Mr. Speaker, I wish to say a few words on the equalization bill before the House at report stage. It is actually a very brief bill. It removes the $10 billion cap for one year on equalization to the poorer provinces and allows the cap to go up by several hundred million dollars. However, after that one year, it restores the original cap of $10 billion and allows equalization to increase by the rate of the GDP.
There is some controversy in this regard. The understanding of some provincial governments was that the cap would be higher than it would be in future years but that it would go back to what the original cap was. That is not good enough because of all the government cutbacks to transfers to the provinces in 1995.
Equalization is perhaps one of the shining symbols of success of our federation. In 1980-81 I remember Prime Minister Pierre Trudeau deciding to patriate the constitution. One of the things that our party pushed for was to enshrine equalization into the constitution of the country.
It is very interesting that we are probably the only country in the world that has equalization payments as part of its constitution. Other countries have ways of trying to equalize the wealth and potential in their countries through various government programs. Canada is probably the only country that has it as a constitutional right for provinces having difficulty or that fall on very difficult economic times.
I was very proud when that happened. I was on the special joint committee of the Senate and House of Commons in 1980-81 as the NDP constitutional spokesperson. We talked a lot about the question of equalization and the need to have it enshrined in the constitution: to share the wealth, to be part of the vision that being Canadian meant those provinces that were better off and those people who were better off would share some of that wealth with the poorer provinces.
I come from Saskatchewan which usually is a recipient province in terms of equalization. There have been times when we have not been a recipient province of equalization. We will be once again in the position of not receiving equalization payments in terms of the economic potential of our province.
The formula is a very complex formula based on the taxing potential of each of the provinces. The reason my province is getting closer to not qualifying for equalization is the increasing revenues from oil and gas, potash and uranium that are coming in to the province.
As a person from Saskatchewan, if what happened a number of years ago happens again, I am proud of the fact that we would no longer receive equalization. I am equally proud of the fact that we would be participants in terms of the government as a whole in providing equalization to other provinces in an attempt to make sure that their services are equal to the services in Saskatchewan and other provinces.
One way the equalization formula is calculated is by looking at taxation potential. It is done by eliminating in the formula the four Atlantic provinces of Prince Edward Island, Newfoundland, Nova Scotia and New Brunswick, and Alberta, which is the province that has the most potential to raise revenues because of the gas and oil industry. The other five provinces are used to average out the potential and the revenues they can collect in trying to bring the provinces that are not part of that five, excluding Alberta, up to a national standard.
National standards are also extremely important in terms of equalizing opportunities for education, health and social services. It is the Canadian way and the Canadian spirit that if we live in Newfoundland our opportunities should be as great as if we live in Alberta.
There is now a new trend in the country which disturbs me a bit. We have heard about it from Alliance members who have asked in debate why we should be paying all this equalization. We have heard complaints from the Alliance that it is a socialistic program. We have also seen as part of that tendency a move in the country in the last few years to greater decentralization, a lessening of the role of the federal government.
We see this in Alberta with Ralph Klein. We see it now in Ontario with Mike Harris. Of course we see it in spades in Quebec with the new premier, Bernard Landry. The provincial Liberal Party in British Columbia is talking about a looser federation. If that were to happen, we would have four large provinces talking about more provincial rights and we would have a looser federation and a weaker federal government.
I am a great believer in a diverse country with a lot of diversity and flexibility, but I am also a great believer in a strong federal government that has the resources and the taxation base to make sure we have national standards in education, in health and in social programs for each and every single Canadian. That is part of the Canadian way of life. We will be involved in a real debate in the next few years about the vision of federalism or fiscal federalism as we look at this new movement in Ontario, Alberta, British Columbia and the province of Quebec.
I am disappointed in Ontario in particular. Over the sweep of our history as a country Ontario has really led the way in terms of being a very staunch supporter of a strong central government in Ottawa. I think of the great contributions of Premier Robarts and Bill Davis and other Conservative premiers in that province. There has been a shift in Ontario in the last three or four years with Mike Harris and that shift coincides with what is happening in the province of Alberta.
This will be a great debate in the country. It will unfortunately pit the larger, more populous provinces against the smaller, weaker provinces in terms of population and economics. That is a debate we will all have to engage in. I think the Alliance Party, along with the Bloc Quebecois, will espouse that vision of a looser, more decentralized Canada.
I think there are still majorities in the House on the Liberal side, the New Democrat side and in the Conservative Party that want to make sure we maintain a very strong federal government to work on behalf of each and every Canadian. That is part of our way of life. That is part of this federation.
I can remember the great debates over the patriation of the constitution and the tremendous fights at that time about making sure that equalization was part of our constitution. We must have that balance in our federation. Too, I remember at the same time when the original package came down that there was nothing in it reinforcing resource revenues and resource rights for the provinces. The government House leader was in the Ontario legislature at the time, I think, but he of course remembers the stories, the struggles and the great divisions in the House among all political parties about the patriation of the constitution.
In our party we used what leverage we had to make sure the provinces did have rights guarantees in terms of resource revenue and natural resources, because we also believe that in a federation provinces must have strong and protected rights and a very strong role to play. At the same time we need to have a strong federal government which also has an extremely important role to play in the governing of Canada. That is part of the debate today and it will probably be part of the confederation debate for many years.
It reminds me of 1968 and 1978 and the election of Pierre Trudeau. Ed Broadbent said at the time that probably the most fundamental thing Trudeau did in his first term was to initiate a department of regional economic expansion, the old DREE department, in terms of more aid, assistance and development to many of the provinces like Quebec and Atlantic Canada, northern Saskatchewan and northern Manitoba. That is part of fiscal federalism.
We have seen some of those programs diminish over the last few years, so it is important that we talk about equalization, that we talk not about rolling back the cap to where it was a year or two ago but about increasing the cap.
The other point I will make is that in 1995 when the federal government decided on a lot of cutbacks because of the large problem in the debt and deficit area, it cut back radically on the transfers to the provinces. There were radical cuts. I know there are a lot of Liberals across the way that are embarrassed by that slash and burn policy of the Minister of Finance and the Prime Minister. I suppose some even hang their heads in shame. The government House leader is signalling that his head is in a noose on this one and he is probably right.
Never in our history have we have seen larger cutbacks by a federal government. In the fiscal sense the government across the way—and you, Mr. Speaker, were elected as a Liberal in northern Ontario—is the most conservative government in Canada's history. I am speaking here of conservative politics in terms of the massive cutbacks in government transfers to the provinces in education, health and social services.