Mr. Speaker, as I was saying before this interruption, there are even members from Quebec in the Liberal Party of Canada who, following the budget of the Minister of Finance, travelled around Quebec to explain that Quebecers got the largest part of the budget, that they should be happy because equalization payments, over three years, would give us $1 billion. They were supposed to be happy as well because all the jobs were going to Ontario and because the formula for calculating the funds allocated under the Canada social transfer had been changed.
It takes people who have sold out and who are intellectually dishonest to go around Quebec saying that it had won it all in the budget, when there were three winners in this budget: Ontario, Alberta and British Columbia. These three provinces were the strongest supporters of the social union framework agreement. The Minister of Finance in a way bought Mike Harris and company with the fine gift they got in the allocation of the Canada social transfer.
This is not the first time the minister has bought the silence and co-operation of the provincial premiers at a cost of hundreds of millions of dollars. Members may remember when there was the harmonization of the GST with the provincial sales taxes in the maritimes. The federal government paid the maritimes almost $900 million to keep quiet and let it have its way. That is how the Minister of Finance and this government operate.
Quebec should be concerned. Each year it pays taxes to the federal government and the members opposite are not even fair-minded enough to see that Quebec gets a demographic share of the taxes it pays.
Quebec should also be concerned when it hears that 30,000 to 42,000 jobs will not be created in Quebec as a result. It should be concerned when it knows that, if the federal government were to return to a more equitable allocation of federal funding for goods and services procurement, for research and development, and Quebecers employed by the federal government in federal laboratories, Quebec's unemployment rate would drop by more than a percentage point. Better yet, these investments would have all sorts of direct and indirect effects.
Since the Minister of Human Resources Development, who is completely lacking in compassion for the less fortunate, shamelessly tightened up the EI rules a few years ago, Quebec's welfare rolls have jumped by almost 200,000 and the Government of Quebec has picked up most of the tab. If federal transfer payments were to return to former levels, the number of people living on welfare would probably drop as well. This should also concern Quebecers.
This should be a major issue, particularly for the Quebec members of the Liberal Party of Canada, who always laugh at or make fun of figures that, believe it or not, are provided by Statistics Canada and the federal government, and that clearly show—the data is not from us, we simply refer to it—the injustice done to Quebec.
There are also things that are not included in this bill. Ever since the Liberal government was first elected, in 1993, we have been asking for a comprehensive reform of the federal tax system, which has not undergone any substantial review since the late sixties, with the Carter commission.
We pointed out, among other things, some blatant injustices in the personal income tax system. Along with the Reform Party, we recently condemned a few of these injustices regarding double or single income families. But there are others.
There is one, for instance, that has existed since 1986. I am referring to the fact that the tax structure, including tax credits, exemptions, tax brackets and income categories, is not fully indexed.
This is extremely costly to taxpayers and will continue to be until full indexation, which was eliminated in 1986, is not restored. Under the current system, any inflation rate lower than 3% is not taken into account by the federal government. The tax tables remain unchanged if inflation is lower than 3%. And since inflation has been around 1% for the past three years, and was between 2% and 3% for seven or eight years before that, there has hardly been any indexation since 1986.
It is profitable for the federal government, a kind of hidden tax. Without the government having to lift a finger, every year the lack of indexation means we pay more taxes to the federal government.
Right back in its first year of application, in 1986, this measure brought $500 million into the coffers of the federal government. If we factor in economic growth, we probably get up to $600 or $700 million per year that do not remain in the taxpayers' pockets. And then we are surprised to see that the taxpayers are getting poorer in recent years, compared to previous generations.
Every year, their assets go down. So does their disposable income. Measures like these are what is impoverishing people. But they do not show. This is why the Minister of Finance does not want to do away with this provision. All he needs do is saunter about with his hands in his pockets, and $500 million, at the very least, drop automatically into his coffers, without his having to impose any unpopular measures.
This is not small change. Looking at the cumulative losses of disposable income for Quebec and Canadian taxpayers, since 1986 the average taxpayer would have lost $7,000, in today's dollars. Had that amount been invested every year, there would now be more than $7,000. I imagine the taxpayers would have liked to have had that much in their pockets.
We are not equipped to keep the taxation level that high. And this is only one example, because there is a whole lot of bias in taxation, which means that middle income taxpayers, that is, about 70% of Quebec and Canadian taxpayers are paying more than they ought to, had the Minister of Finance done his job correctly.
He took advantage of the state of the economy. He did not do much. I have often called him lazy, and I think he is. Had he wanted to, he could have changed the tax system.
Now he is developing a bit of an interest in taxes. How long has this been going on? Since all the opposition parties rose in the House and said “Enough. Taxpayers have had it. The tax system must be changed”.
So the government struck a sub-committee to tour Canada. It will take a number of months if not a number of years before the tax system is reformed, but there is no need to reinvent the wheel.
I have an example about the lack of fully indexed tax tables. The federal government could have indexed them long ago. It could have also established a parliamentary task force to review the tax system.
When the Bloc Quebecois published two analyses, one of personal taxes and the other on corporate taxes, our stand-up comic, the Minister of Finance, rose and said “Well done, you have done a good job. It contains some interesting proposals”. He said that in the House.
We were flattered. We figured we had not wasted our time. The minister seemed serious when he said that these were interesting proposals and that he would examine them. He congratulated the Bloc Quebecois for its two reports on taxation. Since then, what has the minister done? Nothing, except to set up a task force, which worked behind closed doors for several months and postponed by several months the release of its report.
Upon reading that report, one can see why the task force delayed its release. It focussed on corporate taxes, not personal taxes. Why was the release of the report postponed? Because there was not much in it. Moreover, it even contained measures that were detrimental to the growth of businesses. It was making the burden heavier rather than lighter in the area of corporate tax.
One can understand why the tabling of the Mintz report was delayed. There is no trace of that report now. My guess is that the Minister of Finance ditched it.
This is how serious this government and its Minister of Finance, who wants to become the leader of the Liberal Party of Canada, are. It sure sounds promising.
This attitude is unfortunate, because a lot needs to be done in the area of taxation. With our small team, we were able to carry out an in-depth review of the tax system, particularly tax expenditures. We came to the conclusion that some of these expenditures have become obsolete and should be discontinued. There are also tax measures that are totally disconnected from reality, particularly as regards the labour market.
With a hundred or so specialists at its disposal, the federal government could have done the same thing, and it certainly could have implemented these recommendations for fairer taxation for everyone.
Already we can here the Minister of Finance and his faithful members telling us that the government is barely out of the woods, that it does not have the money, that it must be careful. Yes indeed, it must be careful. In fact, this is a very important issue for the Bloc Quebecois. We do not want the Liberals slipping back into their old ways of annual deficits. No more deficits.
In fact, that was the title of a paper we used last year as part of a province-wide consultation in Quebec of real people, asking them what should be done with taxpayers' money, what should be done with the huge surpluses the Minister of Finance is racking up at the expense of everyone but himself.
No more deficits: in fact, we were the only party to table a bill recommending that the deficit be reduced to zero and kept there, in other words, that the budget be balanced. We were the only party to table such a bill.
It is not true that the government has no money. The government has money coming out its ears. It keeps this very quiet, and certainly does not put it in writing. There were still zeros all through the Minister of Finance's last budget, and no sign of a surplus.
In the fiscal year that has just ended on March 31, 1999, the 1998-99 fiscal year, the Minister of Finance had a surplus of $15 billion. As well, he took $7 billion from the employment insurance fund. That is highway robbery, I repeat highway robbery, and it is unacceptable. It is unacceptable to do the same with the pension funds. There is talk of the President of the Treasury Board getting his hands on a $30 billion surplus, but that is another story. The figure for the last fiscal year was $15 billion.
In the present fiscal year, which runs until March 31, 2000, by our predictions the surplus will be $20 billion. The reaction may well be “Oh those predictions, oh those economists”. Certainly, economists do have their shortcomings, but they also have positive qualities.
One of the good qualities of economists, sometimes, ourselves included, is to be cautious. Since 1994, every year the Bloc Quebecois and its little team have predicted the deficit, as well as the surplus generated by the Minister of Finance, we have been no more than 2% or 3% off.
If a company specializing in predictions in Quebec and in Canada had such a result, it would be in great demand. The average margin of error in predictions is between 5% and 10%; ours was between 2% and 3%.
Every time we put our finger on the true deficit, which the Minister of Finance was hiding from us, we were dead on. Every time we started talking surplus, and came up with a ballpark figure for that surplus, we were dead on. So much so that the credibility of the Minister of Finance, where figures are concerned, is virtually zero, if not below zero, for most of the analyses. This is not something I am inventing.
The day after the budget is presented, you open the Globe and Mail , the Toronto Star , La Presse , any one in fact, you listen to the analysts on television; when the subject of the Minister of Finance's forecasts comes up, it is one big joke. People laugh. They double over, they twist themselves in knots, they roll around on the carpet.
And yet it is not all that funny. We have become accustomed to the Minister of Finance giving us a false picture of Canada's tax situation. Given such a totally false picture, Canadians were not aware of the real state of public finances and of the options the Minister of Finance and the Liberal government had to do things, move, help the most disadvantaged, lower income taxes.
It is a sad thing when the government knowingly presents false information, when six months later its figures are proven wrong. I remember once, two years ago I think, we had predicted there would be a certain level of surplus in February. The Minister of Finance criticized us violently, accusing us of throwing figures up in the air. He made fun of us. Six months later, our exact predictions had come true.
It is a sad thing to play with people like that, play with information, not tell people the truth and lie to their faces. It is beneath a minister of finance and a member of parliament. This is however what this Minister of Finance has done, half baked, since assuming his position. He literally and systematically hides the truth of the figures.
So, if the government had a $15 billion surplus in the last fiscal year and now has a $20 billion surplus, it should leave the current surplus of $7 billion in the employment insurance fund to workers and the unemployed. The government would still have $13 billion left to do things with.
The Minister of Finance could have done many things. As I said earlier, he could have done justice to Quebec and restored fairness in how the government spends money on goods and services, investments and staff in federal laboratories.
He could have done all that. He could have said “From now on, I will no longer use the surplus in the employment insurance fund, except to help the unemployed or to lower contributions”. The minister could have done all that. But in order to do these things, one must be honest, tell the truth and take action based on the truth. If one's actions are based on lies, one cannot do these things.
The last budget of the Minister of Finance is nothing but a wad of lies. All the expenditure and revenue items were cooked, and even the auditor general was surprised, since he has repeatedly asked the Minister of Finance to stop cooking the books like that. There are no longer any reliable figures in the minister's budget. There are zeros everywhere, instead of real surpluses of between $15 billion and $20 billion. This is terrible.
So, the minister could have done a lot. He could have done more to help children living in poverty. This is the minister's favourite theme. Every now and then, he gets up, puts his hand on his heart and starts talking about poor children. Child poverty has been on the rise since 1993, but he never mentions that. Since the Liberals have been in power and he has been Minister of Finance, child poverty has increased. People are poorer than before, children as well.
How can he rise in the House, put his hand on his heart, and talk about child poverty in Canada, knowing what he does? The Minister of Finance knows the figures, he knows how to hide them and how to make them say what he wants. He knows that child poverty has increased. How can he get up with a smile on his face and make jokes, then say that his government has done a lot for poor children and that it has worked tirelessly, with the means at its disposal, to reduce child poverty? How can he do such a thing, knowing all the way that it is not true?
How can he do such a thing and, at the same time, help himself to $7 billion a year from the EI fund? How can he say such a thing, when less than 40% of unemployed workers qualify for benefits under the new EI system? The other 60% or 70% are living in poverty, on welfare perhaps, as are the parents of these poor children the Minister of Finance says he wants to help.
If the public were to pay a little more attention to the debates in the House of Commons, it would soon be appalled. It is almost sickening to hear things presented like this when we have been fed this nonsense for six years, told that everything is fine, under control, that the Minister of Finance is working hard to put our fiscal house in order, when it is not true.
But he is making everybody else, the unemployed, the disadvantaged, those who can no longer draw unemployment, do the job. And that is truly shameful.
We in opposition will continue to fight until we drop in order to get this government to listen to reason and put into place some real measures to help those who are in greatest need, thus re-establishing justice and fairness in Quebec.
The figures I have just given are not fabrications, but ones anyone can find in the Statistics Canada data. At the present time, there are between 30,000 and 42,000 Quebecers waiting for the federal government to restore justice and fairness to federal transfers, because then they will be able to work and earn their living with dignity.
The Bloc Quebecois will continue to work on their behalf, and I can assure the House that we will spare no effort in making this government listen to reason, because what it is doing no longer makes any sense.