Debates of March 22nd, 2001

Privilege

[Chuck Strahl, Canadian Alliance, Fraser Valley, BC]

Mr. Speaker, yesterday the secretary of state mentioned a letter that she had from the mayor of Prince George. I wonder if she would table that letter in the House if she had it.

[The Speaker]

The Minister of State—

[An hon. member]

Where is she going?

[Some hon. members]

Oh, oh.

[Dennis Mills, Liberal, Toronto—Danforth, ON]

Mr. Speaker, when the minister made her statement she left the House before the government—

[Some hon. members]

Oh, oh.

[The Speaker]

Order, please. The minister has made a statement. The hon. opposition House leader has asked a question. Obviously no response is forthcoming. There is nothing the Chair can do in the circumstances.

[Dick Harris, Canadian Alliance, Prince George—Bulkley Valley, BC]

Mr. Speaker, I rise on a point of order. Yesterday I stood in the House on a point of order in response to her malicious and false accusations against the people of Prince George. Today, yesterday as she spoke, and last night, we had absolute confirmation that she was indeed absolutely wrong in her statements.

She did not come to the House today because she voluntarily wanted to. She came because she was caught in a falsehood.

[The Speaker]

The fact is the statement has been made. The hon. member is not seeming to make a point of order. He is perhaps disagreeing with the statement or something. I do not know, but I wish he would come to his point. There is no point in protracting the matter. The withdrawal has been made.

[Dick Harris, Canadian Alliance, Prince George—Bulkley Valley, BC]

Mr. Speaker, yesterday I asked in the House for an apology. There was no apology from the minister today. We would like her to table the letter she received that she used in her statement yesterday.

[The Speaker]

Hon. members can review the statement when the blues are available and see what the minister said. My understanding is that there was an apology and withdrawal. I believe the matter is closed.

If members wish to ask about other documents, there is an opportunity for that to happen at a subsequent time and I would invite hon. members to take advantage of those opportunities when they arise.

The House resumed consideration of the motion that Bill C-18, an act to amend the Federal-Provincial Fiscal Arrangements Act, be read the second time and referred to a committee.

Federal-Provincial Fiscal Arrangements Act

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, I would have been tempted to ask a question of the member for Elk Island but I was not sure whether or not I had the floor. As I do, perhaps I will respond briefly to some of what the member had to say, because it seems to me there was a thread throughout some of what he had to say which was critical of the equalization payment scheme we have in this country.

I would remind the member of two things. Equalization is part of the Constitution of Canada. This was constitutionalized in 1982. It is a critical element of Canadian social and economic policy that all citizens, no matter where they live, be served by provincial governments that, because of equalization payments, are able to provide comparable levels of services to all citizens.

The fact that Canadian citizens who live in so-called have provinces have to contribute to that through the federal transfer payments is not something that I think the member would want to be seen criticizing, because I know that his party has been in trouble in the past for sounding like it would like to do away with equalization.

I would caution the hon. member that unless he wants to revive that debate he should be careful as to what he says, because it sure sounded to me as though there was an undercurrent of opposition to equalization payments.

It always strikes me as odd when we hear that coming from a province that is doing as well as the province of Alberta is doing. We do not want to have a situation in the country where the gap between rich and poor provinces grows any greater than it already is. That is the situation that we find ourselves on the edge of now, given some of the economic circumstances that prevail.

We in the NDP rise to speak against this particular bill because of the fact that even though it lifts the ceiling or the cap on equalization payments for one year, it then goes on to restore that ceiling or that cap in a way that we find objectionable. It seems to me that equalization is not just a constitutional principle. It is a moral principle that there should be this kind of comparable equality among all Canadians. However, if it is a constitutional principle, this is something that should not be capped. There should not be a ceiling put on this particular constitutional principle.

I wonder if the members of the Alliance Party could have their meeting outside the House. That is what the curtains are here for. Mr. Speaker, I am talking to you. I wonder whether those members could have their meeting outside the House so that—

[The Speaker]

I am having no trouble hearing the hon. member. That is why I had not intervened. The hon. member does have a strong voice. Although he is a long way away, I was still hearing him quite well. The meeting was not as disturbing to me as it apparently was to him, in the sense that I guess the sound was going that way.

I am certainly happy to intervene on behalf of the hon. member and urge hon. members to show proper restraint in controlling their conversations in the House.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, I was saying that if this is a constitutional principle and one grounded as a certain normative or moral view of what constitutes Canadian society and the relationship that all Canadians have with each other through their federal government so that Canadians, no matter where they live, can have a comparable level of public services, then this is not something that there should be a cap on.

What we have seen too often in this last decade or so is the federal government moving to cap, to limit, its commitment to certain social programs. It is not just equalization. I think of a former program called the Canada assistance program, which was sometimes called CAP for short, which itself was capped by a Conservative government. It was sometimes called the cap on CAP. To compound matters, the Liberal government did away with CAP altogether and brought in the Canada health and social transfer, sometimes called the CHST.

The federal government wonders why there is not the strong sense of country that it would sometimes like to see. No wonder, when we have federal governments that have been progressively withdrawing from its commitments to social and economic equality in the country, starting with the Conservatives with the cap on CAP, or actually starting with the Liberals back in the early 1980s when they were responsible for the first unilateral reduction in federal transfer payments to the provinces.

Over the course of a long time, the federal government has been withdrawing from fiscal commitments it made to the provinces in the course of designing specific national social programs and in the course of living up to specific national arrangements like equalization. We in the NDP say here today that a cap on equalization is wrong and that it should be lifted entirely. However, if it cannot be lifted entirely, then at the very least, when the ceiling is put back, as this bill also does, it should be put back at a base that is higher than where the ceiling was before it was lifted for this one particular year.

My understanding is that that was the understanding the provinces had. They understood that when the ceiling was lifted and the equalization payments rose as a result, that new level would become the new base. Instead, what this bill does is return the base to a lower figure and put many provinces, particularly my home province of Manitoba, in a position in which they are not as well off as a result of the CHST increases as the federal government would like to make out. They lose, through equalization and the restoration of the ceiling next year at this lower base, what they gained through the increase in the Canada health and social transfer.

What happens is, despite all the smoke and mirrors and despite the Liberal campaign promises and the Liberal spin around the great increase in federal funding to the provinces for health care that came with the increase in the CHST with the so-called health accord, provinces like Manitoba are in effect no better off because they are losing on equalization through the equalization cap what they gained on CHST. The only provinces that actually come out of this better are the have provinces because they do not lose through equalization. They just gain through CHST.

Where in the heck is the logic of that? Is this what the government intended, that after all was said and done it would be the have provinces that have more and the have not provinces that have less, because that is the result? I do not know if that was the intended result. I do not know if the government is just stupid or vicious when it comes to this sort of thing. We can take our pick. In any event, this is the result of what the government has done, and what it is doing through this particular bill.

We say two things. First, lift the cap on equalization. Get rid of that ceiling that will cost some of the have not provinces more and more as the years go by, depending on economic circumstances. Certainly current projections would indicate that the cap will cost Manitoba for instance something like $100 million. That is a lot of money in Manitoba. It may not seem like much to a federal government that is projecting a surplus of $15 billion or whatever. However, $100 million can buy a lot of public services, health care and post-secondary education in a province like Manitoba.

What we are seeing is a further downloading on the part of the federal government. The federal government is building up its surplus and fighting its deficit on the backs of the provinces, which in many cases have to deliver those very important services that Canadians really care about in terms of health care and education, for instance. The provinces have to take the heat for the lack of MRIs, or the lack of other diagnostic services, or crowded classrooms or whatever the case may be.

What we see is a very disturbing trend. The federal government over the course of many years now, accelerated in a remarkable way by the Liberals since they came to power in 1993, has been withdrawing from all these commitments. I think it is part of the national unity crisis to the extent that there is one. Liberals spend their time scratching their heads and wondering why Canadians do not have a stronger attachment to their country, and how they can get more federal visibility?

Who has done more to destroy federal visibility and participation than the Liberal Party since it came to power in 1993. It did this through the systematic sell off and privatization of many of our national institutions and infrastructure, eliminating post offices, getting rid of our publicly owned national railway and privatizing Air Canada. The list goes on of ways in which the federal government has taken the federal presence, both symbolically and practically, out of the lives of Canadians. Then the Liberals wonder why Canadians do not have a strong sense of being Canadian. One does not have to be a rocket scientist to figure it out. On top of that it withdraws its fiscal commitment from so many of these programs and leaves the provinces to pick up the slack. There is a lot of slack because most of the areas that the federal government is withdrawing from are growing areas of expenditure, not diminishing areas of expenditure.

We see the Minister of Finance piling up his surplus, taking credit for his fiscal management of the country, and yet in many respects this has been done on the backs of the provinces or the unemployed through the use of the EI surplus.

What is going to happen if worse comes to worse, we do have a recession and we have all these ceilings? Is it not nice for the federal government? It does not have to worry. Recession can come. All the ways in which it will deal with the social consequences of a recession are all capped. It does not matter how bad it gets, the government's commitment is capped: capped on equalization, capped on CHST at a level that is still lower than what it was in 1993 when the Liberals became the government, capped here, capped there, capped everywhere.

It is the provinces that will have to fight the recession, if there is one, all by themselves. They will have to pick up the people who do not qualify for EI anymore and go on provincial welfare. They will have to pick up the increased use of the health care system as people are stressed out by economic conditions et cetera. They will have to do that with declining revenues because the recession itself will affect their revenues.

Meanwhile the federal government will sit back and say, “Oh, we signed a health accord in August 2000 which solved everything, even though it didn't put back what we took out in 1995. We've got an equalization scheme. It's even in our constitution. It's a great Canadian principle”. However it only goes so far. It does not go far enough to address the needs of the have not provinces. It only goes as far as we like it to go without endangering the federal government's fiscal health.

There are a lot of reasons to be concerned about the bill. I know most people I think probably regarded this as a bit of care taking legislation and probably in the end it will not receive the kind of debate in the House that it deserves. However I would implore other members of parliament and opposition parties to take a good look at the bill and take a good look at the principles and the values that underline it and the way in which the bill is a repudiation of our constitution. It is a repudiation of the principle of equalization which is enshrined in our constitution. It is a danger to the long term health of have not provinces which are continually and increasingly being put at a disadvantage in respect of wealthier provinces.

Again I use my own province as an example. However, I certainly know members from the maritimes have similar concerns about equalization and have asked for special arrangements whereby some of the revenues that accrue to those provinces through oil and gas revenues might not receive such a serious clawback as they do now in the equalization formula. This is one of the ways in which this might be addressed, although I do not think there is unanimity among the provinces with respect to that because not all provinces that have all oil and gas revenues are asking for that.

Clearly we need to do something either by way of increasing equalization for all provinces that require it or coming to some special arrangements with certain provinces with respect to certain kinds of revenue. Whatever the case may be, the system that is put in place by this particular bill is inadequate and creates a situation in which more and more have not provinces have their treasuries and ministers of finance put in a position where they do not know really what to do.

In order to maintain services, in the face of the lack of the kind of money they feel they should be getting from the federal government, they have to maintain a certain tax base. If there is a province next door, or two or three over, that does not have to maintain that kind of tax base because it is a have province and it has the revenues, then we have a growing gap between the so-called tax competitiveness of various provinces.

We get a situation in which provincial governments have no policy room to manoeuvre. They basically have to imitate some of the richest provinces. When they do that, they not only lose their ability to make their own decisions, they are sometimes forced into making bad or regrettable decisions. That is not what people had in mind when they came up with the idea of equalization. That is not what we had in mind in this chamber. I was here when we constitutionalized the equalization principle.

I would ask the government members to consider whether they want this to be their legacy. When they had an opportunity to do something about equalization, when they had a surplus, when they could have done something to strengthen this constitutional principle, they did not. Do they want that to be their legacy or do they want it to be said of them that the Liberals were the party who finally brought equalization back up to where it should have been and created the kind of equality in the country that they like to talk about, but which this bill in its details and in its principles betrays?

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I know the member for Winnipeg—Transcona has been in this place for a long time and I can only conclude that he has just not kept up to date with some of the current facts. I would like to clarify for the House and for Canadians a few facts. I find it strangely ironic that they came from a member from Manitoba.

In 2000 and 2001, transfers to Manitoba will be $2.3 billion. It will account for about 35% of Manitoba's revenues and is about 45% above the national average. It is the highest of all four western provinces.

What exactly did the first ministers agree to at their meeting? Perhaps the member for Winnipeg—Transcona has not read the communiqué, so I will remind him. It said:

First Ministers raised the issues of Equalization. The Minister of Finance will examine this issue further after consultation with provincial Ministers of Finance. While final revisions for Equalization purposes for fiscal year 1999-2000 likely will not be known until October 2002, the Prime Minister agreed to take the necessary steps to ensure that no ceiling will apply to the 1999-2000 fiscal year. Thereafter, the established Equalization formula will apply, which allows the program to grow up to the rate of growth of GDP.

It said in 1999-2000 and all premiers signed this.

The member for Winnipeg—Transcona said because of the removing of the ceiling, Manitoba or some of the have not provinces will not benefit and the others will. That is simply misinformation. He knows full well that Manitoba will receive an additional $76 million as a result of lifting the ceiling.

I have one final note. Equalization has actually increased faster than anticipated. It has grown by 33% or $2.7 billion since our government took office. It was the only area of government programming that was not affected by program reviews.

Did the member for Winnipeg—Transcona have an opportunity to read the information that was available to him in the communiqué that was widely published and signed by the premiers?

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, yes, I have a copy of that communiqué in front of me. In fact, the very quote that I have in front of me is the same quote that the member read into the record in the House.

The member said that I have been here for a long time. That is true. I have seen these kinds of federal-provincial fiscal arguments go back and forth over the years. The standard line from the federal government, when we make an argument that a province is getting less than it would be getting if a certain formula were preserved, is that less is more than it got the year before. All we ever get from the government, is how much more the province is getting. We never get any acknowledgement of the gap between the more that the provinces are getting and the even more that they would be getting if the federal government were to respect the formula, or the constitutional principle, or some previous agreement or whatever the case may be.

This is the standard form of avoiding the truth that we get from the federal government when it gets into this kind of pickle. In the very paragraph that the member read, it said:

—the Prime Minister agreed to take the necessary steps to ensure that no ceiling will apply to 1999-2000 fiscal year. Thereafter...the formula will apply, which allows the program to grow up to the rate of growth of GDP.

There is nothing in the bill which indicates that commitment will be kept. My understanding from a minister of finance is that the bill does not keep that commitment and also is not in keeping with the understanding that the ministers of finance had, that the base would not return to where it was before.

I think it is kind of typical that the member would stand up and say that because it is sort of standard federal government fare. Those members always talk about this or that going up but they are never prepared to at least be honest and say that it would have been higher had they kept their commitment. At least they could explain why they did not keep their commitment and why there is a gap between the more and the even more. No. All we get is talk about the more. It is easily done but it does not convince me.

[Paul Forseth, Canadian Alliance, New Westminster—Coquitlam—Burnaby, BC]

Mr. Speaker, I would ask the member to carefully reflect on what he is saying and explain the underlying principle of what he is talking about.

Is there a perverse incentive to equalization? What is the long term goal? Should it not be to eventually get off such supports? Is he talking about more transfers rather than self-sufficiency? Should equalization not be gradually reduced, as, for example, offshore revenues greatly increase? If in future years a province like Newfoundland receives tremendous more revenue benefits, should its reliance on the formula of transfers be gradually reduced? What would be his formula to achieve that self-reliance? Does the member also still believe that it is always just the rights of the receiver and not necessarily the rights and benefits of the payer?

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, we can always count on certain members of the Alliance Party to reveal their true colours. Some of them have grown adept at chameleon politics. They keep trying to look like part of the mainstream by saying that they are not really against equalization, bilingualism or this or that, all the things they were against when they came together to form the against party.

However, with some of them, the truth still comes oozing out. That member is a good example of one of those members. Here he is talking about have not provinces that are in receipt of equalization payments in the same way that I am sure he likes to stereotype people on welfare. The language was identical.

What the member did not acknowledge is that there is a formula now. When provinces get to a certain state of economic revenues they do not receive equalization. That is already built in. Does the member not know that or was he just trying to make some perverse point that we are not all like B.C. and Alberta?

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

Mr. Speaker, the hon. member just mentioned have not provinces. That truly tugs at my heart. It paints a picture of us back in New Brunswick, Nova Scotia, Newfoundland, Quebec and P.E.I.

Does the hon. member, who just got up to ask a question, not know the role we played in building this country? Does he not know the history of this country? It started back in P.E.I., in New Brunswick, in Nova Scotia and in Quebec, and those equalization payments should be increased so that no one refers to us as have nots.

I do not know how my Liberal colleagues from the maritime provinces and Newfoundland can handle their colleagues from Ontario and out west when they refer to us as have not provinces. We are proud to be Canadians back in the maritime provinces, Newfoundland and Quebec.

Does the hon. member agree that the equalization program should be changed so that no one refers to us now and in the future as have not provinces? Does the hon. member agree that we will contribute and continue to contribute to build this country? We never refer to our people from out west, in Ontario or other provinces in a negative way. That is not our way of doing things back east.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, I am not sure if that question was directed to me or to the member who asked me a question a little while ago.

To the declaratory part of the statement from the member who just spoke, all I can say is, amen.

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

Mr. Speaker, since the member talked about me at the beginning of his speech, I want to make a clarification. I guess for there to be good communication, there has to be a certain amount of synergy between the speaker and the listener. I wish he had heard what I said.

In my introduction, I said that I agree with the principle of equalization. I said that several times in the body of my speech and it was the closing sentence of my speech.

I used some of my time to talk about a very serious anomaly, which is that poor people in the have provinces are subsidizing rich people in the have not provinces. That is a fact. I have a technical document on that. It is absolutely—

[Some hon. members]

That is nonsense.

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

It is not nonsense.

[The Deputy Speaker]

Order, please. A very fundamental principle in the Chamber is being able to express oneself freely in a question or an answer.