Mr. Speaker, it is my pleasure to participate in the debate on the Bloc motion regarding transferring tax points to the provinces. I will broaden the discussion a little if I may because there are three components of the Bloc economic policy that form a logical and coherent whole. That can be taken as a compliment, I suppose.
The first component is today's motion, that is the transfer of tax points from the federal government to the provinces.
The second component, which coincides with that, is the Bloc's notion that the federal government's surpluses next year will be about $18 billion—according to the Bloc—rather than $7 or $8 billion according to the economists. If that is true, it will be easier for the government to make such a transfer to the provinces.
The third component is the Bloc's idea that we should give up the Canadian dollar and use the U.S. dollar.
All three of these components are a logical and consistent whole because all of them separately and together lead to the same thing. All three lead to a weakening of the federal government, a weakening of the Canadian economy and an increase in the likelihood of the separation of Quebec from Canada. While they are logically coherent, I would for those reasons oppose them all very strenuously.
I will go through very briefly each of the three components of the Bloc economic platform. First, on the transfer of tax points, which is the subject of the motion today, I will comment very briefly on the major elements of current transfers including tax points. I will then give the House two reasons why I think the Bloc motion makes little sense at all.
Right now there are three major components of transfers from the federal government to the provinces. The first consists of around $18 billion of cash transfers, which was increased recently by the health accord in the fall of last year and added some $20 billion of federal money for health over five years.
Next, and this is something the Bloc Quebecois and indeed all the provinces tend to forget, we have transfers in the form of tax points because back in 1977 the federal government transferred tax points or taxing powers from the federal government to the provinces. This amounts to a value of $16 billion today whereas in 1977 when the transfer occurred it was about one-tenth of that.
The fact that the Bloc and the provinces tend to ignore this tax point component is relevant, as members will see in a minute, to the subject of its motion respecting the transfer of further tax points.
The third component of special relevance and importance to Quebec concerns equalization payments made to have not provinces. This year those payments consisted of $11 billion of which nearly half or $5.4 billion went to Quebec. This equalization payment has been among the fastest growing components of our expenditures, having increased by 33% over the last decade or so.
It is the status quo. What the Bloc is proposing is that the federal government transfer more tax points to the provinces. In my opinion, this is not a good idea at all. What the federal government did last fall was to make the largest cut in personal income tax in Canadian history, a $100 billion tax cut, but a tax cut for Canadian taxpayers.
What the Bloc Quebecois wants is not a tax cut for Canadian taxpayers, but a tax cut for Canadian provinces. In my opinion, it is a lot better for the federal government to cut personal income tax than to cut taxes for the provinces.
If any province wants more revenue it is entirely free to raise its own taxes, but if Ottawa has excess money it should cut taxes to the people, not to the provinces as the Bloc motion suggests.
The final point is even more important. It shows that the Bloc proposal is inherently and blatantly contradictory. We have had transfers of tax points from Ottawa to the provinces since 1977. Whenever provinces say how much Ottawa is contributing to health care or other social programs, unfailingly they never include the tax points. The provinces say Ottawa only pays 19% of health care or some amount like that because they have forgotten the tax points, which would more or less double the contribution.
Now they want us to transfer further tax points. Do we think that in the future they will acknowledge that transfer when they report the contribution of Ottawa to provincial social programs? Obviously they will not, given the history of the last 24 years when they have never reported tax points.
So it is obvious that the object of this motion on transfer of tax points is to reduce the importance of the federal government in the eyes of Quebecers. That is the true objective of the Bloc Quebecois because, if the importance of the federal government is reduced in the eyes of Quebecers, this will advance the cause of separatists. This is its objective. It has nothing to do with the economy. It is purely political and a good reason to oppose this motion.
The second point is related to the first. According to the finance critic of the Bloc Quebecois, all bank economists who make these economic forecasts are always wrong and only the finance critic of the Bloc Quebecois is right. He showed with graphs the huge forecast errors economists made and the small forecast errors of the Bloc.
I told him the other day that perhaps he should not be here in parliament. If his forecasts are so wonderful, he should start his own business and he would become a millionaire.
It is true that if one can outperform the market in terms of economic forecasts one can be a millionaire.
But before the finance critic of the Bloc Quebecois makes this career change, if I were him, I would continue believing the economists. Consequently, it seems to me more reasonable to think that the federal surplus will be $7 billion or $8 billion, instead of $18 billion, next year.
I will be very brief on this final point because it is all part of the same separatist circle coming together. It is the incessant clamour by the Bloc for Canada to give up its dollar and use the U.S. dollar. It is evident from a separatist point of view that this would be a very nice thing, because come the great day of separation, if we were all using the U.S. dollar, currency would not be an issue. However, if we were using the Canadian dollar, it would be a big problem. Obviously from a purely political view the Bloc favours dollarization.
I have one story to illustrate the point that there is very little support within the Canadian business community for dollarization. We had a debate in Quebec on dollarization, which I participated before I got into politics. Three hundred business people came to the Montreal board of trade meeting. Then the organizers wanted to have a repeat debate at the Toronto board of trade but there was no interest. The dollarization issue is largely a Quebec issue, in particular a Quebec separatist issue, plus a sprinkling of academics across the country. It has no general backing from the Canadian business community.
In conclusion, I mention these three aspects of the Bloc program because they all hang together: the further transfer of tax points; the gross overestimate of next year's federal surplus; and the incessant clamouring to use the U.S. dollar. They are coherent in the sense that individually and taken as a whole they would lead to: first, a weakening of the federal government; second, a weakening of the Canadian economy; and third, an advancing of the cause of Quebec separation. On all three of these grounds I strongly oppose this motion.