House of Commons Hansard #131 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.


Committees of the HouseRoutine Proceedings

11:50 a.m.


Pauline Picard Bloc Drummond, QC

Madam Speaker, the parliamentary secretary cannot be serious. Such comments are despicable. This is the bleakest week that I have ever experienced in this parliament.

This member, the Parliamentary Secretary to the Minister of Finance, has not spent sufficient time on the Standing Committee on Finance to have heard the witnesses' priorities. They told us “The Canada social transfer needs to be increased”.

According to the member, the government has given $3 billion, but he was not here when the government made drastic cuts that virtually drove the provinces to bankruptcy in 1993-94. With respect to education, the funding is at its lowest level ever. For health care, we are dealing with an aging population and increased costs for technology and drugs. And the government thinks it has done us a favour? First of all, this is a commitment that was made last year; it is not in this year's budget. These figures were announced in last year's pre-election economic statement. They thought they would do the provinces a big favour, but they never brought the funding levels back up to what they were in 1993-94.

Also, it was never indexed. The provinces are asking for several billion dollars. The provincial ministers met recently to ask the Minister of Finance—it is not the Bloc Quebecois that is asking—to increase the Canada health and social transfer. Meanwhile, the member opposite has just told us that the Bloc Quebecois does not know what it is talking about. Unbelievable.

What is more, he insults my colleague. In the budget forecasts for the past five years, the member for Saint-Hyacinthe--Bagot has only been off by around $4 billion, yet the Minister of Finance has been off by $60 billion. I am not sure which of the two is more brilliant.

Committees of the HouseRoutine Proceedings

11:50 a.m.


Gilles-A. Perron Bloc Rivière-des-Mille-Îles, QC

Madam Speaker, I am only too glad to hear what the member for Drummond has to say, for she is someone who knows what she is talking about.

As everyone knows, the Bloc Quebecois—and not just the Bloc but the Auditor General of Canada as well—has long been critical of this Minister of Finance who, without any scruples, helps himself to the money in the EI fund in order to supplement his revenues.

What does my charming colleague from Drummond have to say about that?

Committees of the HouseRoutine Proceedings

11:50 a.m.


Pauline Picard Bloc Drummond, QC

Madam Speaker, just so the members opposite do not accuse us of saying any old thing, there was an article—such articles appear daily—which contained comments by tax experts and economists. From everything I have read, no one had anything good to say about the current budget of the Minister of Finance, except his parliamentary secretary, but I doubt very much he read the articles in the papers.

As I was saying earlier, to be more transparent, there is an article in today's La Presse , which refers to the Minister of Finance and the employment insurance fund. I will quote from it, because on the other side they think the Bloc Quebecois is making things up.

It says that the Minister of Finance has no compunction about using the record surpluses of the employment insurance fund to finance other government programs. It also says that the Minister of Finance is using the fund to finance the sectors of health and education. The Minister of Finance is saying this when everyone knows the money is going onto the debt.

The article goes on to say that despite criticism by the auditor general and sharp criticism from the opposition parties, the unions and business people, the Minister of Finance plans to keep using the employment insurance fund surplus, which should reach $42.8 billion by the end of the fiscal year.

There is no need to point out that the government is not putting a cent—and I nearly used a word to describe that cent—in the fund. Workers and employers contribute to the employment insurance fund. The government is using the money for the debt. If at least it were used for certain priorities, such as increasing the Canada health and social transfer, we would agree to it for the sick and the young, but it is not the case. As I said earlier, the CHST has never returned to the level it was before the draconian cuts by this government in 1993-94.

They are also telling us that it is because they are concerned about health. They dip into the employment insurance fund and they claim to care about health, and they are trying to get the public to swallow that one. It is crazy.

Committees of the HouseRoutine Proceedings

11:55 a.m.


Carole-Marie Allard Liberal Laval East, QC

Madam Speaker, I cannot help but rise in connection with the statement made by my colleague for Drummond, who is probably unaware of the demands being made by the municipalities concerning additional help with infrastructure.

Today I cannot understand how she can fault our desire to help municipalities upgrade their infrastructure. I also do not understand how she can fault an additional $600 million for the infrastructure program, specifically to help the provinces, including Quebec where we both come from, to equip themselves with highway infrastructure that meets the public's expectations.

Nor can I understand her criticism of the $2 billion for a new foundation that will make it possible to find out what all provinces require and to finally come up with the necessary infrastructure to help Canadian businesses and to help Canadians move around the country more readily.

I would like to ask my hon. colleague whether she is aware that the municipalities of Quebec have been demanding more assistance for infrastructure?

Committees of the HouseRoutine Proceedings

11:55 a.m.


Pauline Picard Bloc Drummond, QC

Madam Speaker, I cannot believe my ears. My Liberal colleague does not know that the provinces have jurisdiction over municipalities. She refers to the foundation. The famous $2 billion does not even exist at the present time in the tables. That amount has not been budgeted. It is contingent on our having a surplus at year end. Creating foundations was criticized by the auditor general. This makes no sense.

As for these two billion dollars, if we have them, why is the government not using them in established programs, which we are quite happy with at this time? Why not inject them into existing program, rather than a foundation to be directed by goodness knows who? Departmental employees have even been asked—

Committees of the HouseRoutine Proceedings

11:55 a.m.

The Acting Speaker (Ms. Bakopanos)

Unfortunately, the hon. member's time is up. The hon. member for Winnipeg Centre.

Committees of the HouseRoutine Proceedings

11:55 a.m.


Pat Martin NDP Winnipeg Centre, MB

Madam Speaker, I am happy to join the debate on the report of the standing committee and their prebudget consultations.

It is useful for us to have a good look at this report, which was tabled on November 26, and compare it to what actually came out in the budget. I think we will find some glaring contrasts or at least some glaring omissions. I do not believe what came out in the budget accurately reflects what the standing committee heard. In other words, what Canadians told the committee did not find its way into the budget that was tabled on December 10.

It is true, as the report says in its executive summary, that this report jells down to five key priorities. However, those five key priorities are not the same five key priorities that the standing committee heard in its five weeks of prebudget consultations. It is disingenuous to try to say, for instance, that one of the key five points the standing committee claims it heard was an increased call for tax cuts and the need to maintain the $100 billion tax cut regime that was introduced last year.

In actual fact, when we looked at the representations made to the committee, we saw that virtually no one went there asking for tax cuts and deficit reduction. This was not the top issue on the minds of most Canadians who made presentations to that committee. To list the $100 billion tax cut program as one of the five key top of the mind issues of all Canadians on the very opening page of the report from the committee is simply not true or accurate as to what actually was heard.

Points were raised over and over again, by groups of Canadians who came to the prebudget consultations. There was an almost unanimous theme across the country. Those issues are not addressed in the budget. A key and paramount issue that I would like to raise first among those is the EI program.

Today, speakers from the opposition benches at least have pointed out the shortcomings of the EI program as it exists today. I would like to bring it down to the context of the riding that I represent, which is a very low income riding. In fact, it is the third poorest riding in Canada by whatever measurement is used.

The impact of the changes to EI, when the government switched to the hourly basis rather than the weekly basis to qualify, has been nothing short of devastating. By dollar figure, $20.8 million per year less in benefits now comes into my riding than under the old eligibility rules. This may not seem like an overwhelming amount of money to some people who are used to dealing with large figures, but it is a visible and tangible difference in the riding I represent.

Perhaps it would be easier to put it in the context of what a $20.8 million payroll would do to a riding. For instance, if we were trying to lure some new company into the riding that had a $20 million a year payroll, we would pave the streets with gold to bring that company in. It would employ a lot of people and it would be an injection of a lot of capital into the small area of the downtown core of Winnipeg.

Taking $20 million from my riding, where people are already living on fairly modest means, some who are very marginalized and are unemployed, has a very tangible social and economic impact on the riding. We are very critical that nothing has been said in this budget about lightening up the eligibility rules so that more people will qualify and it will become an unemployment insurance program again as it was designed to be.

The member for Drummond pointed out a very real fact of which we should be very aware. The federal government does not put one cent into the EI fund. It stopped doing that in 1986. Formerly it was funded roughly one-third, one-third, one-third; employer, employee and the federal government. The federal government pulled out its share. Now that entire fund and the surplus therein is contributions from employers and employees and no one else.

We have used this analogy before, but to deduct money from a person's paycheque for a specific purpose and then to use the money for something completely different is at the very least a breach of trust. In the worst light it is out and out fraud.

A worker has a reasonable expectation. There is a trust relationship that develops. When the government is holding my money to give me a benefit it has promised me and then I am unlucky enough to find myself unemployed, I have a less than 40% chance of receiving any benefit whatsoever. The government has clearly misled workers in the EI program.

This one thing would have made a huge difference in the riding I represent. Let us keep in mind that the $40 billion surplus in the EI fund represents a surplus of $750 million a month. That is what this cash cow is generating for the Liberal government. The modest increases in spending in the budget are really the EI surplus. Without it the government would not have the discretionary spending it has. It would not have been able to give tax cuts.

It is unbelievably perverse to take money from people who need it the most, unemployed Canadians, and give a tax cut to people lucky enough to have a job and an income. It is a reverse form of Robin Hood. It is robbing the poor to give to the rich.

That is my first observation when looking at the report of the standing committee in its prebudget consultations. It failed to listen to the almost unanimous view it must have heard in every community it visited that we must do something to fix the EI fund.

I have a second point that I will bring into the context of my own riding. It is helpful to break down a large abstract document such as the federal budget into the ramifications of how it affects ordinary Canadians.

My riding is in a low income neighbourhood. Persons with disabilities are often low income people. A disproportionate number of disabled people live in my riding in the core area of Winnipeg, given the population of Winnipeg overall. It has come to our attention recently that every disabled person who gets the disability tax credit received a letter in the mail demanding that they requalify for the tax credit.

No matter what their disability is or how permanently disabled they are these people are being forced to go to a doctor. They must pay for the exam because doctors do not do this type of exam under the Canada health plan. The exam costs as much as $135 and they must pay upfront. They must get a written letter which says that the person is disabled to the degree that he or she should qualify for the disability tax credit.

How meanspirited can the government be? In an era of budget surpluses it chooses 90,000 or 100,000 disabled Canadians across the country and forces them to requalify to prove they are disabled. The status of many of them such as people who are legally blind will not change. It is something they must live with. They deserve the disability tax credit.

I find this offensive. On behalf of the many disabled people in my community who have brought the issue to my attention I condemn the practice. I want that on the record.

There is another thing that could have been addressed in the budget and which upsets those of us who represent low income areas. The point was raised very capably by my colleague from the Bloc Quebecois that a great number of seniors who collect old age security pensions are at income levels low enough that they also qualify for the guaranteed income supplement. However, literally hundreds of thousands of Canadians who qualify for the guaranteed income supplement have never applied for it and are not getting it.

It is their money. They are arguably the poorest of the poor. To be eligible for the guaranteed income supplement one must be a very low income person on literally the lowest socioeconomic rung of the ladder. The federal government knows who these people are because they are identified when they file their income tax.

In other words, Revenue Canada knows who they are and HRDC is the department that could and should be issuing their guaranteed income supplement cheques. Why do the two agencies not talk to each other? Why does Revenue Canada not tell HRDC there are 100,000 to 200,000 Canadians who deserve the guaranteed income supplement but are not getting it? Why does it not tell HRDC to give it to them?

We should not put the onus on these people to apply. For many reasons they sometimes do not. Some elderly people may not fill out the forms correctly or even know the benefit is available to them. I understand there are as many as 270,000 Canadians in this situation.

Let us look at the number of reasons. It could be an issue of basic literacy. It could be a lack of command of either of the official languages if they are new Canadians. It could be mental competency. There could be any number of reasons elderly seniors either do not know about the program or do not know how to fill out the forms and fail to qualify. It could make a difference of $5,000 per year.

That is 270,000 Canadians times $5,000 per year. Being a low income riding, my riding has a disproportionate number of low income seniors because they seek the lower rents in the area. I estimate that as many as 8,000 or 9,000 of those 270,000 people from around the country are living in the riding of Winnipeg Centre in the downtown core of Winnipeg. If I do a bit of quick mathematics and multiply 9,000 times $5,000 per year, that is $45 million worth of federal money that would be injected into my low income riding of Winnipeg Centre overnight.

Let us imagine the difference this would make to the social and cultural fabric of the community I live in. Yet it is being withheld. This is the kind of thing that makes me absolutely furious. It is along the same lines as the miserliness that has been demonstrated by the disability letters and making people requalify. It is an issue we will not let relax.

My mathematics were wrong. It would be more than a $45 million injection of capital into my riding. It would be an injection of $54 million per year into my riding to help the poorest of the poor. People who make maybe $12,000 or $14,000 a year from their OAS or from all other sources of income would get another $5,000 per year. It might make the difference between abject poverty and a reasonable quality of life for those people.

I have church groups in my riding. I compliment the Home Street Mennonite Church in my riding of Winnipeg Centre which is conducting a mass letter writing campaign to do two things: first, remind the minister how fundamentally wrong the path is that she is taking; and, second, seek out and find seniors in the community who may be eligible for the guaranteed income supplement and have not taken active steps.

It will be like the old voter registration campaign in Selma, Alabama, in the sixties. Bands of well meaning people will be going through low income apartment blocks to find seniors, let them know they may qualify for the program and help them fill out the forms. If the seniors do not have a family member to fill out the forms the fine people from the Home Street Mennonite Church will. It is to their credit.

Another thing that came up during prebudget consultations, more as a lobby or to register dissatisfaction, was that the public service unions were still furious that in the last parliament the government passed legislation which gave it the legal right to take the $30 billion surplus in the public service pension plan.

Of the $100 billion tax cut which shows up in prebudget consultations as one of the five priorities and shows up in the budget as a continuation of the five year $100 billion tax break, $30 billion was taken out of the public service employee pension plan. Incredibly the government got away with this. It was Marcel Massé's last move. It was the task he was given on his way out. I think I can use the name of the former president of the treasury board now that he is no longer a member of the House of Commons.

This was atrocious. It is an indication of where the government found the surplus it is bragging about and giving back in the form of tax cuts to the wealthy.

Employment insurance has a $40 billion surplus. The government happened to find $30 billion laying around in the public service pension plan. Rather than share it with employees the government took 100% of it. It did not even sit down to negotiate a fair split or offer to increase the monthly income of beneficiaries. There was none of that. The government took every penny of it.

The guaranteed income supplement that should be going to seniors is still sitting in the coffers of the federal government. It should be put into circulation. Then we would see some economic stimulus. Then we would see the riding of Winnipeg Centre with the two things I outlined: first, changes to EI to restore the $20 million a year we used to get in EI benefits; and, second, the $54 million we have forfeited or do not enjoy because of the government's deliberate and wilful blindness to the fact that senior citizens who qualify for the guaranteed income supplement are not getting it.

Being from the prairies it would be negligent of me not to raise another shortfall in the budget: the absolute dearth of anything concrete to deal with the agricultural crisis on the prairies. There was a lot of hope and optimism on the part of people in the prairie agriculture community that the budget would be the time to do something about the emergency prairie farmers are facing.

Some 11,000 prairie farmers in Manitoba, Saskatchewan and Alberta left the family farm last year alone. They finally gave up. They kept farming until it was all gone and they could not farm any more. They have had to leave the family farm.

When the east coast fishery was in crisis years ago I was one of those who wondered if we really had to pour billions of dollars into it. We had our own problems on the prairies. However people came to me from the Atlantic provinces and asked how I would feel if the bottom fell out of our key industry, the whole family farm agricultural industry on the prairies. Would I not want the federal government to do something to help the basic economic fabric?

In that context they were right. I would expect the government to intervene on a sectoral basis and do something about it. I can therefore see why it was so devastating to lose the east coast fishery. It justified all the programs, TAGS, et cetera, that went into it.

The same is now happening on the prairies. It has happened. It is an emergency, just as it was an emergency with the east coast fishery. We are coming to the federal government looking for real support to save the agricultural economy on the prairies.

I am trying to keep my remarks pointed to my own riding because, as I say, it is helpful to render down such an abstract concept to practical implications. I will do so.

In my riding of Winnipeg Centre the largest growing demographic group is the aboriginal community. People are flocking into downtown Winnipeg looking for a better life. They are coming in from reserves with a great sense of hope and optimism that there will be a better quality of life for them.

To this point it has been a tragic story. Even as the Indian Act is 130 years of social tragedy there is a new social tragedy emerging among the urban aboriginal population in cities like Vancouver, Winnipeg, Regina, Saskatoon, Edmonton and elsewhere across the west. I do not know a lot about eastern Canada but it may apply there too.

The Speech from the Throne gave hope and optimism to the aboriginal community that this would be the era in which we finally redress some of the historic injustices that have resulted in the tragic statistics we see today. By statistics I mean the ridiculous overrepresentation of aboriginal people in our jails, a social indicator that something is horribly and fundamentally wrong with our relationship and dealings with aboriginal communities.

Another startling figure is that although Canada ranks number three on the human development index of the United Nations, aboriginal people are number 63 on the same index. To have that kind of range within one country shows we are not trying hard enough.

We were disappointed again. The aboriginal community was looking forward with great optimism to the budget. The aboriginal leadership and on reserve and off reserve peoples thought this would be the year they would finally be welcomed into the mainstream of the Canadian economy. What we saw was a small gesture toward specific problems. Fetal alcohol syndrome is important, but $185 million over two years is not enough. It falls way short of the work that needs to be done.

I need only point out the water conditions in northern aboriginal communities in Manitoba. Fully one-third of them has no source of potable freshwater. When people died in Walkerton it was a national emergency and a national tragedy. This goes on every day in communities all over northern Manitoba. Yet we do not have the money to address the issue.

The last thing I will mention is the $2 billion fund for the strategic infrastructure foundation. The premier of Manitoba was quoted in the newspaper today as saying he had never seen an infrastructure program, supposed to stimulate the economy, which kicks in only when the economy is in surplus.

What a contradiction. Exactly when we do not need an economic stimulus package is when we are in economic surplus. The only time we are going to be able to access the $2 billion for the rapid transit we need or for the Red River floodway work we need is when the government shows a surplus. It is not projecting a surplus next year adequate enough for the infrastructure program to be accessible to my home province of Manitoba.

It is a real illusion, a shell game, to say that there is a $2 billion foundation which will be reinvested in infrastructure across the country but only when times are so good that we do not need it. We do not need economic stimulation when we are in a surplus situation. We need it now when we are looking at a slow economic period.

Committees of the HouseRoutine Proceedings

12:20 p.m.


John Bryden Liberal Ancaster—Dundas—Flamborough—Aldershot, ON

Mr. Speaker, I want to congratulate the member on his excellent speech, even though it is coming from the opposition benches. He touched on many points that are of great interest to all Canadians of compassion.

He touched on one point that was especially interesting to me. That is the suggestion that there should be some exchange of information between departments like Revenue Canada, or whatever it is called, the revenue agency, and human resources development in order to identify those Canadians who are most in need of the types of programs that the government would like to give to them.

The problem is it is a privacy issue. The reason this information is not exchanged is because interpretations of our present Privacy Act make it impossible for government departments to trade that information.

The member will recall that the Minister of Human Resources Development found herself in a terrible quandary when it was revealed a year or so ago that human resources development was keeping this type of cross-file information and the privacy commissioner had complained. Furthermore I would like the member and I, and others in the House on the backbenches, to address this issue because this interpretation of the Privacy Act is doing great damage.

The member, who has many aboriginals in his community will be familiar with the non-insured health benefits program. This is a case where free drugs are available to aboriginals. It is well known that some aboriginals, a very small percentage, are abusing the program to the point of receiving so many drugs that deaths are occurring. This could be prevented, as it was almost prevented, by Health Canada ensuring that the information from doctors and pharmacists is exchanged through a central clearing agency which exists. However an interpretation by Health Canada of statements made by the privacy commissioner stopped this interchange of information. Consequently we have had people dying.

We have had other instances where former civil servants have accessed government programs that they should not access. All we have to do is access the files that contain their pension information.

I wonder if the member opposite would address this issue of privacy. Should we not be revisiting the Privacy Act to ensure that Canadians are better served by the programs?

Committees of the HouseRoutine Proceedings

12:20 p.m.


Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, the hon. member is bang on. When we did make inquiries to the Minister of HRDC about the guaranteed income supplement information, we were told that to share that information, for Revenue Canada to give it to HRDC, would be a breach of the individual's right to privacy. That was the only excuse that would come up. It is the law and that was the interpretation of the law, but why then is the inverse not true?

Just recently HRDC was informed by the Canada customs agency of EI recipients leaving the country while they were collecting EI. They were caught on their return to the country. When they checked in through customs a red light went off that the person was collecting EI. The person was supposed to be at home looking for work every day and how was it that he or she was in Europe? They were rooted out. Is that not a breach of a person's privacy under the act, having Canada Customs and Revenue Agency telling HRDC about EI recipients who travel?

We would argue that a better interpretation of the Privacy Act would be that if it is to the person's advantage and benefit, these things can be done. If it is to the person's disadvantage, then the person has the right to say that they do not have a right to that information. I do not know if that is possible.

However, the hon. member is right in that all of this stems from the conditions under the Privacy Act. We believe that in the interest of fairness, we should be either addressing and amending the act or at the very least taking a different interpretation of it.

Committees of the HouseRoutine Proceedings

12:25 p.m.

Progressive Conservative

Gerald Keddy Progressive Conservative South Shore, NS

Mr. Speaker, I listened to most of the hon. member's speech and there seemed to be something lacking.

For my own information I have been trying to peg down the NDP's position vis-à-vis support or non-support for the military. Certainly in the prebudget report there is not enough support for the military.

The military asked for $1.2 billion just to stay in the black. It will be given $150 million this year and $150 million next year.

Yesterday the NDP voted not to support the military, to actually take the meagre amount it got out of the budget and give it to health care. This would exclude any more funding for the military, and I understand that funding for health care is needed too.

Exactly what is his party's position? What I hear the member's leader saying is that her party does not want to give extra money to the military, yet in a scrum she said that her party does support the military. There is a nuance that I am missing and perhaps it could be explained.

Committees of the HouseRoutine Proceedings

12:25 p.m.


Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I do not think there has been any real mystery. If the hon. member is interested in our position on defence, the critic who sits on the standing committee has been quite open and clear on the position.

I represent an area that has the 17th wing air force base. I have met with the leadership of that base, Colonel Haig.

We are very concerned that there are people in the Canadian military who have to go to food banks every month. There are people in our armed forces who are actually living below the poverty line.

An entry level private with a family of four may earn $28,000 or $29,000 per year. The low income cutoff is $32,000 for a family with two children. We find this absolutely unacceptable. We have advocated since day one, and it is on the record quite clearly, that we want fair wages and working conditions for our men and women in the armed forces.

The same applies to the equipment we ask them to use. We do not want 40 year old tanks or helicopters. We want to give people state of the art, up to date--

Committees of the HouseRoutine Proceedings

12:25 p.m.

An hon. member

But we cannot do that without expanding the budget.

Committees of the HouseRoutine Proceedings

12:25 p.m.


Pat Martin NDP Winnipeg Centre, MB

We called for spending to bring our military in line with our NATO colleagues so we could meet our obligations. I understand that our military spending is second only to that of Luxembourg. It is the lowest of all NATO nations. As one of the richest, most powerful and successful countries in the world, we can do better than that.

If we do fall short of buying into the whole military industrial complex, I do not apologize for that. However, we have been consistent in making sure that the men and women in our military have fair wages, decent living conditions and the right tools to do the job.

Committees of the HouseRoutine Proceedings

12:25 p.m.


Libby Davies NDP Vancouver East, BC

Mr. Speaker, first I would like to congratulate my colleague from Winnipeg Centre for an excellent exposé of what the federal budget is about. He has based it on his analysis of looking at the prebudget consultations and the very real experience he has gained from his own community. His community is very similar to my own community in east Vancouver where people are really hurting and are looking for help and support from the federal government.

A few days ago the member asked a very good question in the House about the real intentions of the government with regard to aboriginal people. We heard all the promises in the throne speech yet it looks like there has been a massive shift in the direction of the government to somehow throw all the treaty negotiations off the table. The bits and pieces that we have seen are really not going to help aboriginal people fundamentally address the injustices.

I ask the hon. member to comment on what kind of impact he sees from these budget consultations and whether or not they will actually help aboriginal people in terms of the resources that have now been taken away.

Committees of the HouseRoutine Proceedings

12:25 p.m.


Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, the hon. member for Vancouver East is absolutely right. Aboriginal people have been dealt a real double whammy in recent weeks.

First there was great hope and optimism that the present budget would be the budget which would finally address some of the historical injustices they have been living with over the years. They were disappointed. Then they opened the National Post last weekend and learned that the Prime Minister had stated publicly that he is going to implement a fundamental policy shift in the whole relationship with aboriginal people.

In other words the Prime Minister said that we are not going to waste any more time on nuisances like rights and redress issues. In other words, all these 1,071 outstanding Indian land claims are too expensive, there are too many court cases, too much litigation and from now on we are spending money only on moving forward from this point on.

This is a slap in the face to the aboriginal community's leadership. It was done out of the blue, without any consultation. They opened their newspapers and saw that on the basis of one dinner with the aboriginal leadership and the newly struck committee of cabinet ministers reviewing aboriginal issues an announcement they are going to fundamentally change the whole relationship and the way of dealing with the basic claims issue.

It throws out the window the Royal Commission on Aboriginal Peoples, the most comprehensive royal commission in the history of Canada, and $58 million worth of research and recommendations. Arbitrarily the Prime Minister said “No, I think we will change things”.

The Prime Minister is looking for a legacy. He was the architect of that disastrous white paper in 1969. He is still trying to implement those same things that were rejected so resoundingly in the white paper, which are assimilation, no more nuisance land claims, no more rights and redress issues, just basic economic development from this point on.

Aboriginal people have been dealt a double whammy and they are justifiably upset.

Committees of the HouseRoutine Proceedings

12:30 p.m.

Progressive Conservative

Peter MacKay Progressive Conservative Pictou—Antigonish—Guysborough, NS

Mr. Speaker, I am glad to be here today to speak on this particular matter that results from a motion stemming from the “Securing Our Future” report that came from the Standing Committee on Finance.

I want to take a moment to congratulate the member for Kings--Hants and all members of the standing committee for the effort that went into these prebudget consultations. The report, to a large degree, provided Canadians and all the political parties here in the House with the opportunity to have some input into the budget. Unfortunately much of that input and that information was ignored and put to one side because of competing political interests and agendas that relate directly to the Liberal leadership race.

The Minister of Finance brought forward a budget to great acclaim. There was much ballyhoo about this particular budget which was presented almost two years after the last budget. I note with interest that this is the seventh budget, I believe, since 1994 and it is the seventh budget that refuses to follow through on that initial promise of getting rid of the GST. This of course was directly linked to much of the acclaim and the credit that the Minister of Finance would like to garner for himself and his government. However, it is those revenues that have allowed the government to balance the books and to claim to have slain the deficit. Those budgetary surpluses are a direct credit to the previous administration, not this administration.

I would be loath not to point out that the Liberal government campaigned vigorously against that particular policy. It spared no opportunity to eviscerate the previous government for suggesting that it would bring in a services tax that was directly intended, I note, to bring down the deficit at that time.

Many people in the Chamber will recall the olympian back-flip of the current minister of heritage when she suggested that if her government did not get rid of the GST she would resign immediately. Well, she did resign but she ran again. It is the same example for the Leader of the Opposition who has repeated that copout by resigning only to run again, but I digress.

The budget comes up short on a number of levels, particularly with regard to the Canadian military and in addressing the issues of productivity and failing productivity. Sadly, there was ample opportunity in this budget to address many of these issues that predate September 11, for as sad and horrific as those events were, there were many issues that pointed directly to a lagging economy and to the need for the Minister of Finance and for the government to look ahead and reflect a little bit on what the government's fiscal plan was going to be.

Mr. Speaker, I should indicate that I will be splitting my time with my colleague in the coalition, the hon. member for Prince George--Peace River.

Another telling comment was made in the Chamber this week by the Minister of Finance. He stated, “what is important in a budget is the way in fact it is received by the public”. It is a very sad commentary and a telling one as to the priorities or the lack of priorities. It points directly to that age old Liberal adage of being like a windsock, driven in terms of finding out what the priorities of the people are and then giving them what they want, not necessarily what they need.

According to the minister, the budget should be judged simply by the polls and by public opinion. Yet I think most Canadians, if we polled them in their homes and in their places of work, would be quick to point out that there were a lot of things that they would have liked to have seen in this budget completely ignored. My colleagues in the NDP have raised the issue of agriculture, as have members of the coalition and other members in the House.

Agriculture seems to have been given zero contemplation in terms of a budgetary allocation. In fisheries, numerous individuals in the riding of Pictou--Antigonish-Guysborough continue to struggle in that lifelong occupation of working on the sea.

The town of Canso is facing a crisis, to quote the minister of multiculturalism. As we speak, the town of Canso is facing near extinction if the Seafreez plant in that community leaves.

Those are the sorts of practical difficulties with which Canadians are dealing. Will they have a job? If they do not have a job, will they be able avail themselves of the employment insurance that they paid into? Much like the CPP, which is allocated for a specific purpose, to sustain individuals in their retirement or if they are so unfortunate as to be unable to work because of health reasons, the employment insurance program was intended specifically to sustain people when they were out of work. This is an issue we are all too familiar with in Atlantic Canada, and in many regions of the country, such as Quebec, Saskatchewan and right across the country. This is still a huge problem for our people. This again relates directly to productivity, to businesses being able to be productive, to provide employment and and to provide opportunities.

The EI surplus as it stands is ballooning. It is somewhere in the range of $36 billion to $38 billion and it is continuing to accumulate. Individuals, employers and employees are paying into the fund at the rate of $2.05 per $100. There was an opportunity to bring that down further, to allow people to keep more of their hard earned money in their pockets, but those phrases are becoming trite now because it is not happening.

As a result, an opportunity has been missed to tax people less, to let them keep more of their money rather than follow this ballooning idea that we can take money from people in volumes and then give it back to them in a very patronizing way and tell them how their money would be best spent.

I think most Canadians are crystal clear in their minds as to how they would like to spend their money. They would like to pay down their mortgages, provide for their children, put money away perhaps for their children's education, simply live and pay for their oil.

Speaking of oil, we know the auditor general was quick to identify a number of wasteful areas. All governments have suffered from that. There is no pride in pointing out that any one administration was trouble free when it came to government waste, but the auditor general clearly identified that in 16 departments over $16 billion could have been cut in terms of waste.

One of the areas identified was the heating oil rebate. That is not to say that individuals were not entitled to money back, but on the list were individuals who were deceased or who were living outside the country, and some of them were university students living in residence and not paying heating bills. It is indicative of the poor management of taxpayers' money.

Another area of savings I would be quick to point out would be the gun registry. I know there are polls but it all depends on how the question is asked: “Are you in favour of gun control?” Everyone is in favour of gun control but are we in favour of registering long guns at a cost of $700 million? That is another question altogether.

The $130 billion figure in the budget is staggering and hard to contemplate. For the Minister of Finance to stand in his place in the House of Commons and suggest that there was no area in which there could have been cuts, no savings found in the presentation of the budget, insults every Canadian's intelligence.

The productivity crisis that I referred to in my opening remarks is at a very serious level. There was no reduction offered in the budget on investment killing capital taxes, no reduction in the payroll taxes and no reduction in the basic yearly exemption, which is particularly germane to students in the country who in the summer months seek employment, some who make barely $3,000 that would be applied to their education and yet they are taxed on that amount.

I would suggest as well that there is certainly room to raise the basic personal exemption to $12,000 at a minimum. If one is making $12,000, one cannot afford to live in this country. The working poor deserved a break but they did not get it in the budget.

Committees of the HouseRoutine Proceedings

12:40 p.m.

Edmonton Southeast Alberta


David Kilgour LiberalSecretary of State (Latin America and Africa)

Mr. Speaker, what sort of surplus or deficit would the hon. member from Nova Scotia have given us in his budget? How does he think we have been doing in terms of managing the fiscal problems we inherited from his party in 1993?

Committees of the HouseRoutine Proceedings

12:40 p.m.

Progressive Conservative

Peter MacKay Progressive Conservative Pictou—Antigonish—Guysborough, NS

Mr. Speaker, I assume the member is talking about the party which he was once a member. As for being in a deficit, it depends on whose books we look at. Many economists are saying that we are in a deficit now. I take much of the member's comment with a grain of salt. What we would certainly have done was put money in priority areas that were different from those chosen by the government. We certainly would have put more money into the military.

The government's own appointed auditor general suggested that our armed forces need over $1 billion a year for the next five years, as opposed to what has been offered up, which is $1 billion spread out over five years. The armed forces will continue to decline and continue to face situations where they will go off to defend Canada's interests and to defend freedom with ill-equipped ships, poor radar equipment and guns, and lacking the basic things such as clothing and battle fatigues. Those things are clearly not a priority for the government.

It is interesting that this particular member would attach himself to this budget with such great aplomb given that he, like the Minister of Canadian Heritage, promised to get rid of the GST.

Yes, I very much attach myself to his former government, the Progressive Conservative government. It had the intellectual and internal fortitude to bring in a tax that was meant to bring down the deficit, that his Minister of Finance now likes to wrap his hands around as being responsible for. It happened in spite of what he has done, not because of what he has done.

Committees of the HouseRoutine Proceedings

12:40 p.m.

Canadian Alliance

Grant McNally Canadian Alliance Dewdney—Alouette, BC

Mr. Speaker, while responding to letters from some students in my riding from Whonnock Elementary School, I noticed a comment made by a grade 5 student that fits right into my colleague's speech. The student wrote:

The issue I am concerned about is the taxes because I think that people (our parents) are paying too much money.

Even young people in our country can understand the concept of high taxation and the impact it has on families. I would not mind hearing my colleague's comment on that particular point.

Committees of the HouseRoutine Proceedings

12:45 p.m.

Progressive Conservative

Peter MacKay Progressive Conservative Pictou—Antigonish—Guysborough, NS

Mr. Speaker, the comments of a grade 5 student serve us well at times in this place. I think we need to step back sometimes from the economic debate and talk about, in very real and straightforward terms, how this impacts on Canadians in their everyday lives. They want to have a quality of life. They do want to have more take home money at the end of the work week. Clearly this young student is hearing around the dinner table and the breakfast table that his parents are suffering and are not getting a return on their hard work.

The government had an opportunity in this budget, as it has had in every budget, to bring taxes down and allow Canadians to keep more of their dollars, but that did not happen. We have seen the government time and again leave the taxes as they are, or in fact increase taxes as it did in this budget. It has put a surtax on travel. That is, in many ways, another job punishing tax. Because of the geographic size and the challenges of this country in terms of its massive land mass, people need to travel. Now, on top of income tax, on top of GST and on top of taxes in every walk of life, they must pay another surtax. We are already paying taxes at airports in the form of airport improvement taxes. As a result of this budget, there is another $2.4 billion tax grab by the government. Who will it affect? It will affect working Canadians, Canadians who have to travel as a result of their work or to be with their families during the holidays. It could not come at a worse time.

The young student in British Columbia shares the concerns at a very early age that many in this place will continue to work to resolve. However this young man will inherit a huge debt if we do not find a way to not only bring down taxes but to bring down the massive deficit that will continue to be there unless we are more prudent about how money is spent.

Committees of the HouseRoutine Proceedings

12:45 p.m.

Canadian Alliance

Jay Hill Canadian Alliance Prince George—Peace River, BC

Mr. Speaker, it is indeed a pleasure for me to rise and get this opportunity to address the motion before the House concerning the 10th report of the Standing Committee on Finance ironically called “Securing Our Future”.

In referring to the report itself, at the start of my remarks I would like to pay a special tribute to my colleague in the coalition from Kings--Hants and all the work he does as our finance critic in trying to hold this government accountable. Trying to do that is a huge job, as I am sure people out in the real world fully understand.

I would like to point out and perhaps read just a couple of excerpts from the report itself into the record. They show a clear difference of opinion between the approach taken by the Liberal government with its free spending ways, which the latest example of which is contained in the budget of this week, and the approach advocated by the PC/DR coalition. One of the recommendations states:

The PC-DRC strongly supports recommendations to significantly increase resources for the Department of National Defence, the RCMP and CSIS.

I want to say that at the outset because the government did move in that area. All of us are aware that it has spent a considerable amount of time over the last few days bragging about what it calls its security budget. In a few moments I will to get why we have concerns about that.

While we support the general approach that we obviously need and have been calling for money to be funnelled to especially our armed forces for a number of years now, we have some concerns about the way in which this government will be held accountable for that spending. Another recommendation states:

The PC-DRC recommends implementation of an annual “Red Tape Budget” in addition to the annual spending budget. This would afford Parliament the opportunity to debate the regulatory burden on both Canadian business and individuals. The regulatory budget would detail the estimated total cost of each individual regulation, including the enforcement costs to the government and the compliance costs to individual citizens and businesses. A regulatory budget would help hold governments accountable for the full costs of their regulations and could prevent the current patchwork of redundant regulation that can stifle Canadian enterprise.

That is in direct response to pleas that we hear constantly from the private sector about the increased costs of regulation, yet we see all too often that the government does not move in that area to eliminate red tape to reduce the costs of doing business in Canada.

We have a number of other recommendations that came forward, as I said, from our finance critic, the hon. member for Kings--Hants. I strongly recommend that people read not just the report of the committee but the supplementary report contained at the back, which puts forward some ideas from our critic.

Specifically on the issue of the budget, as I said in my remarks, we support the specific targeting of some of the hard-earned tax dollars that are sent to Ottawa to areas of law enforcement, border, port and airport security, and increased funding to replace the cuts from CSIS and RCMP, as well as to try to replace at least some of the funding that has been slashed from our armed forces budgets over the years.

I would like to perhaps just remark briefly, again with a touch of irony, that this budget, for which we waited almost two years, follows the latest report from the auditor general by about a week.

Some of the issues the auditor general raised are very interesting. In connection with the Canada Customs and Revenue Agency, she said that it needed to improve the way it looked for smuggled or dangerous goods entering the country, obviously highlighting some of the problems that she has identified with that particular agency. It is interesting that contained in this budget is an additional $1.2 billion of new money for that area.

That is a concern because, while I think there is general acceptance across the nation of the need to spend increased dollars in these areas to secure our country and our citizens, there is great concern about the accountability or lack of same from the government.

On the employment insurance surplus, she noted that the surplus grew by about $8 billion last year to roughly $36 billion, even though the government's own actuary said the fund needed no more than a maximum of $15 billion to cover any potential downturn, which we all know we are already into. Obviously the government is using the dramatically inflated employment insurance fund as its slush fund to funnel money into programs that it deems important. I stress it deems important. It is quite likely not shared by a lot of citizens out in the real world.

I also noted one other area, which is the Atlantic Canada Opportunities Agency. The auditor general noted that ACOA failed to inform the public about $400 million in loans. Why that jumped out at me is because another piece of legislation which is currently before the House of Commons is what is referred to as a housekeeping bill, technical amendments to a variety of acts, Bill C-43. One change the bill would make to the act which deals with the governance of ACOA is that the board of directors of ACOA, once Bill C-43 is passed into law, will only meet once a year rather than four times. This will occur despite some obvious concerns being expressed by the auditor general about the accountability of that organization.

What else has the auditor general said? I am sure some of the numerous quotes will be of great interest to the viewing public. On the big issue of the undermanagement of grant and contribution programs, the auditor general said:

A lack of diligence in designing programs, assessing project applications, and monitoring recipients' performance meant that public funds were placed at risk. But the attention paid to grants and contributions has not yet been translated into overall improvement in the way they are managed across the federal government. As this report shows, all programs we audited had one or more significant shortcomings.

The auditor general went on to say:

The government still has a lot to do to fix the chronic problems in the way it manages grants and contributions.

I assume this is despite the so-called human resources development minister's much vaunted six point plan. She went on to say:

Our most recent audits found a government-wide control system for grants and contributions that is not yet rigorous enough to ensure the proper management of public funds. We are concerned that serious and correctable problems remain unexamined and uncorrected.

She went on to say:

Grant and contribution programs tend to be undermanaged—departments pay too little attention to their design, delivery, capacity, and performance and to the training of staff who manage them. Until the Secretariat and departments meet all of their responsibilities and manage grants and contributions rigorously, these programs will have chronic problems and run an ongoing risk of using public funds ineffectively and inefficiently.

I would suggest that this is a pretty damming report by the auditor general about the spending habits of some of the departments of this Liberal government. Yet we see dramatic increases in spending in the budget.

It is interesting to note that one would have to question why the finance minister did not address some of the issues brought forward by the auditor general and try to clean them up. Perhaps part of the reason is the very real worry, which I am sure he has, that with an upcoming leadership race in the Liberal Party of Canada he cannot afford to alienate or anger any of his caucus colleagues, especially his cabinet colleagues who wield certain influence within the Liberal Party of Canada.

I wonder how much of the government's inattention to the auditor general's report and correcting the problems she has identified is attributable to that rather than oversight and sloppy bookkeeping.

During question period this week, the hon. finance minister made some sort of remark about the importance of a budget being how it is received by the public. What is important in a budget is the proper care and maintenance of the sanctity of tax dollars of hard-working Canadians, not what the public might or might not think about how the government puts its budget together.

Committees of the HouseRoutine Proceedings

12:55 p.m.

Canadian Alliance

Grant McNally Canadian Alliance Dewdney—Alouette, BC

Mr. Speaker, I appreciate my colleague's speech because he pointed out many of the deficiencies in the government's budget. During his speech he touched upon the auditor general's report. During debate over the last several days government members have asked what opposition members would identify as wasteful spending. We have identified those areas in this place.

I would like to ask my colleague about the $16 billion identified by the auditor general as areas of spending that are not of high priority. Before the parliamentary secretary jumps to his feet and says that opposition parties are against x , y and z , which is the government's first line of defence, what areas would my colleague suggest be repriorized, with money put into high priority rather than low priority areas? I know he touched on it, but I would like him to elaborate on it.

Committees of the HouseRoutine Proceedings

12:55 p.m.

Canadian Alliance

Jay Hill Canadian Alliance Prince George—Peace River, BC

Mr. Speaker, I have been here eight years now and over the years we have continually pointed out where the government and its predecessors since 1993 have made poor choices for Canadians. I am often reminded of a saying that I have heard since I came to Ottawa: “Ottawa is about 20 square miles of city surrounded by reality”. That is how Ottawa is viewed by those living outside Ottawa.

Time and time again we see in Liberal budgets that the government reinforces that perception. By naming Ottawa I do not mean to slam the city. Ottawa is a beautiful city and I have come to appreciate it during my short time here. However I am speaking specifically about the sometimes unreal atmosphere in the Chamber and what parliament does under a majority Liberal government.

My colleague from Pictou--Antigonish--Guysborough identified some of those areas. Hundreds of millions of dollars were spent on the gun registration scheme. We argued time and time again that the money could have been better spent in law enforcement.

Billions of dollars were funnelled through grants and contributions. The auditor general, following up on the good work of her predecessor, Auditor General Desautels, identified time and time again to the government and its predecessors that there were fatal flaws in how it administered those dollars. It seemed to shovel the money off the back of a truck as fast as it could.

If anyone dared to question the government, somehow the person was seen as attacking some specific individual who might be getting some benefit from the money some place in Canada.

When poor choices are made and big, bureaucratic, red tape programs are created, the benefits to a small number of people are small. The economy as a whole could be allowed to flourish and grow if the government got the heck out of trying to manage people's lives, create jobs and all this type of nonsense that seems to be the socialist mentality in the government.

I do not know whether it has too many New Democrats in its cabinet or what the status is but we have a real problem. A pro-business agenda has not been put forward over the last number of years by the government. Rather it has been tax and spend and not spend wisely.

Canadians do not mind being taxed. They are among the most heavily taxed people in the world. They accept that to a certain degree if they see money spent wisely. However time and time again the government has made poor choices.

I hear it all the time. I was on an open line radio show in Prince George yesterday. Judging by the phone calls that were coming in from out in the real world, people are not buying the nonsense that the government is trying to shovel about the budget. They know that there was nothing in there that would help put turkey on the table at Christmastime.

Committees of the HouseRoutine Proceedings

1 p.m.

Markham Ontario


John McCallum LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, let me say that I am new to this profession. In my previous life I was used to debating budgets and economic matters in the banking and university worlds. Generally we had debates of substance and we did not go back and forth telling each other that our statistics were wrong.

This is quite a different world when dealing with the opposition. In just about every debate opposition members have thrown out statistics that were absolutely false. Yesterday there was a particularly egregious example coming from the hon. member for Medicine Hat, the best finance critic the Alliance has ever produced. However he twice claimed that Canadians, presumably because of the Liberals, suffered declining living standards in the year 2000 compared with 1999.

I looked into this and discovered that after inflation real disposable income went up in the year 2000 by 3.5%, the biggest increase in at least a decade. I will be factually based in my remarks unlike the hon. member for Medicine Hat and his successor. In terms of public debate it is better to get one's facts correct and then one can go on to substantive issues of debate.

I begin with the issue of deficits and surpluses. We have two extremes that are both wrong. The Alliance is saying that we would go back into a deficit or that we would have a planning deficit. It is wrong.

Then we have the Bloc Quebecois saying that we have an enormous surplus of around $13 billion, which is astronomical compared to what all of the other economists in the country are saying.

I want to deal with both because both extremes are wrong. We are being attacked by the opposition for reducing the size of our contingency reserve or for eating into part of the contingency reserve.

What are contingency reserves for? They are for unexpected negative contingencies. What was September 11 and its aftermath? If ever there was an unexpected negative contingency it had to be September 11 and its aftermath. One could call it the mother of all contingencies. Therefore it is entirely appropriate that we use a part of the contingency reserve in the face of this tremendously tragic event which is also bad for the economy.

We have no planning deficit; we have a surplus. The idea that economists are saying we are in a deficit is crazy. Economists, not the government, do the fiscal projections on which the surplus projections are based. As the minister pointed out in the budget, even if we take the four most pessimistic economists and the four most pessimistic projections we would be in a surplus this year, the next year and the year after. We are the only G-7 country which would avoid going back into a deficit so the Alliance is wrong. Let us now go to the other extreme.

This $13 billion surplus the Bloc Quebecois is referring to, which is astronomical when compared to what all of the other economists in Canada are saying, can be explained in one of two ways: either the Bloc Quebecois is wrong—one economist—or else all of the other economists in the country are wrong. Take your pick. As far as I am concerned, the Bloc Quebecois' forecast has no credibility.

My second point concerns the question of fiscal stimulus. There are those on the other side of the House who have claimed that we are doing nothing to help Canadians at this time of economic slowdown, that we are doing nothing to promote health care and so on. Both those claims are wrong. What matters for individual Canadians and the Canadian economy is the support they received this year. It does not matter whether that support was announced in this budget or the last budget.

Last year we had a $100 billion tax cut. We cannot have a $100 billion tax cut every year, strange as that may seem to the opposition. The measures taken a year ago are now coming onstream and providing significant support to the Canadian economy and to individual Canadians at this time of global slowdown.

We had an additional $17 billion in tax cuts which came onstream January 1 of this year just at the time of the economic slowdown. I am not saying the government predicted that but as things turned out these were impeccably timed tax cuts putting an extra $17 billion into the pockets of Canadians and for Canadian companies.

There is an extra $3 billion this year for health care and $23 billion over five years. The idea the federal government is pulling back from health care is false. It is true that there were cuts in the first half of the nineties because when the federal government came to power in 1993 it inherited a $42 billion Tory deficit. It would have been unsustainable had we gone along with that. We would have hit the wall. We had to get rid of that deficit, so early on there were some cuts.

A couple of days ago on the 22nd anniversary of the defeat of the government of the right hon. member for Calgary Centre on its budget the then prime minister boasted that having inherited a deficit of $38 billion from the Liberals in 1984 he bequeathed us a deficit of $42 billion in 1993. That is a strange idea of Tory progress, from a deficit of $38 billion to a deficit of $42 billion, whereas the Liberals not only wiped out the $42 billion deficit but we turned it into surpluses.

There were cuts at the beginning but we have been restoring funding to health care in the last five years. Five years ago the federal government accounted for 21% of total Ontario program spending. Now it is 30%. We have been accounting for an increasing share of the expenditures of the government of Ontario including health care. It is even more for Quebec.

Perhaps the Bloc Quebecois members are not familiar with the figures, but federal transfers account for 30% of the spending programs in the province of Quebec.

If we go further east to the maritimes, it is up to 40%. A very major component of that fiscal stimulus, in addition to the $17 billion in tax cuts going into the pockets of Canadians, was an additional $3 billion for the health care system. We, like other Canadians, acknowledge that this is our top priority. In addition to that there were a number of other initiatives: infrastructure, research and so on, putting the amount of the stimulus to well over $20 billion to $26 billion and probably larger than that. Certainly it is larger than what the Americans are talking about doing, not that they have implemented it yet.

Let us treat facts as facts. If we look at the forecasts of the OECD, of the IMF, of any economist we care to imagine, all of them say that this year and next year the Canadian economy will outperform that of the U.S., both in growth and in jobs. This is in sharp contrast to the early eighties and the early nineties when we did worse. These economists and experts are unanimous in the view that we will do better. Part of the reason for that is this very large stimulus that the government has provided this year and that will get even bigger next year. In addition to that we have the lowest interest rates in 40 years.

It is for this reason, having put our fiscal house in order, having started from a starting point of a $17 billion surplus, that we have been able both to provide this very substantial support for the Canadian economy and the lowest interest rates in 40 years and to do all of that without going back into deficit. It is largely for those reasons that these experts are unanimously of the view that our country will do better than our neighbour in jobs and growth this year and next year.

Now I would like to deal with the question of tax cuts and the capital tax. We have been taken to task by the Canadian Alliance for not cutting taxes further in the budget, and wrongly so, because who is the keenest in the land on further tax cuts, apart from the Alliance? I would say the BCNI, the Business Council on National Issues, and the Canadian Chamber of Commerce. Both of those entities have acted in what I would describe as enlightened self-interest by stating explicitly that they were not calling for further tax cuts in the budget, partly because they recognize the exceptional circumstances in which we find ourselves today and partly because they recognize that $100 billion worth of tax cuts is already on stream and in the process of being implemented.

From the corporate point of view, what have we done? We get criticisms from the Tories on productivity. We get criticisms from the Alliance on tax cuts. We have implemented halving of the capital gains tax. That is good for productivity. That is a major tax cut. We have got rid of the income tax surtax. We have improved the treatment of stock options, which is important for the new economy. Perhaps most important for business, we have set in motion reductions in the corporate tax rate so that by the year 2004-05 our corporate tax rate will be about five percentage points lower than that of the United States.

All of that adds up to a massively pro-productivity agenda, contrary to what the Tories are saying. It means that we do not need to have further tax cuts in the budget, as approved by the BCNI and the chamber of commerce, contrary to what the Canadian Alliance has been saying. I would now like to say a few words about tax points and the Bloc.

Its position is completely ridiculous. The government has already made numerous transfers to Quebec in the past, in the form of tax points. We have given the provinces, including Quebec, more leeway to collect taxes.

In Quebec accounting practices, in separatist accounting practices, when funds are transferred to the provinces in the form of tax points, the federal contribution counts for nothing. That is the first point.

Given that, for them, current tax point transfers count for nothing, now they want us to transfer more in tax points, so that they can count these new tax points for nothing as well.

The Bloc Quebecois is asking us to convert the cash transfers, which do count, into tax point transfers, which do not count. Clearly, from a separatist point of view, for the PQ and the BQ, this is an excellent idea, since they receive more money and can turn around and say that the federal contribution is nothing. But from our perspective, we will not be taken for fools. We will not be taken in by this separatist ploy to give more resources to the separatists, only to have them say that we are not giving anything. We are not idiots on this side of the House.

In conclusion, I hope that we can in future be somewhat more fact based in our comments in the House, notably the Canadian Alliance. Out of every six facts it has, approximately four turn out to be totally erroneous. To summarize my position, I think this is an excellent budget because it has achieved four things.

It has put safety and security first. It has put what is necessary but not more than necessary into those safety and security measures.

Second, at a time of substantial global economic weakness it has provided massive support to the Canadian economy in the form of tax cuts, health care spending and other investments. This will stand us well in withstanding the global turbulence better than we have done in the past and emerging from it strong, and stronger than our neighbours.

Third, it has remained faithful to the government's longer term agenda, the social agenda, aboriginals, foreign aid, innovation, research, and the environment and so on. We have taken measures in all those areas.

Finally, incredible though it may seem, we have achieved all this in a time of extreme global slowdown without going back into deficit.

Committees of the HouseRoutine Proceedings

1:20 p.m.

The Deputy Speaker

Given the interest that members have in asking questions of the parliamentary secretary, I would hope that they would co-operate and keep their questions somewhat succinct, and the parliamentary secretary likewise, and we will get an interesting exchange and more people participating.