Debates of Oct. 19th, 2000

Economic Policy

[Hec Clouthier, Liberal, Renfrew—Nipissing—Pembroke, ON]

I beg your indulgence, Mr. Speaker.

When the member wants to take a run at our Prime Minister—and our Prime Minister can quite easily defend himself—but when he starts to talk about $2 million and $3 million, which he has no proof of, let us look at the scenario.

The Leader of the Opposition gave over $20 million in grant money to golf courses, tuxedo rental shops and limousines in his own riding and over $14 million has not been accounted for. Let us not start taking a run at our Prime Minister because of something that he may or may not have done.

Let us talk about health—

[The Acting Speaker (Mr. McClelland)]

I am sorry but we are running out of time. We have to give the hon. member a chance to respond.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, I am glad he finally got to his question.

What I did when I stood up earlier was explain to the parliamentary secretary some of the programs that we would cut. Granted, we are talking at this stage only about $7 million or $8 million. If I had an hour we could put it up into the billions.

The member from Nipissing says that we are $25 billion short. Let me state exactly where it is because hidden in this magnanimous gesture of tax relief, in this mini-budget, is $52 billion in new spending. Twenty-three dollars billion goes to health care, which it has ripped out of it since 1993, but that still leaves about $25 billion in new spending programs that the government is trying to hide in this mini-budget by talking about all the tax relief; $25 billion in new spending. Just to make sure that it got spent, just to make sure that no Liberal forgot how to spend money, they brought in the ex-premier of Newfoundland to remind them all how to spend money. We are going to see that person in action if this Liberal government, my goodness, I shudder to think, should ever win the next election. I pity the people in the government, and there are two or three who have some fiscal sense, because they are going to be crying themselves to sleep every night as they watch the ex-premier of Newfoundland teach all the Liberals who may have forgotten how to spend money how to do it once again.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I am happy to enter the debate and talk about some of the numbers that the previous speaker was missing.

He said that there was some more spending in here, and he is correct, but look at the spending programs. The spending is on the environment, on alternative fuels and on making our air and our water safe. These are the things that the reform alliance has no interest in. It also has spending to enhance our granting councils, to put more money into research and development, to invest in the brain power and the knowledge power of the people of this country, to make this country a better place and to make us more innovative in the world of global economy. These are the things of course that the Alliance is not particularly interested in.

I hear the members from across the way laughing and carrying on as if this was some kind of funny game. This is not a game. It is very serious to the people of Canada. The debate is about public versus private spending.

The opposition would have us believe that somehow by stripping out public expenditures they would simply go away. The reality is that if we take money out of certain programs it will simply have to be replaced by the private sector. I know the reform alliance would just love to see this in the area of health care.

It was interesting that the other day one of their own speakers was telling us about the access to health care in the province of Alberta where in fact people have to pay their own premiums and that there was a whole list of people in the province of Alberta who, for whatever reason, were unable to make the premium payments and, as a consequence, did not get health care.

That is the kind of society the former treasurer of the province of Alberta would have us live in. Canadians are not fooled by those kinds of choices. Canadians do not want that kind of society.

I would like to talk about the whole area of taxation. Certainly the economic plan of the Minister of Finance was very forward looking with its concept of reducing personal taxes. Across progressive income tax rates we really have four income tax brackets if we count the first one as being zero.

I would like to talk to some of the people out there today about progressivity in the income tax system and the so-called vision of taxation our members across the way would have us believe in. Progressivity simply means that as people earn more money they have the propensity and the ability to pay proportionately more tax. In other words, they are not paying proportionately more tax on all the money they have earned but only on that portion of higher income they have earned.

Canadians have long accepted the concept of progressivity. If one is wealthy, if one has been so generously endowed to earn well, one will pay proportionately more in income tax. We are not talking about rates. We can see today that our government has reduced rates. The two different issues here are rates and progressivity.

I would question all this business about exemptions, deductions and so forth. They really mean nothing to the average taxpayer. The only thing that means anything to anyone is total tax bite in relation to total income. Subtract the two and what is left is the disposable income with which one can actually go to the supermarket or department store and physically buy something. That is the only thing that is important to people.

I would suggest that people start thinking about all the taxes they pay in their lives. We talk about municipal taxes, about sales taxes, and about excise taxes. The one thing they have in common is that they are all flat taxes. They do not go up as one's income goes up.

If we took all of those taxes, included income taxes and looked over the broad spectrum of people's earnings, guess what? Canada has a flat tax system today. As incomes go up, in other words, total taxes do not. I have statistics here from numerous professors that will bear out this equation.

We can go into the reform alliance members' dream world, or I should say nightmare, of a flat tax system that would take the income tax system and also flatten it. They have backed away a little from that. They have said they will not do that right away. Maybe they will just wait awhile or sneak it by the door and then stick it to people. The reality is that people are not going to be fooled by that.

By the way, no countries in the western world have a flat tax. No peoples in the western world have sat down and said it is a fair and reasonable thing to flatten the income tax system. I know the province of Alberta thinks it has one but it is not a country yet.

If in fact the income tax system was flattened, what would happen? Looking across the perspective of people's incomes we would actually see the wealthiest people paying less proportionate tax than the middle class. Let us think about that. We would actually see a line on a graph. As people start hitting $100,00 a year and over, their proportionate tax bite would actually go down. I can think of nothing more perverse or immoral from a party that talks about morality and values. I can think of no situation that can justify such an immoral position as transferring taxation from the wealthy to the middle class. This is a fundamental issue as we go into this election.

I have had the privilege to go to countries that actually have this type of taxation system. They have it not by choice but through corruption an an inadequate way of collecting taxes. Many of the countries in South America often have a similar system.

There one finds a small group of wealthy people who pay very little tax. They have their money hidden in foreign accounts and so forth and do not contribute to the economy. Then one finds a massive group of poor people who have no ability to participate in that economy. It is not good for either the wealthy or the poor. The wealthy cannot sell goods because there is nobody to sell them to and the poor cannot consume them because they do not have the money to buy them.

I suggest that this vision of reform alliance on flat tax would drive us into a two income groups: one for the wealthy and one for the poor. Few people in the existing middle class would have the ability to catapult or make that astronomic jump from being middle class to wealthy. That is the vision that party would bring a vision where the wealthy get wealthier and the poor are destined to be poorer and poorer.

The previous speaker talked about some of the wasteful spending of the federal government. It makes the assumption that if governments spend the money it is terrible, but if somebody in the private sector spends the money it is good.

I have a list of HRDC programs. I look at the Alliance formula here. They talk about all the stuff they would reduce to make their little world work. They talk about reducing HRDC grants and contributions.

I want to talk about some of the things that have occurred in my riding of Durham. I look at the first one on the list of people who received grants from HRDC: Independent Deaf Services. Archibald Orchards and Estate Winery is a small business that is trying to establish a winery in my riding, and very successfully. They taught some young students skills they probably would not otherwise have received because nobody would hire them. They hired those kids to work in that business. The business is successful, creating jobs in my riding and bringing in wealth. The winery is also exporting product across the border, bringing export dollars into Canada.

Another organization I presume the opposition does not like is the Bowmanville Memorial Hospital. HRDC gave money to allow people to work in the summer months at the local memorial hospital.

The Bowmanville Zoological Park is another one. This is private sector. They own a park. They are doing films. I cannot remember the classic film about the elephants in Africa, but those elephants came from Bowmanville. They train elephants for movie productions. They created a school to do that. People are coming from all over Canada to get this training, and we are exporting that to the movie industry all over the world. This is a success story that the reform alliance would have nothing to do with.

I will refer to another so-called terrible expenditure.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I rise on a point of order. I usually let members misuse our name three times before I rise. It is now three times that this member has not called us by the proper name as ruled by the Speaker. It is Canadian Alliance. I would ask you to remind the hon. member of that.

[The Acting Speaker (Mr. McClelland)]

The hon. member for Elk Island is quite correct. The name of the Reform Party has been changed to the Canadian Alliance. It has been clearly understood that this is the name by which the party will be recognized.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, we can dress them up but we still cannot take them anywhere.

The Central Seven Association in my riding received $10,000. What does Central Seven do? It deals with the mentally handicapped in my riding. This is a program the opposition would be happy to stomp out.

Tyrone Mills is a privately owned historical site in my riding that is having a very difficult time maintaining itself. It is one of those areas where if it was not privately owned it would have to be government funded and cost us twice as much to maintain. We gave the historical site the terrible sum of around $13,000 back in 1998 to help with some of their summer student employment programs.

White Feather Farms is a very successful farming operation in my community. It received $6,000 to assist in summer employment on the farm. Young people got work experience in the agricultural sector. These things would not have happened without these programs.

The list goes on: the municipality of Clarington; the Durham region community care association, which helps people with home care; and other things the opposition, whatever their name is, would do away with.

To the people of Durham it is not funny. The people of Durham take this very seriously. They do not find it particularly humorous to be told that these things are a waste or boondoggles. They can see right through it.

I would like to move on to the so-called health care agenda of the Alliance. It is interesting to read the letter the Alliance's illustrious leader sent to the premiers on the discussion of the health care formula. Essentially he talks about the transfer of tax points to the provinces in support of health care. This is the same party that refuses to acknowledge the fact that back in 1997 the federal government entered into an agreement with the provinces to transfer tax points in support of health care. In its little booklet it shows a wonderful graph of how the Liberals stopped spending on health care. What is missing? The transfer of tax points, which is the very thing they want to do. Its whole platform is not only ridiculous but also unethical, frankly. It is not true.

That program of transferring tax points to the provinces would simply mean the federal government would have nothing to say in health care. Indeed, the provinces are arguing about that now. In my own province the government refuses to acknowledge the fact that it was transferred tax points back in 1997, as if it never happened.

For those people who do not fully understand tax points, and many of us do not, the federal government has a federal income tax on which the provinces usually piggyback their taxes. With tax points, rather than simply taking money in and sending provinces a cheque once a year, the federal government would just reduce its amount of federal tax and allow the provinces to occupy the taxation room. The provinces would then collect directly.

However, once the government does this it is almost like giving candy to a baby: provinces consume the candy and want more. They seem to forget the fact that they received these tax points and have been enjoying the benefits since 1997.

That is the type of regime this party would impose on us in the area of health care. In other words, rather than money being sent from the federal government to the provinces, it would all go through the position of tax points. That essentially means the provinces would go their own route to creating a health care regime.

They will forget about the federal government which essentially ends up in the creation of 10 provincial health care systems and also systems in the territories, none of which make any sense to each other, none of which would be portable, transferable or accessible. The reality is Canada's health care spending is the fourth highest per capita in the world and yet when it comes to service delivery, we rank about 18th. The federal government did not create those statistics, the provinces did because they are responsible for the administration of health care.

It begs the question then why would we transfer more power to the provinces that already created this inefficiency, this inadequacy? Does this issue of commitment to health care by the so-called Alliance help to get down to the root problems of the health care system? No, it does not. It simply means that we would transfer power from the federal government to the provinces and there would be no uniformity of health care in the country.

I note in their little platform document that the Alliance says it is interested in Canadian unity, yet when we ask people what unites us as a nation we often talk about our social programs. The fact that we have a universally accessible health care system is one of the things that we see as defining us as Canadians. This is the very central issue that the Alliance would do away with, a universal health care system, and in fact it would allow for the experimentation of privately funded health care.

I note in its documents the Alliance talks about needing more doctors and nurses. I had a health care forum in my riding and I brought in the people who run Durham Lakeridge Health Corporation. I brought representatives from the physicians and nurses. It was a funny thing; after discussion that night the conclusion was that it has nothing to do with money. Sure, we would like a little more money for our MRIs and for machinery, but the reality was that the problems were fundamental. We had too many doctors pushing paper, working on computers and not delivering health care. We had an administrative system in our provinces that mitigated against the delivery of health care.

The Alliance members celebrate that. They want to give more money. They keep pouring money into the top of this thing but it is not coming out at the bottom. That is why when we sat down with the provinces we demanded there be an accountability framework. We demanded that there be accountability on how we are spending the money, on how waiting lists are being made better, how the delivery of health care to average individuals is being made better. We believe that there is a fundamental role for the federal government in health care, of the lives of the people of this country. That is a fundamental difference between us and the party over there.

I would like to talk about some of the other elements that were in the economic statement, not the least of which were some interesting elements in reducing corporate taxes and also capital gains taxes. I note that with our capital gains tax reductions, capital gains tax in real terms relative to the American tax is actually lower now. This gives Canadians a great opportunity to invest in themselves and in the country. It has always been one of our sore points that Canadians have often not invested in themselves. We have allowed for greater rollovers of capital gains. If we buy stock in small companies and then buy another one, we can keep rolling over that money in Canada tax free.

I will end on that happy note. This is a great economic statement. The party over there is in lots of trouble.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I rather enjoy listening to the member because he has a logical mind but sometimes he tends to distort things. It is just the way it comes out, but I thank him for his speech.

I would like to correct one misconception. It is in fact true that individuals in Alberta and British Columbia pay a premium to have access to the health care system. That is how those provinces happen to set it up.

I would like to inform the member and everyone else who heard him that people who do not have money do not go without health care in Alberta. As a matter of fact, there is a means tested system. If people do not have the means to pay the premium then they are exempted from paying it, which is the way it ought to be. I do not think the member raised a valid point.

I would like also to talk a bit about the health care system. I noticed that the member wears glasses. I am sure he has been to a dentist. It occurred to me that neither optometric services nor dental services are covered under the Canada Health Act and yet it seems that our Canadian population is well served by private enterprise in those areas. We also have general practitioners and hospitals and so on that are publicly funded. That seems to work reasonably well most of the time except when there are some severe glitches in the system as we have experienced in Canada in the last seven, eight or ten years.

It would be disingenuous of us to simply say that we will never discuss whether or not there is a role for private practitioners. I think there is. As I have already said, there are a number of different medical areas which are certainly essential. I would be really lost, literally, if I did not have my glasses and yet I do not expect anybody else to pay for them. We should have in place a system whereby those who do not have the means to pay should be able to get their glasses covered. I think they do through our social welfare system. We are not against that.

As far as health care is concerned, the member really does misrepresent our stand. We have always had, reflecting the wishes of Canadians as a grassroots party, the health care system as our highest priority. It has been a concentrated effort on the part of our, shall I call them our political adversaries, to try to distort our image on health care. I am getting very tired of it. I am one who fully supports an adequate health care system. I believe very strongly in and voted for our policy that says no Canadian shall be denied needed health care because of a lack of ability to pay. That is our policy.

I would like the member to stop his concentrated effort of distorting what we believe in so that his party can somehow come out as the defenders of health care when in fact it has been under their watch that health care has seemingly suffered so very much.

[Alex Shepherd, Liberal, Durham, ON]

Madam Speaker, the member for Elk Island said that I was distorting his party's position. This was concerning the list of people, possibly in Alberta and British Columbia, who are required to pay their own premiums and if they did not, it was possible they would not get access to the health care system. I am only repeating what I heard the member for South Surrey—White Rock—Langley say yesterday. We can go back and look at her speech where she said those very things. She is stating presumably the position of the Alliance. I would not say she was misleading the House. I presume she was telling the truth.

On the issue of other private sector provided health care, I think members will find that in the area of dental care where people do not have some kind of coverage whatsoever with their employer they get poor dental care. We could go to the dental association and others who will confirm that. Reality is where the service is not readily available people do make economic choices. If they have less money, they get less health care. That is all there is to it and that is the kind of system the member is promoting.

On the member's final point he said that I was distorting the position of his party regarding the facts or the balkanization of the health care system. I would like to mention some statements from his own leader who sent a letter to the premiers. In the letter he talked about allowing for, more or less, a system of tax points being transferred to the provinces. This will allow any province to opt out of cost shared programs in areas of provincial jurisdiction with full compensation. Opting out. Have we ever heard of opting out? That was Quebec's thing years ago, “Opt out of this. Opt out of that. We will create our own program”. That is exactly the health care system that this party wants to promote, an opted out system where everybody is going off on their own little bailiwick with no accountability, with no commitment to the people of Canada and certainly no harmoniousness across this country that we could all share and respect as our health care system.

[Ken Epp, Reform, Elk Island, AB]

Madam Speaker, I reject what the member is saying about our policy. We believe that it is the role of the federal government to work very closely with the provinces and come to an agreement with them with respect to the funding of health care across the country. Certainly there has to be accountability.

I find it rather amazing that a member from the government side, after the gross mismanagement in HRDC and in native affairs, that the auditor general just decried—it is not us saying it—that he would somehow imply that the Liberals are the masters of accountability and there would be none under our programs. It is really just the opposite. I need to rebut that.

I would also like to ask the member about tax credits. During his speech he indicated that the view in our graph is somehow distorted. He actually held it up even though props do not usually appear in the House. I often wish we could. As a math teacher I would love to show those graphs to help communicate. He actually did it and got away with it. He showed that dip in health care spending by the federal government which was indeed cash transfers. I understand tax points. At the same time we never noticed that our federal tax load actually went down. In other words, the tax room was vacated but we were still being taxed.

There is that aspect to it. The other part that rather confused me is that he said “We are not acknowledging that they transferred tax points and that this is good”. Then he also said almost in the same sentence, and I may not be able to quote it exactly, something along the line that when transferring tax points, the federal government's ability to have a say in it is removed.

I disagree with that. I think that tax points is a valid way of arranging with the provinces for financing. I would like to ask him if we propose tax points it is bad, if it is done by them and we are not acknowledging it, it is good. I think he is inconsistent and I would like him to clarify.

[Alex Shepherd, Liberal, Durham, ON]

Madam Speaker, quite frankly the decision to engage in the tax point exercise was in 1977, certainly a long time ago. I was not around. I believe that the government confronted with the same choice would not do that.

It simply has not worked out. In the province of Ontario, the premier continually ignores tax points. In fact he delights in spending millions of dollars of taxpayers' money showing how little the federal government is contributing to health care, totally and erroneously misrepresenting the position of the province of Ontario.

When the member says that this is a fair and equitable arrangement if we give tax points, it is not in reality in the day to day push and shove of politics. Provinces will not come clean. They will not stand up and say “We honestly understand what happened. We honestly understand that tax points were given to us. We will give you credit for it”. They just say “You are not doing your share. You are only giving us 13 cents on the dollar and therefore you have nothing to say in the area of health care”. That is not true. We are not willing to accept that. We are not going to accept it in the future.

[Ken Epp, Reform, Elk Island, AB]

Madam Speaker, on a point of order. I wonder if I could find unanimous consent of the House to just ask the member one more quick 30 second question.

[The Acting Speaker (Ms. Thibeault)]

Is there consent to continue questions?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[Pauline Picard, Bloc, Drummond, QC]

Madam Speaker, I will begin by saying that it is obvious to everyone that the government had one thing and one thing alone in mind when it brought down this mini-budget, and that was the upcoming election. All economists and editorial writers today would agree.

With the staggering, not to say exploding, surpluses at the disposal of the Minister of Finance, we were expecting that he would do something for those who were really responsible for helping put the fiscal house in order, those whose efforts have made the last three years of zero deficits possible and are still being gouged by the federal tax system, those who are the reason the Minister of Finance can stand here today and boast about surpluses.

We thought that the main beneficiaries of these tax cuts would be low and middle income families, not families at the top end of the scale who can take advantage of tax loopholes not those earning $250,000 and up, not millionaires and friends of the Minister of Finance.

This year he dares to say that the surplus will reach $6 billion only, whereas close to $12 billion is already sitting in the federal government's coffers. This is more than double his forecasts for this year. He could have done twice what he is doing now.

He could have helped the most disadvantaged, low and middle income earners, the folks who pay EI premiums, and the small and medium size businesses which are now footing the bill for tax cuts for the rich.

He could also have helped the unemployed men and women who are not receiving any EI benefits because of the drastic cuts made in the system and because of the tighter eligibility criteria.

It is the families in rural areas, young people, women and seniors who are paying for the income tax cuts of the rich.

The government wanted to upstage the Canadian Alliance before the election call and woo its voters. The government seized on the idea of the flat rate proposed by the Canadian Alliance, which was strongly criticized because it favours the millionaires, and incorporated it into its mini-budget.

It took the $100 billion in surpluses from the pockets of low and middle income taxpayers, off the backs of the unemployed, women, young people, the sick and the disadvantaged. It is totally indecent.

Do not get too excited about the tax cuts because we are not going to get them right away—only in a year and a half. It could have presented the same budget in February, but the wealthiest in society will not really feel the effect of this mini-budget for a year and a half.

According to the information in the Minister of Finance's economic statement and budget update, a single parent family with an income of $250,000 or more will enjoy a tax cut 40 times greater than a family with one dependent earning $30,000. In the case of an income of $250,000 the reduction represents $20,000 net in income tax, and in the case of an income of $35,000, it represents a mere $500, when there is one dependent involved.

The government is giving millionaires a $20,000 cut in income tax and middle income and disadvantaged families a $500 cut. What is even more disgusting is that the government will give the most disadvantaged families a government cheque for $125 because of the current oil crisis. This is really disgusting.

The minister kept telling us that people earning $35,000 did not pay taxes. We questioned him on several occasions, because we knew that these people were in fact paying taxes, but he kept telling us that they did not.

Oddly enough, now he admits that they do pay taxes, since he just told us that they would be paying less. If this is not trying to fool people, I do not know what it is.

This budget also shows that the government continues to accumulate surpluses shamelessly because, as I said earlier, the tax cuts will occur in one and a half year. Once again, the government continues to fiddle with the figures by using tax deductions as tax cuts. This has to be seen. Members should take a look at page 97 of the minister's economic statement, where a chart shows that the employment insurance fund is being used as a form of tax relief.

The government is dipping into the surpluses of the EI fund to grant tax cuts to high income earners. Moreover, it is fiddling with the figures and using the child tax benefit.

The GST, a tax that should not exist when a government is enjoying such surpluses, is part of the tax relief scheme. Even the auditor general condemned this dubious practice and told the government not to resort to it again. The government then brought down a mini-budget and again fiddled with the figures to create a smokescreen. It hid the real figures because it was afraid to have a real debate on the real issues.

I currently am a member of the Standing Committee on Finance. I was at the in-camera presentation of this mini budget, before the Minister delivered his speech in the House. Out of curiosity, I immediately checked where was the support promised to women's associations that met with the Prime Minister last week.

These women had 13 basic claims. They met with the Prime Minister who told them to wait and see what would be in the mini budget. That was the first thing I did. Believe it or not there was nothing and even less than nothing.

There is nothing for low income single mothers who should pay no income tax, nothing for social housing and nothing for the former older workers of the Celanese plant in our region, which has closed down. These people contributed to employment insurance for 30 and 40 years. They were given a severance cheque, which they were told was a gift that they should use, and later we would see if they were entitled to employment insurance benefits.

These people, aged between 55 and 57, will have a hard time finding a job because, as we know, entrepreneurs and employers do not hire people of that age, whom they no longer trust. This government had a duty to establish a program like the modified former older workers program.

There is nothing in there for the former workers in Drummondville, Jonquière or other areas who suffer the hardship of plant closures.

There is nothing for employment insurance, parental leave, foreign aid or for ordinary people who paid for those surpluses. Nor is there any basic financing provided for associations working with women.

The government cut all forms of assistance and core funding to these women's groups when it asked them to submit projects. It assesses the merits of each project and then tells the women that it will be sending a cheque with a maple leaf.

The women who work in these organizations put in between 70 and 80 hours a week to come to the rescue of other women faced with some very basic needs. Instead of spending their time helping other women, they now have to develop projects to find the money they need. They would not always have to look for money if the government had taken its responsibilities and extended core funding to help these organizations.

I want to remind the House that these groups that help women in need are the keepers of the fundamental values of our society. When a government has been able to generate a surplus on the backs of low and middle income taxpayers, as this one has, one of its priorities should be to meet the demands of women's groups; it has a duty to do so. I imagine the government will pay for this on November 27, the night of the election.

The Prime Minister laughed at them. Women's groups got slapped in the face by the government. The Prime Minister knew full well that women would get nothing from the budget update. He does not care at all about the demands of women. This government is laughing. Women's groups are of no interest to it.

Yet it is the women who raise children and support society, but that is not of any interest to the Liberals. They prefer the people earning $250,000, those who have easy lives, those who have no trouble getting around the taxation system in order to pay less tax, and those who have no trouble keeping a roof over their heads. They prefer to give presents to these people instead of going with the real priorities.

It is indecent to present a budget like this one. There is nothing for the provinces as far as health is concerned. A transfer has been made, $21 billion put back in the Canada social transfer, and now they are patting themselves on the back for that. Yet this is just the money that had been cut from the provinces. It is not even the government's money. Ottawa's money is the taxpayers' money and it must be returned to them via the provinces for health and education. Brutal cuts were made and now the $21 billion is being given back to the provinces.

Today, in spite of the accumulated surplus, they cannot even index the Canada social transfer. The provinces still have a great deal of difficulty delivering services in the health sector because of the aging population, the high costs of the new technologies and the high cost of drugs.

The provinces are still having serious difficulties and there is not an ounce of compassion being shown toward them. They are being given back the $21 billion that had been cut and ought not to have been. With the surplus, as we can see, the provinces are being dragged down, are being strangled. The provinces are being made to bear the brunt of the burden; they cannot deliver all of the health services they would like because they cannot afford to, while the federal government is busy congratulating itself. This is disgusting.

There is no reference in this budget either to the indexing of funding to universities for post-secondary education. This is at a thirty year low. Nothing is said about that. They are patting themselves on the back about their $100 billion surplus.

There is absolutely no indexation of the Canada social transfer for health and the youth. The budget provides a one-time allocation for heating costs. What a sham.

At present, a single elderly woman who has only her pension cheque to get by on is living under the poverty level. A recent study has shown that 47% of single elderly women are living under the poverty level. Those who have an oil furnace will get a small $125 cheque, with the all important maple leaf to boot, when their bill has in fact doubled.

In 1999 the bill was between $500 and $600. This year it will be over $1,000, $1,100, or $1,200. In colder areas, bills will be even higher. Yet the government claims to be giving a generous gift, a $125 cheque. That is absolutely unacceptable.

In the budget, senior citizens living under the poverty level are also ignored. There is nothing in this budget for these elderly men and women who have a made a contribution to our society. The government should make them one of its priorities.

What will low income single mothers who spend 30% of their income on housing do when their heating bill doubles? Will they deprive themselves of food toward the end of the month or freeze in their homes? The $125 cheque from the government will not be a big help. One hundred and twenty five dollars does not even cover one grocery bill for a single parent family with two children.

The Liberal government has reduced the income tax for the rich and the friends of the party. It has done just like the minister who cannot understand that, because he has his ships built somewhere else. He could not care less. That is also the reason why there is nothing in this budget for shipbuilding yards; nothing for the one in Quebec City and nothing for the other yards across the country. He does not care. He has his ships built elsewhere, just like he pays his income tax elsewhere.

These surpluses do not come out of his pockets. It comes from the taxpayers, from the unemployed and from the workers who contribute to the employment insurance program.

This right wing budget is an insult to all Canadians. It is a budget that ignores the least advantaged members of our society.

The minister could have done a lot more. We have been putting forward the figures he is proposing now for a long time. We have been doing so for years. We have been telling him for at least four years that he will have all those billions in his coffers. He has always laughed at us.

While our figures match now, we in the Bloc Quebecois do not have the same priorities. If I had more time, I would give you a list of our priorities. With $147.5 billion, our priorities would target women, the disadvantaged and the low and middle income earners. For the government, it is the opposite. While we concentrate on those with an income of up to $80,000, for the government that is the level at which tax reductions start.

We would also invest in tax reductions, and we will discuss our true priorities during the electoral campaign.

[Pierre De Savoye, Bloc, Portneuf, QC]

Madam Speaker, before making a comment and asking a question to my colleague from Drummond, I would like, as a preamble, to indicate to the House that last week I informed my colleagues of the Bloc Quebecois that I will not be seeking a third mandate.

I would like to take this opportunity to say to all my colleagues in the House how I appreciated working with all of them. It is indeed a privilege to represent our fellow citizens in this House.

I would also like to say that as a member of parliamentary committees and associations I had the opportunity to get to know some of my colleagues better, to develop a friendship with them based on mutual respect and consideration and to recognize their competence and their involvement in issues which we all wanted to see properly dealt with.

My only regret would be that it is still necessary to have members from Quebec sit in the House. I would have hoped to be the last federal member from Portneuf. I know that my colleagues had the same hope because if Quebec were sovereign there would be no need for us here.

Obviously the will of the people of Quebec has been different, but the presence of the Bloc Quebecois in the House, as we can see in today's debate and in those we have every day, is essential for the protection and the advancement of Quebec's interests. I might even add that it is more than ever essential. Thank goodness the Bloc Quebecois is here.

That leads me to ask a question to my hon. colleague from Drummond with regard to the mini-budget the finance minister delivered yesterday. Here I will digress to say that while I thought Christmas was on December 25, apparently it was yesterday. However make no mistake, the minister is not a real Santa Claus. He is a phoney Santa Claus because he is not delivering real gifts. I want to talk about the particular issue of the subsidy granted to individuals for heating oil. That is very nice, but not everybody heats their home with oil; others use other sources of heat. What about them?

Now that taxpayers will have a little more money in their pockets to pay their heating oil bill, what is stopping oil companies from raising oil prices? The law of supply and demand is well known. Market forces are at play, and it is not because the minister is offering that kind of fiscal measure that this will change.

Since consumers will have more money available, it will be a strong incentive for oil companies to raise heating oil prices in order to pocket that money. Besides, is that not precisely what oil companies have been doing for some time now, pocketing our money at the pump or at the time one buys heating oil in order to generate profits unheard of in many years?

In fact, the government is not dealing with the basic problem, which is the fact that oil companies are now abusing a situation I would describe as quasi-monopolistic and the consumers have to pay for that.

Does the hon. member for Drummond not think that with this fiscal measure of the finance minister there is a huge risk for the people she talked about, women in particular, to get swindled by the oil companies trying to put their hands on this little amount of money, which is not even enough to cover the additional costs they will be faced with this coming winter?

[Pauline Picard, Bloc, Drummond, QC]

Madam Speaker, before answering my colleague's question, I would like to tell him that we are sorry he is leaving the Bloc Quebecois, but this is his decision.

He has worked with us for seven years. I can tell the House that I have worked with him on some issues and that he is very professional, he wants to get things done, he is a hard worker and he has integrity. I think his constituents will miss him. All the Bloc Quebecois team will miss him.

I would like to thank him for everything he has done during these seven years for his constituents, for his riding and for Quebec's interests.

I do not have much to add to my colleague's question because he has answered it himself. Yes, there might be a suspicion that some people will be cheated. Perhaps the question I could ask—I do not know who could answer it—is, when the government sends a $125 cheque to help people with their heating bill, why will everyone get a cheque?

Let us say that a single person lives with his or her mother, for instance, or with a student or a roommate who is working and that the person who signed the lease receives the $125 cheque to help with the heating bill, will the roommate also receive $125? This second person does not pay the heating bill. We are totally confused. All those who get a GST tax credit, whether they have an oil heating system or an electric heating system, will get $125, while this cheque is supposed to help those whose heating bill actually doubled. This is all very confusing.

The same holds true with the figures, which can be fiddled with. This is really confusing. As my colleague said, we can assume that there will be some slightly shady characters who will try to collect this cheque.

Something must be done, and the government must think twice before doing this. I think that if this cheque is going to be given to people to help pay their oil heating bills and if the government is going to refuse to take steps to lower fuel prices in Canada, the government should look into who will get a cheque to ensure that it really goes to pay the oil heating bills, as these bills have doubled.

[John McKay, Liberal, Scarborough East, ON]

Madam Speaker, I would like to note at the outset that I will be splitting my time.

When I first came to Ottawa I made a point of meeting with the Minister of Finance, in part to get to know him better and in part because I had run on a platform that emphasized debt reduction and tax cuts. We shared a coffee and exchanged views on the current issues of the day. Over the past number of years we have shared quite a number of other coffees, had a few meals and played some pretty lousy golf.

I have always appreciated the Minister of Finance's candour with caucus members, his intellectual grasp of the current issues of the day and his ability to reflect in the budget the issues he is hearing and give them force and effect.

I have also appreciated the support that the Prime Minister has given over the past number of years in fashioning a variety of budgets. Those budgets are in fact attuned to my set of values and beliefs.

When I ran in the last election I said that our debt was way too high and that we were becoming uncompetitive, with the United States in particular and the G-7 in general, in terms of our overall tax burden.

As I potentially face my constituents once again, I think I have a pretty good story to tell. I will be able to say to them that over the past three and a half years in the course of our mandate the debt to GDP ratio has gone down from 71% to about 58%. I will be able to tell them about the absolute reduction in our net national debt of $28 billion. I will be able to say that the reduction in market debt is even greater, at last figure $32 billion, possibly higher. I will be able to say that the Government of Canada has run fiscal surpluses for the last three years. They can reasonably anticipate that debt servicing costs will be down by $1.7 billion and that the debt to GDP ratio will come down to about 40% by 2005.

As I reflect on my conversation with the minister some three years ago, never in my wildest dreams would I have believed I would be able to go back to my constituents and tell them that debt story. I am amazed at the accomplishments of the Minister of Finance and the Prime Minister in directing the resources of the Government of Canada in dealing with its debt burden.

The other part of our conversation had to do with tax relief for Canadians. Frankly I was quite vague about it. I did not really understand what was meant by a $100 reduction, a change in a threshold, or a percentage change. For me, it has been a steep learning curve as the minister has fashioned three budgets and a number of economic updates.

My own instincts have been to start where the impact would be greatest, namely among low and middle income Canadians and then work to upper income Canadians recognizing that when one gives tax relief to low income Canadians, it does filter up our progressive tax system. The system in some respects is relatively simple but to think back three years ago and realize that brackets have gone up substantially and that rates have been going in the other direction is really quite a significant accomplishment.

One has to earn $8,000 of taxable income before one gets taxed. From $8,000 to $35,000 the rate has been reduced from 17% to 16%. From $35,000 to $60,000 the rate has gone down from 26% to 22%. From $60,000 to $100,000 the rate is at 26%. For over $100,000 it is at 29%. Every one of those percentage points literally represents billions of dollars. Cumulatively the impact is $100 billion. These are very significant changes. These are substantive tax reductions which frankly I never would have believed based upon my conversation three years ago with the Minister of Finance.

To be candid, I was not overly enthusiastic about the Canada child tax benefit. However, I have come around to the view that if we really want to benefit low income Canadians, we have to do it through a combination of measures. Otherwise if we simply cut taxes, it becomes terribly expensive to the treasury and it does not necessarily benefit the people whom we want to benefit the most. I was therefore more than pleased that effective July 1, 2001 the Canada child tax benefit will be raised with the maximum benefit for the first child going up to $2,500.

In a similar vein, giving tax relief to Canadians who have disabilities or Canadians who are caregivers, I am pleased to see that the minister has raised the disability tax credit up to $6,000 and the caregiver tax credit up to $3,500.

There is an enduring myth in the House that somehow or another we should ignore Canadians with higher incomes or businesses, notwithstanding the fact that we know that businesses generate income and jobs. We somehow or another believe that they should be ignored and taxed to the max.

I am pleased that the Minister of Finance does not buy into that myth and that Bay Street, to coin a phrase, needs to be recognized for the contribution it does make to the Canadian economy and to the general well-being of Canadians. His commitment is to lower corporate tax rates from 28% down to 21%. He has already implemented a 1% cut and there is a commitment to cut 2% for the next three years legislatively. In my view this brings certainty to the tax structure which is something all businesses can appreciate.

Reducing the capital gains inclusion rate from 75% to 66% to 50% is an accomplishment that all entrepreneurs should welcome. That puts us below comparable American rates. Tax-free rollovers will be expanded and made available to more businesses. The size of an eligible investment will be increased from $500,000 to $2 million and the companies themselves from $10 million to $50 million. This should be of great assistance to those who find the tax structure somewhat restrictive in their entrepreneurial activities.

Finally, on the tax side of things, I want to congratulate the minister and the Prime Minister for the deindexation of the system. This was an item which was argued loud and long in caucus. One of the members who argued it loudest and longest was the hon. member for Durham. I congratulate him for his persistence.

The minister pointed out in his speech yesterday that government is more than simply balancing books. He, the Prime Minister and the Minister of Health stood firm in their resolve that the Canada Health Act be respected, that the provinces recognize that we are more than 10 little independent principalities, that this country has certain health care principles and that those principles are enshrined in the Canada Health Act.

The message is clear. We are not above using cash to make sure that all provinces give consistent quality health care across the country. Health care should not be dependent upon the size of one's wallet, or the various governments' budgets, or wacky right-wing philosophies. People should not have to have a wallet biopsy just to get treatment.

Notwithstanding the pathetic whining by the province of Ontario, the Prime Minister saw fit to increase the cash component of the Canada health and social transfer by $21.2 billion over five years. Members will recall that prior to the February budget, the province of Ontario was taking out ads insisting that the Government of Canada cut taxes, cut taxes, cut taxes. One minute after the delivery of the budget the province of Ontario shifted its focus on more money to the province of Ontario by way of CHST transfer with no strings attached.

The inconsistency and hypocrisy of the province of Ontario is obvious for anyone to observe. Even at the worst of times, the province of Ontario had its transfers reduced by something less than 2% of its overall budget which was restored immediately as soon as funds were available. That was done last year. Misinformation is a modus operandi for the Government of Ontario. A little history is in order here.

In 1997 the CHST was created. The agreement was that the Government of Canada would reduce its tax room and the provinces would take its place. As Ontario's economy has grown, so also has its tax revenues. Therefore, the tax component has grown which has more than made up for the modest reduction in cash. With this new money the cash component of CHST is increased by 35%.

The Government of Canada has hedged its bets though with the mere certainty that the provinces of Quebec, Ontario and Alberta will stretch the notions of affordability, universality and accessibility to the maximum.

I am returning to my constituency this weekend. I will have a pretty good story to tell. I can go back to my constituents and say we reduced taxes substantially, over $100 billion, that we reduced debt substantially, $28 billion, and that we restored Canada's health care system to the tune of $21 billion.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Madam Speaker, the public sees the so-called mini-budget not as an honest attempt to solve the economic problems of our country, but rather as a cynical attempt to buy the voters in the coming election.

Three things have happened over the last little while which I am going to ask my colleague about, bombs the government has let explode in its own lap. One is the access to information debacle in that the government is vigorously trying to hide information to which members of the public have every right of access. The second is the mini-budget. The third is the auditor general's report, which not only is a scathing attack on the government's failure to spend the public's money wisely, but also is an indication of its flagrant abuse of the public purse not only in HRDC, but also in aboriginal affairs and many other areas. Last is the government's frequent spending of the taxpayers' money all over the country in a vain and failing attempt to try to curry favour with the voters.

Spending is taking place to put back the money the government has taken out in health care, which was over $22 billion. Incidentally, the money it will put in will only get us back to 1995 levels for health care and education in spite of the fact that when this comes into play we will be 10 years behind the eight ball.

How can my hon. colleague justify the government's spending an additional $29 billion of the taxpayers' money beyond the money that has already been allocated for health care? How can he justify to his constituents that putting in $22 billion as of the year 2006 which will get us back to 1995 levels is going to fix our health care woes?

[John McKay, Liberal, Scarborough East, ON]

Madam Speaker, I do not know what figures the hon. member is reading. My recollection of the budget numbers is that spending absent debt has basically been flatlined for the past two or three years. The management by this government has resulted in the ability of the government to significantly reduce debt. I would have thought that the hon. member's party would have been more than supportive of the notion that the nation's debt should be reduced. I do not see how the hon. member thinks he can have it both ways.

I cannot quite get my head around how the hon. member and his party in particular can criticize the mini-budget. Reducing taxes with cuts, which I understand to be the most significant part of the hon. member's party platform, by accumulatively $100 billion, is a pretty significant cut for Canadians across the board, both at the upper and lower ends. I cannot quite see how that can be criticized. I cannot quite see how putting back $21 billion over five years into the health care system can be criticized as a terrible thing. Over that period of time $21 billion is a significant sum of money.

We have also put money into technology research. We are in the bizarre situation of spending 9% or 10% of our gross domestic product on health care and having absolutely no idea how it is spent, where it is spent or by whom it is spent and of having to beat the provinces over the head just to have a reporting system. I support the position taken by the government on this for the simple reason that I would not want to continue to send money down a sinkhole until we knew exactly where the money was going and how it was to be spent. I would think I would have the support of the hon. member for the initiatives taken by the Government of Canada on that issue alone.

[Steve Mahoney, Liberal, Mississauga West, ON]

Madam Speaker, I want to deal with a few specifics but I would rather talk a little about the philosophy of what the mini-budget is and what it is not.

First let me deal with what it is not. It is not a document that mirrors in any way whatsoever the philosophies or the attitudes of the Conservative government in the province of Ontario. I want to respond directly to my good friend the treasurer, the minister of finance for Ontario, Ernie Eves, who is quoted in the paper as saying “Give credit where credit is due. I think finance minister Martin is moving in the right direction. We have been preaching a lot of the stuff that Mr. Martin seems to have picked up on since 1995”.

Let me be clear. One thing we did not do which Mr. Eves and the Ontario government did do, is we did not borrow money to give a tax cut back to the wealthiest people in the country. How does one give a tax cut while continuing to run a deficit? That is absolutely crass politics at its worst. While we appreciate the fact that my hon. friend in Ontario congratulates the minister and the government for bringing in a budget that he seems to like, we do not need any lessons on how to balance our books, how to reduce the tax load, or how to pay down the debt. In fact, this government has shown true leadership in all of those regards.

I have been interested to hear some of the responses. I am sure the members opposite were busy with all the spin doctors yesterday trying to figure out how in the world they were going to criticize this without looking like they want to take back things that the government is giving to Canadians.

This is not a socialist budget, I can assure members. It is absolutely not. I heard the leader of the NDP stand in her place, and in a scrum, say that the government has clearly decided that its agenda is based on tax reductions. That is absolutely correct.

What does it do in terms of helping families? Let us take a look at some of the examples. This is what is so puzzling when I hear the socialists stand up and say that the government did not do enough here, that it did not do enough there.

A two-earner family of four with a combined income of $60,000 last year paid about $5,700 in federal tax. Next year their taxes will fall by over $1,000, a first year cut of 18%. A cut of $1,000 for a family of four, a husband, a wife and two kids, means that they have $1,000 more that they can use perhaps for their children's education, for a family vacation or to pay some bills they are behind on. Is that not all good social policy? It makes a lot of sense to me.

A single mother with one child earning $25,000 a year received a net benefit of just $1,400 last year. Next year she will receive an additional $800, for a total benefit of $2,200. Maybe the silk stocking socialists that inhabit the chairs in this place just do not think that $800 is a lot of money. Let me tell them that to a single mom in Mississauga $800 is a heck of a lot of money. She can use that money to benefit her children, to pay for something she needs, to help pay for their education or to help pay for their clothing. Of course it is a social benefit. Would the NDP take it away? Would it suggest that we not give that tax break?

A one-earner family with two children making $40,000 last year paid about $3,325 in federal tax. Next year they will pay about $1,100 less, a reduction of 32%. This is a family in which one spouse goes to work and the other stays home as a caregiver, with two children. They are saving $1,100. This is real money. This is real money back in the pockets of Canadians who need that money.

We absolutely have the financial house in order in Canada and we have turned around and given back that money to where it belongs, in the hands and the pockets of the hardworking taxpayers.

Let me say what it also is not. It is not a Bloc budget. Why? It actually strengthens Canada, which is clearly not on its agenda, not in its interests and not in its party platform. It would rather continue to drive wedges. Not only does this budget strengthen Canada, it benefits Quebecers, because a lot of the people I referred to, the two-earner family, the single mom, the one-earner family with two kids, live in Quebec. They are going to see that money coming back. Going into an election—let us admit that is what is going to happen—the people of Quebec are going to look at this and ask the Bloc why it is criticizing the fact that the Government of Canada is giving them back some of their money.

I can tell the House what this is also not. This is not a federal Conservative budget. We had a number of years of federal Conservative budgets under Brian Mulroney and, I might add, with the assistance of the current leader of the Conservative Party in this place who was a member of the Mulroney cabinet. With his assistance they managed to drive this country to the state where people were saying, in New York and other places around the world, that Canada was bordering on being a third world country, that Canada had run up a deficit, an overdraft, of $42 billion with no idea of how to pay it off.

The Canadian people had an idea. While we stand here and take credit for it, the true credit for eliminating the deficit, and for this budget, belongs to the Canadian people.

It is not a conservative budget. It is far-reaching. It is visionary. It sends a message to all Canadians that says the government knows they have suffered through years of cutbacks and years of turmoil, and it is time because we do have a surplus, not because there is an election. If there is an election in November or in April, what is the difference? There is a fall mini-budget or economic update that is done every year.

Those members know this. For them to suggest that the Alliance should be able to put out its policy book and tell everybody that it will do some of the nonsensical stuff it is talking about and that we should just sit back and do nothing, excuse me? We have a constituency in the country, a very large constituency. We are the only party with representatives from sea to sea to sea, everywhere in the country.

This mini-budget is not an Alliance budget, I can tell hon. members that. The Alliance claims that we have somehow stolen its ideas. What nonsense. It wants to put in a flat tax. I will be making a statement later about what that really is, a three-hump camel, so I will not go into it at the moment.

Let me just tell the House that the Alliance wants to bring in a flat tax. Do hon. members know why? Because it is simple for that party to understand. It can ask Canadians how they would like to pay 17% or maybe 25%. It thinks that is simple to understand.

What is the result of that? Add up the Alliance numbers. If the Alliance was putting out a budget of this nature it would turn the federal government into nothing more than a head waiter for the provincial governments right across the country. It would put the situation in such a disastrous state that all we would need would be annual meetings of first ministers who would meet somewhere, who knows, maybe in Charlottetown, or likely in Edmonton.

[An hon. member]

Maybe Mississauga.

[Steve Mahoney, Liberal, Mississauga West, ON]

Yes, Mississauga. They would get together, ask how much the pie is and then say “Here is your share based on per capita”. They would eliminate regional development.

What that party has attempted to do to decimate the HRDC plans is a national disgrace, because the people it is hurting are the people who need the most help. We have heard members from that party say that they consider people in the maritimes lazy. We have heard them denigrate all the different groups in the country that we support and believe in.

We believe in economic regional development because it creates jobs. It creates pride. It creates self-respect for Canadians wherever they live in the country. Just because people happen to live in oil-rich Alberta does not give them the right to have a better standard of living than somebody who lives in Newfoundland or New Brunswick.

It is time to go to the Canadian people, put our two visions on the table and let the people decide.

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

Madam Speaker, I must say that natural gas emission rivals the massive Sable gas offshore project in my province of Nova Scotia.

Unfortunately, when I speak of gas, this mini-budget with its mini vision is really not going to offer the people very much other than more postdated promises until after the election. What we see happening is this approach by the government to come trick or treating to the Canadian public, just on the eve of an election, dangling these goodies out in front of the public only to pull them back unless it gets the vote.

My question for the hon. member is, with this so-called mini-budget, where is the vision? Where is the long term plan to tackle the deficit and the debt? Where is the long term agenda to try to pay down this national debt that we have?

What does this do for students? What about students who are wrestling with huge debts coming out of university and with no hope of getting on their feet or even a kick-start into the economy? Right now their choices are either to go bankrupt or to go to the United States. That is unfortunate and that is the environment they are facing right now based on what the government has set up. What are we going to do for students? What is the long term plan to deal with the debt situation?