Mr. Speaker, this is not the first day we have debated the bill but it is the first day we have debated it on third reading.
There is a history and a track record to the legislation in this place. The real track record was the first minister's conference communique of September 11, 2000, when the announcement was made on the one year lifting of the ceiling on equalization payments would occur. Of course that was about one month before a general federal election was called. People, particularly the Prime Minister who was the major part of making that announcement, would very much have had the election in mind at that time.
We have an agreement that was reached in a very politicized environment. It is for one year and one year only. We really are talking about retroactive legislation. The spin doctoring that has come out of the Liberals on this particular initiative has been absolutely incredible.
I have the press release from the minister's office dated March 15. It spent more time talking about the fact that because of the Ontario's hot economy the total transfers were going to be $1.8 billion higher than it did the substance of the press release which was supposed to be about the legislation, this bill which was tabled that day in the House of Commons.
There is a general recognition, a disquiet and a discomfort among some of the bureaucracy in the finance department and other places that this is a politically opportunistic, unprincipled way to approach the whole issue of financial transfers to the provinces. They really are trying to bury the facts of how we arrived at this.
The real reason we ended up with that announcement last September 11 was that the federal government had balanced the books. It got rid of the deficit between 1993 and 1999 in three ways. First, it gutted transfers to the provinces, particularly the CHST which funds health, education and other important areas, by reducing it 33%. Second, it gutted the Department of National Defence. Third, it reduced all other programs by an average of 3%.
We can see how much damage was done because the priorities of the government were obviously not the priorities of the people. This is an attempt to make up for the first set of cuts to the CHST, the health and social transfers to the provinces, on a one time basis in a politically charged atmosphere.
I have great difficulty with all the breast beating coming from the Liberals about how generous they are. They say this is a good announcement and pretend it will somehow continue. The official opposition supports the principle of equalization. It is the government that makes equalization look bad by this kind of ad hoc, band-aid reaction.
The bill is very narrow in scope, as I mentioned. It deals with only one year, yet the government is attempting to make it look more broadly based.
We support the notion that the federal government ought to equalize access to core public services at reasonably comparable levels of taxation. There are many problems with the current system. It should be much more open to discourse and debate.
I listened carefully to the member for St. John's West when he talked about how economic development, particularly in the non-renewable natural resource sector, is penalized by the current way the equalization system is applied.
It reminds me of what we have done with the north. Equalization payments apply only to the provinces, but in the north we have federal territories: Nunavut, the western Arctic, the Northwest Territories and Yukon. Federal transfers to those jurisdictions are the major part of their budget. Anywhere from 80% to 90% plus of the total revenues of territorial governments come from the federal government.
Historically the equalization formula has worked in a perverse way. If a region creates economic development it is penalized on an almost dollar for dollar basis. What is the incentive to become self-sufficient? This is contrary to economic thought and rational development policy.
Let us look at the economies of countries with mobile populations. I heard the Secretary of State for Latin America and Africa ask about the demand for skilled workers in the province of Alberta. How do we get people to fill those jobs? How do we get them to move to that jurisdiction? That is a crucial question.
It is clearly demonstrated that one of the major reasons the U.S. economy is resilient and strong and has low unemployment is that culturally and by policy its population is used to travelling to new jurisdictions to seek employment. The United States has the highest labour mobility in the world. That is what gives its economy such great transitional strength and reduces its unemployment numbers.
Any country that makes it more convenient to stay in one place than to move to new opportunities is doing its people a great disservice. The Secretary of State for Latin America and Africa was on to a very important question about which our young people are thinking a great deal.