. Whence my earlier conclusion that Quebec is obviously being kept in a state of economic dependence within Canada.

I now wish to address the issue of health. Among the blatant illusions held out by the Minister of Finance's last budget, the one about health was certainly, to my way of thinking, the biggest and the most insidious.

In fact, the public is hard hit by the major cuts to the health care system resulting from the federal government's cuts to provincial transfer payments. By the way, 80% of the cuts made in Quebec's health care system by the Government of Quebec were a direct result of cuts in provincial transfer payments by the federal government.

The public is therefore only too delighted at the announcement, or the illusion being held out, that more money is going to be put into the health care system. And this is where the problem lies, because the budget in fact does not reinvest a cent in the health network. In fact, they announced, nobody dreamt it, an additional $11.5 billion in health transfers to the provinces over five years, including $2 billion in 1999-00 and $9 billion between now and 2004.

This increase in transfers the federal government is dangling before the provinces is nothing more than a reduction in the amount of the cuts planned. Instead of absorbing cuts of $42 billion between 1994 and 2003, the provinces will have only $33 billion drawn off. And they are expected to be grateful for that.

What is more, this announcement of $2 billion for all of Canada in 1999-00, is barely the amount Quebec alone is deprived of annually and barely a third of the $6.3 billion the provinces had sought annually from the federal government in order to nullify the effects of its cuts. However, the government remained deaf to these requests.

It has chosen to accumulate huge surpluses, which it hides in its budget activities, on the backs of the particularly disadvantaged, the sick, the unemployed, the workers and the provinces.

This is a lazy government that has made others carry its responsibilities. Barely 11% of federal cuts were made in its own operating programs and budgets. The rest were imposed on transfers to the provinces and on employment insurance.

This budget, which the bill before us is to implement, is discriminatory, unacceptable and unfair to the public, and we must oppose it vigorously.

Budget Implementation Act, 1999Government Orders

3:40 p.m.

Stoney Creek Ontario


Tony Valeri LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I listened attentively and I have again come to the same conclusion: Bloc members continually pit one against the other and continue to pit Quebec against the rest of Canada. That is their mission. Since that is why they are here, what else can one expect?

The member also talked about how, when we moved to the equal per capita formula, Ontario somehow benefited more than Quebec and that B.C. and Alberta somehow benefited more than Quebec. I point out to the hon. member that Quebec did in fact balance its provincial budget when it received a $1.4 billion increase in equalization payments.

I want to remind the hon. member that the province of Quebec also benefited from an increase in equalization payments. The province of Quebec receives 34% of transfers from the federal government. It has, as the hon. member mentioned in his speech, just under 25% of the population. One has some difficulty understanding how a Bloc member can continue to stand up and say that somehow the rest of Canada is being so unfair to the province of Quebec.

He asked why we had moved to the equal per capita? Is the hon. member actually saying that in the eyes of the federal government—and there are a number of people sitting in the gallery today—some Canadians are more equal than others depending upon which province they live in?

We inherited a system which was a cap on cap. When we were able to find the resources, we moved to an equal per capita so that every Canadian, regardless of what province they lived in, would receive an equal amount of money in transfers that go to the provinces for health care services and education. I do not understand how the hon. member can say that we are being unfair to Quebec because we are moving to an equal per capita system for all Canadians.

The member also talked about economic dependency. Has the hon. member ever thought that perhaps the economic dependency that he is talking about is really triggered by the consistent push by the Bloc for separation? That underlying theme does have an impact on Quebec's economic development each and every day.

I guess the bottom line is that they have nothing to add to the debate so they will just pit the rest of Canada against Quebec and say, “oh, my God, we are being unfair again”.

As a member of parliament, he should at least have the decency to say that there are things the federal government offers to the province of Quebec and to all Canadians, regardless of where they live, that are of benefit. There is a reason to be part of this great country and that is to ensure that we all move into the next millennium in a way that we are able to prosper together.

Budget Implementation Act, 1999Government Orders

3:40 p.m.


Stéphane Bergeron Bloc Verchères, QC

Mr. Speaker, the parliamentary secretary might have benefited from listening to my presentation, since it contained a number of the responses he is seeking. I will, however, be pleased to remind him of a number of things.

First of all, yes, of course, the Bloc Quebecois is a sovereignist party, because we consider, and have numerous occasions to demonstrate, that the federal regime penalizes and disadvantages Quebec, and that Quebec would have a better chance to develop if it were not part of the Canadian federation.

In fact, Quebec and Canada would be in a far better position to look to their own development, in partnership with each other, if they agreed to acknowledge that they are indeed two distinct countries, completely different one from the other.

Our mission in the meantime, however, also involves defending the interests of Quebecers to the best of our ability. I cannot therefore accept the argument put forth by the parliamentary secretary that we are here for the sole purpose of denigrating everything the federal government might do. There is no doubt that the recent budget, which provides that the transfer payments will now be calculated on a per capita basis, is totally unacceptable and detrimental to Quebec.

It is not I nor the Bloc Quebecois saying that, it is the President of the Treasury Board. I will quote him again, since the parliamentary secretary did not listen. In 1995, the President of the Treasury Board said “This would be the worst possible situation for Quebec. It would be so bad that, in my opinion, it does not make sense that this could be the solution”. After all, it is not the sovereignists who decided that. Yet, this is the solution chosen by the government.

Where were the Liberal ministers and members from Quebec when this per capita formula for transfers to the provinces was adopted at Quebec's expense? What did these people do? Why did they remain silent, instead of protecting the interests of the Quebecers who elected them?

Budget Implementation Act, 1999Government Orders

3:45 p.m.


René Canuel Bloc Matapédia—Matane, QC

Mr. Speaker, I want to congratulate the hon. member for Verchères—Les-Patriotes, who found the right words to describe an unfair situation.

I am convinced that our fellow Quebecers who listened to him will share his views. Why is it that we, sovereignists, really want to have our own country, while they do not want us to leave this country? The government claims that it gives a lot and that it is fair. As for us, we say that something is not working. Even in the budget, one can see that the regions are not getting anything. The government collects a lot of money from the unemployed, but it does not give them back that money.

I have a question for my colleague. What would he call a situation like this, where the poor are getting poorer, where 1.5 million children do not have enough to eat, and where the government keeps saying that everything is just fine? What would the hon. member call such a situation?

Budget Implementation Act, 1999Government Orders

3:45 p.m.


Stéphane Bergeron Bloc Verchères, QC

Mr. Speaker, I thank the member for Matapédia—Matane for his excellent question.

I would tend to call it blindness. They refuse to see reality as it is, to acknowledge that this formula puts Quebec at a disadvantage, so much so that Liberal members of Quebec have voted for the budget and will probably vote for the bill we are now debating. In doing so they will go against what the President of the Treasury Board said four years ago about that formula.

I heard the secretary parliamentary trot out the rhetoric that the government has been spouting in recent months, saying, for instance, that without the $1.4 billion, Quebec could not have balanced its budget.

I wish to say at the outset that without the cuts the government put in place two, three and even four years ago, the Quebec government would have balanced its budget and eliminated its deficit. The federal government, by its unfair reduction of provincial transfers, delayed by four years fiscal balance in Quebec. This was my first point.

Second, I believe I clearly explained earlier that the $1.4 billion is in no way a gift to Quebec. This money was owed to Quebec according to the federal government's own calculations. The federal government had not paid this amount and waited until this year to do so. Therefore, that payment is in no way exceptional. This was money Quebec was supposed to have in any case to draw up its budget.

Incidentally, I mention to the parliamentary secretary, for his own personal information, that for this year the Government of Quebec announced a surplus of $2.9 billion in its budget.

This means that even without the $1.4 billion in equalization payments the Canadian government brags about giving Quebec, which allegedly allowed it to balance its budget, the government of Quebec would have reached a balanced budget om any case, in spite of all the obstacles put in its way by the federal government.

Budget Implementation Act, 1999Government Orders

3:50 p.m.


Derrek Konrad Reform Prince Albert, SK

Mr. Speaker, I am pleased to make some remarks on Bill C-71, an act to implement certain provisions of the budget. Throughout the debate so far, and this includes what I have heard in my riding, one clear theme has emerged: if we want tax reform, vote Reform. That is the first message.

I will take a few minutes to talk about the government's no relief tax policies as shown in Bill C-71 and the effects they are having on Canadians. I want to talk about Canadians who live in the Prince Albert riding, not Canadians in general.

We are having difficulty retaining our youth and our talent. I recognize that they are not always the same, that talent is talent at every age but youth is confined to youth. This phenomenon affects our ability to engage in entrepreneurship and takes away our young people with talent, older people who have been trained in the university system, in the arts and technologies, and our business people.

These people are leaving Canada. Patriotism and pride are not enough to keep them. Patriotism and pride do not feed them or their children. They do not pay the mortgage. They do not make the car payments. They do not pay for fuel and they do not pay the taxes. People are voting with their feet and with their moving vans. That is what is happening in the country under the Liberal government and its high tax policies.

A person may well ask who are the beneficiaries of the high policy. It is the foreign recruiters and moving companies. Very few other people, if any, are benefiting from high taxes aside from possibly tax collectors.

I also want to talk about the negative effect high taxes are having on the protection and maintenance of health care and social services not only in Canada but in Saskatchewan in particular. In that regard I have a letter that I wrote to my constituents which has been copied by another hon. member of the House. It shows the effect of high taxes on Canadians.

What are the Liberals calling this budget? They are calling it the health reinvestment budget or the health budget, but as usual their numbers do not add up. We can just take a look at what the Liberal government's so-called reinvestment in health care amounts to in this budget as evidenced in the details.

In 1993 when the Liberals took power the Canada health and social transfer was $1,453 per taxpayer. When we take into account the latest budget the amount will be $1,005. That is quite a decrease, $448 to be exact or a 31% drop compared with 1993. In 1993 it was $18.8 billion in total. This restores it to $14.5 billion, which is still $4.3 billion less than when the Liberals came into power.

To put this into further context, we should not forget the six years of bracket creep when people had inflationary raises. Also inflation reduces the power of those who have not even managed to get a so-called inflationary increase in their wages. We begin to see the effects this is having on individual Canadians.

The Liberals will be putting back $11.5 billion over the next five years. Big deal. They are taking three dollars from the system for every dollar they put back in. The hon. member for Macleod illustrated this very effectively with a blood bag and a syringe to show how much less is in that blood bank after the Liberal budget of this spring.

The government will raise the income threshold at which the Canada child tax benefit begins to be phased out by $9,590 from its current level of $25,921. When it was announced in the 1998 budget and implemented in July, replacing it with the working implement supplement, the new Canada child tax benefit began clawing back benefits at lower levels of income than the existing system. When it was announced in 1998 the clawback began when a family's after tax income exceeded $25,921.

What effects are Liberal high tax policies having on Canadians with no tax relief in sight? Let me give one example that happened to me recently. I had a request from a family who wanted to see me in my office. In came a young father, his wife and their little child. What did they say? The man was completely mad; he was really upset. The wife was near tears and the child was just plain cute and did not know what she was growing up into.

They are both working trying to put their lives together and to maintain a lifestyle that is suitable for a married family. It turns out with two incomes they are unable to make ends meet. They are looking at possibly losing their car. If he loses his car, he loses his job.

What was he complaining about? He was not complaining about the gross amount of his salary. He was complaining about high taxes, high Canada pension plan premiums and high employment insurance premiums.

The employment insurance surplus was $19.1 billion at the end of 1998. The public accounts indicate that the surplus is considerably larger. We know there is nothing less than that in the account. The premiums were reduced all the way from $2.70 per $100 of insurable earnings to $2.55 per $100 of insurable earnings. These are nickels and dimes. These people are going under and they are crying out for relief from those kinds of things.

The Canada pension plan contribution rate increased to 7% from 6.4% in January 1999, which is an annual increase of $1.4 billion taken out of the pockets of Canadian taxpayers, whether they are business owners and their businesses are having to pay their portion or people who are actually on the frontline doing the work. The Canada pension plan rate has increased every year during the Liberal tenure. It started at 5% in 1993. By the end of 2003 it will rise to 9.9%, which is a 98% increase.

Personal income tax increased through bracket creep. It was never eliminated and it was not mitigated in this budget. We will see another $900 million taken out of the pockets of Canadians through bracket creep.

The tax pain is causing the brain drain. What good is it for the government to promise good health care when the effect that high taxes have over time is to actually diminish the tax base required to support the health care and social services Canadians desire?

I want to turn to how high taxes contribute to an overall depleting effect on our tax base. It does this by driving away our youth and our talent. That is a sad reality. John Roth, chief executive officer at Nortel, stated just last week:

Taxation is testing the allegiance of some of Canada's best and brightest.

That results in a reduced tax base. Peter Foster in yesterday's Financial Post wrote:

Taxes must come down if we want long term revenues generated by economic activity to increase.

Does the Prime Minister not know this? Surely he must. Maybe he just does not care. We wonder what his answer would be. He seems to think that high taxes are part of the Canadian way of life. If he really thinks that, he is living in a dream and it is not the Canadian dream. The rest of them are living in a nightmare.

The Prime Minister might think that high taxes are just part of the Canadian way of life, but he knows they cannot keep increasing. The tolerance threshold has been reached and surpassed this year. The government continues to ignore the actual effects of high taxes on society as we began to see in the past few years. We are watching our youth and our talent go elsewhere.

Those of us who travel back and forth to western Canada or other parts of Canada talk to young people who have been recruited by foreign firms. They are going to find out what improvements are available to them in other tax regimes and they are not looking back. They are not only going south. They are going in other directions. I want to paraphrase a letter that was written to my constituents, and borrowed by another member. The so-called brain drain phenomenon is created by high taxes and is a growing cross-generational problem. Many Canadians think of the brain drain primarily in terms of the younger generation who are heading south to more favourable tax and employment conditions. However, events taking place in northeast Saskatchewan this month highlight a new reality. The brain drain is not limited to youth. It is a serious problem that crosses generational boundaries.

Consider first the recent commentary from influential Canadian entrepreneurs Paul Desmarais and Jim Pattison concerning the insidious effects the high taxation policies of successive Liberal governments, including the Mulroney Conservatives, are starting to have on our country.

Montreal's Paul Desmarais calls Canadian taxes exorbitant and a drain of potential income for Canada. “When the government is too greedy”, he says, “people find other solutions”.

Jim Pattison, also a self-made billionaire from Vancouver, calls high taxes the number one issue for every senior executive in the country. Although he remains in Canada out of a sense of loyalty, he says he does not blame those who leave in favour of lower taxes and a stronger dollar.

One could argue that the opinions of wealthy businessmen are irrelevant to the debate over taxation of the broad Canadian population. However, it is not only boomer billionaires are who are speaking out, people at all income levels are raising their voices in protest, including those whom we assume are the meat and potato beneficiaries of our current tax system, our professionals.

This fact was reinforced to me as I prepared to sponsor a forum on health care in my riding involving my colleague, the member for Macleod, who is the Reform Party's health critic.

In the course of conversations with physicians, other health care professionals and concerned constituents, I was surprised at the interest shown in discussing, not health care, but the havoc the Liberal government tax policy is wreaking on our society.

In a letter and subsequent telephone conversation, one doctor, whose name is being withheld at his request, was invited to discuss health care. He said:

As a physician working in this country for 24 years, I now discover that I have no alternative but to leave this country...over the past five years I have seen friends and colleagues leave this country in disgust due to the brutal levels of personal income taxes...I now pay 54% in taxes and contributions to government...and could not afford to ever retire if I remain in this is obvious that the governments of the day have no interest in meaningfully reducing personal income taxes.

He went on to say that he and at least two of his colleagues were planning to move within the next few months.

This poses a further, more immediate problem. Who will practice medicine in Saskatchewan? How can Saskatchewan, already facing a shortage of rural doctors, ensure a quality health care system when its doctors say they are being taxed out of the country?

The brain drain is neither a phenomenon of youth nor a minor issue. It is a symptom of stress and the predictable result of a bad tax system. We must take it seriously by providing sustainable tax relief or suffer the crippling long term effects into the new millennium.

What I see from this is that the doctor was not even looking for more money. He was not looking for better working conditions or a new place to go. He was not asking for a new hospital, a new office or new operating equipment. He wanted to live a life commensurate with his actual income which is taxed to the point where it is not the income he thought he would have and not enough for him to retire on without being required to work the rest of his life to try to turn his practice over to someone else.

Social science has identified at least one fundamental characteristic of human motivation and that is that humans are motivated to avoid pain. If one is to be motivated to avoid pain then one moves away from it. If the Canadian tax system is causing taxpayers pain they will move away from the tax system, and that is to other countries where the tax regime is not so onerous.

It is easy to understand why our youth and talent are leaving Canada for the U.S. and, I might add, for other places. It is to avoid the pain of paying high taxes here.

Neither loyalty to Canada, nor our good lifestyle, nor the natural beauty of our country is enough to keep them if they cannot make a living. That is a base need of all people.

I also want to mention that we are paying a lot more but getting a lot less. It is the impact that taxes are having on services. We see this dismal aspect in the budget every time we think about the services that Canadians are getting for the taxes that they are paying.

As I pointed out, despite the increase to the health and social transfer, which was not very much, we should remember it was the Liberals who gutted and savaged these things. We have to question their priorities.

I want to talk about an issue that arose in my riding as a result of what the government would call tax cuts or tax savings, which I think is poor spending. The government will open a joint office with the Saskatchewan government, ostensibly to save money. This office will serve a very large rural area with a lot of aboriginal people who use that as their service base.

We will no longer have a federal presence in the town I come from, which has a population of around 5,000 people. To go from there to the next town where there is an employment insurance office takes one hour each way.

These people come into town to use the services, to buy their groceries, to visit the doctor, to visit the dentist, to visit the lawyer, to do their dry cleaner and maybe even their laundry. Whatever services they needed they could get in that town. All of a sudden, those who most need employment insurance services will be forced to drive at least another hour one way to access those services. That means those Canadians who may now be off the government's tax roll, thank goodness, are all of a sudden having to pay their own way.

I have to wonder what the net benefit will be of this. Businesses in my home town will be losing business because these people will drive right by. There is another negative effect of the system, but do they get their tax dollars back? Nothing doing.

How does the government find creative ways to spend the money it says it is saving? We will now have two people driving out a couple of times a week to sit in an office. They will both probably need to have laptops because desktop computers no longer do the job. We all know laptops are more expensive.

They will probably need a vehicle to drive. I have heard a rumour, but I would not doubt it, that they will be driving a Jeep Cherokee to get there. They will be paid overtime for travel. As the weather in northeast Saskatchewan is notoriously unpredictable, more often than not, they will have to stay overnight, in which case they will probably be paid right through the night. They will be on overtime for the rest of the week. They will have their hotel and meals bills paid. What kind of a saving is that going to be?

Consequently, I think we are definitely paying more. We keep on paying more and we keep on getting less under this regime. It is so frustrating for the people in my riding. I had to say these things on their behalf because they have had it.

The young family that came into my office to express their despair at the situation in which they find themselves, both working, paying for child care, paying high taxes, paying high employment insurance premiums and paying high Canada pension plan premiums, where do they find themselves? They are going to lose everything because this Liberal government is simply continuing to collect taxes and Canadians are getting fewer and fewer services for the money they are putting in.

The last two things they asked me was how they could get politically involved and how they could fight the system. I gave them a name and it sure was not the name of the Liberal organizer in my riding. I do not think they would have wanted it even if I had given it to them. They agree with what I said when I started at the top of my speech if Canadians want tax reform, vote Reform.

Budget Implementation Act, 1999Government Orders

4:05 p.m.

Ottawa—Vanier Ontario


Mauril Bélanger LiberalParliamentary Secretary to Minister of Canadian Heritage

Mr. Speaker, as the House of Commons moves to a final vote on the 1999 budget, I would like to take this opportunity to talk about responsible government.

The theory of responsible government is at the heart and soul of how democracy functions. It is at the heart and soul of our parliamentary system. It is the foundation of Canada. The government is democratically elected and it is expected to fulfil its mandate on behalf of all the people in the country. Members of parliament are elected as democratic representatives of all constituents.

In the old days there were feudal lords and robber barons but democracy changed that. It is thanks to democracy that Canada is year after year chosen as one of the better countries in the world in which to live.

As the member of parliament for Ottawa—Vanier, I happen to represent some of the very richest people in Canada and some of the poorest people in Canada. What I am going to say may be more popular with one group than the other, but upon reflection they will hopefully all agree.

Several corporate leaders in the past few weeks have somehow come to the conclusion that the government should ignore the democratic mandate on which it was elected. They have this notion that they set the political agenda and the fiscal agenda of the governments. Some have even tried issuing veiled threats to coerce the Government of Canada into providing lower tax rates for high income earners.

Absolutely corporate leaders have an important role to play in consulting with the government and making their views heard. However, in this country it is one person, one vote and not the size of our chequebook that determines our democratic rights.

Part of responsible government also means conducting responsible debate. That means playing straight up with the basic facts. The Business Council on National Issues, the BCNI, purports to speak on behalf of the chief executive officers of Canada's 150 largest corporations.

Two weeks ago the president of the BCNI criticized the Minister of Finance saying “enough is enough” and added, “what we are asking the minister to do is to demonstrate his commitment to the importance of bringing down personal taxes as a priority”. What an absurdly unfair comment for such a business leader to make.

The Liberal government has already provided tax relief in this and in last year's budget. We have taken 600,000 poor Canadians off the tax rolls altogether. Families trying to raise two kids on $30,000 will no longer have to pay income tax. Families with incomes of $45,000 will have their taxes reduced by at least 10% this year alone. Middle to high income earners, and yes, even every millionaire in the country, has had their 3% surtax removed in this year's budget. The government has made reducing taxes a priority. It is just that we have been responsible about it.

In considering the BCNI's call for lower tax rates, I will point out some facts. The average compensation for CEOs of Canada's top 100 companies was $3.4 million last year. That was up 26% from the year before; a 26% increase in one year. I am not begrudging those people what they have earned. That would be up to their shareholders. I merely mention it to keep things in perspective.

There are thousands of public servants in my riding whose pay was frozen while the government attacked and eventually eliminated the federal deficit, as we said we would do. These public servants have now received pay increases averaging 2% to 3% after years of being frozen. Not a 26% increase.

Public servants, who are so often criticized, know that their sacrifices have made a huge difference. They know that the Government of Canada balanced the books. They know that the cost of borrowing in Canada is far lower today than it has been for years. It is even lower than in the United States. They know that inflation has been virtually wiped out. They know that we have put the recession far behind us. They know that Canada creates jobs at a healthier clip than most of the European democracies.

When the government received its second majority in June 1997, it made a contract with the people. That is what the principle of responsibility is all about. It contracted to devote half of the budget surpluses to debt reduction and tax relief and half to pressing social needs like child poverty, health care, education and investments in research for our collective long term benefit. That was the principal mandate on which we were elected. As a responsible government we must fulfill that mandate. That is responsible government in its traditional form.

There is also responsible government in the sense of acting responsibly for the future. What certain corporate leaders seem to be suggesting is that we should ignore everything else and give them a tax break. I suppose the Minister of Finance could have acted differently. He could have borrowed to pay for tax cuts. However, the Minister of Finance said “No, we will not do that. We will provide tax relief the responsible way after we have eliminated the deficit”. That is exactly what we have done.

That still leaves us with a $580 billion debt in Canada, a debt which was built up during the lifetime of every adult alive in the country, a debt which costs Canadian taxpayers in excess of $40 billion annually in interest charges. The only responsible course of action is to continue to take chunks of any budgetary surplus and pay off some of that debt, as we said we would do.

We must reduce the debt. We have no right to pass that debt untouched to our grandchildren. To do so would be to exercise greed today at the expense of our kids tomorrow. As citizens and as parliamentarians we cannot wash our hands of our responsibility in this matter. I do not often agree with columnist Andrew Coyne of the National Post who said of the growing call for irresponsible tax cuts, “I suppose we ought to be ashamed of ourselves”.

Debt reduction is structural and its benefits permanent. People who became wealthy over the last 30 years as the country accumulated debt ought to understand that reality.

On team Canada missions abroad, business leaders rightly talk about Canadian values. They talk about safe streets, our health care, our ability to sustain linguistic duality, our ethnic diversity, our public infrastructure, our transportation and communications systems, our commitment to the elderly, our commitment to human rights, our commitment to fairness. They point out that Canada is not a polarized society with unseemly disparities of wealth or incomes. They point out that this is why Canada is a safe place to invest. They are right when they say that abroad. I would just like to hear them say it more often at home.

To talk of Canada and the United States strictly in terms of tax rates is to imply that our nations, our values, our cultures are otherwise interchangeable. I would suggest that if people really believe that, they should try to get elected to parliament on that platform. If the president of BCNI really believes that, he should try to get elected on that platform.

This government has balanced fiscal prudence and the upgrading of social programs at the same time. We have balanced debt reduction with tax relief. The tax relief has gone for the most part to the people in our country with the least money who needed it more. If someone thinks that people with the most money should be the first ones to get tax cuts, let them run for parliament on that platform.

As the governor of the Bank of Canada indicated a few days ago, Canada is on the right course and tax differences with the United States are not the cause of Canada's problems. If someone thinks that the governor of the Bank of Canada is wrong, let them run for parliament on that platform.

Responsible government means representing all the citizens who live in Canada. Responsible government also means protecting the interest of Canadians who have yet to attain the age where they too can participate in the election of their government. Responsible government means balancing the interest of taxpayers with the interest of the common good. For all of us that is what the 1999 budget achieves.

Budget Implementation Act, 1999Government Orders

4:15 p.m.


Dick Proctor NDP Palliser, SK

Mr. Speaker, congratulations to the member opposite. I listened carefully to his speech.

I wonder if the member shares my disquiet about the recent comments from one particular corporation operating in this city. I am referring to Nortel. I am old enough to remember that Nortel was once Northern Telecommunications which was a Canadian crown corporation. In his comments he talked about the wealth that has been generated for individuals over the last 30 years. I wonder if the present board of directors of Nortel appreciate that the investments that were made by Canadian taxpayers and the Canadian public over the years have helped to put Nortel in the position that it is in today. The wealth that it is generating has come from the public and in fact there is some obligation that is owed back to this country. Would the hon. member care to comment?

Budget Implementation Act, 1999Government Orders

4:15 p.m.


Mauril Bélanger Liberal Ottawa—Vanier, ON

Mr. Speaker, there is no doubt that the enviable position of Nortel today is due in part to the benefits from government programs in the past. It is due in part to the benefits of government purchases of the systems and equipment which that company produces. It is due in great part to the benefits of having a well educated labour force to draw upon. All of those conditions have been created with public support.

There is no doubt in my mind. I think that others at Nortel, other than the executive vice-president, have tried to correct the impression left and there is indeed a great deal of allegiance from the company toward the country. I suspect that a majority of the board of directors of Nortel also feel this way.

This is just one of the examples we have heard about in recent days of what I call corporate leaders trying to set this agenda that at all costs we must provide immediate tax relief and so forth. I have argued that to do so and to forget the debt we are carrying is to not act in a responsible manner.

This government campaigned on applying half of the surpluses to debt and tax relief and half to social and economic programs that were very much needed. Over the course of our mandate it is my fondest hope that we will achieve that commitment.

From listening to some of the comments of some of our corporate leaders, they would forgo too rapidly the benefits of spending some money in some very needed areas such as health care as we did in the last budget.

I am here representing a riding that has some of the richest people and some of the poorest people in the country. I would not be comfortable with myself if I had not made the comments I made today. To not take care and reduce the debt somewhat would be irresponsible. I would not be prepared to support such a notion.

Budget Implementation Act, 1999Government Orders

4:20 p.m.


Rick Casson Reform Lethbridge, AB

Mr. Speaker, I would like to pose some questions to the member opposite and point out some facts about this budget, about what it has done to Canadians and about what this government has done to Canadians since it came to power in 1993.

I wonder if he would like to talk a little about bracket creep and the amount of money that has been taken out of Canadians' pockets, out of the pockets of families. That has hindered families from making ends meet. Each Canadian taxpayer is paying $2,000 more in taxes now than they did in 1993. Canadian taxpayers overall will pay $42.1 billion more in 1999 than they did in 1993.

The issue of disposable income should be hard to argue. Between 1993 and 1997 disposable income for Canadians fell by over $2,000. That is right out of the pockets of every Canadian. It takes food off the table and clothes off of kids' backs.

Would he not agree that Canadian taxpayers are getting $448 less each in health care dollars from this federal government than they got in 1993? Overall the health care budget is $4.3 billion less. There are almost 200,000 people in this country on waiting lists for health care. We get calls every day, as I am sure the member does, from people who are waiting for health care. There are 200,000 people in Canada waiting for health care.

Would the member like to comment on some of those issues?

Budget Implementation Act, 1999Government Orders

4:20 p.m.


Mauril Bélanger Liberal Ottawa—Vanier, ON

Mr. Speaker, I certainly would like to comment.

The budgets of this year and last year propose essentially to provide some relief that does away with the phenomena of tax bracket creep mentioned by the member opposite. I will not get into a precise number argument because we could be at it all day. The cuts over the next three years are certainly more substantial than the bracket creep the member mentions. If he did his homework he would have to agree with that. There is real tax relief in this budget after bracket creep, as he mentions.

I am a little perplexed with the attitude of some of the members opposite who do not seem to care about the level of debt we have accumulated over the past decades. We should be serious about tackling that.

If the hon. member is serious, then he should be applauding this government's success in eliminating a $42 billion deficit in less than five years, for the first time in three decades paying off some debt and therefore reducing on a permanent basis some of the carrying charges. He should be applauding the government for not having borrowed money to effect tax cuts.

That is a very responsible approach to government. That is what this government has done and continues to do in its budget.

Budget Implementation Act, 1999Government Orders

4:25 p.m.

The Acting Speaker (Mr. McClelland)

It is my duty to inform the House that we have now arrived at the point in our debate at which there are 10 minutes for debate with no questions and no comments.

Budget Implementation Act, 1999Government Orders

4:25 p.m.


Howard Hilstrom Reform Selkirk—Interlake, MB

Mr. Speaker, it is a pleasure to be here in the House today to speak on the budget and Bill C-71, an act to implement provisions of the budget.

We will hear different comments over the course of the day in regard to the budget, the value of the budget, $150 billion or whatever it is, $130 billion last year. These kinds of figures are thrown around but to average Canadians sitting in their homes, in their small businesses or on their farms, we are talking about figures that they find very hard to comprehend.

Even I find it hard to comprehend some of these gigantic figures we deal with in the House. These figures are backed up by the work, sweat and toil of all Canadians who provide this parliament with the money we are budgeting and spending. It is absolutely incumbent upon us to do that wisely and to get our priorities straight when we go about spending the money we collect from taxpayers.

The question of how much in taxes we should be taking from the people is probably one of the predominant questions we are dealing with in this day and age. The consensus around the country and certainly in Manitoba and my riding of Selkirk—Interlake is that too much money is being taken away from taxpayers.

Budget Implementation Act, 1999Government Orders

4:25 p.m.

The Acting Speaker (Mr. McClelland)

Forgive me, but I must interrupt the hon. member. It seems we made a little mistake and got a little ahead of ourselves. In fact, there is another hour in this debate before we get to the 10 minute portion of the debate.

The hon. member for Selkirk—Interlake does have a full slot. He will have 20 minutes with 10 minutes for questions and comments.

Budget Implementation Act, 1999Government Orders

4:25 p.m.


Howard Hilstrom Reform Selkirk—Interlake, MB

Thank you, Mr. Speaker, for those words on the progress of this debate and how it will be carried out and when it will end.

Certainly in talking about the time to debate these issues, the more time the better. The more fully they are explored by all parties and the more ideas that come in, the greater the benefit is to the government of the day as to where its priorities should lie and how it should handle the money taken from the taxpaying public.

Earlier on, an hon. member discussed a figure from the past. I believe it was the fellow who discovered America, Columbus. The member suggested that he was kind of lost. He related that to the government of the day.

What we have is more like Dr. Livingstone in Africa. It is a government that is wandering around in the bush, in the forest and the jungle, not really knowing which way is out. The only way the government is able to survive is to have a gigantic increased flow of taxes. By having this gigantic increase in taxes, it can wander around the jungle and continue to survive. Hopefully at some future date, which could be referred to as election day, someone from the Reform Party would come along and show the government the way out of the jungle.

In any event, we will talk about the jungle of taxation in this budget. It is not unlike a jungle because it is very difficult to comprehend the whole thing at once. I will touch on some of the highlights. We will see where the budget has some strengths and where it has some weaknesses that could have been improved.

Its is expected to be a balanced budget, something that is absolutely vital to any small business and to any government. We never learned in the past the lesson that we have to pay our bills, that if we borrow money we have to pay it back. The situation we find ourselves in now is having a balanced budget and having to pay it back.

The budget was balanced on the backs of Canadians. There is only one taxpayer, the average Canadian who earns an income in the business world or on the farm. The balanced budget indicates an underlying surplus of some $3 billion for 1998-99. By subtracting the $3 billion contingency fund, the budget balance, the surplus, is expected to be zero for this year and future years. There is some dispute in the financial world between the finance minister and the private sector. The two do not seem to jive. One is saying there is a budget surplus while the other is saying in essence that it is barely a balanced budget at zero.

With the high spending levels of the government we cannot stand any bit of a downturn in the Canadian economy. The surplus of funds which keeps the government in operation would start to dry up and be much smaller. Without a corresponding reduction in spending we would end up borrowing and going deeper into debt.

The time to start reducing spending is not once the downturn comes. The time to start spending reductions is when we have a vibrant, strong economy. One of the big failings of the budget is the big reductions in spending that should be happening. The government would still end up with more tax dollars to spend because it is going from roughly a $130 billion to a $156 billion budget.

This kind of thinking is what we in the opposition parties are trying to put across to the government to ensure that it looks at it, not as a high spending money grows on trees type government but as some prudent common sense average citizen would handle his or her business affairs.

The budget announced $7.7 billion in cumulative tax reductions over the next three years which sounds good. Excluding the employment insurance rate reduction of $1.54 billion in 1999-2000, $2.81 billion in 2000-01 and $3.4 billion in 2001-02, in reality taxes will increase by just over $2 billion in the next three years.

I always get interviewed in my home riding after a budget comes out. People ask me if it is a good budget for them or a poor budget. My advice to them is always very simple. When a budget is in place and has been implemented for six months or a year they should keep track of their paycheques to see if at the end of the day they have more money. That is the bottom line for the average Canadian. The figures being thrown around by the government often do not tell the whole story.

I talked about how some of this budget money is used.

I would like to talk for a moment about the millennium scholarship fund which was raised at an agriculture committee meeting I attended this morning. Five deans and presidents of universities gave presentations. They talked of more funding for research and more funding for the operations of their universities.

I took the liberty of asking one of the presenters if the $2.5 billion that will go into these scholarships was the best way to move that money into the education system. Having good graces, these people did not criticize the government straight out and say that this was about the worst way we could fund education. However they certainly made it well known that their wishes, their desires, their way of funding education, would be to have that $2.5 billion go directly to the universities for all students to have an opportunity to get the highest possible levels of education.

It is a good example of the priorization being right, that money is needed in education, but the vehicle by which the government decided to do it was wrong. I assessed it on behalf of my constituents. By giving the money directly to universities the government would not receive the accolades and the votes it would get from buying individual voters, individual people who would receive these scholarships.

More or less if you vote for me we will give you a scholarship. It would not be that direct, but the suggestion would be that the government had done something great for the person getting a scholarship and he or she should feel indebted to the government and vote the right way the next time. That is a very poor way. I felt a bit reinforced in my thinking on this subject by these university professors and leaders in education.

When we talk about priorizing spending, once again a lot of the spending that is not being properly priorized should be rethought by the government. Agriculture is one area that could use some additional spending by the federal government. The reason I say that is not so much that it should give subsidies straight to farmers, but the priorization of spending on agriculture should have greater emphasis.

We know that agriculture creates tremendous wealth for the country by bringing in hard offshore currency. Many internal domestic industries simply recirculate cash inside the country. When we see something that is a real big export dollar earner, that sector deserves strong government support.

When we take away the $900 million AIDA package we end up with government support of agriculture to the tune of $600 million or certainly less than $700 million from the federal government. That is insufficient for such an important industry.

Some will ask for ideas on where to find some of that money. I do not intend to go through everything today, but certainly CBC television is one area that could be handled very well by the private sector. As Canadians we spend a lot of money on it every year.

We need a bit of gun control in terms of handguns but we do not to spend upward of $1 billion over the next year to register lawfully possessed private property like rifles and shotguns.

I ranch and have a hired man. I will have to pay not only for me to have all these permits but I will have to pay for his training. That adds an absolutely unnecessary cost on to a business.

The rural development secretariat working in the health care field, which I raised in committee and bears repeating again in public, is trying to find doctors for remote areas and that sort of thing. In each province across the country the health care system is working very hard and spending millions of dollars to find doctors for remote areas. We are wasting money duplicating what is a provincial responsibility. They are doing the best job that can be done. This is something that could be repriorized by the government and the money used for something else.

The transitional jobs fund is one of those programs which has good projects and bad ones. A small remote town in my riding received a health care facility which was partially paid for by money from the jobs fund. People no longer have to travel close to 100 miles to visit relatives who have Alzheimer's disease, for instance.

The structure of the program is like the structure of the millennium scholarship fund. It has a built-in opportunity for the government of the day to abuse it. I think we saw some of this abuse with regard to hotels in Montreal having a strong connection to the government and to the Prime Minister himself. According to my last accounting some $1 million went into that particular transitional jobs fund project, which I can only refer to as a patronage, slush fund type payment.

I have a final comment to make on where money could be saved rather than wasted. Newspapers indicated today and yesterday that $83,000 had been paid for an assistant to the justice minister to deal with the CHST, the Canada health and social transfers system. The government should repriorize its spending.

Canada health and social transfers have been cut drastically over past years. With the government's announcement in the past budget we see that money has been put back into the health and social transfers. That will only bring it up to the 1993 level of funding, which is clearly insufficient for the health care needs of today.

Once again I encourage people to contact their members of parliament and ask them for more details on the budget, on the funding, on the spending and on the priorities. It must get message out to Canadians on what the budget is about. In closing, I can only say that by having an informed Canadian public we can have better government.

Budget Implementation Act, 1999Government Orders

4:45 p.m.

Progressive Conservative

John Herron Progressive Conservative Fundy Royal, NB

Mr. Speaker, I am pleased to rise to speak to the 1999 budget and to address some of the concerns which the government has failed to address.

The principal issue that I want to address is that there has not been meaningful, broad based tax reduction, which the country desperately needs to grow our economy in order that we can be more competitive and, yes, more productive. As has been pointed out in the last number of days and weeks, Canada indeed has a productivity problem, which is largely due to the fact that our society is overtaxed.

It may come as a shock to Liberal members that personal income tax as a percentage of our gross domestic product is 18% higher in Canada than in the United States. Corporate taxes are 17% higher than they are in the United States. And we wonder why growth in our economy is stifled compared to what we see in the United States.

There is another price that this country pays for its high tax regime. More and more often our best and our brightest, the best young minds that we have in the country, are faced with a shocking fact. They are likely to finish an undergraduate degree owing $25,000 to $30,000. They are faced with decisions. Where do they seek opportunity? Where will they get paid more? Where will they get taxed less? Where can they have the best quality of life?

I am very proud to say that I still believe the best quality of life is found within the borders of this great country that we call Canada. However, we are going to lose more of our best and our brightest if we do not provide them with a tax regime which makes it competitive enough for them to stay here. I am saying, quite simply, that we need to lower taxes to end the brain drain.

I also want to point out what small business has pointed out time and time again. I would like to refer to a document from the Canadian Federation of Independent Business which indicates where small business feels their concerns were missed in terms of the excessive, extraordinary payroll taxes that we pay in this country. This government takes in over $6 billion more annually through the EI fund than the program actually consumes. That money belongs in the pockets of the Canadian taxpayers. It is plain and simple.

The CFIB also indicated where the concerns of the younger generation have been missed. As a younger person and a younger member of the House, I can say that the younger generation is very concerned about this. We have a $600 billion national debt which has been run up over the last 30 years. Now we are asking the younger generation to bear the burden of that debt. We owe it as parliamentarians on all sides of the House to make prudent investments to begin to pay down the national debt. It is our moral obligation.

There are other reasons for us to pay down the debt. As long as we have an enormous debt, as we do today, we will pay over $45 billion annually to service the debt. We will always be threatened with high taxes. We can never lower taxes unless we eliminate the causes of high taxes, and the principal cause is the national debt.

We need broad based tax reduction. Government members stand in question period, day in and day out, and say “We have lowered taxes”. I know people who are capable of lowering taxes. If there has been any growth in this country over the last decade it has been largely due to our export driven economy. Why is that? Where did that growth come from? It came from the free trade agreement of 1988, which was expanded by the NAFTA in 1993, which the Liberal Party opposed.

The government likes to take credit for balancing the budget. I would like to make it very clear that it was the Canadian taxpayers who made sacrifice upon sacrifice in the last number of years to get our fiscal house in order. It has been quite an ordeal. It has been a 15-year work in progress. I applaud Canadian taxpayers because they made the sacrifices to balance the budget.

Getting our fiscal house in order and once again having growth in the economy of this country is largely due to the Ontario government of Mike Harris. Since its election in 1995 it has lowered taxes and has made a commitment to balance its budget by the year 2001. If Mike Harris and Ernie Eves had not started the economic engine of this country again, that being the province of Ontario, nobody would have balanced the budget, not even this finance minister. That is very clear.

I would also like to point out where the real fiscal leadership in this country came from. From the political perspective, it clearly came from the provinces, first and foremost. I know it hurts, but it was the Progressive Conservative Government of the province of Alberta, led by Ralph Klein, which made a very firm commitment to pay down the debt because it believed it was wrong to burden the younger generation with it.

Gary Filmon, the Progressive Conservative Premier of Manitoba, also brought forward initiatives to balance the budget. He is the senior statesman of the provincial premiers in terms of the balanced budget legislation that he brought forth.

Again it comes down to the growth that has been created by the province of Ontario, which has been driven by the export sector and the lower tax regime.

I would also like to pay tribute to the government which was in power between 1984 and 1993 in terms of the tax reform which it initiated. If it was so wrong, why has the government not changed it? If free trade was so wrong, why has the government not changed it? Mr. Speaker, I know that you know the answer, being the very learned gentleman that you are. The reason the government has not changed it is simply because it works.

I believe it is imperative that we take some initiatives to invest in the future of the country.

It was a sin for the government to get its fiscal house in order by hacking transfer payments by more than 30%. Those transfers pay for our priority programs, such as health care, post-secondary education and social services. The government is not going to do anything. It is passing the burden of the problems to the provinces. I am very happy to say that the provinces met the challenge.

There are some investments to be made. I want to highlight one priority, the student debt level. It is a sin for an undergraduate to finish a degree today with a debt of $25,000 to $30,000. Why is that? Because the government slashed transfer payments by over 30%—

Budget Implementation Act, 1999Government Orders

4:50 p.m.

Progressive Conservative

Norman E. Doyle Progressive Conservative St. John's East, NL

It was 35%.

Budget Implementation Act, 1999Government Orders

4:50 p.m.

Progressive Conservative

John Herron Progressive Conservative Fundy Royal, NB

It was actually 35%, the learned member from St. John's East has pointed out to me.

If there is one investment that the government needs to make it is to ensure that we put more money into post-secondary education so that our best and our brightest can go to school. I have talked to the member from Compton—Stanstead about this on numerous occasions and I know that he shares the same sentiment. He is very fearful that some of our best and brightest will choose to not even go to university. I am extremely concerned about that.

The government has no plan, in terms of health care, to attract doctors or nurses; nor does it have a visionary concept to attract doctors to rural Canada. That is very important to the residents in my riding of Fundy—Royal.

The government takes credit for putting money back into health care through the transfer payments, the CHST. However, the province of New Brunswick was getting less money. It was getting $11 million less because of the 1998 budget. This year it is actually getting a little more. The government is playing a bit of a shell game with our health care dollars. I find that to be a travesty.

I will sum up by indicating what this government missed in the 1999 budget.

There should have been a prudent, serious commitment to paying down the $600 billion national debt. It should have sent a signal to Canadians that it was the right step.

It should have provided Canadians with the broad based tax relief which they rightfully deserve. Doing that would have given our economy the injection it needs so that we could become the country we know we can be.

I want to ensure that the government puts money into priority programs, not silly programs like the transitional jobs fund. We need to put money into priority spending areas, such as health care. I am particularly concerned about rural health care. We also have to ensure that our best and brightest have access to affordable post-secondary education.

As the environment critic for our party, I would point out that the finance minister is a former environment critic, yet the environment department is still one of the most underfunded departments in this government. That is a shame.

To set the record straight, it was the provincial governments which actually provided the political leadership in terms of fiscal responsibility, primarily the Progressive Conservative governments of Manitoba, Ontario and Alberta.

We also need to pay tribute to the people on the front lines of this debt and deficit debate, the Canadian taxpayers who sacrificed to get the job done.

Budget Implementation Act, 1999Government Orders

4:55 p.m.


Rick Casson Reform Lethbridge, AB

Mr. Speaker, I want to ask a question of the member. It is nice to see him in the House today, wound up like he is. I sit on the environment committee with him and this is quite unusual. He must be speaking from the heart.

We have an accumulated debt in this country of $580 billion. In the projections of this government for the next three years that will not go down one nickel. If it says that it is paying down the debt, it is not.

What part of the national debt should be paid down first, the part this government ran up or the part his government ran up? Should we use the GST money to do that? When his government was selling the GST it said that it would use that money to pay down the debt. I would like him to explain what happened.

Budget Implementation Act, 1999Government Orders

4:55 p.m.

Progressive Conservative

John Herron Progressive Conservative Fundy Royal, NB

Mr. Speaker, it is my honour to have the opportunity to address such a very constructive question. I know that was the intent of my hon. friend from the environment committee.

First we have to look at the GST, which is a tax itself. No one likes taxes, but the GST was a replacement tax for a hidden federal manufacturing tax. It was a good thing to do, according to this government. Otherwise, it would have changed it. It was such a good thing that the minister of heritage decided to run twice on the very same issue.

When it comes to the national debt and which part of the debt we should pay down, we need to take a very serious look at the debt issue itself. There is a partisan swing there, but the overall impression is this. The past government lowered the debt as a percentage of GDP.

To be quite honest, more should have been done and more needed to be done. We need to continue to use our export driven economy, our access to the American market to keep our economy growing and pay down the debt in a very serious deliberate way so Canadians know we are making investments in that. We have a moral obligation to do it. We have a reason to do it from a productivity perspective.

I will be very pleased to answer any questions.

I thank my hon. friend and colleague from the environment committee for his interest in this particular issue.

Budget Implementation Act, 1999Government Orders

5 p.m.


John Williams Reform St. Albert, AB

Mr. Speaker, I cannot help but object to the member's comments welcoming debate on paying down the debt.

As my hon. colleague for Lethbridge has pointed out, the cumulative debt stands at $580 billion which has saddled this country into low productivity. Year after year after year Michael Wilson and Brian Mulroney told us that this debt was going to go. I remember it well.

In 1984 Mr. Mulroney campaigned and indicated that we were $170 billion in debt courtesy of the Liberal Party and this was going to sink us under a whole margin of debt. Mr. Mulroney's government was going to fix this when it took office. From 1984 to 1993 the Mulroney government ran up the debt from $170 billion to approximately $450 billion. The Liberals continued on and ran it up to $580 billion. It was the Reform Party coming over the horizon and saying that if things did not change we would take over this place that caused the Liberal Party and that rump down at the far end, the Progressive Conservative Party, to change their minds.

The member says he wants to enter into a debate about the national debt. Let us remember what two parties created the national debt. It was the Reform Party that came here and caused them to change.

The member talks about the GST replacing a hidden tax. The manufacturers sales tax did not affect me much as a consumer but the GST hits me in the pocket every time I go to the cash register. People do not like it. It was brought in over the protestations of every Canadian. The Liberals kept it even though they promised to get rid of it.

I want to know what the member is going to do about the GST and high taxes. There are $40 billion in interest payments every year because of the national debt.