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 Order
Oral Question Period

3:10 p.m.


Denis Coderre 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 Order
Oral 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, 1999
Government Orders

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


Jake Hoeppner 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, 1999
Government Orders

3:20 p.m.


Stéphane Bergeron 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, 1999
Government Orders

3:40 p.m.

Stoney Creek


Tony Valeri Parliamentary 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, 1999
Government Orders

3:40 p.m.


Stéphane Bergeron 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, 1999
Government Orders

3:45 p.m.


René Canuel 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, 1999
Government Orders

3:45 p.m.


Stéphane Bergeron 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, 1999
Government Orders

3:50 p.m.


Derrek Konrad 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, 1999
Government Orders

4:05 p.m.



Mauril Bélanger Parliamentary 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, 1999
Government Orders

4:15 p.m.


Dick Proctor 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, 1999
Government Orders

4:15 p.m.


Mauril Bélanger 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, 1999
Government Orders

4:20 p.m.


Rick Casson 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, 1999
Government Orders

4:20 p.m.


Mauril Bélanger 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.