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.
Gar Knutson LiberalParliamentary Secretary to Prime Minister
Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to three petitions.
Art Hanger Reform Calgary Northeast, AB
Mr. Speaker, pursuant to Standing Order 34(1), I have the honour to present to the House, in both official languages, the ninth report of the Canadian NATO Parliamentary Association which represented Canada at the meeting of the standing committee and the Secretaries of the National Delegations of the NATO Parliamentary Assembly held in Dresden, Germany, March 26 to 28, 1999.
Maurizio Bevilacqua Liberal Vaughan—King—Aurora, ON
Mr. Speaker, I have the honour to present, in both official languages, the 17th report of the Standing Committee on Finance.
In accordance with its order of reference of Tuesday, April 20, 1999, your committee has considered Bill C-72, an act to amend the Income Tax Act to implement measures that are consequential on changes to the Canada-U.S. Tax Convention, 1980, and to amend the Income Tax Conventions Interpretation Act, the Old Age Security Act, the War Veterans Allowance Act and certain acts related to the Income Tax Act, and agreed on Wednesday, May 5, 1999 to report it with amendments.
Lorne Nystrom NDP Qu'Appelle, SK
moved for leave to introduce Bill C-510, an act to provide cost of production protection for the family farm.
Mr. Speaker, by means of a very short introduction, this is a bill to provide to the agricultural producers of our country income that is reflected in their cost of production. It is to be calculated on a three year basis. It covers most commodities in the country. It is something that farmers have been calling for, for a long time. It ties the cost production formula into what income they get when they sell their commodities, be it grain in the fall or livestock at certain times of the year.
(Motions deemed adopted, bill read the first time and printed)
Darrel Stinson Reform Okanagan—Shuswap, BC
Mr. Speaker, I rise today to table two petitions.
The first petition is from people of my riding of Okanagan—Shuswap asking for a moratorium on negotiations of a multilateral agreement on investment, or MAI, until the Canadian public has been fully informed and consulted.
Darrel Stinson Reform Okanagan—Shuswap, BC
Mr. Speaker, the second petition confirms the importance of heterosexual marriage as a foundation of the family, which in turn is the foundation of Canadian society.
Raymond Lavigne Liberal Verdun—Saint-Henri, QC
Mr. Speaker, I am tabling today, in both official languages, a petition signed by my constituents and calling upon the government to pass an immediate moratorium on the cosmetic use of chemical pesticides.
Lorne Nystrom NDP Qu'Appelle, SK
Mr. Speaker, I have the honour today to table a petition signed by 104 Canadian residents, mainly from the city of Moose Jaw, but also from the city of Regina.
What these people are calling for is that the Senate of Canada be abolished. The reason they are asking for that is because the Senate costs the Canadian taxpayers some $50 million a year. They say that it is undemocratic and unaccountable. They also say that it is not elected and it is therefore not proper to have a Senate as part of our modern democracy.
On behalf of these 104 citizens, reflecting 104 senators, I table a petition to abolish the Senate.
Guy St-Julien Liberal Abitibi, QC
Mr. Speaker, pursuant to Standing Order 36, I am tabling a petition from the Inuit community of Umiujaq, in Nunavik.
The petitioners state that, at the present time, there are 16 to 20 people in three bedroom dwellings. The Inuit find the housing conditions in Nunavik extremely distressing. They consider the situation totally intolerable. It contributes to the high incidence of tuberculosis, infectious diseases and social problems.
The federal government must assume its obligations under the James Bay and Northern Quebec agreement as far as housing in Nunavik is concerned.
Gar Knutson LiberalParliamentary Secretary to Prime Minister
Mr. Speaker, I ask that all questions be allowed to stand.
Budget Implementation Act, 1999Government Orders
Saint-Laurent—Cartierville Québec
Liberal
Stéphane Dion Liberalfor the Minister of Finance
moved 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
Stoney Creek Ontario
Liberal
Tony Valeri LiberalParliamentary Secretary to Minister of Finance
Mr. Speaker, I certainly appreciate the opportunity to speak at third reading of Bill C-71.
Along with strengthening health care, increasing the Canada child tax benefit and assisting below and modest income Canadians, Bill C-71 also covers a range of other measures such as debt management, income tax administration, first nations taxation and public service pensions, among other things.
While wide ranging, I would say, and I am sure hon. members would agree, that all these measures are connected. They fall within the sphere of the government's ongoing commitment to an effective, efficient and fiscally responsible government.
I would like to briefly summarize some of the bill's highlights. Bill C-71 provides for the transfer announced in the 1999 budget of an additional $11.5 billion in health care funding to the provinces under the Canada health and social transfer.
It is also important to note that this increase will be distributed equally for every Canadian in every province. By eliminating the per capita disparities in the distribution of the CHST, all provinces by 2001-02 will receive identical per capita entitlements, thereby providing equal support for health and other social services to all Canadians.
The provinces will receive $8 billion of the $11.5 billion through the CHST over four years beginning April 1, 2000. The additional $3.5 billion will be paid in the form of an immediate one time supplement to the CHST from funds available this fiscal year. The provinces can decide for themselves how much they will draw down each and every year over the next three years.
The purpose of the immediate one time supplement of $3.5 billion is to respond directly to the concerns that Canadians had from coast to coast to coast about the lack of emergency services that they were able to access, as well as the long waiting lists. The $3.5 billion will be in the hands of the provinces to immediately draw down as they see fit in order to meet the needs of their particular constituents.
When the funding increase reaches $2.5 billion in 2001-02, direct federal cash support under the CHST will be $15 billion a year. The health component then of the CHST will be as high as it was before the expenditure restraint in the mid-1990s.
The next measure in Bill C-71 deals with two components of the Canada child tax benefit: the base benefit and the national child benefit supplement. Both are changed in the 1999 budget. Bill C-71 sets out the design of the 1998 budget commitment to provide an additional $850 million increase in the national child benefit supplement payments to low income families. The maximum national child benefit supplement benefit level is being increased by $350 in two stages: $180 in July 1999 and $170 in July 2000. The net income level at which the national child benefit supplement is fully phased out is also being increased to $27,750 in July 1999 and $29,590 in July 2000.
These changes mean that a family with two children earning $20,000 will receive an increased benefit of $700 for a total of $3,750 per year. As well, a $300 million enrichment of the base benefit in July 2000 will increase benefits for modest and middle income families by $184 per family. It will also be accomplished by means of an increase to the $29,590 in the net income threshold of these benefits.
The bill also addresses assistance for children in another area by ensuring that the full amount of the single supplement of the GST credit will go to single parents earning under $25,921. Unfortunately some very low income families with children may not have been receiving the full GST credit supplement. This bill addresses this problem by increasing the GST credit benefits for low income single parents to complement the national child benefit by providing these parents with the full $105 amount of the single supplement.
The bill also addresses first nations taxation issues. The 1999 budget confirmed the government's willingness to continue discussions about taxation matters with first nations and to implement arrangements with first nations members.
Bill C-71 gives the B.C. Sliammon first nation authority to add a value added tax on all tobacco products and fuels sold on reserves. B.C.'s Westbank first nation, which already taxes tobacco products and alcoholic beverages, will now be able to charge a 7% GST style tax on its on reserve sales of fuel. In addition, the Yukon First Nation Self-Government Act will be amended to give effect to the GST rebate provisions which were added to their self-government agreements last year.
There are also measures involving the administration of taxation. A service agreement signed last October between Revenue Canada and Nova Scotia allows for a limited release of taxpayer information to Nova Scotia Workers Compensation Board. The bill also allows for co-operation in audits. Certainly this exchange of information helps ensure amounts owed are indeed paid.
Members will be pleased to note that before exchanging any information the federal government will ensure that the workers compensation board fully adheres to the current confidentiality safeguards that apply to the sharing of information with agencies outside Revenue Canada.
Another part of Bill C-71 deals with good financial management. Hon. members are aware that the government is committed to managing its debt cost as effectively as possible. This bill amends the Financial Administration Act to enhance the effectiveness of debt and risk management.
The amendments, many of which are technical, confirm some existing practices. They clarify the authority governing the government's borrowing and distribution of its debt and modernize the government's fiscal and risk management powers. The bill also spells out the government's standing authority under the FAA to ensure that maturing debt can only be refinanced within a given fiscal year, a practice the government has followed for years.
New borrowing authority to finance a deficit would be obtained as in the past through a borrowing authority bill. It is important to ensure that all members understand that the amendments to the FAA are in no way compromising the authority that is required to finance a deficit. In fact, that authority would be obtained as in the past through a borrowing authority bill.
Other measures guarantee that parliament will receive information annually on the government's debt management programs and plans which speaks to the transparency and openness of the management of our debt.
As I mentioned at the beginning of my speech, some of the other measures of Bill C-71 have to do with amending the basic pension formula in the public service, Canadian forces and RCMP superannuation acts which calculate benefits on a five year rather than the current six year average salary. That is an improvement to the existing plan.
Also included in the bill are provisions for amending the Patent Act to clarify the Minister of Health's authority to pay the provinces moneys collected by the Patented Medicine Prices Review Board from excessive pricing of products by patented manufacturers.
Also included in the bill is a measure clarifying the scope of federal loan guarantees under the Agricultural Marketing Programs Act to financial institutions that fund advance payments to our agricultural producers.
Finally, the bill also includes a measure that will provide the Minister of Finance with the authority to undertake financial operations necessary to meet Canada's commitments under the European Bank for Reconstruction and Development Act.
The 1999 budget omnibus bill establishes important foundation blocks for the future in terms of new funding for our public health care system. It benefits children and families in need and implements measures that improve the operations of government, all while sustaining our commitment to financial discipline.
Generally and overall it is important to note the 1999 budget extends the government's plan to build a strong economy and a secure society. It is an approach that we as a government have consistently followed, an approach which is designed to advance living standards of Canadians. It is a strategy that we have applied through each of the government's six budgets to date. We essentially take action on three fronts: maintaining sound economic and financial management; investing in key economic and social priorities; and providing tax relief and improving tax fairness.
First, certainly strong economic growth and reduced debt burden better enable the government to provide tax relief and make key investments. The 1999 budget again confirms that the era of deficit financing is over. We will continue to deliver balanced budgets or better.
Second, our investments in health care and research and innovation and other key areas improve Canadians' ability to work and their quality of life.
The third pillar of our strategy tax relief is very clear. In essence the 1999 budget delivers tax reductions of $16.5 billion with the 1998 budget collectively. When we include the reduction in unemployment insurance that number escalates to $17.3 billion.
It is important to note that our approach will be one of balance and it will remain balanced. We have demonstrated a three front strategy over the last number of budgets. We will continue with that approach. The government has eliminated the deficit faster than anyone expected. We have seen the results of our financial management in low inflation, low interest rates, the increase in job creation and the ongoing economic activity.
It is important to note as well that the work of the government in this area is still not complete. We still must continue to provide improvements to the quality of life and the standard of living of Canadians. We need to continue to provide tax relief. We need to continue to provide opportunities for Canadians to work and enjoy the quality of life they are accustomed to in this great country.
It is clear that many benefits will result from Bill C-71. I urge my hon. colleagues to pass this legislation without delay.
Monte Solberg Reform Medicine Hat, AB
Mr. Speaker, it is a pleasure to rise and debate Bill C-71.
This bill is part of what the government introduced in the budget in February. It gives us a good indication of where the government's head is at when it comes to some of the big issues that confront the country today in terms of the economy and those sorts of things.
I want to talk a bit about one of the big current debates in the country. In fact it is a debate that the government helped initiate, mainly the industry minister. It has to do with the issue of productivity. Most people who follow this issue closely would acknowledge that improving the productivity of the nation is critical if we are going to give Canadians an improved standard of living, something that we have enjoyed almost every generation since Confederation.
The question I pose to the government is does this budget really improve the nation's productivity? Does it take a step in the right direction in terms of making the country more productive? Does it at least help us reach our potential when it comes to being more productive?
On close analysis this bill does not come anywhere near doing that. I do not think it makes Canada more productive. I do not think it helps us improve our standard of living. I do not think it helps us improve our health care anywhere near the degree that Canadians are expecting.
At the finance committee discussions are being held on the issue of productivity. Yesterday we had several people before the committee, some economists, some from banks, insurance companies and the conference board. There were people representing particular interests such as the education sector, the biotech sector, the high tech sector, and so on.
All have acknowledged that we have to improve our productivity if we want to improve our standard of living. We are far behind our major trading partner, the United States, in terms of our productivity. There is some debate as to whether or not that gap is getting worse, but everyone acknowledges that for the last 10 years we have been substantially behind the United States. The consensus yesterday was that the gap would be about 20% behind. When we have a gap that big, it means that our standard of living is also that much further behind that of the United States.
Some people ask why compare ourselves to the United States, the Americans are bad and that kind of thing. It is important to look back and remember that Canada used to have a standard of living that was actually superior to that of the United States. We had a standard of living where we were their economic betters.
It is wrong for us to settle to be the poor cousins of the United States. We deserve to have a standard of living that is as good or better than theirs. It is something that my parents grew up with and people became accustomed to over a long period of time. Sadly we seem to have fallen behind the Americans now and I think it is time to reclaim our rightful place as their economic equals at the very least, if not their betters.
The question is how do we improve our productivity? How do we get to become a more productive nation? This is something we put to the experts who were assembled around the table. While there was not necessarily a consensus on what we should do, there was some agreement on what the key factors are for improving productivity.
Among them is a good education system. In Canada people would have to acknowledge that we do have a good education system but certainly it could be improved. It is also a fact that we spend more on education than almost any other country in the world. We do put a lot of money into it. I do not think it necessarily needs more money but it probably could be improved in various ways, shapes and forms. It is important to point out that most of that responsibility falls on the provinces because education belongs to them according to the Constitution.
There was some agreement that we have to put money into infrastructure in Canada. That makes sense to me. Of course most of that responsibility does fall on the provincial governments, even though it is interesting to note that the federal government does take about $3.8 billion a year from consumers through gas taxes and fuel taxes of various kinds. Most people would say it would make sense to put that back into highways and that kind of thing, but the federal government only puts a few hundred million dollars of that $3.8 billion back into highways. The government is probably not doing the job it could be doing to improve infrastructure in Canada.
It is interesting that over the last generation or so the size of government grew dramatically and money did not go into one of the most important things for improving our overall productivity which is infrastructure. It went into all kinds of soft programs, such as social programs, which are well and fine but they do not necessarily improve our productivity as a nation, something the government claims to be very concerned about.
One of the things that improves productivity, and I know there is a consensus on this, is a country that does not burden the people who create the wealth with all kinds of rules and regulations. There has been some progress made in that way over the last many years.
We have entered into free trade agreements which have helped improve the flow of goods and services between Canada and the United States and Canada and other countries, as we now trade freely with several countries, more or less. There are always trade disputes but basically that was one of the other factors which improves our ability to trade.
Sadly we still have all kinds of internal trade barriers in Canada between provinces. Although the federal government promised it would deal with this, and this was something the industry minister said he would address a long time ago, frankly the federal government has done very little to improve the state of trade within Canada. We still have many internal trade barriers.
We also have a tremendous amount of regulation in Canada. I remember one day phoning the Library of Parliament. When I asked them to tell me how many federal regulations are on the books in Canada today, they basically laughed at me. Every year we produce hundreds of regulations. It makes it extraordinarily difficult for business people to do what they do best which is produce wealth, prosperity and jobs for people when they have to sit down and fill out forms and obey regulations that someone produced 50 years ago that in many cases probably are not applicable any more. Sadly we still have to contend with that. This government has not done a good job of eliminating burdensome regulation.
There are probably other factors as well that I have not mentioned.
Finally we come to an issue that the Reform Party has pushed for as well as other people who are very concerned with the state of the Canadian economy, which is simply that we have an extraordinarily high tax burden in Canada today, and that does hurt our productivity. It hurts it in a number of ways. This was an issue that was debated a bit yesterday as well.
First, when we have taxes that are as high as they are in Canada it causes many people, who in many cases are very skilled and have great talents, to go elsewhere to pursue their careers. We see this all the time.
People on the government side are saying there really is not a brain drain, that it is not a problem because we are bringing in as many people as we are losing and they are highly educated people. I do not buy that for a second. Yesterday we had all kinds of people appear before us. They told us they were in the high tech field and that they know what is happening. They said they are losing people from their companies who go to the United States because there are more jobs, they pay better, they tax them more lightly and they can purchase more with the money they earn because their dollar is more valuable.
We hear that over and over again. We hear it from companies like Nortel. I would argue that Nortel is the leading company in Canada. It employs 76,000 people, many of whom are in Canada. It is a real world leader in all kinds of high tech areas. It is involved in things like telephone switching, and now the Internet. It is doing wonderful things. It employs tens of thousands of people who are given a chance to have wonderful careers with wonderful salaries. Officials of Nortel are now saying to the government that it must start to cut taxes because if it does not they ultimately may have to follow all those employees they have lost to the United States.
It is not often that a leader of business will stand in front of the government and say that its policies are wrong. It takes policies that are so wrong-headed that they are having a real material affect on the bottom line of those companies. For obvious reasons these companies do not want to alienate government.
It speaks volumes when a company like Nortel speaks up. However, it is not just Nortel. My goodness, we had Mr. Desmarais speaking out. He has very close connections with the Prime Minister. We had Mr. Pattison speaking out. These are captains of industry in Canada who are saying “If you continue to tax us this heavily we are going to have to seek opportunities elsewhere in the world and we will no longer be able to continue with the same level of investment in Canada that we have in the past”.
This is not me speaking. In many cases it is people who have close ties with the government who are speaking out, saying “This must come to an end because we are driving some of our best and brightest out of Canada”. That is the first point I want to make.
We also heard yesterday from someone who is involved in the biotech field. That gentleman told us that it is not just a question of salaries, but because there is so much more economic activity going on in the United States and its economy is booming, it is able to offer this gentleman, a brilliant scientist, a geneticist, an extraordinarily interesting job. That is what motivates a lot of these people. It is not just the money, it is the jobs as well. He had been offered an opportunity to head up a $15 million research project in the United States. He did not tell us whether he was seriously considering it, but the very fact that companies are coming to Canada and making these offers to some of our people should concern us.
There is another reason that has to do with high taxes which is causing people to go to the United States. When there are lower taxes, as there are in the United States, there is more economic activity because there is more money in people's pockets. There is more wealth being created. They are able to provide more money for all of these wonderful research projects.
I recall recently an article in the Globe and Mail that talked about a biotech firm in Quebec that was simply unable to attract senior researchers to the company because they were going instead to the United States.
We recently had people from the universities appear before the committee who said that their problem was not that they could not find people, it was that they had lost their senior people to the United States. It is usually the United States, but not exclusively. They were having to fill those positions with very junior people. Then the cycle continues. Once those people get some experience, many of them head off to the United States.
This is an extraordinarily serious problem and it obviously impacts our productivity. When we lose all of these highly skilled people it means they are not producing wealth and jobs for Canadians. That ultimately means, of course, that our standard of living falls. As I pointed out earlier, in Canada we are accustomed to seeing our standard of living actually double every generation, but that is not happening now. Our standard of living is much lower than it used to be relative to our major trading partner, the United States. We have fallen far behind. There is a consensus on that.
In fact, I must point out that even the Minister of Industry has made an issue of this. He has suggested that our standard of living has fallen below that of Mississippi, Alabama and Georgia. He gave a speech on this in February.
Monte Solberg Reform Medicine Hat, AB
My hon. friend across the way is piping up. I am sure he is a little embarrassed about that. It was his industry minister who did it. If he wants to take someone to task he should take his own industry minister to task. I am simply pointing this out. Obviously, whether or not those are accurate facts, there is a serious problem today. If they were not accurate, I just do not know why the industry minister would be telling Canadians that is the case.
Now that we have established that there is a problem and that high taxes are a big part of the problem, what do we do about it? What did the government do in Bill C-71? It talked about lowering taxes. What did it do in the budget overall? It talked about lowering taxes. The government talks about $16 billion in tax relief over three years. What it does not talk about is that while it is reducing taxes marginally on the one hand, it has already set in motion tax increases on the other hand.
The Canadian Federation of Independent Business appeared before the committee the other day, saying that what the government does not say is that because of bracket creep, which is the inflation tax the previous government basically set in motion, every year we see the impact of those tax cuts the government was bragging about eroded to the point where after three years there is no tax relief at all according to the Canadian Federation of Independent Business.
What the government also did not say was that a couple of years ago when it set in motion the huge increases to Canada pension plan premiums it did not calculate them as tax increases. It said it was a rise in premiums. However, Canadians have to pay those premiums. They do not have a choice. That is a payroll tax. By the way, they are not getting any more pension for those huge increases in payroll taxes. In fact, they are getting a slightly smaller pension as a result of the changes the government made.
Overall, the point is that the tax burden continues to grow. If hon. members opposite doubt what I am saying, I would refer them to something in the 1996 budget documents, which is that the real way to measure whether the tax burden of a country is going up is to look at the tax level to GDP. Back then it was about 14%. Now it is up to 17%. That is at the federal level and this is the government's own measurement that we are talking about. Taxes are ramping up. That is the objective fact. It is not our data; it is the government's data.
We can forget about what the government tells us about taxes going down. The true fact is that taxes are going up and the government should be straight with Canadians.
Tax relief is extraordinarily important for getting our economy moving again at a rate where it will produce the types of jobs we once took for granted. Some people doubt that tax relief actually helps productivity, but there are a couple of ways it does that. I mentioned brain drain a minute ago. If it will stem brain drain it will help our productivity.
The second point I want to make came up again at the finance committee yesterday. Another way that lowering taxes will help productivity over the long run is that it will help capital formation. There are a couple of ways it does that. If we lower income taxes overall there will be more money in people's pockets. If we lower capital gains taxes we suddenly free up all that locked in capital which people are afraid to cash in. They know there will be a huge tax bill if they do that because of the high capital gains taxes we have in Canada.
Between cutting personal income taxes and lowering capital gains we free up a lot of capital that is currently locked into investments that otherwise would not be locked in. There would be a better return on investment. Ultimately a pool of capital would be formed which would allow individual workers to produce more. That is the rough definition of what improving productivity means. When we improve productivity the standard of living for Canadians goes up. We need to start lowering taxes for that reason as well. Those pools of capital will be formed and then all of a sudden they will be used to start new businesses of various kinds.
The evidence is very clear. In the United States when capital gains taxes and income taxes were cut we saw a boost in revenues. The reason for that is just what I pointed out a minute ago; all of that potential was unlocked and all of that money all of a sudden came forward. Some of it was taxed, but people were happy to have it taxed because it was taxed at a lower rate and they were able to use the bulk of it to create jobs by starting new businesses and that kind of thing. Ultimately everybody was better off. The government even brought in more revenue. How can that be a bad thing? It is a very good thing.
As the chairman of the finance committee pointed out yesterday: Does everyone agree that we have to produce more wealth before we can redistribute the wealth? That is a good point. I am glad my Liberal colleague from Toronto made that point. Certainly members on this side agree with it.
This brings me to the end of the first half of what I want to say. In essence, I do not believe that Bill C-71 brings about the productivity benefits that many of us believe we have to have in Canada. It simply does not lower taxes enough. It does not deal with things like regulation. It does not lighten the burden for Canadians. It does not unlock all that wealth that we could be using to produce jobs and give people the personal financial security that so many people crave today.
Many families are absolutely stressed out because both parents have to work, and not because they want to. They have to because Canadians are taxed so heavily today. This government really does punish people for the great crime of trying to make a living. That is absolutely wrong. We need to see some major tax relief in Canada, not when it suits the government but today. If we do not deliver it today we lose all kinds of opportunities every day. We lose all kinds of opportunities for investment, more jobs and wealth that will benefit everybody. We need to have that. That is one big reason that I oppose Bill C-71.
I want to talk about the other major aspect of Bill C-71, the part of the bill that addresses the issue of health care.
Bill C-71 is part of the budget that came down in February when the government put back some of the money that it originally took out of health care starting in 1995. Basically for every $2 it took out it put about $1 back in.
By anyone's definition that is a shell game. It is not a question of improving health care. It devastated health care on the one hand. Then it put a band-aid on it with the other hand and wants to be patted on the back for it. As somebody once put it, it has gone out and started a huge fire. Then it tries to put it out and wants credit for saving everyone because it put out the fire. That is a ridiculous approach.
We need to acknowledge that some money has to go back into health care. We also have to point out that this is only a stopgap. We have to find other ways to make health care more effective in Canada.
My colleagues across the way like to talk about how much more superior Canada's health care system is to that in the United States. It is superior in many ways. I agree with that. However, we need to assure Canadians that just because we do not necessarily support the health care system as it is today the American system is not the only other option. I do not want the American system. There are many things about the American system that are horrible. I do not like a lot of what the American system is about. That does not mean that we cannot improve the Canadian system. There are many things wrong with the Canadian system.
I heard my colleagues across the way talk for five years about how wonderful it is that we all have equal access to the health care system in Canada. More or less that is true, but we do not have equal access to health care. We might have equal access to the system. We have equal access to a waiting line. In Canada today over 200,000 people are on waiting lists to get surgery. That is ridiculous.
I know from personal experience, as I am sure colleagues on both sides of the House know, that family members are sometimes stricken with a serious illness and end up in the hospital. It could be because of an accident or for some other reason. Very often they cannot get the treatment when they need it. I personally have had family members who had to wait seven or eight weeks with extraordinarily serious illnesses. That is wrong. When the health care system denies people health care when they need it, it is time to take off the blinders and say that we have to make some fundamental changes to health care. It is not serving the public well.
Right now we are in a situation where relative to what the future holds the problem is fairly easy to solve. Down the road as the baby boom generation ages and is inflicted with more and more sickness and ill health that come with old age, we will be in a situation where the health care system, as presently constituted, will be under unbelievable pressure. We will see the great bulk of the population needing to get health care treatment and the little remnant that is left, the people still in the workforce, having to pay for it. The government has not done anything to prepare for the coming crunch in health care.
It is time to quit cranking up the rhetoric about American style health care and deal seriously with the issues. There are ways to do it. The first thing we have to do is find ways to accommodate some flexibility for the provinces in dealing with this issue. They fund the great majority of health care in Canada.
By the way, while I am talking about this point, I should point out that friends across the way will often say that American health care is a private system and in Canada it is a public system. That is baloney. First, the United States funds publicly about 47% of its health care. In Canada our public funding is 69%. We both have substantial public investments but we also have big private components to our health care.
I think we should lay that on the table and make sure people are clear about it. Let us not have a phony debate about not having any private health care in Canada at all because we do, and let us not pretend that they do not have in the United States because it does.
Going back to the provinces, we know for instance in Alberta that in the past the provincial government has tried to find some ways to take the pressure off the waiting lists for health care. It did that by allowing a public-private system for eye surgery, for instance. In doing so many people were able to go to the Gimble eye clinic and get eye surgery. They did not have to wait for weeks and weeks or months for a service that they wanted and in some cases really needed. At the same time it opened up a spot on the public system so that someone else could move up and get surgery faster.
When the federal government got wind of that it said it could not have it; it just made too much sense. It punished the Government of Alberta by cutting back the transfers to Alberta. That was a huge mistake. It sent a message to all the provinces that the federal government would not allow them to be creative and find ways to help their citizens, or would not deal with the upcoming health care crunch by giving them some flexibility.
The federal government plays the phony game of Canada having public health care and that is all it has. As I pointed out, about a third of our system is already privately funded and has not meant the disintegration of health care. To the contrary, it has meant that we have had some money go back into the system so that we can give people health care when they need it.
The only thing I can think of that is worse than having to pay for health care out of our own pockets is not having health care when we need it. Unfortunately we just do not get it in the health care system in Canada today.
Lynn Myers Liberal Waterloo—Wellington, ON
What about Brazil? Maybe we want to go to the Brazil system next.
Monte Solberg Reform Medicine Hat, AB
My friend across the way is yelling at me. If he believes so strongly in the public health care system, why did the Liberals take $21 billion out of it in 1995? That is what I ask him. If they believe it is so wonderful, why did they take that $21 billion out?
Although my friend across the way can criticize me for what I am saying, I think he should look at his own actions and question whether they made sense, if he really believes in public funding of health care.
I conclude by saying that Bill C-71 has failed Canadians in a couple of important ways. I do not think it deals with the issue of improving our standard of living by giving us the tools to be more productive. We on this side would do that by cutting taxes. We have laid out a plan for tax relief which amounts to $2,000 for the average family of four. That is just a beginning. We would also dramatically reduce our debt and at the same time ensure that we improve our health care in Canada.
The second point I want to make is that the government has not addressed the health care issue. It has thrown some money at health care but basically has said to the provinces that it will not let them be creative and reform the system in a way that helps their people in their provinces. The provinces are answerable to the public according to the Constitution for health care. The federal government is saying it does not care how many people are on waiting lists for surgery. It will do it its way and relegate people to waiting in the hallways of hospitals. I think that is despicable.
I urge my friends across the way to adopt a new approach, an approach that is a bit more open minded to some of the things that have worked not only in the past in Canada but also in other countries around the world. If the Liberals did that, not only would they win the support of this party but they would also overwhelmingly win the support of hard pressed Canadians.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Mr. Speaker, I am pleased to rise to speak at third reading of Bill C-71.
I would like to begin by focusing on one particularly unpleasant aspect of this bill, the one that changes the rules of the game.
The Minister of Finance is changing the rules of the game in the way funds are allocated to the provinces to fund social assistance, higher education and health.
In this budget, without warning—and this particular provision is in Bill C-71—the Minister of Finance decided that, in contrast to past procedures, the most important criterion for the allocation of funds for social assistance, higher education and health would no longer be the provinces' needs but their population, over a two year period.
That changes the picture; that changes things. When it comes to the funds allocated to social assistance to help the most disadvantaged, the most important criterion should not just be the provinces' population, but their needs as well.
If in one region of Canada, in one province that has urgent needs because there is a higher incidence of poverty, the logic of social policy is to give to those in need.
The Minister of Finance decided unilaterally, without talking to anyone, especially not to the government of Quebec, that henceforth all the money would be allocated according to population. As a result, Canada's most populous province, Ontario, will get about 64% of the funds. As early as this year, Ontario will be the big winner regarding the Canada social transfer since, all of a sudden, population becomes the sole criterion for the allocation of funds, even in the case of social assistance, and that province has the largest population.
This means that, over the next five years, under this new formula, Ontario will get about $5 billion out of the $11.5 billion in new money from the federal government. By comparison, Quebec will get $900 million.
Under these unilateral arrangements made by the Minister of Finance, Quebec will suffer an annual shortfall of at least $350 million over the next five years.
During the debate that we had at report stage in this House, some Liberal members said “There is no pleasing you. You are not happy because we are treating all Canadians across the country equally. They are all on an equal footing”. That is not the issue. It is important to stress this again, because the members opposite have a very hard time grasping it. Perhaps this is due to a lack of interest in the most disadvantaged across Canada, a lack of sensitivity or a lack of compassion.
It is important to understand that the funds provided for a social policy must be allocated to those who need them. With this new criterion solely based of population, we can no longer talk about a social policy but, rather, about a policy of equal redistribution of funds across Canada, on the sole basis of population.
The government cannot claim to have a Canadian social transfer, a social policy, when this policy no longer targets low-income households.
Some might say that, if there are more Quebecers who are unemployed or on welfare, Quebec's policies should be a little more proactive and contribute to economic growth and job creation. I agree. Clearly, Quebec has to do more. It must innovate, take up the challenge of the new economy and grab the bull by the horns, as it were, in order to reduce our level of unemployment and steadily eliminate pockets of poverty.
But the federal government must do its part as well. Quebecers are paying approximately $31 billion in taxes every year to the federal government. It would perhaps be a good idea for the Liberal MPs from Quebec to one day do their job properly. I will explain what I mean.
Quebec is still not receiving its fair share. We sound like a broken record. A journalist once told me we were playing the same old tape. Quebec is not receiving its fair share. If Quebec were to receive its share of federal government spending, we would not need to point this out. The situation has not changed in 30 years. The federal government is systematically discriminating against Quebec.
If it did, perhaps Quebec would not have 30% of all the welfare recipients in Canada. Perhaps Quebec would not have, year in and year out, a two or three percentage point difference in its unemployment rate compared to the Canadian average, never mind its position compared to Ontario. Perhaps the Canada social transfer would never have been necessary, since Quebec would have had fewer people unemployed or on welfare, but that is not how it is.
I will give some illustrations, because this is so important. We do seem to be repeating ourselves, but I will do so ad nauseam, until the federal government shows some justice toward Quebec.
Taking the example of goods and services expenditures, Quebec has 25% of the Canadian population but, for the past 25 years, federal goods and services expenditures in Quebec have been far lower than its demographic weight.
For goods and services alone, the government's day to day spending, last year the federal government spent 20% in Quebec. That is 4 percentage points short. We have 24% of the population, and the federal government purchases goods and services from Quebec companies which account for only 20% of its total expenditures in this field. That difference means jobs, and poverty as well. There would be less poverty if that figure were raised from 20% to 24%.
Looking at federal government capital investments, again Quebec is not being treated fairly. Quebec receives 19% of the federal government's capital and general investments, while its population is 24% of the total. Once again, that difference means jobs, construction jobs. It would also mean less poverty, if we increased the percentage of federal capital investments from 19% to 24%.
Federal subsidies to businesses shrink every year as well. Only 18% of federal funding to Canadian business goes to businesses in Quebec. It is easy to say that Quebec businesses have a low productivity record. The fact of the matter is that the federal government siphons off $31 billion worth of our taxes annually in Quebec. It does not give us our fair share, which is about a quarter of the money.
The federal laboratories in Quebec receive only 16% of all capital spending on federal labs. Unless things have changed in the past few minutes, we still have 24% of the population and get only 16% of federal funds for federal government labs.
For research and development, the figure is generally 14% compared to 24%, although R and D is everything and will make our businesses competitive in the future. R and D is what makes the difference between countries or regions of countries ranking among the best in the world or being left by the wayside. We get 14% of the money for research and development.
No one can tell me that this does not have an impact. It has a definite impact on the relative competitiveness of Quebec and Ontario. Ontario gets help from the federal government, while Quebec gets neglect.
In science and technology, Quebec gets 13% of the federal jobs. The number one province in that respect is Ontario. For all the expenditure items I mentioned earlier, the winner is Ontario with 45% to 50% of all the federal funds allocated for goods and services, investments and general capital expenditures.
For several years now we have been doing an annual tally of what readjusting federal spending could mean in terms of job creation, if it were based on Quebec's demographic weight. Do members know how many jobs this means per year?
If, tomorrow morning, the federal government decided to do justice to Quebec—it would be even better if Quebecers decided to achieve independence and keep all of the $31 billion they send every year to the federal government—and invested in Quebec a fair share of research and development, goods and services and so on, there would be between 30,000 and 42,000 more jobs on the Quebec labour market. This is a lot of jobs.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
I hear a member from Ontario. I would rather not reply. When you have it all and you start criticizing those who are not so lucky, it is not very nice.
With 30,000 to 42,000 more jobs, do members know by how much we could lower the unemployment rate in Quebec? It would drop by 1.2 points. This means that instead of an annual difference of two to three percentage points for the past 25 years, there would have been a difference of one to two points between the unemployment rates in Quebec and Ontario, or the average unemployment rate in Canada.
Reducing the unemployment rate by more than one percentage point takes energy, originality, economic policies and relatively good conditions for a fair length of time. Simply restoring the criterion of demographic weight, i.e. 24% in goods and services procurement, research and development spending, federal laboratories, and their staff as well, and all the salaries this research and development staff would receive within Quebec, would reduce the unemployment rate by one percentage point.
Based on the latest unemployment figures, this would mean the rate would be 7.8% instead of the current 8.8%. That is still high, but simply by treating Quebec fairly and adjusting payments and procurement of goods and services, the federal government could reduce unemployment by one percentage point, create the 30,000 to 42,000 jobs Quebecers are waiting for and are entitled to but are being denied. They are being denied a share of the taxes they pay.
The $31 billion in taxes they pay the federal government adds up over time. And it is time the federal government assumed its responsibilities and started treating Quebec fairly. We are not asking for more than our share. We are asking for 24% of spending, our demographic weight in terms of the total population of Canada. There are 30,000 to 42,000 jobs riding on the good will of the federal government and fair treatment for Quebec.
Not surprisingly, people say they are tired of hearing Quebecers' same old refrain about federal transfer payments ad nauseam. This is not something dreamt up by sovereignists or the Bloc Quebecois. The Bloc Quebecois was formed in June 1991. This situation has been going on for 25 years. Federalists in Quebec City, such as Mr. Bourassa, have denounced this situation, based on federal government figures.
We did not make up these figures. They do not come from the Bloc Quebecois, the Parti Quebecois or the Quebec Liberal Party. They are federal figures from Statistics Canada. If hon. members look in the Statistics Canada catalogues under federal government expenditures on goods and services, by province, and under capital expenditures, they will find them. They are not made up.
I have a bone to pick with the members of the Liberal Party from Quebec, across the way. It seems to me that the first thing to do, as Quebecers, would have been to demand justice of the Minister of Finance or the President of Treasury Board, as far as federal transfers and general expenditures are concerned. They have not done so. They prefer to laugh in our faces.
Every time the question of inequality of federal government expenditures and investments in Quebec is raised here in the House, I see Liberals from Quebec over there laughing, finding it funny. They find it funny that we are, year after year, shortchanged to the tune of 30,000 to 42,000 jobs. They find that funny.
When they receive people in their riding offices who have lost their jobs, mothers or fathers in their forties, or in their fifties—which is becoming increasingly frequent—they feign compassion, saying “Oh, if only we could help you, but you know the state of the federal public finances makes it impossible. We will work very hard at it, though”.
They do nothing of the kind. They are a bunch of do-nothings. The best proof of this is that, in the last budget brought down by the Minister of Finance, Quebec got nothing. Ontario got all the structural investment.
The Ontario ministers got something from the Minister of Finance's budget, but Quebec got nothing. Some Quebec MPs travelled the length and breadth of Quebec to say—
Gérard Asselin Bloc Charlevoix, QC
Mr. Speaker, I rise on a point of order. You will agree that the member for Saint-Hyacinthe—Bagot is giving a fine speech on the important subject and bill relating to finances.
I would ask you to note that there is no quorum. You will see that there are seven times more Bloc Quebecois members than Liberal members in the House.
Budget Implementation Act, 1999Government Orders
The Acting Speaker (Mr. McClelland)
The hon. member for Charlevoix has called for quorum. We do not have quorum.
Call in the members.
And the bells having rung:
Budget Implementation Act, 1999Government Orders
The Acting Speaker (Mr. McClelland)
We now have quorum.