Mr. Speaker, I will be splitting my time with the hon. member for Waterloo—Wellington.
This debate is like Yogi Berra saying déjà vu all over again. We do seem to be going at this once again. The provincial premiers meet in Saskatchewan and their surrogates coincidentally rise up in the House in order to bash the federal government for not giving them enough money. Some tunes never change.
The problem for the party opposite is that no amount of money will ever be enough. No amount of cash, no amount of tax points and no amount of equalization payments will ever be enough for the sponsors of this motion.
If the premiers had their way, Canada would become a collection of independent principalities and the Prime Minister would be nothing more than a bill collector. He would be in the rather unenviable position of having to phone up a Mike Harris or a Bernard Landry in order to get enough money to cover the expenses for the army. By that time, of course, in their generosity it would probably look like nothing more than a glorified police force.
The facts, however, are somewhat less prosaic. Provincial revenues in the fiscal year 1999-2000 totalled $181 billion, as opposed to the federal government's share of revenues which was $161 billion. Provincial revenues for the past 25 years have exceeded federal revenues regularly and consistently. Maybe the Prime Minister should have a meeting with himself to see if he can get the revenue flowing the other way.
The provinces do very well in this scheme of loose federalism and have virtually the same access to revenues as the federal government. The major transfers from the federal government to the provinces are through the Canada health and social transfer in the form of tax points and cash.
Generally at this point eyes begin to glaze over because Canadians, and indeed I would suspect many members, do not understand tax points. I have some sympathy in this regard.
The definition of a tax point is room given by the federal government to the provincial governments in the tax system. The federal government reduces its rate by a certain percentage in order to give provincial governments room to increase theirs accordingly. The tax point transfers make no difference to the overall burden on taxpayers. It is in fact a break even situation for all taxpayers. The provinces increase their tax base at the expense of the federal government and presumably in Saskatchewan that is exactly what the premiers are trying to do.
Tax points are one of the means of transferring revenues to the provinces based upon the strength of their provincial economies. If, for instance, Ontario does well, the revenue from tax points will go up and the money will come into the federal treasury from the provincial taxpayer. It does a U-turn and heads directly back to the provincial treasury. The federal government merely acts as a collector of those funds.
Throughout the dark period of federal fiscal difficulties, the tax points remained sacred. There was no reduction and there was no change. Whatever the economy of the province generated, it immediately went back to the provincial treasury. It is a very simple system.
The Bloc is in the unique position of arguing that tax points do not exist, but if they do exist then they want more. The head office in Quebec City has dictated today's motion, which reads:
That, in the opinion of this House, the government should call a federal-provincial first ministers' conference for the purpose of reapportioning the tax base among the federal and provincial governments through the transfer of tax points.
Do we really believe that premiers want to apportion more tax points to the federal government? Really, and I have some swampland in Florida.
Then, very handily, the Bloc manages to answer the motion by setting up Quebec's own commission. It is called the commission on tax disparity. I am grateful to my colleagues opposite who see no need for the debate, as they have already prejudged the issue simply by naming this commission the commission on tax disparity. What could be more clear? It is always handy to arrive at one's own conclusion before stating a problem.
In the year 2001-02 the provinces and territories will receive a total of $34 billion in tax points and cash, $15.7 billion in points and $18.3 billion in cash. It is anticipated that there will be a 19% growth in tax points over the next three or four years.
Last September the federal government committed itself to an additional cash transfer of $21.1 billion over five years. Having worked the federal government over for cash in September, it is now time to work the federal government over for tax points in May and June. Some would argue that the Prime Minister becomes a head waiter for the provinces.
If the federal government does not retain some control over the cash, the provinces would never have any meaningful national health standards and we would be even further down the road to absurd levels of devolution.
The Liberal government's policy of transfers to the provinces is a balanced one. The cash component is large compared to the tax transfer component. This means that not only does our government preserve and enforce national standards but the provinces can rely on stable sources of revenue.
That does not begin to address the equalization program that is now at an all time high at $10.8 billion of which, by the way, Quebec receives the lion's share. In the province of Ontario the CHST accounts for something in the order of 18% to 20% of provincial revenues. It has remained fairly steady over the years as Mr. Harris has chosen to reduce his revenue sources by his commitment to tax cuts in preference to all other commitments.
Various provincial governments make their own choices about spending versus tax relief and the federal government has little say, some would say thankfully, over those choices. It is now a little hypocritical for the provinces to come along and say that they need more federal moneys because of their own decisions. Having worked the so-called CHST cash cow in September, namely the cash part of the CHST, we are now in May and we are trying to work the tax points part.
The finance minister has repeatedly said that there is no financial space for large initiatives. The federal government debt is still quite enormous even after the $15 billion paydown this year. The first $40 billion of all federal revenues immediately goes toward the interest payment on the debt. If we took away another $34 billion for CHST transfers and cash, and added in another $11 billion in equalization, we would have precious little money left over for other programs, such as direct transfers to Canadians on matters like EI and pensions. Spending pressures for research and development, for on reserve aboriginals and for pensions would continue to be enormous in the short and medium terms.
The provinces do very well in this very devolved federal state. Their revenues actually exceed the federal government's and their debts are less than those of the federal government. The government already transfers over $40 billion to the provinces. I for one say that enough is enough and I urge hon. members to reject the motion.