House of Commons Hansard #84 of the 36th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was billion.


Motions For PapersRoutine Proceedings

3:25 p.m.

Some hon. members


Budget Implementation Act, 2000Government Orders

3:25 p.m.

Wascana Saskatchewan


Ralph Goodale Liberalfor the Minister of Finance

moved that Bill C-32, an act to implement certain provisions of the budget tabled in Parliament on February 28, be read the second time and referred to a committee.

Budget Implementation Act, 2000Government Orders

3:25 p.m.

Etobicoke North Ontario


Roy Cullen LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I appreciate the opportunity to speak today at second reading of Bill C-32, the budget 2000 implementation omnibus bill.

Budget 2000 is an historic budget. As the Minister of Finance stated in his budget speech, not only is the deficit a matter of history, but the government is now projecting its third, fourth and fifth balanced budgets in a row, something that has not been done in nearly half a century.

However, there are other tangible reasons why budget 2000 represents a dramatic advance for Canada and Canadians. Budget 2000 addresses the fundamental challenges we face as a nation, challenges we identified in last October's fall update.

First, as the minister said, the government will continue to provide sound fiscal management. He said that the days of deficits are gone and they are not coming back.

Second, the government will lower taxes to promote economic growth and to leave more money in the pockets of Canadians.

Third, in order to ensure equality of opportunity, the government will make investments to provide Canadians with the skills and knowledge they need to get the jobs they want.

Fourth, the minister said that together we will build an economy based on innovation.

All Canadians can be proud of the government's record. However, as the minister also stated, it is not a record on which we are prepared to rest. Canadians do not want to dwell on the past; they want to focus on the future. Indeed, that is the message of this budget.

Again, to paraphrase the minister, the government's challenge now is to build on this newfound strength. The government is sticking to its plan of sound fiscal management, lower taxes and investing in skills, knowledge and innovation. Through this plan, the quality of life for Canadians and their children will be enhanced.

Quality of life runs the gamut, from access to quality health care and post-secondary education, to healthy children, secure families and vibrant communities. It also includes sharing the benefits of economic prosperity with those who need support the most. That is what we are doing through this budget omnibus bill, implementing the budget's proposals to strengthen post-secondary education and health care, and to help children get the best possible start in life.

The bill we are debating today contains 10 measures that were announced in the 2000 budget. Three of these measures are of particular importance to the nation's well-being, starting with our health care and education systems, continuing through better assistance to families with children, and finally, financial assistance to students. To provide these benefits on time, these measures must be passed before the House adjourns this summer.

First, this bill amends the Federal-Provincial Fiscal Arrangements Act to authorize payment of the $2.5 billion increase to the Canada health and social transfer for health care and post-secondary education to a trust in support of health and post-secondary education.

Second, the Income Tax Act is amended to increase child tax benefits and to provide indexed GST benefits as of July 2000.

Third, the bill amends the Canada Student Assistance Act to ensure uninterrupted delivery of student loans after the current agreement with financial institutions expires on July 31, 2000.

Again let me emphasize the timing for the passage of these three measures is crucial. If we delay, it is Canadians who will suffer.

The remaining seven components of the bill may not face the same deadline. They are, however, just as important for millions of Canadians and for the effective and efficient operation of government.

These measures would amend the Employment Insurance Act and the Canada Labour Code to double maternity and parental leave to one year. They would increase the foreign property content limit in RRSPs and other deferred income plans. They would amend the Canada pension plan to allow provinces to redeem securities given to the CPP investment fund. They would amend the Special Import Measures Act to bring Canadian countervailing duty laws into line with recent changes to the World Trade Organization agreement on subsidies and countervailing measures. They would enable certain first nations to levy a 7% tax on sales of fuel, alcohol and tobacco products on reserve. They would amend the Excise Tax Act to preserve the GST-HST base and avoid tax evasion.

I would now like to discuss each of these 10 measures in some detail. I will begin with the $2.5 billion increase to the CHST.

The minister summed up the reasons for this measure in his budget speech when he said:

The success that we have achieved as a nation has come not only from strong growth but from an abiding commitment to strong values: caring, compassion and insistence that there be an equitable sharing of the benefits of economic growth.

For this reason the first announcement in the first budget of the 21st century was that we would increase funding for post-secondary education and health care. These are the highest priorities of Canadians and they are ours.

Bill C-32 legislates a $2.5 billion increase in the Canada health and social transfer. These funds will be distributed to provinces and territories on a per capita basis and paid into a trust from which they can draw down over four years, beginning as soon as the bill is passed.

As hon. members know, the federal government transfers approximately $40 billion a year to the provinces and territories through three major programs to help them provide vital services to Canadians. The first program is the CHST which supports health care, post-secondary education, social assistance and social services in the form of cash and tax transfers. It is also the largest federal transfer. The second is equalization which enables less prosperous provinces to offer comparable public services to those in other areas of the country. The final one is the territorial formula financing for public services in the north.

The federal government has already acted three times before now in the 1996, 1998 and 1999 budgets to strengthen the CHST. Combined with the value of tax transfers, total CHST in 1999-2000 was $29.4 billion higher than in 1993-94. With this new supplement it will be close to $31 billion for 2000-01. That also incorporates the $11.5 billion added to the CHST in the 1999 budget.

This additional support will provide an additional $1 billion in fiscal year 2000-01 and $500 million a year in each of the following three years for post-secondary education and health care.

As I said, combined with the 1999 budget $11.5 billion investment this means that the cash component of the CHST will reach $15.5 billion in each of the next four years, an increase of almost 25% from the 1998-99 level. If Canadians compare that with the rhetoric of the opposition parties, they will understand the government's huge commitment and priority attached to health care and education.

As I indicated, this supplement will be paid into a third party trust and the provinces and the territories will have the flexibility to draw on it as they see fit.

The bill should be passed quickly in order to get much needed money into the health care system to deal with the pressing needs of Canadians. Some Canadians might wonder, if there is money on deposit sitting there that is not being implemented by the health care system in certain provinces, why the government would do that.

We are responding to the very urgent needs of Canadians in the health care system. Whether that is in emergency rooms, waiting lists for surgery or whatever the case may be, the provinces have the flexibility to draw on it as they need it.

Another key measure in this bill concerns child tax benefits. As the minister emphasized in the budget, “assisting families is not only the smart thing to do, it is the right thing to do”.

Let there be no doubt, he went on to say, that one of the best things we can do is to leave parents with more money at the end of each month to invest in their children's well-being.

Budget 2000 does exactly that. To fully protect taxpayers against inflation the budget restores full indexation of the personal income tax system effective January 1, 2000.

This is the most important change to the Canadian tax system in more than a decade. Indexation has applied to personal income taxation for inflation but only when it reached over 3%. It has been that way since 1986. Indexation will particularly benefit middle and low income Canadians because of bracket creep and the fact that these taxpayers generally receive the benefits under the child tax credit and the GST credit.

As hon. members are aware, the Canada child tax benefit is a key element of federal assistance to families. It has two components: the Canada child tax base benefit for low and middle income families and the national child benefit supplement for low income families.

To further help families with the added expense of raising children, the bill also increases Canada child tax benefits by $2.5 billion annually by the year 2004. The government's goal is to increase the maximum Canada child tax benefit for the first child to $2,400 by then through fully indexing the Canada child tax benefit, increasing both the base benefit and the national child benefit supplement beyond indexation, increasing the income thresholds at which the base benefit begins to be reduced and the national child benefit supplement is fully phased out, and lowering the reduction rate for the base benefit.

These changes will bring the maximum Canada child tax benefit for the first child to $2,056 in July 2000 and to $2,265 in July 2001, well on the way to the five year goal of $2,400 which I just mentioned.

For the second child the goal is to raise the maximum Canada child tax benefit to $2,200 in 2004.

This means that benefits to middle income families will be substantially increased. For example, a family with two children with an income of $60,000 will see its Canada child tax benefit more than doubled from its pre-2000 budget level of $733 to $1,541 by 2004.

Overall these increases by the end of five years will bring the Canada child tax benefit to more than $9 billion annually, of which $6 billion will go to low income families and $3 billion to modest and middle income families.

The fact that low and middle income Canadian families are depending on the Canada child tax benefit increases and indexed GST benefits this coming July is another reason to pass the legislation without delay.

The federal government is taking the necessary steps to ensure that students who need student loans when they go back to school in September will receive them in time. This bill ensures that money will be available to students in need.

By way of background, the Canada Student Loans Program has played an important role in expanding access to post-secondary education since 1964.

Through loans and other financial assistance totalling over $15 billion, approximately 2.7 million students have been helped since then. Annually, the program helps over 350,000 needy Canadian students access post-secondary education.

Until now Canada student loans have been administered and delivered on behalf of the federal government by financial institutions, an arrangement that will expire on January 31, 2000. Bill C-32 ensures that the Canada student loans program will continue to serve students after July 31 of this year. Money will be available for student borrowers and there will be no interruption in service.

The role of the Government of Canada is to provide the finances necessary to support the Canada student loans program. Loans will be administered by service providers on behalf of the federal government. Service providers, which many financial institutions currently use to administer their own loan portfolios, are private companies that have the capacity to administer loan portfolios including student loans.

Service providers would sign an agreement with the government to establish loan accounts, maintain contact with the borrowers and administer the loan once the borrower begins repayment. I want to assure students that there will be no significant changes to the program. Students who have already consolidated their loans and are repaying them will not be affected at all.

Before hon. members ask about students who have difficulty meeting their repayments, may I remind them that the federal and provincial governments have greatly increased the assistance available to borrowers having difficulties repaying their loans. One thing is for certain. This new program will be in place for those students who need financial assistance next fall. I am sure hon. colleagues will support this measure.

The 2000 budget also does a lot for parents of newborn and newly adopted children. It extends parental leave under the employment insurance program and makes benefits more flexible and accessible. At present, including the standard two week waiting period for benefits, the EI program provides up to six months of maternity and parental leave benefits for new parents. That is 15 weeks of maternity benefits for recovery from child birth and 10 weeks of parental leave available for both adoptive and biological parents.

The maximum amount of child related leave will now be doubled to one year. This will be done by increasing parental leave to 35 weeks, which can be claimed by either parent or divided between them. Combined with 15 weeks of maternity leave and the standard two week waiting period, the amount of child related leave will be one full year.

In addition, maternity and parental benefits will be made more accessible by lowering from 700 to 600 the number of insurable hours that must be worked to be eligible. Parents will be eligible for benefits with as little as 12 hours of work a week over the course of a year.

In addition, parents will have greater flexibility in choosing whether one or both of them spend time at home with a new child. Only one waiting period will apply rather than two as is currently the case.

Finally, parents will be allowed to work part time while receiving parental benefits in the same way as regular EI claimants. This will help mothers, if they and their employers choose, to gradually return to the workplace following their maternity leave, and also enable parents to maintain their skills and work contacts while taking parental leave.

Further, income earned while receiving parental benefits will be treated the same as for regular EI benefits. Parents can earn up to 25% of their weekly benefit or $50, whichever is higher, without affecting their EI benefits.

All of these parental leave benefits changes will positively impact some 150,000 families each year at an estimated annual cost of $900 million.

In addition, the Canada Labour Code is being amended so that employees in federally regulated workplaces will have their jobs protected during the extended parental leave period.

I would like to move along now and discuss some of the other measures in the bill.

For example, there is one measure that affects registered retirement savings plans, RRSPs, and registered pension plans, RPPs, which are the primary source of retirement income for middle income Canadians. Several entities, including the House of Commons finance committee, the Senate banking committee and the Investment Funds Institute of Canada, have asked the government to reconsider the current level for the limit on foreign property investments in registered pension plans and RRSPs. As a result, to provide better opportunities for Canadians to diversify their personal retirement savings investments through RPPs and RRSPs, the foreign content limit on those investments will be raised from 20% to 25% for 2000 and to 30% for 2001. These increases will also apply to the Canada Pension Plan Investment Board.

Speaking of the CPP, there is an amendment in the bill that directly affects the plan. Let me explain the background to this change.

Following extensive public consultations, federal and provincial governments agreed in 1997 on major changes to the Canada pension plan which were enacted by parliament in 1997 and brought into effect in 1998. The changes are expected to sustain the Canada pension plan throughout the aging of the population and the retirement of the baby boom generation.

Contribution rates are increasing in a phased manner. This will create a sound, adequately funded plan whose earnings can help pay for future benefits. The Canada pension plan provides a basic level of earnings replacement on which tax assisted private pension plans and RRSPs can build.

One of the important changes in 1997 supported by all Canadians, perhaps with the exception of the Canadian Alliance party, was to enhance the returns to plan members by investing in the market funds not needed immediately to pay for benefits. A fully independent investment board operating at arm's length from government manages these market investments in the best interests of CPP plan members.

The CPP legislation allows all provinces to borrow from the CPP for terms of up to 20 years. The proposed amendment before the House is to allow the provinces to prepay their obligations to the Canada pension plan in advance of maturity and at no cost to the Canada pension plan.

The provinces asked for this change and federal and provincial finance ministers agreed to it at their meeting last December. This will provide more flexibility for provinces that are enjoying fiscal surpluses as the economy booms and they are looking for ways to reduce their debts. It also means that more funds will be transferred to the CPP investment board and invested in the market at higher expected returns.

Turning now to the Special Import Measures Act, SIMA, these amendments will bring Canadian countervailing duty laws into line with recent changes to the World Trade Organization agreement on subsidies and countervailing measures. The WTO subsidies agreement contains provisions that rendered certain foreign subsidies that satisfied very specific criteria immune from countervailing duty action. These non-actionable subsidy provisions lapsed on December 31, 1999 as a result of the failure of WTO countries to agree to their extension.

The amendments in Bill C-32 allow for the suspension of provisions in SIMA that implement these non-actionable subsidy provisions into Canadian law. In addition to bringing Canadian countervailing duty law into line with these recent changes to the WTO subsidies agreement, these amendments will ensure that we are not treating our trading partners more favourably than they are treating us in countervailing duty investigations.

Bill C-32 also addresses first nations taxation. This year's budget marked the fourth time that government has indicated its willingness to enter into taxation arrangements with interested first nations. As a result, the Cowichan tribes, the Westbank first nation, the Kamloops Indian band and Sliammon first nation all levy a tax on the sales of certain products on their reserves. Personal income tax collection and sharing agreements with the seven self-governing Yukon first nations are also now in effect.

This legislation will enable 13 first nations, all listed in the schedule that accompanies this bill, to levy a direct 7% GST-style sales tax on fuel, alcohol and tobacco products sold on their reserves.

The Canada Customs and Revenue Agency will collect the first nation sales taxes and the federal government will vacate the GST room where the first nation tax applies.

In the future, interested first nations could be added to the schedule through an order in council without the need for a legislative amendment.

The Excise Tax Act is also amended in the bill. Among GST and harmonized sales tax registrants there is generally a high degree of voluntary compliance when it comes to reporting or remitting tax. However, instances can arise where allowing a registrant the usual remittance period can put these tax revenues at risk.

Where the Canada Customs and Revenue Agency has reason to suspect tax evasion in these circumstances, it has been powerless to proceed with assessment and collection action. The bill provides the Minister of National Revenue with the authority to take immediate collection action to protect revenues in these circumstances. The minister can now apply ex parte without notice for judicial authorization to assess the registrant before the normal due date and to take the necessary collection actions to recover the money. The registrant will have the right to apply for a judicial review of the court's decision.

I would like to point out that the Income Tax Act contains a similar provision relating to the collection of income tax.

In conclusion, I am confident that hon. members can be counted on to pass this legislation with haste. Canadians across the country are awaiting the benefits. We all know why this bill has to be passed quickly.

First, the CHST increase must be enacted to get much needed money into the health care system to deal with the pressing needs of Canadians.

Second, in order for the child tax benefits and indexed GST benefits to come into force on July 1, this legislation has to be passed before the end of June.

And third, the bill must be passed in time for the student loan program to be available for students entering school in September.

I believe that one telling fact about the 2000 budget was the respect it was accorded from hon. members opposite and from Canadians in general. In fact, question period in this Chamber the day following the Minister of Finance's speech was revealing by how few questions were asked about the budget. Hon. members opposite along with Canadians across the country knew that the 2000 budget delivered what the Minister of Finance promised: help for low and modest income families with children, help for the health care and post-secondary education systems, and help for students who want to pursue higher education.

All are measures that build on the new-found strength the minister talked about in the budget and which are designed to improve the quality of life of Canadians.

This is a new budget signalling a new beginning for a new century. Canada greeted the 21st century with a new fiscal record and a renewed hope for improving the quality of life for Canadians.

This is a government that cares and this is a government that has a social conscience. The 2000 budget measures in this bill reflect this. I urge my hon. colleagues to accord speedy passage to this legislation.

Budget Implementation Act, 2000Government Orders

3:55 p.m.


Monte Solberg Reform Medicine Hat, AB

Mr. Speaker, I am pleased to rise and debate Bill C-32, an act to implement budget 2000.

I say to my friend across the way who has just spoken that if he has a conscience, not just a social conscience, he must feel a little twinge after what he said. He said some things that really need to be responded to. I shall respond to them first and then I shall deliver the body of my speech.

My friend across the way suggested that the official opposition, the Canadian Alliance, did not ask questions about the budget the day following its introduction in the House by the finance minister. That is very telling; in fact, it speaks volumes about the government, because during that question period the day after the budget was introduced, every single question we asked was about waste in government and about the scandal in human resources development. Somehow my friend across the way thinks that is not part of the budget, that the money which is allocated, $15 billion a year toward grants and contributions, somehow is not part of the budget. I guess the Liberals assume it is part of Liberal play money.

Canadians pay a lot of taxes to fund the $15 billion which the government uses so unwisely. I would suggest to my friend that he may want to consider his definition of what constitutes questions on the budget, because I would argue very strongly that Canadians who have to pay those taxes, I can guarantee, feel that it is part of the budget.

I want to comment in an organized way on budget 2000, on Bill C-32, and I am about to do that. My friend across the way said that we should pass this piece of legislation with haste. I would argue that if we did that, we would be passing it with waste. As I mentioned a minute ago, there is a lot of waste in what the government does, and I am going to elaborate on that in a moment.

I am going to argue that to support the government on Bill C-32 would simply be to entrench the terrible habits the government has: the habit of underachieving, the habit of not addressing huge problems which stand in front of it every day. Instead the government tries to paper them over and throws some money at them. It spends all kinds of money on reports and studies to give people the impression of action, when that is not the case at all.

Let me remind my friend across the way of the huge problems that face Canada today. We have a crisis in health care. Canadians across the country are required to line up, queue up to get basic services. This is ridiculous.

We are a country that spends a lot of money on health care already. However, do we hear the government talking about making some basic reforms so that we can ensure the money gets down to the patients, that we have patient centred health care? Absolutely not. Do we see a government that is willing to be upfront and honest about how much money it actually delivers to the provinces for health care? No.

In fact my friend just spent a long time talking about what they have as done for health care. The simple fact is that in 1995 the cash transfers for health care were $18.8 billion. In the next several years it will rise to $15.5 billion. In the interim they cut it down as low as $12.2 billion. They cut the heart out of it.

Budget Implementation Act, 2000Government Orders

4 p.m.


Roy Cullen Liberal Etobicoke North, ON

What about tax points?

Budget Implementation Act, 2000Government Orders

4 p.m.


Monte Solberg Reform Medicine Hat, AB

I hear my hon. friend. In 1977 the federal government agreed with the provinces to give back their tax points. Tax points are tax revenue earned in the provinces which goes to the federal government and is yielded back to the provinces. That agreement was made 23 years ago. There were no strings attached. No one said they had to go to a particular set of services.

At what point does that money belong to the provinces? It is not part of the cash transfer which the federal government originally agreed to give to the provinces to ensure that things like health care and higher education were funded. Absolutely not.

If the government were honest for a moment, it would acknowledge that cash transfers have dropped dramatically for health care. Even with the money it put back in, it is nowhere near where it was. The government has come nowhere near addressing the problems in health care. All it can do today is pick fights with the provinces.

Witness the problems with Ontario. Witness the problems with Alberta right now. Its solution is to go to the level of government that provides the services the moment it tries to do anything different. The provinces are trying to find some way to ensure that important health care services actually deal with the needs of their own people. The federal government at every opportunity dumps all over them and threatens to withhold transfers. The only level of government which is showing any kind of innovation is the provinces. The federal government's answer is to hit them with the big hammer every time.

I do not think that is dealing with the problem. I would argue it is trying to shift the blame to the provinces. I would argue it is an abdication of its responsibility as the senior level of government in Canada. It has completely abdicated its responsibility.

There is an example of where budget 2000 and Bill C-32 fall short of addressing a fundamental need of Canadians, which is good and timely health care. It is not happening and Bill C-32 did not address it.

What are other examples of huge problems which the government did not address? If we go through the entire budget, we find piles of documents which are probably eight inches thick. Do we ever see a mention of problems in human resources development, of the mismanagement of funds?

If chief financial officers for a private sector company produced an annual report which neglected to mention the type of mismanagement the government is involved in human resources development, in Indian affairs, in EDC, and in the scientific research and experimental development tax credits, which the auditor general reported on yesterday, and did not report on those things, they would be fired so fast it would make their heads spin. They would probably be in big trouble with securities regulators for producing a report that was so misleading.

Does the government even feel a twinge of conscience about producing a budget that does not mention these things? Not at all. There was not a mention in my friend's speech across the way of the problems in human resources development and the other problems that have plagued the government over the last several months. When people are not told the whole story it is the same as telling a lie. I would argue that the government is not telling Canadians the whole story.

What are some of the other problems that are not addressed in the budget? Let us consider the fact that in Canada we have seen disposable income virtually sit stagnant for 10 years. It has finally risen about 5% over the last 10 years. Does the budget deal with that problem?

My friend across the way will say that they brought in $58 billion in tax relief, but when we break it down is it really $58 billion? Let us go through the numbers. My friend talked about the child tax benefit. Anybody who pays attention at all would argue that it is not a tax break, that it is a social program.

What is the definition of a tax break? It is when the money is left in people's pockets in the first place. It is not taken out and redistributed so that some people get it back and some do not. That is not a tax break. That is a social program. That is what we do with the guaranteed income supplement and old age security. Those are social programs. They are not tax cuts. We cannot call that a tax cut. It is a social program of about $7.5 billion.

What about bracket creep? My friend mentioned that they eliminated bracket creep and reindexed the tax system for a tax break of $13 billion. Is that really a tax break? All that does is cancel future tax increases.

We are happy the government has done it. It picked the pockets of Canadians for a long time and milked the cow dry. That does not mean all of a sudden when it quits doing it that the government should be credited for cutting taxes. It simply is not the case. It is a cancellation of future tax increases of $13 billion.

The third trick it used was to suggest that if it cut taxes with one hand and raised them with other somehow people would be better off. That is exactly what it does. Let us consider that over the next few years $29.5 billion will come out of the pockets of taxpayers to pay for higher payroll taxes, Canada pension plan taxes in particular. That largely erases any benefit from income tax cuts that the government would bring in.

What is the net effect? Out of that $58 billion in tax relief emblazoned in headlines the day after the budget Canadians will get $8 billion. That is the real tax relief. When we break that down per taxpayer, it means $100 in his or her pocket a year. It should not be spent all in one place, that $2 a week. We could go to Starbucks and it would be spent in a week. That is not very much tax relief.

I remind my friend across the way that it is not simply a case of ensuring we put more disposable income in people's pockets, as vital as that is. It is also a situation where we have to remain competitive with our neighbours to the south and other competitors from around the world. I will get into that in more detail in a moment.

We have talked about the government's failure to deal with the problems in health care. It has failed to deal with the mess in human resource development and the general mismanagement of government. It has failed to deal with ensuring that people have more disposal income.

Let us talk for a moment about Canada's competitive position. Does it really deal with some of the problems that plague Canada when it comes to our competitiveness? I would argue that it does not. While this debate is occurring to some degree in academic circles, and certainly the business community is vitally interested and has taken the government to task a number of times over this issue in the last little while, I would argue that it is not happening in public often enough.

It is time for it to start to happen. I also think many Canadians are starting to see the connection between high taxes, high corporate taxes, lots of regulation, obtrusive governments, lack of competitiveness and back sliding against our international competitors. It truly is a concern.

Let me talk about our situation when it comes to competitiveness, especially in relation to the United States, our biggest trading partner and certainly the country we are in most competition with. Taxes in Canada, even after all the government's changes or its alleged tax relief, are still going to be far higher than they are in the United States. Why is that a problem?

It is a problem for a number of reasons. First, if our taxes are higher, those who are trying to run businesses charge more for their products and services. They need to charge higher prices in order to pay the taxes they have to deliver to government. That makes them uncompetitive. It also means that shareholders start to say there is a point at which it may make more sense for them to move to some place which rewards initiative. In many cases, unfortunately, that means moving to the United States.

One of the great ironies involves a company called Clearly Canadian that manufactures a soft drink. It had to move out of British Columbia to Seattle. Clearly Canadian is now clearly not Canadian. It was driven out by the tax policies of the government. It is essentially a tax refugee and we see thousands of them.

We also see all kinds of young people who were educated at taxpayer expense at Canada's wonderful universities and colleges being lured south to greener pastures by American firms, typically, but also by other firms from around the world.

Why is that? In some cases people take a look at their tax position in Canada and at the tax position in the United States and say they would be better off in the United States. I am not suggesting that is the only reason, but it is a reason for a few people.

Because we have much higher taxes than those in the United States, we do not have the economic activity which breeds the type of economy that produces jobs like the economy in the United States. Right across the border in the United States there has been much faster growth over the last several years. As a result it produces far more jobs.

Unemployment in Canada is at 6.8%, the lowest unemployment rate in 18 years. Historically we are doing okay, but internationally we are so far behind that it is unbelievable. Our rate is 70% higher than it is the United States. It is also about 70% higher than our average until about the mid-1970s.

With unemployment levels at that rate and when people can go across the border and find jobs very easily, they tend to go where the jobs are. When they go to the United States not only are there more jobs but the jobs pay better because businesses are desperate to find people and offer more money. When people are hired there they find they have more money left over because taxes are lower. Of course they end up being paid in American dollars which are worth more than Canadian dollars. When people go south of the border they win economically in four different ways. There is a huge attraction to the United States.

The answer is not to criticize people for being disloyal like the Prime Minister would do. It is not to bury our heads in the sand and say the brain drain does not exist. The answer is to learn from the mistakes of the past, learn from other countries around the world, heed the advice of people affected by it and start to make some changes which ensure that the economy grows not as fast as the economy of the United States but much faster. It is to ensure that we remain competitive and get ahead of other countries so we can attract back some of this talent and investment.

We want to become a magnet for talent and we want to become a magnet for investment. Bill C-32 simply does not do that. It is like saying “We will grudgingly make some changes”, but it does not catapult us into the lead, and we are critical of the government because it does not recognize the problem.

Consider that between 1988 and 1998 Canada's output per capita, which is a reflection of the standard of living, grew by 5% over a 10 year period. In France it grew three times faster. In the United States and Australia it grew four times faster, in Norway six times faster, and in Ireland eighteen times faster. The government should be ashamed of that.

That should be a wake up call. When it is punishing the people because of inaction and the inability to make the connection between public policy decisions and good outcomes for the people, it should be ashamed if it cannot make that connection. Too often this government uses the tools of government to make decisions that not only do not benefit its people, but which ultimately benefit the Liberal Party of Canada. There are so many examples of that, I could stand here all day and talk about them. That is a shameful legacy which this government is leaving behind and there is much human wreckage in the wake.

What do we do when we are confronted by this sort of situation in this great country, Canada, with its huge and bountiful natural resources and wonderful human capital? We have an educated nation. We have a nation of immigrants, people who have brought their experience from around the world to Canada. We have a history of being innovative. We are entrepreneurs. These are our great natural advantages. What do we do to enhance those advantages, to ensure that we get the most from what we already have? What are the public policy decisions that we put in place so that we can really mine our great resources, both natural and human? I would argue that the very first thing we should do is to stand out of the way of those people.

One of the first decisions any government should ever make is to understand its own limitations. It should put limits on itself, because governments cannot do everything. They do some things well. They keep the peace well. They can be very helpful if they remove the barriers to trade. They can be very helpful even in redistributing income. I will concede that. However, once governments go beyond that they get into very dangerous territory.

The record of this government is littered with examples of that, whether it be human resources development or the scandals that go on in departments like Indian affairs, or even industry, or the revenue agency's handling of the scientific research and experimental development tax credits, which is absolutely shameful. When governments go beyond that and try to pick winners in the economy we have problems. As the finance minister said—and I am sure he wishes he had never said this—“Government cannot pick winners, but losers sure can pick government”. Truer words were never spoken. I just wish that he would listen to his own advice because this government intrudes into the economy far too much and the result is that Canadians are worse off.

When the government takes a dollar from the hands of the taxpayer and puts it into the hands of a bureaucrat or a politician, we end up with the taxpayer, an entrepreneur, a business person, a homemaker, a student, being $1 worse off and somebody else, someone who is a friend of the government, doing much better. That is a lousy trade-off. It stinks. Many times I would argue it is nothing but pork barrelling and patronage, and it must come to an end.

What do we do now, once we have decided to limit government, to put some clear restrictions on what government should do? We start to take the resources that are freed up as a result of that and put them into things which people care about. What are those things?

If we suddenly reallocated money from all of those grant-giving agencies, what would we do with it? We would put it into higher education. Absolutely. That is something which people value. They want an educated populace in the country. They understand that one of the things we can do to help make our country more productive and allow people to live more enriched lives is to ensure that they have an education. We support that. That makes more sense than giving it to the human resources minister to hand out to cronies and friends, which is crazy.

We could put it into health care. We have argued that we have to do a lot more than put money into health care, but when it comes down to making choices about how money should be spent by government, I think most Canadians would concede that money is better spent ensuring that we get medical services when we need them instead of pouring it into a fountain in the Prime Minister's riding, which is some of the crazy stuff that goes on through human resources development and other agencies.

Let us make those kinds of fundamental choices. Let us reallocate. We believe that there is $5 billion to $10 billion in the existing envelope of spending in government today that should be reallocated from things that are counterproductive and low priority, and sometimes outright pork barrelling and patronage, and put into things that people care about. I have named a couple of them, higher education and health care, to name just two. That is the first thing we do.

Second, once we have established that, we would ask what we would do with the approximately $150 billion which will accumulate in the next five year period over and above the amount we spend this year.

I remind my friend across the way that in the November fiscal and economic update the finance minister laid out a projection of what the surplus will be that will accumulate to the government over the next five years. When we get through all the gobbledegook, it amounts to roughly $150 billion. What would we do with that $150 billion?

We believe that after we have reallocated the waste that already exists in government into things that people care about, like health care and higher education, we should take the great bulk of it and start to give it back to the people who earned it in the first place. It is their money.

Do you realize how hard Canadians work today to look after their families? It is incredible. People work very hard. All they want is to be able to keep the money they earn.

I find it unbelievable that if a person is making $10,000 in Canada today as a single person, that person has to pay federal income tax. All these people want is the dignity that goes with knowing they can support themselves and their families, if they have a half-decent job and are working a reasonable amount of time. That is all they ask. They are not asking a lot. They just want to keep the money they earn. They are willing to pay their share of taxes, but they are not willing to pay taxes to all kinds of things that most people regard as wasteful and corrupt. That is what happens too often today in Canada.

How do we do this? The Canadian Alliance has a solution. We call it solution 17. It is a program of major tax relief and important, if not sweeping, tax reform. It has three major elements. The first element is that we would raise the basic and married exemptions, both, to $10,000. Those people who are making $10,000 in income would no longer have to pay any tax. A two income family, each making $10,000, would still not have to pay any income tax because they would have a basic exemption of $20,000.

The second thing we would do is extend a deduction of $3,000 per child to every family in Canada with children. A single income family of four would not pay any tax on the first $26,000 of income. A single parent with one child would pay no tax on the first $23,000. If there were two children, there would be no tax on the first $26,000. This would help people at the low end.

According to the Library of Parliament when it ran our proposal through its modem, it found that 1.9 million low income Canadians would no longer have to pay any tax to the federal government, which is an outstanding social benefit of solution 17. It is not the only one. I will say more about some of the other social benefits of solution 17 a bit later on.

The third point is that if we got rid of the 5% surtax, got rid of the 29% rate and the 26% rate, we would be left with one rate of 17%. What would that mean to people if they had the big hike in exemptions, the deduction for children, for every family in Canada with children, and the dropping of the rates to 17%? Obviously it would mean a huge tax cut for every Canadian. There would be 1.9 million low income Canadians lifted right off the tax rolls.

My friends have asked if there would be a tax cut for people at the high end. Absolutely. Would there be a tax cut for people in the middle? Absolutely. In fact, if someone was making $50,000 a year, in a single income family of four, the tax bill would drop by $5,000 in the fifth year of our program.

My friends have asked about somebody earning $200,000. That person would also do very well. We want to reward people who work hard and have in many cases the skills and the options to leave this country, as many of them have already done. We want to keep them here.

The top 1% of income earners in Canada produce 17% of all the tax revenue in Canada. We want to keep those people here. The top 10% produce around 50%. The top 10% are people who earn more than $50,000 a year. Do we want to alienate those people and drive them out? I do not think so. Those people bring in a lot of revenue for government, so let us provide incentives for them to stay in this country. Those people are the entrepreneurs, the innovators, the people who form the new economy.

I want to point this out because it is a pretty important point when we are talking about the new economy. In 1999 on the NASDAQ, the new technology stock market exchange in the United States, there were 165 initial public offerings for new Internet companies. On the TSE over the same period in Canada, one year, 1999, there were four. There were 40 times more in the United States. Why is that? Because the United States does not punish people for being entrepreneurial. It encourages an environment where there is capital accumulation.

Venture capital is extraordinarily important in ensuring that new companies get off the ground. In 1995 there was 12 times more venture capital in the United States than in Canada. By 1999 the gap had grown to 18 times more venture capital in the United States than in Canada. Obviously there are incentives for people in the United States to save and pool their capital. In Canada it gets taken by the taxman. We have such high taxes in Canada that people cannot save money to invest in new ventures, as an example. That is why the size of Canada's new economy, on the biotechnology side, is so tiny compared to that of the United States, even on a per capita basis. It is not a 10th, it is like a 50th of the size. The reason for that is, we do not have the proper incentives in place to grow the economy.

The government had a chance with Bill C-32 and the budget to address this fundamental problem, but it completely ignored it. Solution 17 recognizes that we are in global competition. We understand that. We would address these things by rewarding people for taking a risk and not punishing them for the crime of making a good living. There is nothing wrong with that.

I do not believe in the politics of envy. I do not think we should say because they have done well, we will now punish them. That is crazy. People should pay their fair share. Under solution 17, people at the high end would pay more than their fair share. Let me give an example of what I mean by that.

Under solution 17, a single income mom earning $24,000 would pay about $170 in taxes. Compare that to someone who makes $1 million, an income which is 40 times more than that of the single income mom. That person's tax bill would be 1,000 times more, and would pay about $170,000 in taxes.

I do not know how anyone could say that that system still is not progressive. Obviously it is. Does it punish people at the high end? No it does not. It drops the rate at which they have to pay and encourages them to stay. In fact it will draw people back. I believe that solution 17 would help Canada become a magnet for talent and capital, just like Ireland has become.

I mentioned Ireland a few minutes ago. Ireland is an amazing success story. Between 1988 and 1998, the output per capita grew 18 times faster than it did in Canada. How did it do that? What did it do? It did a number of things.

Ireland put more money into education. We acknowledge that and we are arguing we should do that as well. We probably should go with some reforms because we do not believe just throwing money at things is the right way. We think it is appropriate to put some money into the transfers to the provinces for health care and education.

Another thing Ireland did was it bought some labour peace. It had had problems with squabbling between the private sector unions and employers. It bought some labour peace and that is a good thing, but that is not nearly the problem in Canada that it is in Ireland.

The thing Ireland did which had the biggest impact was it dropped taxes. It dropped corporate taxes dramatically. It dropped personal income taxes and capital gains taxes. What was the impact? As I mentioned, its standard of living has jumped through the roof.

Ireland is a country that for 150 years lost population. Its biggest export was people. Canada was one of the great beneficiaries of that problem. In fact, my own ancestry can be traced back to Ireland. Ireland was such a poor country for so darn long but it finally figured it out. It understood there was a correlation between smart public policy and prosperity, something our government cannot seem to get through its head.

When Ireland figured that out, what happened? Now its population is growing for the first time in 150 years. The situation is that Ireland with 1% of the population in Europe now gets 20% of all the new investment in Europe. So much money is pouring in that it now provides its citizens with free university education. It has a growth rate which is through the roof.

That could be Canada in North America. We could be what Ireland is to Europe. We could be the place where all the money flows to. The United States does not have to be seen just as a big competitor. It can be seen as a big market, as an opportunity. Why do we not mine it by making proper public policy decisions?

The government is so mired in the past. It seems so unwilling to change even when problems are so obvious and confront the government every day. It boggles the mind. It is still caught up in a 1970s time warp where it thinks it can intervene in the economy, and pick winners and losers. Ultimately it picks losers and the result is we are all impoverished for it. That is so wrong.

I remind my friends across the way that Canada has a long heritage and history of having a standard of living which was higher than that of the United States. As the industry minister would point out, that is no longer the case.

John McCallum of the Royal Bank pointed out in a recent paper that Canada's standard of living which was once the same as that of the United States is now down to two-thirds. He said that if we keep going the way we are going, in another five years we will be down to 50%. Well, thanks very little. I am not interested in that.

We have to recognize the problem and make the public policy decisions that will get us out of it, not to make us equal with the United States but to move us beyond the United States. Why can Canada with the resources it has not be the most prosperous country in the world? We would be helping not only Canada and our citizens if we did that but we would be helping the world because that prosperity goes everywhere. Those are the types of public policy decisions we should make. Solution 17 is part of that. I have talked a bit about solution 17. I want to talk about some of the other changes that we would make.

Another part of our overall fiscal plan is to take the entire contingency reserve and the entire prudence adjustment the government itself suggests we need over the next five years and use it to pay down debt.

The government has taken a very tepid approach to debt repayment. When it first came to power the debt was $480 billion which became a debt of $583 billion and now it is down to $577 billion. We should pay down that debt more aggressively. Some revenues are starting to come in. Let us make hay while the sun shines. Our plan would pay down $34 billion over the next five years compared to the government's $15 billion, a big difference.

Finally, we would also put another $15 billion into spending, $1 billion a year over the next five years. This would ensure that there is money for things that people care about: health care, education, defence, the RCMP, infrastructure. Those are important things, a lot more important than some of the wasteful things the government spends its money on.

I know my time is coming to a close and I regret that. I could say a lot more, but I will be very satisfied with the 40 minutes I have been allotted.

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4:35 p.m.


Eric C. Lowther Reform Calgary Centre, AB

Mr. Speaker, I rise on a point of order. When the member for Medicine Hat speaks about solution 17 and taking the working poor off the tax rolls, it bursts hope in the hearts of Canadians from coast to coast. I ask for the unanimous consent of the House to extend his time so he can elaborate more on that part of solution 17.

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4:35 p.m.

The Acting Speaker (Mr. McClelland)

It is hardly a point of order. It might have been a point of order if the hon. member for Calgary Centre was asking him to expand on his Irish heritage. Nevertheless we will put the question to the House. The hon. member for Calgary Centre has asked for the unanimous consent of the House to provide another 15 minutes for the member for Medicine Hat to expound on his thesis. Is there unanimous consent?

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Some hon. members


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Some hon. members


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Monte Solberg Reform Medicine Hat, AB

I appreciate my friend's intervention, Mr. Speaker. I will simply conclude by saying that the Canadian Alliance believes that solution 17 and the larger policies that we propose could propel Canada to be a world leader, a place where people from all over the world will come because they will be so attracted by the prosperity and the incredible standard of living that we have. I would urge my friends across the way to be mindful of this the next time they think about preparing a budget. Let us hope that they do not get a chance to. Let us hope we have an election before then.

I simply say in closing that as the Canadian Alliance is feeling a new birth here, I encourage people across the way who are very interested in solution 17 and to what we have talked about to find out more about it by accessing our website Canadian Of course we would love to hear from the public if they are interested in this proposal.

I thank the House and my friend across the way for his indulgence over the last 40 minutes.

Budget Implementation Act, 2000Government Orders

4:35 p.m.

The Acting Speaker (Mr. McClelland)

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Halifax West, Veterans Affairs and the hon. member for Mississauga South, Health.

Budget Implementation Act, 2000Government Orders

4:35 p.m.


Hélène Alarie Bloc Louis-Hébert, QC

Mr. Speaker, I am pleased to rise this afternoon to address Bill C-32, the Budget Implementation Act, 2000, at second reading.

The public did not know what to think of a government that has budget surpluses. We heard many things, because budget surpluses give ideas to people.

Some wondered “How will the government strike a balance? Will there be tax reductions? Will the debt be lowered? Will social transfers finally be increased?” Unfortunately people did not realize that the government is secretive and that the Minister of Finance stashes money away like a squirrel. The sharper ones would have expected this budget to contain a number of somewhat misleading elements.

We discovered quite a while ago that the government had much bigger surpluses than anticipated, surpluses estimated at $137 billion. This is not to mention the waste that we keep hearing more and more about when we take a closer look at what is going on in the government's administration.

The Minister of Finance once again mislead the public with truncated budget forecasts. Indeed, most observers agree that the surpluses will be between $115 billion and $150 billion.

The Bloc Quebecois did a conservative estimate of the surpluses and came up with the amount of $137 billion over a five year period. This is a huge amount. It is clear to us that the Minister of Finance could have done a lot more, particularly in terms of tax reductions and transfers to the provinces for health, education and post-secondary education.

I would like to address the matter of transfers for health care and education, because there is nothing or almost nothing for it in this budget. The minister is releasing $2.5 billion for transfers to the provinces. This amount is both inadequate and a one time measure. In other words, the amounts allocated for health care and education are pitiful, when in fact these areas have been shown clearly to be priorities for taxpayers.

And yet the federal government has plenty of money to invest where it feels like. We need only think of recent events, which are ongoing in the House, in connection with the use of the grants made by the Department of Human Resources Development.

For example, it has enough money for various foundations and other organizations parliament has no control over, such as $6.8 billion this year in order to waste money in the Department of Human Resources Development—$1.3 billion annually—and to distribute $1.4 billion in contracts without tender. Despite all, the government still refuses to invest where it cut, namely in health care and education.

To summarize the 2000 budget in terms of transfers to the provinces, $240 million is being made available for health care in Quebec, enough money to run the health care system for two days. And yet the government has the means to do a lot better with the accumulated surpluses. The $2.5 billion announced for the provinces is far from enough. Quebec's share will be $240 million for 2000-01 and $120 million for 2001-02.

Does it know that hospitals cost, for Quebec alone, $3.7 billion a year, or $100 million a day. Clearly, the amounts proposed by the federal government will not enable the provinces to address the problems in their respective health care networks.

We learn as well, in budget 2000, that the $2.5 billion will be charged to 1999-2000. The budget for 2000-01 is charged to 1999-2000. This is a ridiculous level of social transfer, frozen over four years.

As we can see, the minister is continuing his old practices of transparent management. There has been a lot of talk of clarity this spring.

Here again this is a matter of playing with figures in order to convince us that Ottawa cannot afford to give back to the provinces and to Quebec what the Liberals have taken from them in recent years. Quebec comes out a major loser in this entire political masquerade. It has, in fact, borne the brunt of over 50% of total cuts to the Canada social transfer since 1994.

Finally, including the tax points under the CST, the Minister of Finance tells us that, between 1999 and 2004, the total transfer will be $156 billion. This increase is, however, solely the result of the value of the tax points which, for the same period, go from $14.9 billion to $17.2 billion. It must be understood, however, that these tax points are not transfers; they are revenues belonging to the provinces and to Quebec.

Now, moving on the social housing, there is a considerable difference between $54 million and $1.7 billion. The Bloc Quebecois called upon the federal government to inject $3 billion into an infrastructure program, $1.7 billion of which was for social housing.

These demands were the outcome of a broad public consultation, yet once again the demands of Quebecers have been ignored. This government is so arrogant as to totally ignore the unemployed, although they contribute more than $5 billion yearly to the minister's surplus.

Although his colleague, the Minister of Labour, promised a concrete action plan for the homeless, the plan she unveiled with much fanfare in December 1999 contains no tangible measure for improving the situation. Yet the need is there, the public can see it clearly, and social housing can also be improved in various ways according to need.

So the government's inaction was immediately met with a wave of protest. In all this, it appears that the pressures from the Toronto area for short term assistance for the homeless won out over the real needs of the homeless and those with inadequate housing.

Since the early 1990s, those with inadequate housing have lost out to budget cuts and the freeze on budget increases for social housing. Since 1994, the government has been withdrawing from housing completely. In fact, no longer do we hear anything about new social housing. The federal government no longer talks about helping those whose housing is inadequate. All it does is maintain existing commitments.

In the very early 1990s, it was estimated that budget cuts would generate savings on the order of $620 million between 1991 and 1996. Taking the exponential effects of these cuts into account, that is close to $3.5 billion over nine years that has not been spent on this sector. Anyone visiting our ridings or taking a look as they travel through this or other provinces can clearly see that there are urgent needs in the area of social housing.

There is no way $268 million over five years—or $54 million annually—will do the trick. This is ridiculous. For Quebec, this comes to less than $20 million a year. These budgets will not even be allocated to social housing as such but, rather, to renovation projects. I understand that, after years of not investing, the immediate priority is to renovate, because housing units have fallen into disrepair.

One per cent of the budgets, or $1.6 to $1.7 billion more per year, would have been a reasonable investment to provide adequate social housing. While these amounts would not have met all existing needs, they would have allowed us to help the social housing program to adjust to today's realities and to the realities in the ridings and municipalities that have a real need for such housing units.

When he delivered his budget speech, the Minister of Finance referred to “Secure social programs that recognize that real progress is made by reaching for the top, not racing to the bottom”.

Is this to say that, for his government, social housing and those who live in inadequate housing are at the bottom?

During this overview of the 2000 budget, I also want to discuss the indexing of tax tables.

In that regard, we say finally, because the Bloc Quebecois has been asking for that measure since 1993. Since 1994, the federal government has taken $17 billion out of taxpayers' pockets, through non-indexation. It is important to note that non-indexation is not at all the same as tax reductions. It only means that Quebecers will not pay more taxes because of inflation.

We must remind the minister that non-indexation is not a tax reduction. In the 2000 budget, the government follows up on the representations made by the Bloc Quebecois and by groups of citizens to put a stop to hidden tax increases resulting from non-indexation. However, that measure comes a little late. Indeed, between 1993 and 2000, non-indexation will have generated between $12 billion and $17 billion for the Liberal government.

As for tax reductions, they will only come later. We will have to wait. Yet, the federal government has more than enough leeway to redouble its effort to reduce the tax burden, as early as this year.

Let us make no mistake, indexing is not a real tax cut. In fact, with indexing, a taxpayer pays no more or less tax.

The 2000 budget informs us that the annual tax saving in 2004-05 will total $10.9 billion, including $6.2 for indexing. If we subtract the tax savings for business from this amount, indexation represents 60% of the alleged tax cuts. For the year 2000 alone, the estimate is that the real tax cuts will represent only about 20% of the cuts of $3.3 billion the Minister of Finance announced.

Now, I would like to address another matter, which has become a daily matter of interest and that is the management of public finances, a black hole of $10.4 billion.

It is important to address this in the context of a budget, since the savings made could have been applied to such important items as the social transfer, health care and education.

Since 1994, the Liberal government has created no less than 80 agencies that are not accountable to parliament. These agencies spend $6.8 billion annually, without any control. If we add to this figure the contracts given out without tender and the fiasco at the Department of Human Resources Development, we end up with $10.4 billion spent annually with no control.

When the government gives out money and delegates powers to agencies, they have to be accountable. We have to know where the responsibility lies. In order for us to know this, it is natural to insist on control.

The government has come up with this formula of creating agencies. It is no trifling matter. The 80 agencies created since 1994 manage to escape these controls, because they are headed by directors answering to a minister, who answers to another minister, and when we look for ultimate control, we find none. A black hole of $10.4 billion is no trifling matter.

Last November, the auditor general pointed out that over 77 new agencies spending over $5 billion annually were not under the control of parliament and were not accountable. It is almost incredible.

That means $5 billion that are outside the control of the public as a whole. Three new organizations have been added in the latest budget, as well as $1.7 billion. In 2001-02, then, this makes $6.8 billion in public funds outside the control of Parliament and of the public.

On the other hand, there is the black hole of Human Resources Development Canada, which, on its own, represents $1.3 billion. HRDC transfers to businesses and to individuals are absolutely unmonitored. Where has the money gone? Were jobs created? If so, where? Was there political patronage? These are questions without answers, and this budget will not change a thing.

The Minister of Human Resources Development has been asked the same questions over and over again for weeks, always with the same responses; in other words, we have had no response questions like the ones I have just asked, namely: Where has the money gone? Were jobs created? Was there political patronage?

No answers. There were tons of documents, but each time we looked into one in greater detail, we found that what the departmental employees were giving as answers differed from what was in the document we had been given. This is worrisome enough when just one department is involved. Perhaps if we keep on investigating further, more worthwhile discoveries will be made.

In this connection, I would like to bring to hon. members' attention what the auditor general says in the highlights of his report. The auditor general's report is our guide as parliamentarians, whether we are in the opposition or the government, in determining whether public funds have been properly managed.

I will give a few highlights of the auditor general's report, which came out this week. The following comments are from the report:

The federal government must introduce strong control mechanisms in order to eliminate potential fraud in the immigration system.

I will come back to immigration in greater detail.

Education services for aboriginals must be improved in order to clearly define what the federal government's role should be and control spending.

Spending is still a concern. The auditor general has found that there is a complete lack of control over spending. He is sounding an alarm. The report also reads as follows:

The rules for the treatment of scientific research tax credits, estimated at several billions of dollars, should be tightened.

What does tightening the rules mean? It means that somewhere there were abuses, that things were not done according to procedure. The report goes on:

The RCMP's outdated computer system is a cause of concern for authorities, and the turnaround times for crime laboratory analyses are a threat to public safety.

Bills were adopted in this House giving the RCMP increased authority to conduct DNA tests for evidence purposes in rather horrible cases. If the results take forever, there is a problem. It is not a case of spending too much money, but not enough.

The Department of Human Resources Development is getting EI cheques out faster, but the odds of inaccurate payments have increased. Things are just fine: more haste, less care.

Canadian Food Inspection Agency inspectors need more information in order to better assess the risks posed by travellers entering the country. If all manner of people can enter the country as they wish, questions are in order. If this is what is going on, it is probably because of a lack of staff and money. Those areas with real, identifiable needs are perhaps where the government should be throwing its money.

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4:55 p.m.

The Acting Speaker (Mr. McClelland)

I am sorry to interrupt the member. The hon. government House leader.

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5 p.m.


Don Boudria Liberal Glengarry—Prescott—Russell, ON

Mr. Speaker, I apologize to the hon. member who is making a speech.

At the request of an opposition member earlier today I committed to table an article from the Jerusalem Post which spoke glowingly, as most people do of course, of Canada's very fine Prime Minister. I am now pleased to table this article in both official languages.

I am still prepared to table several copies of the Toronto Star whenever the House wishes me to do so.

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Scarborough—Rouge River Ontario


Derek Lee LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, I rise on a point of order. I also thank the hon. member for Louis-Hébert for her indulgence.

There have been consultations among all parties in the House and if there is unanimous consent I would move:

That, in relation to their study on the Revolution in Military Affairs and the Quality of Life in the Canadian Forces, the members of the Standing Committee on National Defence and Veterans Affairs be authorized to travel to Kosovo, Yugoslavia and London, England from May 19 to May 26, 2000 and that the necessary staff accompany the committee.

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The Acting Speaker (Mr. McClelland)

Does the hon. parliamentary secretary have unanimous consent of the House to move the motion?

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Some hon. members


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The Acting Speaker (Mr. McClelland)

Is it the pleasure of the House to adopt the motion?

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Some hon. members


(Motion agreed to)

The House resumed consideration of the motion that Bill C-32, an act to implement certain provisions of the budget tabled in Parliament on February 28, 2000, be read the second time and referred to a committee.

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April 12th, 2000 / 5 p.m.


Hélène Alarie Bloc Louis-Hébert, QC

Mr. Speaker, I will now discuss immigration.

The auditor general's report contains some rather startling information concerning immigration, such as the fact that it can take up to three years to process an immigration application. One paper noted the following:

Crushed under the paperburden and the lack of resources, Canadian offices abroad sometimes take over three years to process immigration applications from entrepreneurs or skilled workers.

I continue with another quote on immigration:

It is no surprise, notes Mr. Desautels, that Canada has not been achieving its immigration objectives over the past few years.

While good candidates have to wait for long months, others get ahead by using false statements—a phenomenon that is more and more frequent, according to the auditor general, which is worrisome—or with the complicity of unscrupulous agents.

For 1998 alone, the department's Office of Professional Conduct admitted that some 500 visas had been either lost or stolen. Moreover, there is no reliable computer system—

This is almost unbelievable in the year 2000.

—to track down all the moneys collected by foreign offices for visas.

I continue to quote the article published in La Presse by journalist Vincent Marissal:

Another risk for Canadians is the uselessness of the medical tests imposed on newcomers.

In addition to being overworked, Immigration Canada doctors have been using the same tests for 40 years, namely tests for tuberculosis and syphilis. It is time, says the auditor general, to review the list and, perhaps, to communicable diseases...such as HIV or hepatitis B and C.

Anyone who has travelled abroad extensively is well aware of the risk, in certain countries, of picking up diseases such as hepatitis B and C. I am not talking about AIDS, because I think there is public awareness about this issue.

We welcome these people here and do not have them undergo any of these tests, because we cannot afford them, because we do not have enough doctors and because we are buried under paperwork. I cannot get over it. I am talking about Bill C-32 and defending the interest of Quebecers in connection with a budget containing excessive spending and very substantial surpluses, but, daily, we see absolutely incredible problems.

In my riding, I have the honour to have many immigrants. There are two universities in my riding. I often have occasion to speak with these immigrants. I knew of the complexity of many problems, but I had no idea the inconsistencies of the immigration system were so chronic, so persistent and of such magnitude.

I had a look at what this budget reveals. As members know, my interests lie in agriculture and biotechnologies. I would like to indicate what I found in the budget pertaining these two favourite subjects of mine.

The sum of $90 billion is to be allocated over three years to the federal departments and agencies regulating the processes and products of biotechnology. There is nothing to rejoice about here. As the ministers of finance, health and agriculture seem to live in a bubble, it is a good idea to remind them where things stand in the new biological technologies approval process.

On September 30, 1999, 200 federal experts on food quality and safety wrote to the Minister of Health, Allan Rock, to tell him of significant gaps in research on GMOs, for example, because of the shortage of personnel at the Canadian Food Inspection Agency. Their letter reads in part:

Risk assessment has and continues to be compromised by a significant lack of scientists.

The letter goes on to say:

The Agency is in a conflict of interest situation because it must, on the one hand, ensure that foods are harmless, while on the other hand encouraging food production and export.

It also states that the system's administration and deregulation strip those involved of responsibility as far as meeting their obligations is concerned.

This is not the first reference made to stripping of responsibility and to impunity.

It was not an easy decision for two hundred federal government scientists to abandon their usual reserve and sign their names to such a letter, thus endangering their jobs. They were so concerned that they felt they had to speak out. These are career scientists; they know what they are talking about. Quoting again from the letter:

We do not test these products ourselves. No Health Canada researcher is assigned to transgenic foods, because there is no funding for such research.

What planet is the Minister of Finance from, if he believes that these $30 million yearly are going to make it possible to solve all problems, including ethical ones?

What is of concern in connection with the new technologies and the GMOs is that, when approving transgenic products, the federal government depends on research that has been carried out by the companies, limiting itself to reviewing or approving them. It does not carry out any systematic counter-expertise on all plants and all food items headed for market, because it lacks the experts to do so. dm

The government uses the concept of “substantially equivalent”, by virtue of which genetically modified plants or foods resembling traditional ones and with similar-appearing composition are not subjected to more detailed examination.

According to the federal deputy minister of health himself, speaking before a Senate committee in the spring of 1999, the government did not, at that time, have any expertise whatsoever in genetics. As he put it, “its labs are not really up to it”.

While the approval of new drugs may take years of in depth studies, the approval of transgenic foods takes only a few weeks. How can the government guarantee the safety of these foods without adequate expertise and independent scientific studies?

In May 1999, this same Deputy Minister of Health said, regarding Health Canada's capacity to evaluate GMOs, that the department was not as ready as it should be to face the enormous changes that would occur over the next ten years—yes, ten years—in the area of human, animal and plant health.

In fact, public resources in the area of genetically modified foods are sorely lacking, as this same Deputy Minister of Health—when you think of it, he is my favourite—said in May 1999 before the Standing Senate Committee on Agriculture and Forestry:

We must strengthen our capacity in the genetics area...We do not, at the moment, have the capacity on board...Some of our labs, in particular in the environmental health area, are not in good shape.

The changes that we will see over the next decade in the field of human health, as well as animal and plant health, will be enormous. You asked whether we are prepared. My answer: Not as well as we should be by any stretch of the imagination, but we are engaged in trying to become better prepared by building up a genetic capacity within the department...ensure that consumers know what they are eating.

I have been advocating this for a long time. I have been asking for the mandatory labelling of transgenic foods for a long time.

Thirty million dollars per year is very little when we have to start from scratch, when we need laboratories, geneticists and experts, and when we need to inform the public.

One thing scared me when I looked at the budget for the Canadian Food Inspection Agency. I noted that projected expenditures for the year 2000 are $266 million. In 2002, the figure is down to $261 million; in 2002-2003, it sinks again to $259 million.

Earlier, I mentioned a ten-year time line; what is clear from the figures is that every year spending forecasts for the agency responsible for the food safety of Canadians drop further, although we live in a world undergoing huge changes—this is a rapidly evolving field right now. There is cause for concern.

As the agriculture critic, I must say that the Agriculture Income Disaster Program is aptly named. It was a disaster to administer, first for westerners, who were the first to turn to it, and things went from bad to worse when it came the turn of easterners.

The difficulty of using this program discourages a good number of farmers and, at the end of the road, the resources they obtain are a far cry from what the program promised.

I also wanted to talk briefly about agricultural subsidies. Right now, while Canadian farmers receive $140 a head, American farmers are getting $340; in the European Economic Community, it is $380. We share our entire east-west border with the United States; a Canadian farmer raising the same crops as his American counterpart driving his tractor on the other side of the fence receives $200 less a year.

I can understand that the ideal would be to change world trade policies, but when one is competing on a daily basis, this is very tough.

I had also prepared a brief speech on small farms. According to a study done in the United States, they are the lifeblood of agriculture. The same is true here. Here, they have not even been defined. What are we to make of this? How can there be a policy to help them if they have not even been defined?

I urge the government to include in its coming budgets, to adopt policies that take into account the whole agricultural sector, as well as disparities and the competition we face abroad.

I could go on and on, because agriculture was overlooked in this budget. There are no programs for it. The department's budget is also getting smaller. When we subtract the money for agriculture income disaster programs and income security for our farmers, there is not much left in this budget for the agricultural sector to get excited about.

As a citizen, I have no reason to be happy with this budget. The Liberal government is not controlling its spending. If I were to do the same thing in my family, I would be in big trouble.

It is spending a little here and there to get votes and is doing nothing to resolve the problems it created in the health care and education systems in all provinces, not just in Quebec. We are all demanding a return to the social transfers of 1994.

As the agriculture critic, I am equally disappointed. This budget reveals how little vision this government has in the farm income crisis. Although this is not the subject of my speech, we need only think of the ad hoc injection of public money for western farmers through transportation subsidies.

These are ad hoc measures. They are not long term measures. Farmers in all the provinces are calling for long term policies to ensure their survival, and they have been exemplary in what they have been doing to ensure the sustainability of agriculture.

I am also concerned about the positions this government has taken in the matter of the GMOs, where its head in the sand policy calls into question the system monitoring the safety of our food and our exports.

I have tried to paint a clear picture. As my colleague before me said, we could spend a day talking about the budget. I would like the government to remember the important points. As far as I am concerned, the accountability of those responsible is vital. If the government drags in all sorts of red herrings and establishes all sorts of agencies so no one is responsible, that bothers me. Wastage bothers me just as much. As for the $10 billion hole, we wonder where the money went. The government could bring it back for transfer to the provinces in the areas of health, education and agriculture, which is my greatest interest.

Budget Implementation Act, 2000Government Orders

5:15 p.m.


Lorne Nystrom NDP Qu'Appelle, SK

Mr. Speaker, I rise to say a few words in the debate on the budget implementation bill before the House. We have had a budget before the House for quite some time. When we deal with the implementation bill, we have to ask ourselves what kind of a society we want and what the goals and objectives should be in terms of the budgeting process for the Government of Canada.

For the first time in a long while we have a surplus with which to work. The minister said in his budget update in November that he thought there would be a surplus of around $100 billion over five years. It will probably be more than that. It may be $110 million or $120 billion or perhaps even more, because in general the economy is doing pretty well.

If we look at the growth rate in this country compared to that in the United States, it is actually quite high. Revenues to the government are increasing. When the growth rate is high fewer people are unemployed and fewer people draw unemployment insurance and welfare. There are fewer costs in the social services system and therefore the coffers of the government continue to expand and expand.

We have no idea for how long this economic expansion will last. We have no idea how long the expansion of government revenue will last. In many ways it is very difficult to project into the future. We have to work with the numbers we have. For the first time in many years we have a budget surplus that will go on for quite some time. This is different from the last part of the 1980s or throughout the 1990s when we had to talk about how we deal with debts and deficits and how we deal with valid programs that could not go ahead because of the fiscal crunch.

We now have choices before us and we have to decide what kind of an agenda we want. When I think of the agenda of the future I think what should motivate us is doing the most we can for the common good of the Canadian people in terms of creating a society in which there is more equality of condition and more equality of services. People should be empowered through a better democratic system. We should build a society on co-operation and play an international role in terms of development in the third world and the promotion of world peace. Those should be the goals and the objectives.

If we are to fulfil a goal that speaks to doing the best for the common good, it seems to me we should start now by reinvesting in programs that were cut back by the government a few years ago in the fight against the debt and the deficit, namely our social programs.

If we look at the last number of years and take health care as an example, a tremendous sacrifice was made by the health care sector to fight the deficit. About $30 billion have been taken out of the health care system. That is an awful lot of money, and we have problems in health care today.

We all know that the only problem is not money. The big problem is that $30 billion are missing. Another way of putting it is that when the Minister of Finance decided to radically cut back on health care and social programs in his budget of 1994-95 the payments made at that time compared to the payments now show a deficit of about $4.2 billion a year. To get back to 1994-95 levels it would mean an increase in spending on health care of around $4.2 billion a year. That extra money would go a long way in terms of making sure that we address our health care problems.

Another thing about health care is that even in its most recent budget the government decided that health care and social programs were not priorities. Indeed the priority for the Minister of Finance was a tax cut of some $58 billion over four years. In other words, for every dollar in tax cuts the government will put two cents into health care. That is not the right priority.

The right priority should be to reinvest once again in our social programs, in particular health care, to build a strong health care sector and make sure that we serve people so that they can go to hospital or to a doctor and obtain equal service regardless of income or background. That is not the case.

Because of this some provinces like Alberta are introducing a bill like its bill 11 to set up a partially privatized health care system. I disagree with bill 11. I disagree with that direction. Under the NAFTA if Alberta does that and allows a privatization of health care or a two tier system in health care, it will have to go right across the country because the corporations in private health care have the right to do it not just in one province but across the country. Therefore that is a dangerous precedent to set.

One reason that is happening is the big cutbacks in health care to Alberta, to every province in the country. In my province of Saskatchewan about 13 cents on the dollar come from Ottawa and 87 cents on the dollar are paid by the province of cash injection into health care. In Ontario about 89 cents are put up by the Ontario taxpayer and about 11 cents are put up by the federal government in terms of health care.

At one time the federal government paid 50 cents on the dollar in terms of funding health care when medicare was founded back in the 1960s. After the seventies it started to pull back, to withdraw. Now that we have a fiscal surplus, a fiscal dividend, a major part of it should go into health care to make sure we have a public health care system for each and every Canadian citizen. If we do not do that and the provinces start to privatize, we will lose health care and end up with a two tier American system that is unfair, unequal and very expensive.

A greater percentage of the GDP in the United States is spent on health care than in Canada. We have a public health care system in this country. In that country there is a mixed system. Some 48 million Americans do not have any health care. Those who do not have health care are mainly the poor people, particularly the black people in the United States because of the socioeconomic condition that they find themselves in.

It is extremely unfair to have a health care system that is built on the size of a person's pocket book or bank account and not on treating people as equals. That is the way we are going unless we convince the Minister of Finance and the government across the way that the time has come to put cash on the table and make sure that we build once again toward Ottawa paying up to 50% of the cost of health care in Canada. That should be our number one priority.

In addition, we have the whole question of education and the federal government withdrawing money for post-secondary education. There is a need to reinvest in young people for post-secondary education, for skills, for training and for research and development. If we are to build a strong society and a strong economy in the years that lie ahead, knowledge becomes extremely important. Knowledge is extremely important in terms of building a strong economy. We need a strongly motivated, highly knowledgeable and highly educated workforce. It is the obligation of the federal government to put up more money to make sure we have a workforce that is highly trained and highly skilled.

Those should be the major priorities of the government across the way, but it seems to me that the government has been intimidated by what we used to call the Reform Party. I am sure the Chair would agree that the Reform Party has had a great impact on the agenda of Canada which calls for smaller government, cutbacks in health care, cutbacks in education, cutbacks in the powers of the Canadian Wheat Board, and cutbacks in anything that has to do with the common good or the sense of community. It wants to cut back, cut back, cut back and reduce the role of government, to the point now where the size of government spending is 11.6% of the GDP, the lowest level since the second world war.

I do not know why the Liberal government is afraid of the Reform Party in terms of setting the agenda. The government across the way is the real Conservative Party. We have a more Conservative government now than we had with Brian Mulroney in 1984 and 1988 till 1993.

That has been the agenda, but that is not where the people of the country want to go. In poll after poll after poll they are saying that health care is number one. We need a public system of health care. It should not be privatized. We do not want a two tier American style medicine. That is what the Canadian people are saying. For that we need more federal money going into health care.

My Liberal friends across the way should not be intimidated by this reborn Reform Party, the Canadian Conservative Reform Alliance Party of Canada. The last time I looked at the Gallup poll it is still sitting at 9%, so why be afraid of it? Why have an agenda that is going to the right and is more conservative than the Conservatives?

We need real progressive change. We need some social democracy. That is where the Canadian people are at and that is what the Canadian people want.

Budget Implementation Act, 2000Government Orders

5:25 p.m.


Ken Epp Reform Elk Island, AB

Mr. Speaker, most of what this member said is ridiculous. He somehow seems to think that unless we promote socialism we are not doing the country a service.

The fact of the matter is that the more freedom we give to individuals and the more we promote free enterprise and competition, the better off we will all be. I would like to simply ask—

Budget Implementation Act, 2000Government Orders

5:25 p.m.

The Acting Speaker (Mr. McClelland)

I will have to interrupt the hon. member because I have to give the right to a 30 second reply to the hon. member.