Debates of Dec. 13th, 2001

Committees of the House

[Grant McNally, Canadian Alliance, Dewdney—Alouette, BC]

Madam Speaker, I have a question for my hon. friend. The auditor general pointed out approximately $16 billion of questionable spending on behalf of the Liberal government. Surely he would agree with me that the government could have found some areas of spending that could have been reprioritized into areas of military defence, health care and other priority areas of spending, rather than the grants and contributions that we have seen under the Minister of Human Resources Development.

Surely the member would agree with me that there must have been some room to reduce some wasteful spending. Surely he would admit that the Liberals could be looking closer at some of those areas of wasteful spending and reducing that and putting it into high priority areas. Would he agree with me on that?

[Julian Reed, Liberal, Halton, ON]

Madam Speaker, I suppose my hon. friend would consider it wasteful spending to spend money on fetal alcohol syndrome for first nations communities and the children there? I am sure my hon. friend would feel that those should not be priorities in this country.

The people of Canada should feel lucky with this budget and that somebody across the way is not in charge.

[Svend Robinson, NDP, Burnaby—Douglas, BC]

Madam Speaker, in the very brief time that is left I want to ask the member who has just spoken two questions.

My first question is with respect to the issue of the theft of workers' funds and the massive accumulation of a surplus in the EI fund, without which clearly there would not be a surplus. Will the member indicate when the government will finally fund employment insurance properly in this country?

[Julian Reed, Liberal, Halton, ON]

Madam Speaker, when this government took over there was a $12 billion deficit in the EI account. It has been the policy of this government to build a rainy day fund.

Now it would appear that we are going through at least a temporary rainy day. We are able to draw on that fund and make it work for Canadians. That is what those EI premiums are all about.

[The Acting Speaker (Ms. Bakopanos)]

Unfortunately the time for questions and comments has expired. On debate, the hon. member for Yukon.

[Larry Bagnell, Liberal, Yukon, YT]

Madam Speaker, I found it interesting that the first intervention suggested that my colleague had trouble with relevancy in his point, since we had about an hour-long speech from the first speaker that was not even on the topic which was the report of the Standing Committee on Finance.

I was not going to mention that but if the party that brought up the debate does not talk on the topic then it is hard-pressed to talk about relevancy. Nevertheless, I do not fault those members for what they said in that speech because the concern of all of us today is the budget and the ongoing discussion on it.

I would like to enter into a friendly debate with my Alliance colleagues who have spoken so far, give an opposing view of some of the points they made, and indicate where we are coming from.

I suggest that we have a fairly large philosophical gap. The party talks about overspending but it does not get into the nature of the spending. Where our party is coming from on CIDA, agriculture, the environment and first nations, is that we try to invest in people and remove the root causes of the problems rather than just give undefined amounts of money.

For instance, when we talked about first nations and nothing having occurred, a lot of the investments we have made over the years, with support from most of the parties, have been for education, housing and training. In the next session we will see work on improved governance. All these things are an investment and they do not have to go on forever. They are not permanent expenditures. We are solving problems.

It is the same with agriculture. A number of speakers have said that agriculture was not mentioned in the budget, but that is not true. Instead of only throwing money, although the same levels of funding are there, we are looking at the long term structural situation of agriculture with the Prime Minister's task force. The finance minister said that we will be there when the suggestions from this task force come out.

Another example of the government improving the future is on the environment. The budget looks at the brownfields strategy.

In general there are a number of places, although not permanent investments, where there are investments in people that will ultimately lead to reduced expenditures. We are trying to take that long term view.

One of the points that has been continually raised by Her Majesty's loyal opposition, and was also mentioned by a member of the coalition a few minutes ago, relates to waste.

In their responses and speeches today, I would like to hear a better definition of specifically what they think should be cut. Quite often they refer to large numbers that other people have suggested but they are not willing to take a stand on very many of the items. There are a couple of items but they certainly are not in the scope of the large figures they say should be cut.

I would like the parties that want the items cut to specify the amounts and items and then we can debate those specific items.

The next thing relates to TV and film. A comment was made about investing in TV and film. In my riding I am very excited that film is one of the areas where we have an opportunity. We have a very slow economy. It has the third highest rate of unemployment in the country. We have just had some new films in Yukon and I am very happy about this as it is an important investment for us.

I would like to discuss some comments that have been made a few times in the budget debate relating to pet projects of Liberal leadership candidates. It is humorous to hear those comments from a party that does not even have a permanent leader at the moment and whose leadership is far more of a disturbance to the House than anything they could be talking about.

As those members search for a leader, I am assuming they would like to get one of the best people, with experience and ideas. I am certain the official opposition would not ignore all the ideas of their chosen leader. In fact, the person they pick as their leader would probably have significant influence over their ideas. Why would it be unacceptable that some of our leaders would have some influence on the budget and some ideas? It only makes sense. Theirs is a nonsensical approach.

There is example of one of those projects, which I have mentioned before because I am passionate and upset about it. There is no one party that is totally against this, which is fine, but certain members in a couple of parties have been saying things against the broadband Internet, basically about connecting rural and northern Canadians to the Internet. I do not see why Canadians in my riding and other rural places should be less important than other Canadians, should not be able to get on with the competitive economy which of course would help keep our dollar competitive, et cetera. I am only taking issue with certain members, not with any party.

The auditor general pointed out that different programs and different parties had different management. I worked at Industry Canada years ago. As has always been the case, when there are hundreds and thousands of programs there will be different management techniques. I remember that IRAP and PEMD were very popular programs with the Canadian public. Those programs had different management systems. This is not unexpected, especially if one is trying to modernize management. Obviously the government, every manager and thousands of people will not move at the same speed and at the same time.

I am glad members of the opposition spoke about the investment we are making for aboriginal children and said that it was a viable priority. I also am glad they mentioned Canadian heritage because that is very important for my riding. One of the biggest draws for my riding is tourism, for example, the great gold rush city of Dawson City. Heritage is important to me.

I do think the suggestion of giving money away is a bit of a hyperbole. It is not allowed. The auditor general does not allow it and we cannot just give money away. We have to be more specific.

I also liked the comment that we cannot let the country slip back into deficit. The biggest cheer in the House during the budget speech was as a result of the fact that we would not be going into a deficit this year nor in the next several years.

I also noticed that members of the opposition raised the issue of the CBC a few times. In their next intervention, I would be interested to know which items of the CBC funding should be cut.

I had a number of other comments to make but I will skip over them and go to the item we are supposed to be debating, which is the report of the Standing Committee on Finance.

The finance committee report recommended five items. The first item was security. As everyone has outlined in the debate, it primarily was a security budget to a large degree: $7.7 billion.

The second item was that we should maintain the largest tax cut in history, $100 billion, and the budget did that.

The third item was that we should maintain the largest health care agreement in history made with the provinces last fall and agreed to by all the premiers for the coming years, in spite of our constriction on revenues due to the recession, the fact that government revenues are down and due to the security expenditures. The budget did that.

The fourth item was that we should continue to increase our competitiveness and investments in innovation and research development and the Canadian Institutes of Health Research. All those things were done.

The fifth item the report pointed to was that, in spite of the security concerns we should not lose sight of our longstanding objectives. We did not do that in the other objectives, as I outlined yesterday, with our expenditures on the poor, on first nations people, the disabled and the environment. We kept to our objective on those things. The budget is fairly in tune with the report.

I will close by asking a few questions of the Alliance finance critic. I think he may be up next. I have a great deal of respect for him. I enjoy his research. He does it thoroughly. Hopefully he will answer a few questions.

The Alliance is constantly talking about improving the state of the dollar. Exactly how are we going to do that? What suggestions does he have? I would also like him to answer a question that has been asked three times but as yet has not been answered. Does the Alliance Party agree that we should still fund the Canada pension plan the way we do now?

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

Madam Speaker, I listened with great care to the hon. member's comments on the budget. I know that people in his part of the world, like in all parts of the country, are extremely concerned about how his government is spending taxpayers' dollars.

The Minister of Finance produced a budget which in essence had $130 billion worth of taxpayers' money that was to be allocated, yet in his comments he referred to the fact that there was no area in which there could have been cuts to government spending. There was no area whatsoever that the Minister of Finance could identify that would have saved taxpayers money. He as much as said so. He as much as said that there were no areas where he felt there was an ability to trim government spending, yet the member asked rhetorically where some of that spending could be cut.

I would suggest that one place to start would have been the $700 million that has been poured into the ill–fated, unenforceable gun registry system. I know it is extremely unpopular, particularly in the north, in the area the member represents.

Another area that springs to mind is the $1 billion that seems to have gone unaccounted for in last year's HRDC budget. Incidentally, the finance minister took it upon himself, not in this budget but in the last one, to actually increase that blank cheque that went to that minister's department after she exhibited reckless spending within her department.

The auditor general identified $16 billion in 16 departments that could have been cut. That would have been a starting point. We have to look no further than the auditor general, who is an officer of this parliament, to identify some of those areas.

Another area that springs to mind is the $1.4 billion that was sent out in home heating oil rebates which made its way to some notorious places, such as some prisoners. Students who were living in residence also received them, but that is not to say that students do not deserve some kind of funding from the government. People living outside the country and deceased people were recipients of the cheques. My understanding is that of the $1.4 billion, over $250,000 did not make it into the hands of those who actually should have been receiving it. John Diefenbaker may have received a cheque.

These are just a few suggestions I have in response to the hon. member's rhetorical question.

My question to the member is, does he not associate himself with the auditor general's report? Does he not agree that there has to be somewhere in that $130 billion where even a dollar could have been trimmed to save taxpayers money this year?

[Larry Bagnell, Liberal, Yukon, YT]

Madam Speaker, I thank the member for that intervention because it allows me to re-emphasize the point I was making. I am glad he started on a small list.

A great example is that the member would choose to sacrifice the thousands and thousands of poor who received the home heating oil grant for the administrative problems of a few people. That is fine. That is exactly why we want this list, to see what the opposition is willing to sacrifice.

The auditor general did suggest a number of areas related to spending. The two parties complaining about it have not elaborated on which areas to support. Some of the points the auditor general made related to the administration of those programs. If we are talking about programs relating to first nations, the poor, the environment, or heritage, it does not mean that those areas are bad areas to give money to; it means that their administration has to be improved. I do not have a problem with that. That is what the auditor general is there for. I have no problem with improving administration and saving funds.

I would be very interested in seeing a list from the members of the two parties who are talking about spending, such as the member has stated, with the exact items they would like to see cut. Then we can continue to debate.

I would also like the members of the Alliance to comment on regional funding. Yesterday one of the Alliance members suggested that regional development funding was one of the areas that could be cut.

We in the north have a transfer payment which is like regional funding. There is ACOA. There is western diversification. The whole country is covered, except for southwestern Ontario. Is the official opposition suggesting that we cut the money from the entire country except for southwestern Ontario? And I am not sure it is doing that well either.

[Pauline Picard, Bloc, Drummond, QC]

Madam Speaker, I will start with a comment. This week has been the most disappointing week of any I have spent in this House since my election in 1993-94.

The first reason for this is that we have had a very disappointing budget, and the public is worried, particularly in view of recent events. We were expecting a budget that would have reassured them and provided some measures to get the economy back on its feet.

No such budget was forthcoming. There is nothing for seniors, nothing for businesses, absolutely nothing at all. Nothing for women, for old people, nothing to deal with poverty. That is the first disappointment.

The second reason is that last Tuesday the House passed a bill originating in the other place, creating the position of parliamentary poet laureate. No one ever died of ridicule, fortunately, or we would have lost a number of our colleagues here in the House. This is totally scandalous.

When this becomes known, the Liberal government will have something to answer for. This is totally abhorrent; not one cent to help people, to provide them with some security in a time of economic downturn, and yet we have a bill to create a poet laureate for parliament. They are thumbing their noses at Canadians. It is not supposed to cost that much, a salary of $30,000 a year—

[An hon. member]

Plus secretarial staff.

[Pauline Picard, Bloc, Drummond, QC]

Plus secretarial staff, office space and so on. There are a lot of things we are not being told about like the expense account that goes with this position.

While there are people who will not even get a Christmas basket as the holidays are approaching, who have nothing to eat, parliament, with its full coffers, has pretentiously provided itself with a poet laureate. This too is a disappointment, and makes this the blackest week I have lived through here since 1993.

The Minister of Finance often says that he consults the public to come up with a very transparent budget. He sees to it that prebudget consultations are held by the Standing Committee on Finance, on which I sit along with other members from all parties, including the Canadian Alliance and, of course, the government party.

Several witnesses appear before the committee, which sits for hours and weeks. The Minister of Finance says that it is based on these consultations, based on this infamous report that he prepares his budget. That is hogwash. We saw this week that it is hogwash.

The Bloc Quebecois wants to emphasize the fact that, as in previous years, these prebudget consultations are, unfortunately, a somewhat hypocritical exercise, since the Standing Committee on Finance and the Minister of Finance do not really take into consideration the recommendations and grievances of Quebecers and Canadians on how federal surpluses should be used. No one is fooled by the government's approach. We know that the die has already been cast, as we saw this week.

Therefore, I wish to present—because I already spoke on the budget—the dissenting opinion of the Bloc Quebecois regarding the report on the 2001 prebudget consultations that was tabled by the Liberal government.

Hon. members will see that we were right. We do not merely condemn. We have figures. We work on these figures and we make reasonable suggestions to help the public at a time when everyone is a bit stressed out because of recent events. There already was a downturn before September 11. We had anticipated that and we proposed solutions in our report. This is what I want to explain to hon. members today.

First, let us talk about the government's fiddling with the figures. Unfortunately, the federal budget process has become a cover-up operation instead of an information tool on the state of Canada's public finances. As we were all able to see over the past few years, the Minister of Finance has this nasty habit of underestimating budget surpluses. This year, he not only underestimated revenues, he also overestimated expenditures. This is even worse.

Since 1996, the federal government has accumulated budget surpluses of about $35 billion. Instead of making everyone happy through good governance, this government has shown its inability to anticipate its deficits by artificially increasing them while underestimating budget surpluses, as I mentioned earlier. The government did the same thing again this week.

It excluded from all public debate nearly $60 billion in manoeuvring room, which the Bloc Quebecois with considerably fewer means had managed to estimate more precisely. For five years now, with the figures and means we had, we have been out by about $4 billion with the actual figures we were given. The Minister of Finance is out by about $60 billion. Is this transparent?

[An hon. member]

He does not know how to count.

[Pauline Picard, Bloc, Drummond, QC]

He does indeed not know how to count. He is playing with the figures. He is trying to get us to believe his story, but we are not fooled, and neither is the public.

According to the accounting process, if no surplus is forecast, any realized goes to paying down the debt, so surpluses cannot be used because an accounting process is involved. These are fiscal measures, but who is paying for the surpluses that are being used to pay down the debt?

[An hon. member]

The unemployed.

[Pauline Picard, Bloc, Drummond, QC]

The unemployed, because these surpluses come from the employment insurance fund. This has been proven. Even the auditor general criticized this. The employment insurance fund, workers and the unemployed are currently paying off the debt. This makes no sense, when the government is not contributing a cent. It is actually stealing from them. This week all the newspaper articles on the subject were saying this very thing, not just the Bloc. All the analysts are saying it. This is cooking the books, this is theft, no doubt about it.

By falsifying the true picture of public finances in Canada, the federal government has also misappropriated considerable funds from the public domains of health and education, for example. It has also hindered public participation, since the public is receiving very mixed messages.

We condemn the alarmist tone of the report, the report tabled by the Liberal majority at the Standing Committee on Finance. We did not support it, because it does not contain the information and the priorities witnesses came before us to express. The report simply indicates the government's fear about the deficit, while we say this concern and uncertainty are mistaken. The figures were once again falsified, and the Minister of Finance is doing this deliberately.

If they really had good intentions, a statement to this effect would have helped maintain consumer spending at higher levels and would have sent a positive signal of an economy that can slow down without collapsing.

As well, we do not at all agree that there is a danger of slipping back into a deficit position. The budget surplus for the first six months of the fiscal year reached $13.6 billion. In six months, there was a $13.6 billion surplus. The economy was already slowing down before the events of September 11, but even with this slowdown, there is a $13.6 billion surplus. As far as I know, Canada is still in a downturn, but there has not been a collapse. Plus, there are all the current inflows. This is the holiday period and consumers are spending on consumer products.

So where is this crisis? We know that there have been layoffs in some plants, but the situation is not catastrophic. There was already a surplus of $13.6 billion. At the close of the fiscal year, at the end of March, there will be yet another false estimate of the surplus. This false estimate will allow the government to say that it has no choice, that it must put the money toward paying off the debt and creating a new infrastructure foundation instead of increasing the Canada health and social transfers for priorities such as health and education as the provinces had asked. This is but another way to stick their noses in the business of provinces.

Infrastructure comes under provincial jurisdiction. Instead of injecting the $2 billion promised into the existing program that the provinces are already used to, as there were already negotiations and there are already agreements, no, the government had to go and create yet another administrative monster. The directors have yet to be appointed, but we can safely guess that they will be friends of the governing party, those who contributed the most to election campaigns. We have no doubt about that. They want the public to believe that this process and this budget are transparent. Once again, this is hogwash.

How could the government make the entire $13.6 billion surplus disappear? Even with a downturn, this week's increase in military spending, and beefed up security, it is hard to imagine a balanced approach, which is apparently so dear to the government, pushing the bill as high as $13 billion.

In fact, for the country to slip back into a deficit situation, annual growth would have to drop below minus 5%, or spending would have to jump by 11%, showing just how ridiculous this alarmism is.

Finally, the Bloc Quebecois wishes to remind the Liberal majority on the Standing Committee on Finance, and the Minister of Finance himself, that a large portion of last year's federal surplus, approximately $7.5 billion, came from the EI fund surplus. We have spoken about this. According to the fund's chief actuary, this year's surplus will be in the neighbourhood of the $7.8 billion squirrelled away during the last fiscal period. This means that it will be $7.8 billion at the end of March. No small amount.

We would also have preferred to see the economy given a little boost in this budget. In the context of the present economic downturn and the impact of the events of September 11, the Bloc Quebecois proposed to the Minister of Finance a $5 billion plan for stabilizing the economy, without producing a deficit. That is what we proposed.

This plan is built around two key notions: supporting the economy and supporting jobs. It was realistic, effective and responsible. Sadly, the Minister of Finance did not draw from it.

Furthermore, despite the spending this plan would have entailed, the federal Minister of Finance would still have had ample leeway to meet the new security and international aid requirements.

With respect to international aid, we had a plan which could have boosted us to the 0.7% of GDP suggested by the UN. Instead, aid spending has gone up by a meagre one hundredth of 1%, to 0.26%. It is absurd, and then the government tells us about its wonderful foreign aid programs, when several millions of dollars went towards propaganda.

It spent a few million dollars on propaganda in other countries about our leadership in this, that and the other, and about how we are the greatest country in the world. Yesterday, someone even jokingly referred to Canada's greatest terrorists. This strikes me as a bit odd. Overuse of the word greatest will eventually prove one's downfall.

The plan we had proposed was based on more realistic estimates, since it draws on the most conservative scenario. Out of a concern for caution, because the Bloc is a responsible party and does not want to plunge Quebec and Canada into a budget deficit, we chose the hypothesis based on negative growth of 2% for the first two quarters of 2001-02.

As the case may be, at the end of the present fiscal year, as we have said, the federal surpluses would amount to $13.6 billion. We are not talking of the last months, but of the first six months. We think the surplus will be $13.6 billion. We already know the facts. We think it could be slightly higher, but these are conservative figures.

Our estimates reflect the tax cuts and transfers to the provinces. If we deduct from that the $5 billion required to implement the economic recovery plan proposed by the Bloc Quebecois, which represents one time expenditures, the Minister of Finance would still have a comfortable margin of $8.6 billion.

In this recovery plan, which I will discuss it briefly, because time is running out and I have only two minutes left, we proposed to provide $1.85 billion to support small and medium size businesses, and $1.15 billion for employment insurance. The Bloc Quebecois felt that the federal government should implement a series of measures to restore confidence and put back to work the thousands of Quebecers and Canadians who have lost their jobs since the beginning of the crisis.

The government should immediately implement the recommendations contained in the report of the Standing Committee on Human Resources Development. That report, which contained 17 recommendations, was unanimously approved by all committee members.

Out of these 17 recommendations, the Minister of Finance has followed up on just one, which is totally meaningless. It provides for a shorter waiting period for apprentices, such as a labourer or cook apprentice, but there is no new money.

[An hon. member]

There is nothing.

[Pauline Picard, Bloc, Drummond, QC]

There is nothing. The unemployed will have to wait for their cheques before Christmas—

[An hon. member]

Seasonal workers.

[Pauline Picard, Bloc, Drummond, QC]

Seasonal workers will no longer get any cheques either and they will have to rely on food banks. What is the government doing for them? It is utterly shameful.

I will conclude by expressing my sadness following this week's failure. This is a disappointment for all Quebecers and Canadians.

[John McCallum, Liberal, Parliamentary Secretary to the Minister of Finance]

Madam Speaker, the hon. member ought to know that the surplus forecasts do not come from the government but from economists, banks and other institutions. It is therefore difficult to understand why we should believe the Bloc's prediction of a $13 billion surplus. These predictions are totally lacking in credibility.

[Monique Guay, Bloc, Laurentides, QC]

Because we know how to count.

[John McCallum, Liberal, Markham, ON]

These predictions are totally lacking in credibility.

All of the economists are saying one thing, but the Bloc Quebecois is producing forecasts from another planet, predicting an enormous surplus. There is just one situation in which they could be believed, and that is the one in which her colleague, the hon. member for Saint-Hyacinthe--Bagot—

[Some hon. members]

Oh, oh.

[The Acting Speaker (Ms. Bakopanos)]

Order, please. It is extremely difficult to hear the hon. member's question. I would ask that he be shown the same courtesy that the hon. member received for her speech.

[John McCallum, Liberal, Markham, ON]

Madam Speaker, what I was trying to say was that all the economists are saying X, and only the Bloc is saying Y. That being the case, the only reason to believe the Bloc Quebecois would be if the member for Saint-Hyacinthe--Bagot were the most brilliant economist in the country. Is this what the hon. member is claiming?

I have another question as well. The notion that the public is getting nothing in this budget and the economy is not getting any boost is totally ridiculous. What they have received from past budgets, and from this one, is a tax cut of $17 billion. Most of these reductions go to middle and low wage earners. A total of $17 billion is not nothing, as she says. Neither is the $3 billion increase in health expenditures in a single year.

How can these Bloc Quebecois say there is nothing, when in fact there is a major stimulus, even greater than in the U.S.?