Mr. Speaker, I am very pleased to speak on this important debate on Bill C-18. This is a bill of a temporary measure, but it is good for us to be able to see it in the larger context.
I would like to say something about the basic philosophy of equalization payments. What it says is people in Canada who cannot afford certain services because of their wealth or lack of it are still entitled to basic services. I cannot emphasize enough that I agree wholeheartedly with this premise.
The Prime Minister sometimes says, when he speaks of helping those in need, that this is the Canadian way. Unfortunately, in our political environment, it is all together too selective at times. We see certain people who have their needs met almost instantaneously and others have to work for years and years to have their needs met.
I am thinking of the tainted blood scandal and the hepatitis C victims. These are people who, because of a lack of proper procedures by the federal government, were injured by that very specific shortcoming of the federal government. Other provinces, such as Ontario, said that these victims should all be compensated for their loss, but not all of them were. In the federal government scheme of things there was a very narrow window defined. If they were outside of that window, it was too bad.
It so happens that my uncle died from hepatitis. He left a widow. He was in that exact category. He was diagnosed with a brain tumour. The operation was successful and he bounced right back. Before the operation he had problems with headaches and disorientation. However, his recovery took very long. He was always ill. Eventually they diagnosed that he was a victim of tainted blood. He had received hepatitis via his blood transfusions during the operation. He was outside the window for compensation. Is there any compensation for that loss? It seems not, so they fight and fight. Yet others receive aid very quickly.
In the larger scheme, when an election is coming and there is a flood, the promises of compensation and aid to farmers suffering from the disaster are immediate and are large. If it is not during an election or if it is in an area where there does not seem to be a great deal of political capital to be gained, it appears to us, as objectively as we try to look at it, that there is some bias on whether or not that helping hand is extended. I personally believe that we need to give a helping hand to those who cannot afford these things.
I grew up in Saskatchewan. I was born on the prairies, a first generation Canadian, my parents having been youngsters when their families escaped from Russia and came to Canada to make it their home. I remember very well in the early years of my life, which would have been in the 1940s, there was not a great deal of aid for people who were in distress. I know it is hard to believe I am that old, but I am getting there.
It was not an unusual occurrence for my family that the church community I grew up in would reach out a hand to those who needed it. Sometimes it was in the form of a loan. Sometimes it was in the form of outright gifts. Sometimes there were food transfers. That was the way things were done because we were people who were compassionate for those in need.
Later on when my wife and I were married we became aware of a couple who had come to Alberta from Ontario or even farther east. I do not remember which province they were from. They had moved to Alberta and they were in dire straits. They had no jobs and no income. He claimed that the police had stolen his car. We later found out that the police had confiscated it because they could not get into the trunk and they suspected there were drugs in it, but that is another story.
This couple was without food and without shelter. We did not go to a welfare agency. We did not see what we could do to get public funds for them. The way we thought was a natural thing. We knew these were people in need and we looked for ways to help them. I remember trundling groceries up to the second floor apartment that we had arranged for them. We made the payments on the rent for the first month or two so that they could get settled. One of the men in our group gave this man a job. We tried to help them.
Through the process of ever increasing taxation and with the present Liberal government and past Liberal style governments we have had over the last 40 or 50 years, we have had an increasing shift of social responsibility away from families, away from churches, and on to the government. Nowadays we end up with very little fiscal capacity as individuals and as families to actually accommodate the needs of people we encounter.
It is much more natural now to say we will see if we can help people get to the social services centre where there is a government program. This seems to be a general trend that our governments have taken over the last 30 or 40 years. In a way it is good, but it also has a tremendous downside, which is that while it trades on the fact that we as Canadians are compassionate to people in need, it takes away from us the capacity to actually exercise that compassion.
We are taxed to death. I was talking to an individual just yesterday and said that as a young family the decision was made that my wife would be a full time mom, so I was the sole wage earner. Even then our marginal tax rates were 40% to 45%.
I taught a night class instead of having my wife take a job. I taught full time in the daytime and I taught a couple of night courses to supplement our income. I used to say I worked Tuesday nights for Trudeau and Thursday nights for my family. Basically people live on half of their incomes.
One of the reasons I became a member of parliament was to try to address the question of the huge overtaxation. My family and thousands of families like us have lived on something between 30% and 50% of our income. I believe in personal charity. Over the years, besides having 50% of my earnings taken away from me for taxation, I have usually given between 10% and 20% of my income to charities.
In addition, since we were looking at retiring on only my pension which was not that great I put a little into RRSPs. Another 8% to 10% went into that. I had 30% of my salary left. We struggled month after month to pay the bills.
The situation has not changed a great deal. I can say it is great that we live in a country where everyone has free health care. I concur with that, but it has to be done efficiently. The federal, provincial and municipal governments took their taxes from money I had worked very hard for. I really needed a greater income for my family. I am speaking now of before I was a member of parliament. I do not want anyone to conclude that I am crying because I do not earn enough here. We struggled and said that if they were to take that money they had better use it very wisely.
One reason the Conservatives fell out of grace with many people in the west was that they were not perceived to be handling the money properly. They were not addressing the question of the debt. They were not addressing the question of huge interest payments.
I resented the fact that half of my income went to taxes and of that 30% was being used for interest payments on a debt which had burgeoned out of control because of lack of fiscal control by the government. That is why I came here.
Today we are talking about equalization payments. While I am in favour philosophically of helping people who need help, I am not in favour of doing that in an inefficient, wasteful or unfair way.
In passing, I should like to make a statement about equalization payments. Since they are done based on provincial numbers, there is no recognition of the fact that poor people are living in all provinces. Over the years I have thought of this often. Here is a specific example.
I was a young teacher with a young family, trying to make ends meet, making $6,000 a year. Through my unemployment insurance, it was called UI in those days, I was subsidizing a fisherman who made $18,000 a year. It somehow seemed to me unfair because I had no eligibility to ever make a claim. This was especially the case in those years when I was a student and my part time job required that I make UI contributions. I would quit in fall to go back to classes and I was not eligible to receive any benefits. That money was going to subsidize people who were making 20, 3 or 40 times as much as I was.
That is one thing the equalization program does not address. If we have poor people living in the so-called have provinces, they are proportionately disadvantaged compared to in some cases rich people who are living in the have not provinces. The well off people in the have provinces are paying huge amounts of money. I guess the Liberal way is to tax them to death.
When we proposed to level off the tax burden for those who make an adequate amount of money, we were told all we wanted to do was give tax breaks to the rich. The fact of the matter is that the equalization program gives transfers to provinces where some very rich people live, and those people benefit from those transfers.
I will put this in perspective. Most people here know the history of transfer payments. I picked up a book which had a chapter on them and found out a few things that were rather interesting. For fiscal year 2001 it is estimated that the total cash payments from the federal government to the provincial, territorial and local governments will total almost $25 billion. That is a lot of money.
I play with mathematics as some people play on the golf course. Whenever I have an opportunity to do some simple math I do it for recreation. Some time back I built a spreadsheet showing the major federal transfers to the provinces. From 1980 until 1999 I have a breakdown of the total major federal transfers from the federal government to the individual provinces.
It is fascinating to see that in that 20 year period Newfoundland received a total of some $22.5 billion in transfers; Prince Edward Island, $4.9 billion; Nova Scotia, $28.7 billion. New Brunswick, $24.9 billion; Quebec, $178.3 billion; Ontario, $154 billion; Manitoba, some $30 billion; Saskatchewan, almost $20 billion; Alberta, close to $40 billion; and British Columbia, almost $53 billion.
From 1980 to 1999 the total major federal transfers to the 10 provinces was $556 billion. That does not include Yukon and the Northwest Territories. At that time Nunavut did not exist. That amount essentially is equal to our national debt. If we add in the Northwest Territories and Yukon, the total major federal transfers to the provinces and territories for the 20 year period was $573 billion. By a strange coincidence that is almost equal to the present value of our national debt.
We agree with transfer payments, but they must be made wisely. It looks to us as if we could have had zero debt if they would have been managed better. I am not in any way suggesting that transfer payments should not have been made, but meanwhile with the growing rate of the debt there are interest payments due every year. The federal Liberal, then Conservative and then again Liberal governments did not address this issue until we came along and pretty well pushed them into it. The debt is out of hand. We are now spending $30 billion a year on interest payments. That should not be the case.
It is also interesting to find out that the whole idea of transfer payments is almost as old as history. It is included in our constitution. As a matter of fact most of us know that the repatriated constitution of 1982 has a clause in it which supports the concept of equalization payments. The formal system of equalization payments as we have come to know it today actually came into being in the mid-1950s when I graduated from high school. Now a very complicated formula is used which I wish I had time to explain to people.
I have been on the finance committee now for several years. Several years ago we had experts explain to us how the federal system of equalization works.
I remember with some amusement that during those hearings I asked one of these officials, after he had gone through a number of convoluted explanations of how these different things work, if there really was anyone who understood this totally. He looked at me and said probably not. He sort of admitted that even he, being one of the officials, did not know everything about it. He specialized in one area.
It is indeed very complicated. The federal government, in computing the amount of transfer payment, does not to compute how much income each province earns. Rather, it has a formula which, in 34 categories, looks at how much income the provinces could earn. There are different categories for the building of a national average. From that national average, the federal government computes, province by province in each category, whether each province in each category is in a surplus or deficit situation.
I remember when the government added the lottery category about five or six years ago. It was not a question of how much money a province earned through lotteries but how much it could earn. At that time, the equalization payments to Manitoba dropped by about $50 million. Why? Because even though there were literally thousands of people in Manitoba who on principle did not support the lotteries, it was deemed that it could have raised this money if those people would have bought those lottery tickets.
The fact that they did not buy the tickets meant that the provincial government did not have the income. If the people of Manitoba could be persuaded to buy lottery tickets, that would give their government more money. The fact that they were not persuaded took the money away from the provincial government and the formula took the federal transfer payments from Manitoba as well, because the federal government deemed that this was an amount that the province could have earned.
We have documented in the public accounts and other sources the formulas that are used to compute these payments. If I look at the lottery ticket revenue, according to this formula Newfoundland is $31 million short on lottery revenue. P.E.I. is $2.4 million over. Quebec is $63 million under. This qualifies the different provinces for transfers based on whether they are in a positive or negative situation. Alberta is in the plus category by $159 million. Consequently its equalization revenue is actually increased because of the amount of revenue that it presumably could earn using lotteries.
That is just one category. There are many others. They include the sale of licence plates for vehicles. They include many other categories. All 34 categories are listed in this documentation. It is interesting to see how, by using this formula, the government is able to arrange for different amounts of money, sometimes motivated for or by political reasons, for transfers to the provinces.
In conclusion I will simply say that we support in principle utilizing the wealth that we have in order to provide a comparable level of services to all of our citizens across the country.