Madam Speaker, it is a pleasure to rise in the House this morning to speak on the Bloc motion, although I speak on it with some surprise. We have the Bloc asking for a first ministers conference to discuss the reapportioning of the tax base among the federal-provincial governments through the transfer of tax points. I am also surprised by the assertion of the Bloc that there is an imbalance between the provincial governments, or in this instance between Quebec and the national government.
As I listened to a couple of the speeches a few moments ago, there was also a substantial amount of rhetoric with respect to what the government was doing with the surplus and how we were managing our approach.
From the outset, I disagree with the statements made by the Bloc members that the government was not taking a balanced approach to its financing. When we look what we did with our tax file and our reinvestment in health care and post-secondary education, along with the debt repayment, it clearly reflects what Canadians have said to the national government. In fact they have said it to the finance committee.
I also found it quite humorous that a member across the way talked about how we were not consulting Canadians. If we look at the prebudget consultation process that was put in place when we took office, I believe it was more transparent and more open than any prebudget consultation. It was probably the most transparent approach to building budgets in the history of the country.
There have been a couple of statements already made by the Bloc that I have some difficulty with and I will address them as I continue my discussion this morning.
The point I would like to make at the outset is that while the Bloc has put this motion in front of the Chamber and has asked members to consider the idea of calling together first ministers to discuss the issue, first ministers meet often. This is an issue could be added to an agenda for discussion, but I find it outrageous that the Bloc would put forth a motion to discuss tax points, when according to the Bloc it does not mean anything. Therefore, I am a bit confused when I try to comprehend why it would need more tax points.
I would like to illustrate that point by the fact that since I have been in the House, dating back to 1993, and in the various debates which have taken place in the House, the Bloc has never acknowledged the value of tax points. That was said earlier by the hon. member across the way when talking about the federal government's contribution to health care in the province of Quebec. Just to clarify the record about health care and the value of tax points and cash, it is 30 cents of every dollar rather than the 14 cents as the hon. member said.
Again, the Bloc members have made a statement that they want first ministers to get together to discuss the issue of more tax points for the provinces, yet at the same time they never acknowledged the value of tax points. So I have some difficulty with that position. It is quite a contradiction on their part.
Also, there is no consensus among provinces on this issue. Unlike Quebec, many provinces in this federation would prefer additional cash funding instead of additional tax points. We would have to also acknowledge that the change the hon. members across the way are suggesting would lead to some inequities among provinces as well.
Let me point to an example where tax points are worth more in prosperous provinces than in less prosperous ones. One personal income tax point is worth $35 per capita in Ontario but only $17 in Newfoundland in the year 2000.
The cash component of the CHST ensures that all provinces get the same amount of funding per capita. Also, and this may be a point that the hon. member from the Bloc has great difficulty with, the cash transfers also enable the federal government to uphold national values. I point to the principles of the Canada Health Act and the prohibition on the minimum periods of provincial residency to receive social assistance. We had a situation like that recently where the cash transfers actually acted as a lever to ensure some upholding of national values.
The other point that the members across the way made was the issue of fiscal imbalance between the federal government and the provinces.
If we look at the facts, there is no fiscal imbalance between the federal and provincial governments. The majority of provinces, 7 out of 10, had balanced budgets in 2000-01 and 8 out of 10 provinces are projecting surpluses for the year 2001-02. The fact that provinces can balance their budgets and reduce taxes means that they have sufficient resources at their disposal. I should also point out that all provinces have reduced taxes since 1995.
I also have some difficulty with the assertion of the Bloc member that in some way provinces are junior players in the Canadian federation. That is not the case. Provinces are not junior players in the Canadian federation.
They have access to all major tax bases open to the federal government. They levy personal and corporate income taxes as well as sales taxes. They also have unique access to some of the fastest growing revenue sources. While there is some debate about the revenue sources, the provinces nonetheless have access to revenue sources like gaming, liquor and natural resources. When I look at the facts I have to disagree with the hon. member across the way when he talks about the imbalance that exists between the federal and provincial governments.
I would acknowledge, as would any member of the House, that provinces obviously face spending pressures. I hear it every day in my community, as I am sure many members hear it in their communities. The provinces face pressure with respect to health care and education. We all know that those two issues are extremely important to Canadians. Members across the way, particularly those in the Bloc, must acknowledge that the federal government recently announced a 35% increase in cash funding in five years in support of these programs through the Canada health and social transfer.
The Bloc put forward some points this morning with which I would agree. There are spending pressures in the provinces with respect to health care and education. It is incumbent upon the Bloc to recognize that the national government has played a role in helping to ease those pressures and to reflect what Canadians are telling federal members of parliament, for example that health care and education are priorities, so that the national government responds to those issues.
It is also incumbent upon Bloc members to recognize the value of tax points. Perhaps they are doing that now. Hopefully later today those members will rise to acknowledge the value of tax points. Up to this debate Bloc members have consistently ignored tax points and have said that they have no value. Yet today they are asking for more tax points and for a first ministers meeting to attempt to accomplish that.
It is important to point out the financial picture we are facing when we talk about the relationship between the federal government and the provinces. Compared to the provinces, the national government faces a much higher debt burden. In fact federal spending on interest payments is 25 cents per dollar of revenue and provincial spending on interest payments is only 12 cents per dollar.
We certainly face some challenges as a national government. We are prepared to deal with them. We are attempting to pay down the debt at the same time. We have always maintained in the House, since coming to office in 1993, that our approach would be a balanced one. We would not take an extreme approach to governing and working with Canadians.
The hon. member across the way also made the point this morning that the national government was running surpluses at the expense of provincial fiscal stability. I have to disagree with that statement. Our federal priorities are reflected in the recent actions that have been taken, namely the $100 billion in tax reductions to provide savings to Canadians and to spur economic growth. That type of tax plan will help provincial economies to prosper.
Since coming to the House I have consistently stated as a member of parliament that there is a relationship between a reduction in tax and the economy growing. I believe we must maintain a balanced approach. We do not want to jeopardize the very real priorities of Canadians, those being health and education.
There have been substantial increases in transfers to the provinces to support social programs. To date Bloc members have not recognized the value of tax points. I am hoping that today they will stand to recognize the value of tax points and recognize the role the national government plays in reflecting Canadian priorities and in supporting provinces in partnership to address provincial issues, which in many cases are national issues as well.
Tax points are a very important way in which the federal government transfers money to the provinces. My colleagues on this side of the House will be explaining how important they are. It is not the only way in which transfers occur. I would like to spend a few moments telling the House and Canadians about some of the others ways the national government transfers funds to provincial governments. If we want to understand what is happening and if we want to see the whole picture, we have to consider the full range of ways in which the federal government transfers resources to the provinces.
I will focus for a moment on the province of Quebec and make reference to other ways the province of Quebec receives funds from national programs. The province of Quebec receives 26% of federal research dollars, 33% of industrial R and D, 32% of health research funds, 26% of infrastructure dollars, 30% of CFI, 29% of funds allocated for research chairs, and 50% of technology partnership funds.
When we talk about the transfer of funds it is incumbent upon everyone to recognize that the transfer of dollars to provinces occurs in a number of ways, tax points being one. It is refreshing to hear that the Bloc is now recognizing that tax points have value. Cash transfers are another way of transferring money to provinces.
Let us look at the Canada health and social transfer. It is certainly what many Canadians would say is the most important transfer to provinces because of the programs if funds and in turn what those programs mean for families and their communities. Out of that transfer the provinces fund health care, post-secondary education, social assistance, social services and early childhood education.
I should like to present some historical context because it is important to go back in history, as my hon. friends across the way often do, to understand what we are talking about this morning. In 1996 the CHST, a single consolidated transfer, replaced two programs. It replaced the established programs financing which supported health and post-secondary education and the Canada assistance plan which contributed to social assistance.
The CHST transfers money to provinces and territories that helps fund these programs. At the same time, I emphasize, it gives provinces the flexibility to allocate those dollars to their own priorities.
Last September, some eight months ago, the Prime Minister and first ministers from across the country reached an agreement that included a strengthening of the financial commitment to the CHST. It is important to note as well that the first ministers gave Canadians their commitment to strengthen and renew health care services through partnership and collaboration, with the federal government being an equal partner in this renewal.
That commitment set out a five year stable funding plan which would mean a transferring of an additional $21.1 billion through the CHST. That agreement had an immediate impact. In 2001-02 the provinces and territories will receive $18.3 billion in cash. That will significantly help to accommodate some of the increasing pressures outlined this morning with respect to the many CHST funded programs. In fact that number will rise steadily to $21 billion by 2005-06.
The funding commitment was also accompanied by a renewed commitment to the Canadian health care system which was the latest in a series of important CHST related investments on the part of the federal government.
I should like to take a minute to think about some of the measures the federal government has announced in the last few years. In 1998 we raised the annual CHST cash floor to $12.5 billion. The 1999 budget announced an $11.5 billion cash investment in health. The 2000 budget provided a further $2.5 billion in cash. In the last two years alone the federal government announced CHST cash transfers of over $25 billion.
As I said at the outset, our debate today has to consider the whole picture when we talk about transfers to the provinces. Certainly the CHST may be the most important transfer to Canadians, but when we look at the way dollars are transferred to provinces we would be hard pressed to think of a transfer more typically Canadian than equalization.
In terms of policy, equalization means that the federal government helps to reduce disparities among provinces and regions and helps to ensure that all Canadians, regardless of where they live, have access to quality services.
In closing, although I could probably speak to this issue for the entire day, it is fair to say I have some difficulty in understanding the rationale behind the Bloc proposing the motion. Back in 1993-94 the Bloc never recognized the value of tax points. Now it is asking for more tax points. Its members talk about the fiscal imbalance between the federal government and the provinces. That is clearly false. Since 1993 we have been very open and transparent with respect to surplus and with respect to building budgets.
I cannot believe for one moment that the Bloc has any real interest in pursuing the debate and dealing with the facts, given that its only purpose is to continue to bring forward statements that are questionable in some cases. I certainly respect the opinion of my hon. colleagues across the way, but I respectfully disagree with a number of points they made this morning.