Debates of Dec. 4th, 2001

Supply

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

Mr. Speaker, it would seem that the member does not understand that the forecasts used by the government are those made by economists.

These are not political forecasts of surpluses and deficits, they are forecasts by other economists.

His forecasts of surpluses of $13 billion and $11 billion are off the wall compared to what all the other economists have forecast.

Why should the government believe his forecasts, which are so far removed from all the others, unless he is the most brilliant economist in the country?

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I cannot make such a claim. However, I can say to this economist, who has been conditioned by only a few months of politics, that our forecasts are based on the forecasts of Quebec and Canada's major institutions on the growth of the GDP. These rates of growth, in real terms, are those we applied to the growth of spending.

In case he is not aware of it, the Royal Bank continues to publish forecasts, which we have used for this year and the next two years. We have used the forecasts of the Bank of Montreal, the Scotia Bank, the Toronto Dominion Bank, the National Bank, the Mouvement Desjardins and the CIBC. If that is not official and solid, I would like to know what is.

When he was a member of the group of economists consulted by the Minister of Finance behind closed doors, I never heard him speak of the annual surplus. It is easy to step behind closed doors and let the Minister of Finance say “I have consulted economists and here is what they had to say”. But they have a responsibility.

On the Standing Committee on Finance, economists came to testify and they laughed at the Minister of Finance's forecasts. These were the same economists who discussed with him behind closed doors. Somewhere there are issues of competence and honesty.

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

Mr. Speaker, I will split my time with the member for Acadie--Bathurst.

What we have before the House today is a motion that will crystallize debate before the budget the Minister of Finance will bring down next week. I point out at the outset that this year after the finance committee hearings we have a unique situation. We have the Alliance Party and the Conservative Party both making supplementary comments but agreeing with a majority report. Only the Bloc Quebecois and the NDP filed a minority report. In essence, we have a vision of three Conservative parties, the Alliance, the Liberals and the Conservatives, with the same vision--

[An hon. member]

In the same bed.

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

The same vision, in the same big bed, of where they want to take the country.

This was confirmed a few minutes ago in a surprising way by the Parliamentary Secretary to the Minister of Finance when he was boasting that this is now the smallest federal government in Canada since the second world war. He said it in a very boastful way. I thought he was a progressive Liberal. I thought he was on the left wing of the Liberal Party, but he is not. He is very proud of these Reform Alliance policies about a very small and shrinking federal government, a shrinking violet that is afraid to tackle the issues and problems of the day. That is what the minister said.

I know that even some western reformers like my friend from Souris--Moose Mountain are really concerned about the diminishing role of the federal government in the country because he, like I, wants the federal government to play a more major role in health care, in helping the farmers of the country, in public education and in investing in our economy. What do we have instead? We have the agenda of the Reform Alliance being adopted by the Minister of Finance, and the parliamentary secretary, a so-called progressive, bragging about and endorsing that as the right and proper thing to do.

Instead, the federal government should have a people's agenda and a people's budget and make jobs a priority in terms of reinvesting in the economy. What the minister did last year was to have a $100 billion tax cut over five years, much of it for the wealthy and large corporations. What we should be doing now is injecting into the economy 1% of the GDP, or about $10 billion, in areas that will help people and create jobs. That is the priority.

I went to every single one of finance committee hearings across the country and I can tell you, Mr. Speaker, there are very few people out there, except for some people in the Alliance Party, asking for even greater tax cuts, for even more money to pay down the national debt. What the people are saying instead is that there is a human deficit in the country, a social deficit in the country, and that money should be invested in terms of addressing that human deficit and we should do it in four or five areas.

We should be putting money into infrastructure in the country. We should be putting more money into affordable housing. When a house is built, 2.8 person years of work is created. First of all, housing is needed in the country. Social housing, affordable housing, is badly needed. This would also create jobs and stimulate the economy. We need more money for urban transit. We need more money in terms of environmental cleanup, clean water and water treatment plants. We need more money in terms of transportation in general. We need more money in terms of agriculture.

When the government was trying to address the problem of the deficit, which was extremely important and had to be addressed, it cut back on farm support programs, by almost $2 billion since 1993. That is $2 billion, a cutback that is approaching 50% of what the federal government used to pay to the farmers in terms of support programs across Canada.

The government is doing this in the face of tremendous assistance from the Americans for the American farmer. There is now a new U.S. farm bill that has been approved by the house of representatives and is about to be approved shortly by the senate in the United States. It will put an extra $173 billion into the farm economy of the United States over 10 years. That is $173 billion U.S. of extra money in the American economy to stimulate the American farm economy. That is on top of the $70 billion already spent in the last four years. The same thing is happening in Europe. There are massive amounts of aid for European farmers. Our farmers cannot compete and are going out of business. When farmers go out of business, small towns suffer and die and jobs are lost right across the country.

What we need is a people's budget, a jobs budget that will stimulate the economy. We need a stimulus budget which puts $10 billion in the next fiscal year into the creation of jobs into areas where the jobs are needed, into infrastructure, environmental cleanup, water treatment plants, affordable housing, urban transit and transit in general, and the farm economy. In addition, the federal government needs to put more money into the health system and public education. That is what has to be done.

The other issue is employment insurance. My colleague from Acadie--Bathurst will speak on that in a few minutes. Again many changes have to be made to protect people who are being thrown out of work. The majority of workers do not even qualify for employment insurance benefits now.

Those should be the priorities of the government. Those are very important things the government should be doing.

The other point I want to make in this short amount of time is that I am really concerned about the sovereignty of our country. The government should start to address that in next Monday's budget.

Even the new president of the Royal Bank when he spoke in Regina very recently expressed concern about the loss of sovereignty in our country. He talked about the fact that in the last two and a half years around 20% of the companies listed on the Toronto Stock Exchange had been sold to foreigners, many of them Americans. He talked about the fact that around two-thirds of the 33 or 35 gas and oil companies on the TSE had been sold to foreigners, again many of them Americans. He talked about the hollowing out of corporate Canada and the fact that the head office jobs are going to the United States. That is where the decisions are being made and where the research and development is being done.

That was from the president of the Royal Bank. He reflected the growing feeling that we are losing Canada, that we are selling out our heritage. More and more companies are being taken over, thousands in the last few years. The chapter 11 part of NAFTA and the national treatment clause have really gouged out our sovereignty in terms of being able to protect Canadian business and Canadian people in terms of a strong and sovereign Canada.

The federal government is giving away our country. A good example of that was on June 30 when the federal government and the Bank of Canada announced that they were privatizing the administration of Canada savings bonds. Imagine that, privatizing the administration of Canada savings bonds. I am sure, Mr. Speaker, it makes you tremble sitting there in the chair that that vestige of our country's sovereignty is being privatized, not to a Canadian firm but to EDS, an American firm based in Texas. Now when we buy Canada savings bonds, we deal with two phone banks, one based in Mississauga and one here in Ottawa. Why would the bank privatize the administration of Canada savings bonds to an American company?

There is example after example of how our country is being taken over and is being sold out. If we do not do something about it, we are going to lose this country of ours in the next few years.

Many members in the Liberal Party, the Bloc and the Alliance Party are talking about the use of a common currency, a common dollar between Canada and the United States. It will not be like the Euro in Europe where it is a brand new currency with a brand new central bank, where there is some institutional accountability to a European government and the European Community and where three or four larger countries counterbalance each other. It will not be that at all. However, if we keep going the way we are going now, there will be one currency. It will be the American dollar controlled by the national reserve in the United States and all the accountability will be with Washington and the United States congress.

If we lose our currency, if we lose our sovereignty, we are not going to have anything left but a shell. That is the way we are going with more and more members of the Liberal Party across the way, some members of the Alliance and the Bloc Quebecois talking about the use of a common dollar and a common currency, the use of the American greenback in this country.

The time has come for the Minister of Finance to make it very clear that we are not going down that road, that we are going to keep our currency, that we are going to have control of our monetary policy. He must make it clear that we are going to have a new fiscal policy and that the priority of that fiscal policy is going to address the human deficit. The human deficit has been soaring since the massive cutbacks by the federal government.

The parliamentary secretary across the way was boasting about the small and shrinking federal government. As the federal government shrinks and gets smaller, the human deficit, the number of people on social welfare, the number of people who are suffering in terms of low wages is getting larger and larger. We now have the highest household debt we have ever had. Credit card interest rates are extremely high.

Those are the things that have to be addressed. That is what the budget should say when it comes down on December 10. I do not think the Alliance is going the right way. It wants even smaller government, bigger tax cuts and it does not even mention the farm crisis. It wants less and less government. The federal government has a role to play. Let us play it on behalf of the Canadian people.

[Howard Hilstrom, Canadian Alliance, Selkirk—Interlake, MB]

Mr. Speaker, the Canadian Alliance and I do not take a back seat to the NDP when it comes to agriculture. The member can look at the emergency debates we have put forward and the work we have done in committee on agriculture. The member is from Saskatchewan and he and his party have done virtually nothing with regard to the agriculture crisis.

The NDP policies are obviously to spend oneself rich. I would like to ask the member some questions with regard to that. Instead of creating wealth, would the NDP policy be to greatly increase taxes so the member could do all the things that he talked about? If that is not the case, does he intend to reallocate resources within the existing $173 billion which the federal government takes in? Where would he reallocate those moneys? He cannot have it both ways. He either increases taxes or he reallocates. I want to find out where he would reallocate.

The NDP policies are evidenced mostly by the provincial NDPs that have actually been in government. What does the member think about the Saskatchewan NDP government turning down a prairie alliance for the future and not providing the money to start the railway?

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

Mr. Speaker, I do not think the member was listening. I am not talking about increasing taxes. I never used those words at all.

I want a fair taxation system where people pay taxes on their ability to pay according to their wealth. We do not have a fair taxation system. There has been a narrowing of the tax rate where the wealthier people have been getting bigger and bigger breaks all the time.

We have to increase the wealth in Canada, create jobs, stimulate the economy. Investing $10 billion in the economy in terms of stimulating jobs, creates $1.6 billion worth of growth. Much of that money comes back to the federal government in terms of taxes, with fewer people on unemployment insurance and fewer people on welfare.

It is the kind of thing that the Bush administration is doing in the United States, for goodness sake. A right wing republican government is stimulating the economy trying to create jobs, not just in the cleanup of Manhattan and not just in the war effort. I mentioned the farm bill as one example of that, $173 billion. People should realize what kind of money that is; $173 billion U.S. over 10 years and the stimulus that it has in terms of the farm economy. One could go on and on.

I look at the motion before the House. It is there for anybody to see. There are six points in the Alliance motion, six priorities. I assume when it lists six points, those are its six priorities. Do I see agriculture in there? No. There is no reference to the farm crisis, no reference to agriculture, no reference whatsoever to rural Canada. That is the evidence. In the six points of the Alliance Party there is not one word, not one mention of the farm crisis or building up rural Canada and rural infrastructure. I say shame on the Alliance, but at least we know where that party stands.

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

Mr. Speaker, on the question of Canada using the U.S. dollar, the Prime Minister and the Minister of Finance have stated with extraordinary clarity that we are not going to do that. I do not know one person in the Liberal caucus who advocates it.

The member for Regina--Qu'Appelle seems to ignore that we have already instituted as of January 1 a fiscal stimulus larger than what the Americans are talking about. He ignored that in his speech.

The relevant minister announced deals forthcoming very soon with the provinces on affordable housing. We have an infrastructure program that is starting to pick up.

If the hon. member does not want the country to go back into deficit, I cannot understand how a permanent $10 billion infrastructure or job creation program would avoid that unless he is basing his projections on the extraplanetary surplus projections coming from the finance critic of the Bloc Quebecois.

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

Mr. Speaker, about three weeks ago, 100 economists came out with a proposal that we stimulate the economy through the kind of plan I am advocating today. The money is there. The federal government last year for example put $17 billion on the national debt. It has a plan to cut taxes by $100 billion. It is a matter of priorities. It is matter of balance.

A lot of people in the country feel that 1% of our GDP is not too much to spend in terms of creating jobs and stimulating the economy. The parliamentary secretary is the economist in the House. Much of that money comes back to the federal government anyway in terms of the increased economic activity, in terms of increased taxes for the federal government, less money going into EI, less money transferred to the provinces in terms of social assistance and welfare.

A lot of economists feel this way. The parliamentary secretary was at all of those parliamentary hearings too. He knows that the people coming before the committee say that we have to once again rebuild the human infrastructure, address the human deficit. I do not think $10 billion is too much for that. It is a matter of priorities.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, I am pleased to rise in the House today to address the Canadian Alliance motion.

First, while I am not surprised, I am somewhat disappointed. I remember that, during the last election campaign, the leader of the Canadian Alliance told westerners that he wanted to cut employment insurance. When he came to the Atlantic provinces, he said that he wanted to change employment insurance benefits. He was saying two different things.

Today, we realize that the opposition motion says only one thing: that the upcoming budget should, and I quote:

(d) reduce Employment Insurance (EI) premiums by at least 15 cents for next year and continue reducing EI premiums to the break-even rate as soon as possible;

I do not understand why the motion says “to the break-even rate”. Employment insurance is a program which, and I will keep repeating it, belongs to workers and employers. It is a program to which the industry and workers contribute in case the latter lose their jobs.

It is now noon. In Toronto, thousands of people are marching in the streets to protest because they are going to lose their jobs. And 80% of these people will not qualify for employment insurance because they work in the hotel or tourism industry.

As we speak a rally is being held in Toronto. It is not being held in the Atlantic provinces where people have their views and the Fraser Institute from British Columbia keeps pounding on the people in Atlantic Canada. In Toronto there are thousands and thousands of people on the street because the employment insurance that belongs to the working people is not there for them.

Today's motion by the Canadian Alliance only proposes to bring the premium down. Not once in the motion does it say that a program which belongs to the people should go back to them.

It is a shame that my colleague from P.E.I., the member for Hillsborough said that there is no problem in P.E.I. since the intensity rule was taken away. I hope the people of P.E.I. call his office to let him know the problems they have in P.E.I. A couple of weeks ago I was there and P.E.I. has the same problems as they have in New Brunswick, Newfoundland, Nova Scotia and all across the country where there is seasonal work and as they have in Toronto. It is a shame that my colleague from P.E.I. supports the Liberal position.

The motion talks about bringing the premium down. I did not hear of anyone rallying in the streets because they want the premium to come down. I did not see that, but I did see people in the street because they want the employment insurance that they pay into and which belongs to them. That is what the people are saying.

This was the question I asked the Parliamentary Secretary to the Minister of Finance earlier. He did not defend the government's position not to increase benefits.

When employment insurance was introduced, it was not so that the government could fill its coffers and point to a $8 billion or $6.7 billion surplus every year. That was not its purpose. Its purpose was to help people who had lost their job when the economy was bad, as it is today.

Today, not only do people not qualify for EI benefits, but small and medium size businesses are suffering as well. When is the government going to look after them? If people do not qualify, they will not have any money. And I must say that social assistance is not the answer.

Unbelievable as it may seem, there are single people today receiving only $265 a month. How is it possible to live on this, in a country such as Canada, which we are constantly being reminded is so wonderful? It is worse than in the third world, in my opinion. Two hundred and sixty-five dollars a month will not even pay the rent and hydro.

And the government is certainly not prepared to increase social assistance payments now. You yourself know, Mr. Speaker, that when the Harris government took office, it cut social assistance payments.

The line is always the same, whether it comes from the Liberals, the Canadian Alliance members or the Progressive Conservatives, and it comes from the right, not the centre. There is nothing about it that suggests any desire to help people.

Yet, we made proposals during the election. Every time we asked the Liberals a question—and the Bloc did so often—, their response was the same: “You refused to pass the government's bill before the election”. The government tried to slip one past us a few days before the election. It knew that there was going to be opposition because the Canadian Alliance was already opposed. From the beginning, that party was not in favour of amendments to employment insurance. In fact, one of the demands in today's motion has to do with reducing EI premiums.

Last week I asked the government a question. The only answer it could think of was that it had reduced EI premiums. We never get an answer to our questions.

But beyond this there are families, there are people, there are children. There are 800,000 Canadians who contribute to employment insurance, but do not qualify for it. When we talk about employment insurance, the government says that 85% of those who qualify do get benefits. This is a disgrace. It should be 100% of them that qualify for employment insurance benefits.

But that is not the issue. The problem has to do with the changes to the employment insurance plan. The government now demands 910 hours of work to qualify for employment insurance benefits. This is why workers who contribute to employment insurance no longer qualify. Only 35% of Canadians who contribute to employment insurance get benefits.

The reason people are marching on the streets of Toronto today is because they did not accumulate these 910 hours. This is the problem. And that money does not belong to the Minister of Finance, who boasts about properly managing the money in the government coffers. That money is not in the government coffers. It is money that belongs to workers and I can never say it often enough.

There is also a new budget coming up. People who contributed to the Canada pension plan and who suffer from a disability could claim money from the government, through the tax system. But the government is so petty—and this is ridiculous and unacceptable—that now it is targeting these people, people with disabilities, by forcing them to fill out all sorts of forms. The government says “We will lower taxes, but we will deprive a person with a disability of the right to receive money through the tax system”.

This is just to show how little compassion the government has for people. However, it is more compassionate toward business. Two weeks ago, the government announced that it would not lower employment insurance contributions by five cents. I mentioned it in the House last week. I raised this issue. The government received a few phone calls from employers who said “Listen, you cannot do this to us. We want our five cents, our seven cents”.

No problem. On Friday, the government announced that it was lowering premiums by 5 cents. Honestly, 5 cents on $100 does not make much difference for a company.

But when it comes to employment insurance benefits, when a family fails to qualify, when 65% of people do not qualify for employment insurance, that makes a huge difference for kids going to school. For people who end up on social assistance collecting $265 a month, or families on $700 a month, that makes a big difference. So, what this government is doing is not right, it is not honest.

I hope and I ask from the depths of my heart that this government will have the good conscience, once and for all, to live up to its election promises in this upcoming budget, the promises made by Liberal members.

My colleague opposite, if he woke up, would remember telling me “We will pass Bill C-2, and then we will make the required changes. We agree with you, hon. colleague from Acadie—Bathurst”. But no changes have been made.

After hearing the recommendations made by all political parties, whether it be the Canadian Alliance, the Liberals, the Conservatives, the Bloc Quebecois, or the NDP, the Minister of Human Resources Development had the audacity and the temerity to rise in this House and say no to changes to the EI program. This is not right, nor is it honest of the Liberal government.

I hope that in the upcoming budget, the government will show that it cares, even a little, for the workers who lost their jobs. When election time rolls around, they will want their votes.

I would like to thank the members for hearing me. I only hope that I managed to wake up some of the Liberal members.

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

Mr. Speaker, I think that there have been a number of recent changes to the EI plan the hon. member does not want to mention. As far as premiums go, as I have already said, they have been reduced for eight years running, so that employees and employers are now paying $6.8 billion less. That is important.

It is not only on the premium side. Recently we have had three changes on the payment side which the hon. member has neglected to mention. We have enhanced parental benefits, made small weeks a permanent national feature and repealed the intensity rules. We have had substantial reform to employment insurance both on the benefit side and the premium side.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, why should I recognize it? It is there. Yes, changes were made after we had to force the House by arguing almost every day for years. Regarding the changes the government has made, the money does not belong to the Minister of Finance. It belongs to the working people.

I remember a Liberal member of parliament in 1989, who is not here today but who was in opposition at the time, named Doug Young. The people of my riding chose to put him out the door. In 1989 he said he was asking all New Brunswickers to fight the Conservative government's proposed changes to EI because they would be a disaster for New Brunswick.

The changes the Liberal government has made are not enough. The government must bring down the number of hours from 910 to 350. Before it was 150 hours. The number must go down. The number of weeks must be prolonged.

I have said many times that we cannot catch codfish on Yonge Street in Toronto. We cannot catch lobster in Ottawa or get Christmas trees on St. Catherine Street in Montreal. We get them in places like ours, in the north of Ontario or in northern B.C. where people have to go and do that work. It is seasonal work. That money belongs to the working people.

You should not be proud that you have a $7 billion or $8 billion surplus every year, a $40 billion surplus that comes from working people who lost their jobs. How can your government be proud of that? I am not proud of it.

[The Deputy Speaker]

I remind members to make their comments and interventions through the Chair.

[Howard Hilstrom, Canadian Alliance, Selkirk—Interlake, MB]

Mr. Speaker, agriculture is one of the major planks of the Canadian Alliance in parliament. Members will recall that we used one of our supply days in parliament to talk about the drought and the income crisis across the country from P.E.I. to the west. The Alliance also used a supply day specifically for the farm income crisis.

The hon. member should check with the chief agriculture critic for the NDP who is sitting behind him on whether the NDP has decided to use any of its time allotted supply days for agriculture debate. Does he support the federal government taking away $30 billion in excess EI premiums from workers and farmers?

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, if the hon. member does not agree that the government should take that kind of money from the working people, why is it requesting in its motion to bring down EI premiums? Why does part of it not mention raising the benefits?

Why is the hon. member so concerned about agriculture when it is not in his party's motion today? We are approaching a budget. When will there be time to do it?

I speak to farmers in my riding. I agree that we must help. Farmers are people from rural areas. We can develop our country by helping people in rural areas stay in their homes and be able to work there and not have to go to big urban places. I have said that many times. That is why I support the people who work in agriculture. I could never eat a computer in the morning but I like my food. The NDP supports agriculture 150%.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, it is a pleasure today to speak to the opposition motion. I will be splitting my time with the shy, demure wallflower who is a friend to all of us and a great member of parliament, the hon. member for Saint John.

I agree with many of the points the Canadian Alliance motion includes today, for instance, focusing on core priorities and not only on Liberal leadership driven spending, and the strengthening of national security and defence spending significantly. I am absolutely certain the hon. member for Saint John will be talking further on this in a more detailed way, but I think it is safe to say that the Liberal's peace dividend has created a defence deficit in Canada post-September 11.

The budget, which increasingly seems as though it will focus on the issues brought to the forefront by the events of September 11, will probably ignore some of the issues that existed prior to that. I think the defence issue needs to be addressed. There is strong agreement among Canadians that defence and security issues were allowed to slide under this Liberal government. The hon. member for Saint John will be elaborating on that.

Reducing EI premiums further is important. Reducing payroll taxes, which creates a direct disincentive to hiring workers, would make a great deal of sense at this time. As for profit incentive taxes in general and eliminating capital taxes, I do not believe it is necessary to spread the elimination of capital taxes over a three year period. It is a $1.3 billion expenditure. I believe the government could to do that this year. It would reduce the disincentive to investment, which we have in Canada, in a very sensible way without the risk of going back into a deficit position.

I am concerned with the fact that the Canadian Alliance motion does not specifically mention agriculture. I think the opposition motion is making the same mistake that I fear the Liberals will be making in the budget, which is presenting a budget, which will probably be a mini-budget if not a micro-budget, that focuses on the September 11 issues but ignores some of the systemic problems and crises that we had in Canada prior to that. Among those is agriculture, and issue that we need to address. The farm safety net framework in Canada needs to be addressed.

Programs that existed in the past, like GRIP, were far more successful in addressing the issues facing farmers. They enabled farmers to survive if not thrive in difficult conditions much more so than the government's current programs, including NISA and AIDA. Some industry analysts have estimated losses to the grains and oilseeds sector to be $2 billion this year.

One the issues that desperately needs to be addressed by the government is the farm safety net framework. If programs are, by design, inaccessible to farmers who need them, it does not matter how many billions of dollars the government puts into a particular program. I will give the House an example of that.

In my riding of Kings--Hants, we have a large level of agricultural output. In fact 50% of the agricultural output for all of Nova Scotia comes from my riding. It has a greater agricultural output than the entire province of Prince Edward Island. However, my riding has had four years of drought. The AIDA farm aid packages and the NISA packages are based on the last three consecutive years. As a result of that, effectively, if a program is designed around a farmer receiving 70% of the last three years' output and, coincident with that, we have had three virtually non-existent years in terms of production, that program does not deliver anything to the farmer.

I have seen it in my own riding in Nova Scotian and I can empathize with western farmers. It has been an absolute disaster. However this is a national crisis and I would like to see the government, the official opposition and all members of the House pay more attention to the issues of agriculture.

One of the issues the CA opposition motion does address in some ways, although it does not specifically refer to it, is that of productivity. In recent years we have seen significantly lagging levels of productivity growth compared to almost every other country in the industrialized world, in the OECD, and certainly compared to productivity growth rates in the U.S.

The most visible or obvious reflection of that lagging productivity growth has been our weak Canadian dollar. That limp loonie has become almost a national embarrassment to Canadians but, more specifically, a direct reflection on the standard of living and quality of life of Canadians. Canadians do not always realize this but under this government we have seen 20% drop in the value of the Canadian dollar as compared to the U.S. dollar.

I was in a high school in my riding a couple of weeks ago where I asked how many of the students were wearing articles of clothing from the U.S. They all put up their hands. In fact, 35% of everything Canadians buy comes from the U.S.

I asked one student, who had on a pair of sneakers, whether they were from the U.S. His response was, yes. I asked him how much they cost and he told me they cost $100 Canadian. That means those sneakers are $20 more expensive now than they would have been in 1993 when the government took office simply because of the depreciation of the Canadian dollar.

If we do the math: 35% of everything Canadians buy comes from the U.S. and a 20% drop in our purchasing power, that represents a 7% drop in the standard of living for Canadians. It has been a drop in the standard of living that has been in some ways a stealth drop because Canadians have not necessarily noticed it immediately. In time, Canadians will connect the dots and they will realize that the government has depreciated the Canadian dollar to such an extent that not only has it affected our sovereignty as a nation through corporate takeovers, but it has dramatically reduced our standard of living and quality of life as Canadians.

The question could be asked: What would we do to strengthen the value of the Canadian dollar in the long term? There are no short term or easy fixes, but strengthening productivity in the long term would do a great deal to strengthen the value of the Canadian dollar. The government's reticence to addressing the productivity issue has done a great deal to threaten and compromise Canadian economic sovereignty. We have seen that on the corporate side, for instance, with the fire sale on Canadian corporate assets that has occurred in recent years, whether we look at the oil and gas sector, the energy sector, the health sector or the paper sector. One can look at a company like MacMillan Bloedel. What company could be more Canadian than MacMillan Bloedel? It was taken over by Weyerhaeuser. Why? Because we provided such a great opportunity to companies, individuals and corporate entities from other countries to purchase Canadian corporate assets at this incredible discount.

The Prime Minister's response to that has been that a low Canadian dollar is good for exports, or that a low Canadian dollar is good for tourism. If we take the Prime Minister's logic further, the logical corollary of his argument would be that reducing the Canadian dollar to zero would be really great because we would be the greatest exporting nation in the world. That is why economists laugh at most of what the Prime Minister says when he talks about the Canadian dollar.

We need to take steps to eliminate and reduce the types of taxes that attack investment, such as capital gains taxes. We need meaningful tax reform in Canada, in a general sense. We need to address our regulatory burden in Canada, such interprovincial trade barriers. The government's principal focus should be to create a federal and provincial level of co-operation around the single issue of productivity.

Security and defence should also be considered but beyond that we need to address issues that were relevant and important to Canadians prior to September 11 because these issues are not going to disappear because of September 11 and its aftermath.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, I thank the member for his speech and for his participation in the finance committee.

I have a question relating to the aspirations of people in eastern Canada. In a sense, I think they are similar to those in western Canada in that we feel we are being taxed to death and the benefits that we get from the government on the other hand are being cut back or have been cut back. There is an inadequacy there and also a great deal of complaint about wasteful spending in government. I wonder whether he is hearing the same things in his riding as we hear out west.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, I thank the hon. member for Elk Island, not just for his intervention today but for his participation at the finance committee as vice-chairman. He adds a great deal to that committee.

He is absolutely right when he says that the aspirations, goals and concerns of people in Atlantic Canada are not that different than those of people in western Canada or in Ontario. One of the differences in the last couple of decades is that Atlantic Canadians have wanted to be at the same table as the rest of the country enjoying the economic growth that has occurred in places like Alberta and Ontario. We see the development of our offshore oil and gas deposits as being pivotal. That is why it is important that all members of the House take very seriously the initiative of premiers, like John Hamm, the premier of Nova Scotia, in renegotiating and developing a fairer approach to equalization that would enable provinces like Nova Scotia to maintain and hold onto more of the revenue in order to diversify its economy, build a stronger fiscal situation, reduce debt, reduce taxes and grow the economy.

I would bring to the House the reassurance that in provinces throughout Atlantic Canada we are seeing a very diversified economy emerging in terms of IT and a knowledge based economy, and our universities are playing a very important role in that regard.

The same concerns the hon. member hears from his constituents, that government waste and Liberal leadership driven spending may not necessarily reflect the aspirations and needs of Canadians, I am also hearing from my constituents in the riding of Kings--Hants. I am certain that Canadians in every riding across Canada have very similar concerns and ultimately very similar goals for what they would like to see from the government.

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

Mr. Speaker, I certainly agree with the hon. member that productivity is of central importance in the longer term to rising living standards in the country, but I cannot understand why he says that we have not addressed the issue.

Let me give the member four very quick examples. First, we have reduced the corporate tax rate and in three years it will be significantly lower than the U.S. That is good for productivity.

Second, we have had the biggest personal income tax cut in Canadian history, including the elimination of the surtax. That is good for productivity.

Third, we have slashed capital gains by 50% . That is good for productivity and the economy in general, and especially in the new economy where we have piled billions of dollars into university research and research chairs.

Fourth, we have set a target to put ourselves in the top five countries in the world in terms of research and development. That is good for productivity.

Therefore there are no grounds to say that we have been ignoring the need for higher productivity.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, all the initiatives he has spoken about have been steps in the right direction but a tortoise moving in the right direction on the autobahn is still road kill. The fact is, instead of leading through bold initiatives, tax reform and policies that would engage Canadians in a visionary approach to the problems facing Canadians, the government has taken an incrementalist approach that has largely gone unnoticed anywhere else in the world.

Three years ago I asked the Minister of Finance about the weak Canadian dollar and his response was that the fundamentals were strong. That is effectively what the member is saying here today. Since the Minister of Finance said in the House that the fundamentals were strong, the Canadian dollar has lost a further 8%. This year the Canadian dollar lost 11% against the Mexican peso, 4% against the British pound and 6% against the American dollar. The Liberals--

[The Acting Speaker (Mr. Bélair)]

I am sorry to interrupt the hon. member but his time has expired. The hon. member for Saint John.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, I want to thank my hon. colleague for splitting his time with me.

I heard the hon. government member say that Canada's productivity growth has grown. Canada's productivity growth has lagged behind that of other industrial nations in recent years and its productivity growth over the past two decades has been slower than every other G-7 country. Canada has one of the worst growth rates in the OECD.

Today I want to talk about what the government has done to the military. What happened on September 11 was a wake-up call for the government to do something. We do not have the military resources needed to look after the security of Canadians.

Let us take a look at what this government has done.

In 1993 the Liberal government cancelled the contract for EH-101s only for politics and for no other reason. That cost taxpayers $500 million and we got absolutely nothing for it. Also, look at the Sea King maintenance and upgrade program. The program put in place for this cost $600 million. Canada's search and rescue helicopter program cost $790 million. The maritime helicopter project cost $2.9 billion. Also the long term service support that the government put in place cost $1.7 billion. Administrative costs in splitting procurement cost $400 million. The total cost of these Liberal programs, with no inflation included, was $8.6 billion.

The total cost of the Conservative program for 43 EH-101s to replace the Sea Kings, based on Liberal election literature in 1994, would have been $5.8 billion. Then we would have had Sea Kings aboard those frigates that could fly, and we would not have the problems that we have within our military today. God bless those men and women who are trying to look after us.

Having sat on the defence and veterans affairs committee, it tugs at my heart when I see how little our military has received from this government in the way of support. It is not right. The government has cut back on the number of people in our army, navy and air force. The regular force ceiling has been reduced from 35,800 to 20,400. The primary reserves ceiling has been reduced from 24,000 to 20,000. Yet we are asking our men and women to perform peacekeeping duties where they do not go for just three months, but for six or eight months. Some members have come back recently. They have told me that they were ashamed because they had to borrow resources from other countries because they did not have them.

The budget coming down on December 10 must be a military security budget for every man, woman and child in Canada.

What happened to our shipbuilding program? The Minister of Industry when he was running in the election--

[An hon. member]

They sunk it.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

The member is right. They sunk it. That minister came to my riding in Saint John, New Brunswick and held a meeting with the men and women who worked at the shipyard. He told them he would be the saviour of the shipbuilding industry. The late hon. Pierre Elliott Trudeau knew there had to be a shipbuilding policy for the navy and he put money into the shipyard in Saint John. The hon. Brian Mulroney knew there had to be a shipbuilding policy for the navy and put more money into it, as well as the shipyard in Quebec.

We split those contracts between Quebec and New Brunswick. Where are the shipyards today? The shipyard in Quebec has gone into bankruptcy. Our shipyard in Saint John has a lock and bolt on the gate. We had about 4,000 men working at our shipyard in Saint John alone. When we take Quebec and all the companies that have supplied all the resources, parts and things that are needed, we are talking about 100,000 people in Canada who are no longer working, feeding their families, clothing their children and educating them.

This is the most serious situation I have seen in Canada in the last 15 to 20 years. I am truly upset about it because it hurts.

I just came from a meeting with representatives of the chamber of commerce of the Atlantic region. They asked me what is happening at the borders and said that something had to be done. They are asking for perimeter clearance. They want continental security but they have to have clearance.

Of corporation exports, 80% cross the New Brunswick border at Woodstock, Calais and St. Stephen. We have been told that the government will have pilot projects at borders, but once again we are not included. Why do people not understand that the people back east play a major role in the economy of the country? Those men and women who work there do a fantastic job. We have exports that cross that border, such as lumber and seafood. Farmers in the maritime provinces bring their food across the border to those people who want it. We do not get everything from the U.S. The U.S. gets things from us as well.

We have to have some kind of a project whereby we are treated fairly. All we have ever asked for is to be treated fairly. We are saying that the government should create a binational or trinational border management agency that would jointly monitor the entry of goods and people into and out of the North American continent and across the Canada-U.S. border.

As well, the port police have been taken out of all our ports. Those port police took seven courses to become port police and they all did a fabulous job. We did not have the problems of illegal immigrants coming into the country either out west or down east when the port police were there. It is unbelievable the amount of drugs coming into the country and there are no port police to look after that.

There are so many areas that need to be addressed, but if the military issues are not addressed in this budget, the government will never be able to face the public of Canada. If the security issues are not addressed in the budget next week, there is no way the Minister of Finance will sleep nights because those men and women, who put their lives on the line for all of us, their relatives and everyone, will be after the government, and rightfully so.

I and my party will be there to support those men and women in uniform. We certainly will fight for them and we will never stop until they are given the tools to do their jobs.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I want to thank the hon. member for Saint John for a stimulating and vigorous speech. I would certainly like to associate myself with many of the points she made.

One of the key messages that I got from her speech was that we needed an economic stimulation package as part of the budget. A shipbuilding program is something we have advocated.

Could the member expand upon that in the context of the recent B.C. experiment to revitalize the shipbuilding industry there? We used to have 35,000 people working in the dry docks of the Vancouver Burrard shipyards and others. Now there are zero. However when the B.C. government needed four new ferries, rather than buy them from Singapore or Japan, it decided to revitalize its shipbuilding industry. Unfortunately it is still wearing that today because the four ferries that were built were prototypes. Even the first Model T built by Henry Ford surely cost more than the 100th one he built.

Could the member comment on whether the NDP government in British Columbia did the right thing by building ferries rather than buying them offshore?