Mr. Speaker, I rise to begin debate on the first federal budget of the new century.
I would like to dedicate this reply to the budget address to a new Canadian, Joshua Jacob Kroon, born early yesterday evening to our oldest daughter Andrea and her husband Howard. The baby was born on budget day. When I meet young Joshua I am afraid it will be my duty to inform him that according to the budget tabled yesterday he already owes $18,600, that being his portion of the national debt. That is bad news for young Joshua. However, the good news is that by the time he becomes of age, Canada will no doubt have a new government and the Liberal legacy of high spending, high taxes and high debt will be a distant memory.
In addressing budget 2000, I am conscious, and I am sure all members are conscious, that millions of Canadians have hopes and dreams for themselves and their children that can be affected by the spending policies, the taxation policies and the budgetary promises of the federal government. For example, if the federal government wastes taxpayer dollars through irresponsible spending it is Canadians who suffer because there are then insufficient dollars available to fund those services, such as health care, which Canadians value highly.
If the federal government taxes Canadians too heavily it is the take home pay and the bank accounts of individuals, families and employers that are savaged and it is Canadian jobs and economic opportunities that are killed and exported.
If the finance minister makes promises and commitments in his budgets which are then broken, if the truths asserted in the budget turn out to be half truths, which are more dangerous than falsehoods because they are more difficult to detect, then it is the faith of Canadians in the integrity of the government itself which is shaken and eroded.
With this preamble, allow me to review the federal budget under three simple headings: spending, taxes and integrity.
It is clear again from this budget that the highest priority of the Liberal government is not tax relief but the increased spending of taxpayer dollars. The budget reveals that the government will be spending $4.3 billion more this year than provided for in last year's estimates. In other words, the promises in last year's budget to limit spending to $111.2 billion will once again be broken as the government spends $115.5 billion.
This chronic tendency of Liberal governments to break promises to limit spending has been criticized by the auditor general in these words:
At issue is more than the mere fact that the government spent more than it planned to spend. How this was done also matters. A scramble around budget time to find ways to spend money before the year ends is not a process calculated to ensure efficiency, effectiveness and economy in the use of public funds. In fact, it differs little from the end of the year spending by the departments with surplus funds, except that it involves not millions but billions of taxpayers' dollars.
In other words, the end of the year spending binges that have often characterized the government's departments has now spread to the Treasury Board, the finance department and the government as a whole, and this of course is a backward step.
Turning to the future, the finance minister projects surpluses for the next five years of more than $150 billion. If the government truly believed that these surpluses belong to the people, it would give the bulk of them back to the people. What is the finance minister's highest priority with respect to the use of those future surpluses? Is it tax relief? No. Is it debt reduction? No. Once again, the highest priority is to spend.
Of the $152 billion in projected surpluses over the next five years, the government implies that it will spend $66 billion, provide $58 billion in tax relief, apply $15 billion to the debt and leave $13 billion unallocated. Even if one took these figures at face value, which we do not, spending is still the highest priority.
The taxpayers and the official opposition also know that the government spends unallocated revenue, so that the $13 billion in unallocated revenue should be put into spending. The child care tax benefit is a social program not a tax relief program, so that should be put into spending.
Taxpayers and the official opposition also know that the cancellation of bracket creep, with which we concur, is a cancellation of future tax increases not a cut for today's taxpayer and it should not really be included in the tax relief figure. Even if we just take into account these first two adjustments, what the government will do with the projected $152 billion in surpluses is apply $15 billion to debt reduction, provide less than $51 billion in tax relief and spend $86.3 billion. Surprise, surprise. Once again the highest priority of the government is spending taxpayers' dollars.
I note with interest that the government says on page 12 of the budget that it will be supporting more genetic research. When the human genome project is completed, perhaps a complete genetic map of the Liberal species will become available. I am sure that our scientists will discover that the Liberals possess a recessive financial gene. That gene renders them congenitally incapable of saving taxpayers' dollars and compulsively inclined to spend them.
Whether a permanent cure for this disorder will be developed, only time will tell. At present, however, there is only one known remedy and that is to remove the temptation and the capacity for Liberals to spend taxpayer dollars by removing them from office.
The most shocking and disappointing aspect of the federal government's spending program is not the government's overspending of last year's budget. It is not that increased spending of taxpayer dollars continues to be the government's highest priority. We expected all that. The most shocking and disappointing aspect of the treatment of federal spending in this budget is what can only be described as an incredible omission.
I refer to the finance minister's failure to even mention in his budget, let alone address, the spending scandal at human resources development, a scandal which shakes to the core any faith the public might still have in the government's capacity to spend taxpayer money responsibly.
All the government's spending promises and spending plans remain compromised as long as the spending scandal at HRD remains unaddressed and unresolved.
As everyone in parliament knows, the spending of HRD on programs like the Canada jobs fund has been suspect for years. The odour finally became so bad that this summer the department itself was compelled to do an internal audit of 459 files, representative of $1 billion in spending on grants and contributions.
What did that internal audit reveal? It revealed that 15% of the files reviewed did not have an application on file from the sponsor; 72% had no cashflow forecast; 11% had no budget proposal; 11% had no description of expected results; 97% of the files showed no evidence that anyone had even checked to see if the recipient already owed money to HRD or the government; 80% of the files showed no evidence of financial monitoring; and 87% of the files showed no evidence of supervision.
We understand that this audit has inspired the CBC to propose a new game show called “Who Wants to be a Grant Recipient”, with the Minister of Human Resources Development as the host. It would be just like Who Wants to be a Millionaire , except the host does not ask any questions.
Of particular concern to parliament, the ultimate watchdog over the public purse, is that the gross mismanagement of taxpayer dollars at human resources is just the tip of the iceberg.
The federal government spends more than $13 billion per year under the heading of grants and contributions; the spending category under which the HRD funds have been so grossly mismanaged.
If a random audit found that 8% of the files the auditors looked at were so bad that they required a forensic investigation and perhaps referral to the police, what is the situation in the thousands and thousands of unexamined files in that department and across the government?
The Auditor General of Canada has repeatedly warned the government concerning the presence and the size of this iceberg. This is not something new.
In chapter 27 of his 1998 report he said:
We have reported to parliament on numerous audits of grants and contribution programs over the past 21 years. Many of those audits identified similar concerns: inconsistent application or interpretation of government policy on grants and contributions; inefficient use of funds and inadequate measures to ensure accountability by program recipients; lack of control, monitoring and evaluation; and reporting in the estimates and the public accounts that was inadequate to facilitate examination and year-to-year comparisons by parliament.
These conditions all still exist at human resources, hence the spending boondoggle there.
The auditor general went on to say in his 1998 report that these same conditions also exist with respect to the management of grants and contributions by the Department of Indian Affairs and Northern Development, by the Department of Citizenship and Immigration, by the Department of Fisheries and Oceans and by the Department of Industry with particular reference to federal regional development agencies, such as the Atlantic Canada Opportunities Agency, the Federal Office of Regional Development for Quebec and the Western Economic Diversification Agency.
At a meeting recently in the Peace River country, I described the whole HRD scandal. A farmer came up to me afterward and asked if there was any way that we could persuade the Prime Minister to make the human resources development minister the minister of taxes. When I asked him why he would want such a change, he said that if she mismanages the collection of tax money like she mismanages the distribution of it, that might be as good as a tax break. He said that she might lose his file or forget to check whether he owed the government any money.
It is not just the Minister of Human Resources Development who is implicated in the gross mismanagement of taxpayer dollars under the heading of grants and contributions. The government says in the budget that it wants to foster a culture of innovation. However, it is a culture of fiscal irresponsibility that permeates this government. The blame lies with all the ministers who have tolerated it or cultivated it for so long, including the Minister of Finance and, worst of all, the Prime Minister himself.
That the Prime Minister is part of the problem, if not at the heart of the problem, can be demonstrated in half a dozen ways. Let us look, for example, at the mismanagement of grants and contributions to the Prime Minister's own riding, particularly through the transitional jobs fund or later the Canada jobs fund.
What are we to conclude from the following: The Prime Minister's statement to the electors of Saint-Maurice in 1993, as reported in the Montreal Gazette of October 15, “When a dossier for Saint-Maurice lands on a cabinet minister's desk—need I say more—”, he said to gales of laughter during a campaign meeting yesterday”. The taxpayers are not laughing.
Over $2 million in federal government grants and loans given to the Shawinigan hotel project owned by a self-confessed embezzler, $600,000 of it granted and announced without any departmental paperwork two months before the 1997 federal election.
The $164,000 transitional jobs fund grant given to Yvon Duhaime whose hotel was adjacent to the Grand-Mère golf course in which the Prime Minister held a 25% interest. This grant was announced four days before the election and almost two months before any ministerial approval.
There was the $2.04 million transitional jobs fund grant given to companies owned by René Giguère which contributed $4,000 to the Prime Minister's personal campaign in 1997 and almost $15,000 to the Liberal Party of Canada in 1997 and 1998.
There was the $2.5 million grant from HRD given to build a training centre for new economy jobs in the Prime Minister's riding. This is currently being investigated by the RCMP because of allegations that more than $100,000 of that money found its way into the pockets of local directors.
There was the $200,000 grant announced by the federal regional development agency for Quebec for building a lighted fountain in the Saint-Maurice River in the Prime Minister's riding. Access to information documents reveal that this project was being lobbied for by the Prime Minister's office even before a formal application had been made by the sponsor.
Just last week HRD was forced to order a forensic audit into how funds earmarked for a project in the Montreal riding of Rosemont ended up bankrolling a virtually identical project in Shawinigan, once again in the Prime Minister's riding.
If I were describing to the House events occurring in some underdeveloped country with a corrupt and dictatorial government with no traditions or mechanisms for enforcing political or fiscal accountability, hon. members might shake their heads and say that it was regrettable but perhaps understandable. But the events I have been describing have been happening in Canada and involve the Prime Minister of Canada. What a shame. What a disgrace. What a scandal.
We are talking about the misuse and mismanagement of taxpayers' dollars, taxpayers' dollars which the House holds the Minister of Finance accountable for budgeting and managing responsibly. We have the right, indeed we have the responsibility to ask where has the Minister of Finance been in all of this and why is there not a single reference in the budget to these matters?
The finance minister, the would be prime minister, is implicated in all of this. It is now clear from the public accounts particularly between 1995 and 1998 that at the very time the finance minister was slashing health care funding, he was actually increasing the flow of funds to HRD and these programs where taxpayers' dollars were being wasted by the millions.
While the finance minister was withholding funds for hospital beds across Canada, he was authorizing funds for hotel beds in the Prime Minister's riding. Not only were the government's spending controls dysfunctional, but its spending priorities were upside down and the finance minister did nothing to correct either.
Despite all of the evidence of gross mismanagement of federal spending on grants and contributions—and I have only touched on the tip of the iceberg as the auditor general reports make clear—I draw to the attention of the House that in the minister's hour long budget speech yesterday, in the 350 pages of the year 2000 budget plan tabled in the House yesterday, there is not a single reference or even an acknowledgement of this problem. Nor is there any comprehensive proposal for remedying it and restoring the public's faith in the integrity of the government's management of taxpayers' dollars.
This is an incredible omission. This is an inexcusable omission. This omission is an insult to the finance committee of the House. It is an insult to the public accounts committee. It is an insult to the auditor general. It is an insult to the intelligence of the whole House. Most certainly and most deplorably of all, it is an insult to the long suffering Canadian taxpayer.
I venture to say that if any large public company in this country had a billion dollar spending boondoggle in one of its divisions and failed to report it or address it in its annual report to the shareholders, not only would its shares be hammered on the stock market but its vice-president of finance would be dismissed and would face disciplinary action from both the shareholders and the securities commission.
The House passed a law called the Canada Corporations Act that requires companies to adhere to a standard of financial reporting higher than that practised by this government. How can we demand a higher standard from the private sector than we actually demand in the handling of public money?
To add insult to injury, the finance minister has the nerve to come to the House asking for authority to increase federal spending by over $80 billion over the next five years. To that we respond in the name of and on behalf of the taxpayers by asking, why should the House give the government one dollar more of taxpayers' money to spend when it is grossly mismanaging the billions of dollars that it has already been given? Why should the House authorize the government to spend more taxpayers' dollars when the government's budget does not even acknowledge the gross mismanagement or propose any concrete spending controls to prevent it from ever happening again?
Some taxpayers may actually read the budget. They may come to the heading on page 8, “Sound Financial Management”. Then the taxpayers will come to the sentence on page 9, “Let there be no doubt, we will control spending”. When the taxpayers see that, they will say, “Really. You will control spending like you controlled it at HRD, like you control it at Indian affairs, like you control it in the heritage department. No thanks”.
The spending proposals of the minister and the government contained in the budget are unacceptable to Canadians and to the House. They are unacceptable not simply because they propose to increase spending and the burden on taxpayers yet again, but because the integrity of the government spending is compromised and the budget does not even recognize the fact let alone address it.