Debates of Dec. 11th, 2001

The Budget

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, that has about as much credibility as his fiscal credibility right now. The fact of the matter is we proposed $6 billion to reallocate from wasteful spending to the priorities of tax relief, health care and national defence.

Before this budget, Canada had the highest personal income tax ratio in the G-7. After the budget, we have the highest personal income tax ratio in the G-7.

Why did the finance minister, in the midst of a recession, not give working families meaningful tax relief? Why did he ignore his own finance committee's recommendation to eliminate the capital tax? Why is he increasing payroll taxes in the midst of a job killing recession?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, let us take a look at where the new spending of the government has gone to. Over two-thirds to 75% of our spending has gone to the following four areas: transfers to the provinces for health care; increased EI benefits for those who will be claiming those higher benefits; increased spending on the elderly because of an aging population; and increased security.

I ask the hon. member this. Which would he cut? The health care spending, the elderly benefits, the unemployment insurance benefits or would it be security? Which would he cut to pay--

[The Speaker]

The hon. member for Hochelaga--Maisonneuve.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Mr. Speaker, while the Minister of Finance is hiding $6 billion from us, the federal government is now kicking in only 13 cents for every dollar spent on health, compared to 50 cents on every dollar prior to 1977.

How is it that the Minister of Finance, to whom we send over half of our taxes, has been unable to come up with a way to budget enough for the health care system so that funding will be restored to at least the same level as in 1994-95?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, as I just said, the government, through the Prime Minister, signed an agreement one year ago transferring over $23 billion to the provinces for health care and early childhood development. Of this amount, $2.8 billion was transferred this year.

Even more importantly, our transfers to the provinces are not 14 cents for every dollar, but over 30 cents. This is a new high in provincial transfer payments, in equalization payments.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Mr. Speaker, the minister is misrepresenting the numbers.

When the Liberals took office, the federal government was contributing 22 cents on every dollar spent on health care in Quebec. Today, this has dropped to 13 cents. Yet, far from fading away, health care needs continue to increase.

Will the minister tell us why he refused to include new money for health in his budget by restoring the level of funding to what it was when his government took office?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, I just answered the member's question, but I have one for him.

If he does not want to count tax points as a transfer, why is it that he keeps asking for more?

[Joe Peschisolido, Canadian Alliance, Richmond, BC]

Mr. Speaker, yesterday's budget raised the payroll tax for workers and employers. This huge hike will cost the Canadian economy $1.7 billion.

With an economy in recession, would it not be more logical to stimulate the economy instead of strangling it?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, I imagine the hon. member is using payroll tax to refer to Canada pension plan contributions.

All that I can say about why we did this is that I signed it to ensure its viability. I am completely in agreement, but the hon. member ought to ask his leader the same thing. He signed the same agreement when he was the treasurer of Alberta.

[Joe Peschisolido, Canadian Alliance, Richmond, BC]

Mr. Speaker, that does not answer my question.

Since 1993, payroll taxes on workers have increased by $610. That said, it is very surprising to reread the words of the Minister of Finance from May 3, 1994 “Payroll taxes are a cancer on job creation.”

My question is therefore a very simple one. With an economy in recession, why is this Minister of Finance adding $1.7 billion to this cancer on job creation?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, the hon. member has made a calculation error.

When we came to power, contributions were $3.07. They are now $2.20. That is a drop of $6.8 billion. Reducing contributions puts money back into the pockets of Canadians.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, the Minister of Finance should inject a substantial amount of money into the economy to build infrastructures.

However, instead of directly adding $2 billion to the existing envelope, he announced the establishment of a private foundation.

How can the Minister of Finance explain that, instead of investing the money directly and quickly in infrastructures, he chose to bypass all existing channels and create a foundation, which will require new negotiations with the provinces and delay projects?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, again, the hon. member is mistaken. Not only do we have the existing infrastructure program, which will be implemented soon, the affordable housing program and the program for green infrastructure with the municipalities, but the foundation is a new initiative. The $2 billion budget is new money.

We are creating a foundation to ensure that things will continue, that we will continue to co-operate with the private sector under agreements such as the ones on highway 30 and highway 175.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, how can the Minister of Finance justify his political choice to have part of our taxes administered through infrastructures by people who have not been elected, by people who are not accountable to anyone, except to the Prime Minister, who will appoint them in the first place?

How can we give to friends of the government the power to decide which water supply system or highway should be built?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, the best way to ensure that this money will be paid whether or not there is an economic downturn is by setting up a foundation such as the one that we just created. We just saw that with other foundations.

We want the private sector, the provinces and the municipalities to co-operate with us. Need I point out that, in Quebec, municipalities have already expressed their support for our initiative.

National Defence

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Speaker, the auditor general has made it clear that our forces need $1.3 billion immediately to get our equipment operating safely, another $1 billion per year for equipment replacement and even more if we want to start rebuilding our military.

The Minister of National Defence says he is satisfied with providing less than 5% of the necessary money to these same troops who give 100% every single day of the year.

What is happening here? Is the auditor general wrong or has the government entirely given up on a combat capable military?

[Art Eggleton, Liberal, Minister of National Defence]

Mr. Speaker, a combat capable military is something the government is doing. Anytime we send our troops, and we have sent our troops in higher numbers than many other countries in the world in the campaign against terrorism, we make sure they have the resources they need to do the job.

The resources that the finance minister provided yesterday are a welcome addition to our budget. The Minister of Finance has done a masterful job in being able to balance a number of needs and give additional money to the defence department.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Speaker, the fact is that, even including this budget, the Liberals have slashed military funding by $2.8 billion per year. The auditor general, the CDA and most military experts have said that we need at least another $2 billion a year just to keep our forces in their current state and even more to rebuild. However, the government has provided less than 5% of what the experts say is necessary.

Is the defence minister really that weak or has the Prime Minister, who thinks our troops are boy scouts, decided that Canada does not need a combat capable military?

[Art Eggleton, Liberal, Minister of National Defence]

Mr. Speaker, yesterday the finance minister in his budget announced $300 million more in capital funds. We are modernizing the Canadian forces. Just about every major piece of equipment is either being replaced, or being refurbished or upgraded so that our men and women, who do dedicated duty for this country, can have the kind of equipment they need.

With the money that was provided yesterday, over the next five year period we will have some $5.1 billion going into the defence department budget.

Veterans Affairs

[Bob Wood, Liberal, Nipissing, ON]

Mr. Speaker, the Minister of Veterans Affairs announced today that the names of 23 Canadian soldiers executed in the first world war will be added to the First World War Book of Remembrance which lies in the Memorial Chamber.

Could the Minister of Veterans Affairs share with the House today why this recognition is so important to Canadian history?

[Ronald J. Duhamel, Liberal, Minister of Veterans Affairs and Secretary of State (Western Economic Diversification) (Francophonie)]

Mr. Speaker, adding to the book of remembrance the names of these 23 soldiers is a fair and just testament to their service and their sacrifice. It exhibits our gratitude toward what it is they have done.

The 23 soldiers from all regions of Canada volunteered to defend the rights and freedoms of our nation. As such, today we gave these soldiers the dignity which is their due and hopefully provided some closure to their families. I believe it is right.

The Budget

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

Mr. Speaker, my question is for the Minister of Finance. It took 22 months for the minister to decide to ignore the economic security of Canadian workers who are unemployed. Last month 45,000 people lost full time jobs and thousands more will in the future. The majority of people who paid into EI will not even qualify for employment insurance benefits.

In his budget, why did the minister not ease the eligibility requirements for people to qualify for EI or to protect Canadian workers and protect those families?

[Jane Stewart, Liberal, Minister of Human Resources Development]

Mr. Speaker, the Employment Insurance Commission has indicated that 88% of Canadians in paid employment will be eligible for employment insurance.

I remind the hon. member that the program is flexible and as unemployment rises the eligibility requirements are reduced. The employment insurance fund is there and it is working for Canadians at this time when they may need it.

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

Mr. Speaker, back to the Minister of Finance. The employment insurance plan is not working. Even bank economists are predicting an unemployment rate of 8% in the new year.

The minister can say what he wants but in Ontario, for example, only 25% of the people who will be unemployed will qualify for benefits, the lowest of any province. In the last recession it was around 60% in the province of Ontario.

Why is the minister such a scrooge? Why this lump of coal for the unemployed? Why does he not ease the eligibility benefits and extend the benefits for the Canadian unemployed?

[Jane Stewart, Liberal, Minister of Human Resources Development]

Mr. Speaker, the hon. member would be interested to know that as a result of changes and improvements to the employment insurance system made by the government in this fiscal year alone Canadians will be receiving an additional $2.7 billion in income and benefits.

That $2.7 billion may be insignificant to that party, but on this side of the House we know it is making a real difference in the lives of Canadians.