House of Commons Hansard #42 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was finance.

Topics

Prebudget ConsultationsGovernment Orders

10:35 a.m.

Some hon. members

No.

Prebudget ConsultationsGovernment Orders

10:35 a.m.

Canadian Alliance

Charlie Penson Canadian Alliance Peace River, AB

Mr. Speaker, I am pleased today to rise in the debate on the prebudget consultations and the process that will take place leading up to the budget to be brought down sometime hopefully in the new year.

The committee travelled extensively and heard from a lot of Canadians. It produced a report called “Canada: People, Places and Priorities”.

The Canadian Alliance recognizes that fundamentally Canadians want an increase in our standard of living. They want a reversal in the long term economic decline. While the Canadian Alliance supports many of the recommendations contained in this report, we do not feel that these priorities have been adequately reflected in either last year's budget or in the report itself.

Last year the Canadian Alliance issued a supplementary report and it warned the government of the need to control expenditures to allow for further tax relief and debt repayments. However budget 2001 did not make these issues a priority, and therefore we feel compelled to raise them again this year.

Furthermore, this year's throne speech increased the pressure to spend with its many promises for new programs. Private forecasts have estimated the aggregate bill for these new spending programs at about $38 billion over the next eight years and this does not include the cost of climate change commitments, especially to Canadian consumers and taxpayers. With recent speculation of a $15 a tonne emissions credit cap for industry, the Liberals appear to be looking at the overburdened Canadian taxpayer to foot the bill again.

The throne speech hardly mentioned the need for further tax reduction and reform. Instead it stated that the government would maintain its commitment to fair and competitive taxes. The Canadian Alliance argues that Canadian taxes are neither fair nor competitive.

It is against this backdrop that the Canadian Alliance has felt compelled to submit a supplemental report. At a time when health care, security issues and taxation continue to be at the forefront of Canadian concerns, the Canadian Alliance insists that the federal government must not be distracted by costly and misguided legacy dreams.

We believe that these are the issues that require attention: government spending; taxes and the tax burden; ongoing productivity and competitiveness concerns; and the debt burden. I will address those one at a time.

Spending is the first issue I would like to address. The Canadian Alliance strongly supports recommendation 2 of the committee report which calls for a balanced budget, a cap of roughly 3% increase on spending to keep in line with the growth of population and inflation, paying down market debt and a ongoing review of federal expenditures. These have all been longstanding Canadian Alliance policies. However these recommendations can only work if they are carried out, which has not been the case to date.

The significance of recommendation 2 pales when one considers the government's recent increases in federal spending. We note the concerns expressed by the Canadian Chamber of Commerce about the increased government spending levels. President and CEO of the Canadian Chamber of Commerce, Nancy Hughes Anthony, said:

In the view of our members, this...creates a very dangerous precedent. If we look at the cumulative government spending, since the deficit was eliminated--very few years ago, 1997-98--that increase is almost 25%.

The Canadian Alliance strongly urges to federal government to discontinue its new spending spree. We agree with C.D. Howe Institute economist Jack Mintz when he said:

Those who believe governments have inadequate revenues to spend on critical public services have it wrong. The problem is that governments misallocate tax dollars by designing ineffective public programs. For example, in 1999 Canada spent almost the same as the United States on health, education and protection, about 16% of GDP--by the way, protection includes defence and law and order...However, Canada spent almost 25% of GDP on other programs and debt carrying charges while the U.S. spends only about 15% of GDP on similar expenditures.

Members can see that Mr. Mintz is saying that there is a 10% gap between Canada and the United States and it makes up that huge difference in the size of government in Canada.

Rather than increasing spending every year as the new priorities are identified, the Canadian Alliance recommends that the federal government show leadership and make the required spending cuts from lower priority areas so that the overall federal spending envelope does not grow faster than population and inflation.

I want to take a moment to talk about the taxes and tax burden. Our tax burden in Canada remains too high. Even after implementing the tax changes announced in budget 2000, Canada will still have personal and corporate tax rates far above the OECD average. Moreover, our overall tax burden remains about 10% higher than that of the United States, as Jack Mintz said.

Currently the federal government's revenues remain at about 16% of GDP. I want to make the point that they are only slightly higher now than they were in the mid-1990s, so revenues continue to grow for the government. In fact, Dale Orr of DRI-WEFA, in the spring of 2000 in a presentation to the finance committee, said:

Total revenues for all governments, netting out transfers, have only fallen from 41% [of GDP] in 1996 to 40.1% in 2002. It will be disappointing for Canadians to learn that this overall tax burden has not fallen that much.

The Canadian Alliance members note that Canada's tax burden will increase even further during 2003 through payroll taxes, as the Canada pension plan premiums are set to increase another half a per cent. That happened since the time the report was written. That works out to $964 million more out of the pockets of Canadian employers and employees. We are not even sure whether that is sustainable.

The former chief actuary of the Canada pension plan was fired, if the House recalls, because he suggested it probably would have to rise to 15%. The former finance minister did not like what he said and therefore the chief actuary got the boot and the government brought somebody else in who would give the government the answer it wanted.

Mr. Don Maunders, the vice president of the Canadian Restaurant and Foodservices Association, had this to say about it:

So when I ask our operators what they need to hire more young people, they're very clear. They say, “Make it less expensive for me to hire that person, and I'll add them tomorrow”. They look at payroll taxes as a particularly expensive barrier to hiring more staff. As labour gets more expensive, they look for ways to drive more hours out of the workweek.

The Canadian Alliance members reiterate our call for the elimination of the capital tax. We note that the finance committee has once again recommended this move but we urge the federal government to immediately commit to rid Canada of this damaging tax on productivity and investment. It was a recommendation in last year's prebudget consultations and report but it was not picked up.

Recommendation 4 on corporate taxes is somewhat disheartening as the goal of this Liberal Party seems to be to guard against an unacceptable divergence with the U.S. rates. Time and again witnesses before the committee stressed the importance of creating a Canadian tax advantage rather than attempting to keep up with our southern neighbour.

Thomas d'Aquino said in April 2002 that:

--the goal of tax policy should be clear. Competitiveness in taxation is not just a matter of playing catch-up with the neighbors. Rather, Canada should be trying to create a meaningful advantage over its major competitors.

Nothing much has changed since then.

Last, the Canadian Alliance members recommends that the federal corporate tax rate on profits from the resource sector be brought in line with other sectors. It is a drag on the economy. It is a drag on investment. We have had many submissions before us from people in the mining and petroleum industries asking why they are being treated unfairly and why they are not the same as all other industrial sectors in Canada.

The other is the ongoing productivity and competitiveness concerns. The Canadian Alliance is deeply concerned that the reports attempt to play down Canada's problems with productivity and international competitiveness. Many witnesses expressed concern that the productivity gap between Canada and the United States remains wide and continues to grow.

The report however appears to suggest that revised data has shown that the gap between Canada and the United States is smaller than previously thought. There is a well documented 30 year decline in Canada's standard of living that can hardly be made up by revising data. Unfortunately, this is typical of the denial of the Liberals of the role that public policy has played in Canada's long term economic decline.

According to the Global Competitiveness Report 2002-2003 , Canada tumbled five notches to eighth spot among the most competitive economies in the world. Think of it: 25 years ago the United States was number one in terms of productivity and Canada was number two. We were very close. We are now in eighth place. The U.S. remains number one. Just think of where that puts our Canadian companies that try to compete. We have tumbled and we have the worst rating since 1996. Meanwhile, even with the current U.S. economic troubles, the Americans managed to improve their productivity by 4% in just the last quarter alone and I understand that gap is increasing and growing even today.

Here is what Jayson Myers, the chief economist of the Alliance of Manufacturers and Exporters, had to say about it:

The gap in productivity performance between Canada and the United States continues to grow. Productivity is a measure of the wealth-creating capacity of the economy. It's also a measure of return on investment. Our lagging productivity performance is therefore not only an indication that real incomes of Canadians are falling in relative terms to those of the United States, but is also a reason why Canada's share of foreign direct and portfolio investment is declining, and why the Canadian dollar, in spite of all efforts aimed at improving fiscal and monetary fundamentals in this country, continues to depreciate against its U.S. counterpart.

It is roughly 63¢, a big decline since the Liberal government came to office in 1993, and a huge decline in the last 25 years. That is what Jayson Myers had to say about it.

The most troubling matter is the government's longstanding refusal to acknowledge the failure of its own policies to encourage innovation and productivity. Liberal members who comprise the majority of the committee did not recognize the role that successive Liberal governments have played in hindering Canadian economic progress and development. This state of denial is negatively impacting Canada's standard of living, which is currently 30% lower than that of our American neighbours.

What about our debt burden? The Canadian Alliance believes that it is vitally important to control overall spending in order to accelerate debt repayment. Although our debt to GDP ratio has improved, our debt burden still remains very high, and the interest costs to cover that debt continue to be a drag on Canadians.

William Strain, chairman of the taxation committee of the Conference for Advanced Life Underwriting, had this to say about the debt:

Debt is currently at an unmanageable level in relation to the GDP. It's taking 23 cents of every tax dollar to pay the interest. That has to be brought down to a more manageable level going forward...We're certainly encouraged by the level of debt repayment that has occurred over the last few years, and a commitment, even on a five-year timeframe, in the order of magnitude we've seen over the last few years would be a step in the right direction, to have it up in that $5 billion to $10 billion a year committed repayment level.

That is what he said, but we see no line item in the budget that would deal with this issue. It is just left to happenstance. As the report notes, reducing our debt will result in a permanent fiscal dividend, which can be used in strategic investments and other areas like defence, health care and further tax relief. And we certainly know there is pressure in all those areas as the Liberal government has mismanaged those entire sectors of our economy.

To that end, the Canadian Alliance recommends that planned debt repayment be a specific item within the budget and not left to chance at year-end.

Canada has an untapped potential for growth but Canadians need the proper environment to nurture our prosperity. The Canadian Alliance is confident that Canada can regain its prosperity and competitiveness. However, strong government leadership is required to provide crucial fiscal responsibility. Canadians deserve a significant reduction in taxes and prudent management by government departments. It is up to the government, however, to put those priorities into action in the upcoming budget.

I want to deal for a moment with the mismanagement we have seen, which has led to this 30 year decline in Canada's standard of living. It is pretty tragic, really, to see a great country like Canada brought down to this level, where we have had a decline in our standard of living relative to that of our major trading partner, our neighbour to the south, the United States. Our standard of living is something like 30% lower than that of the United States.

What I really want to get across is that the promotional spin of the Liberals as being good money managers is just that: spin and promotion. The mounting evidence clearly paints a very different picture, one of financial mismanagement and accounting deception.

As I stand here today, Canada's standard of living has been falling in comparison to that of our largest trading partner and competitor for the past 30 years. This decline has been even more dramatic since 1993, when this current Liberal administration took power.

How far have we drifted off course? Many economic commentators describe the last 10 years as Canada's lost decade. In the lost decade under this government, Liberal mismanagement and misguided public policies have translated into unfavourable comparisons between Canada and our southern neighbour.

According to the Centre for the Study of Living Standards, Canada's productivity gap was 19% when we were compared with the U.S., measured by GDP per hour worked. This means that Canadians were only 81% as productive as American workers, not because American workers are working harder but because they have better tools and technology than their Canadian counterparts. I would submit that the heavy hand of government on their backs, taking 12% more of the GDP in this country than it does in the United States, is a major contributor to that.

Hand in hand with the Canadian productivity gap is our standard of living gap, which is now 29%, according to the centre. That means that Canadians are only 71% as wealthy as Americans, measured by real personal disposable incomes. This gap increased from 25% in 1993. It is huge and we are in this major drift. I suggest that it is even worse than drift; it is mismanagement, and even worse than mismanagement, it is wilful mismanagement in many areas.

Once Canada was a long term importer of foreign capital, but today Canada has a direct foreign investment gap of 2%. That means Canadians are investing more money abroad, mainly in the United States, than foreigners are investing in Canada. Why is that? They are investing it abroad because they are looking for better rates of return in other countries. Why can investment in Canada not get a favourable return? The first reason is the Canadian dollar. They have to buy machinery and equipment for their new plants. When they buy that with a 62¢ dollar it makes it very expensive.

Then, when they get their plants set up, what happens? There are higher tax rates in Canada. There are higher payroll taxes and there is higher regulation in Canada. In other words, they are not competitive. Then we throw in the issues like the security at the Canadian-U.S. border. Can we imagine what happens? Then we throw in Kyoto and the uncertainty of higher energy prices. Where is new capital flow going to go? People in Canada are voting with their feet on that issue.

Finally, the Canadian dollar gap is 38¢. The dollar is at about 62¢ as we speak. There was a 23¢ gap in 1993. This is another example of the decade of drift, a lost decade under the Liberal administration.

What about our international relations and security? Under the Liberals, Canada has declined not only economically but also in our political stature on the world stage. We now have gaping holes in our military capability and are letting down our international allies. Liberal disregard and anti-Americanism chauvinism have put the Canadian-American relationship in a dismal state. Our once unprotected border is now armed to the teeth by a distrustful American government. As I said, what effect does it have on two-way flow of trade when we have a slowdown to the extent that we have seen?

Meanwhile, even our Coast Guard cannot adequately patrol our shores because there is no money to put fuel in the boats, which have to sit idle.

The Liberals are more concerned with tweaking the nose of the United States than they are with safeguarding Canadian economic interests.

Another case in point: What have they done in regard to agriculture? And what have they done in regard to protecting us in softwood lumber?

Trade relations with the United States, our major trading partner, are at all time low level. I suggest that we do not have the kind of good relations between Ottawa and Washington that are required with the kind of trade relationship we have. It is neglect and it is worse than that. It is actually tweaking the nose, as I said, of Uncle Sam, and it is not acceptable.

Would good managers develop the kind of public policy that has allowed this to happen? I do not think so.

One of the most significant differences between the American government and the Canadian government is that our government takes up 12% more of the economy than the American government, even though the United States spends more public money per capita than Canada. If the money were going to productive spending such as usable infrastructure perhaps it would do some good, but it is not.

What did the Liberal government spend its tax dollars on? That is coming to light every day in the House. There was HRDC boondoggle from about two or three years ago. There was the case of the Hostess potato chip company, I think it was, which was enticed to move its plant from Niagara Falls down the road 40 miles to Brantford, to the constituency of the HRDC minister at the time. What kind of useful infrastructure spending is that? There was $1 billion unaccounted for.

It is even worse. There is the gun registry. The Auditor General identified a cost overrun of at least $1 billion. The Auditor General had to give up because the paper trail was so bad and the books were so bad that the audit could not be completed.

In fact, my colleague from Yorkton—Melville talks about how far the deficit may run on the gun registry. He says that there are only about two million firearms registered. There are some estimates that there may have to be another 10 million registered. This thing could accelerate to several billion dollars. It is out of control.

The Liberals are not good money managers.

What about Shawinigate? Do members remember that?

What about the ongoing advertising scandal, the wasteful spending through regional development programs and technology partnership scandals?

Why is the Canadian taxpayer in the business of funding business? General Electric, Pratt & Whitney and Bombardier were given industrial grants. Is that what we want to do as a government, give money to huge corporations? What is the trade-off? There is less money for things like health care. There is less money for tax relief. Canadians already know how heavily they are taxed.

These are the kinds of problems there are.

Then, of course, we have Revenue Canada and the GST scandal. CBC has reported that maybe $1 billion has escaped through GST white collar fraud. A lot of it has apparently gone into Barbados and into offshore accounts that cannot be recovered. So someone does a couple of months in jail and when he gets out he has an account for $1 million sitting in Barbados. And they get away with it. That is not just mismanagement. It is wilful mismanagement. It is awful.

This is not even to mention the Enron style accounting practices of the government, such as throwing $7 billion in multi-year funding to foundations, money that is sitting in bank accounts across Canada and should have been used to further pay down the debt. Successive Auditors General have said that this accounting standard is not acceptable.

Before the former minister of finance lost his job, he was in Toronto last spring lecturing the private sector about cleaning up their books and cleaning up their act in accounting. I suggest that he did not have any lessons to give anybody. The Auditor General has been on his butt for a long time in this area and this area needs to be cleaned up.

Under the Liberals, federal-provincial relations have also deteriorated, first under health care funding and now with Kyoto.

Some suggest that this all will be cleaned up. There is a lot of hope about how this will be resolved with the political future of the member for LaSalle—Émard, when he comes into the House as prime minister in a few months and turns the situation around. So I think it is only fair that we examine his record for the time he served as finance minister, from 1993 to the summer of 2002.

Unfortunately, the former minister of finance and the Prime Minister are not opposites, as he would have us believe, but are cut from the same political cloth. They both value political expediency over good policy, wasteful spending over restraint, and accounting trickery over transparency. The true legacy of the former Liberal tag team of the former finance minister and the Prime Minister is that they have ripped the fabric out of the health care system and have pushed it to near crisis by slashing funding for the provinces.

Provinces have told us, and we know in the House, that during the height of those cuts we saw $25 billion lost out of the system in health care. Yes, the Liberals have restored the funding to where it was and to maybe even slightly higher than it was when they cut that funding in 1995, but in the process, $25 billion has gone missing. And we wonder why the provinces have trouble funding health care?

Only out of political necessity did these two co-write the budgets that reduced spending. It was only after six years of tax increases that they finally capitulated to the demands of Canadians, in 2000, by grudgingly reducing taxes. From the highest to the lowest point, program spending fell 14%, or $17.8 billion, according to the government's public accounts, which overstate the decreases and understate the recent increases. These financial statements have become, under this Liberal tag team, as genuine as those of WorldCom or Enron.

As the C.D. Howe economist William Robson remarked after the 1999 budget:

Canadians generally can no longer rely on federal budgets, nor on the figures presented in the Public Accounts at the end of each fiscal year, to give a straightforward account of the nation's finances.

What is he saying? In fact, up until about 1993, they were the standard. He is saying that we “can no longer rely on” the budgets or the figures presented in the public accounts to give a straightforward accounting of the nation's finances. What a strong condemnation.

From this perspective, it is outrageous that the current and former Ministers of Finance would have the audacity to lecture the private sector on its corporate governance and accounting rules. Unlike accounting firm Arthur Andersen, the Auditor General has reported the government's accounting failures many times and has repeatedly requested corrective action, just recently, in fact, on the gun registry and on many others.

However, one of the main legacies of this tag team is unapologetic accounting sleights of hand. Advertising, the gun control registry, and the lost tax revenues through GST fraud and international taxation loopholes are the most recent examples of the Liberals keeping Parliament in the dark. The Auditor General had something to say about keeping Parliament in the dark on the gun registry.

Fortunately for Canadians, the national accounts published by Statistics Canada are based on international standards and provide a non-politicized source of financial information. Unlike the public accounts, the national accounts measure peak to trough decline as slightly less than 9% or $11.3 billion. Historically both sources of financial information were comparable. However, after 1992 the public accounts have presented a systemic understatement of program spending.

That is why, according to the public accounts, program spending was below the record high set in 1993, right through to 2001. In contrast, however, the national accounts reveal that the earlier high was surpassed in 1999. A significant reason for the over $10 billion difference between the two accounts is the public accounts improper accounting of family child benefits and the year-end ad hoc spending such as the spending in the areas that I identified earlier as the foundations. The Auditor General has criticized both those practices. She has criticized the accounting of the family child tax benefits and also the foundations' spending.

While expenditure reduction was an integral part of taming the deficit, what was cut is important. Was it done fairly? No. This Liberal tag team effectively off-loaded its problem by slashing social spending transfers to the provinces. The national accounts reveal that transfers to other levels of governments were cut by just over 20% or $6.6 billion. We must keep in mind that this category includes social transfers and constitutionally required fiscal transfers like equalization and therefore understates cuts to social transfers.

Since the fiscal transfers grow in line with GDP, let us consider the impact of reduced social transfers on Canada's largest province, just that alone. I know that it was not just Canada's largest province that was hit, but let us just look at Ontario alone. Federal cash transfers were cut by 36% or $2.6 billion between 1993 and 1998. Therefore, the source of today's fiscal difficulties between provincial and municipal governments can be traced back to these Liberal cuts.

In direct contrast to the dramatic cuts to social transfers, the Liberal government's reductions in its own backyard were relatively tepid. Spending on the federal bureaucracy fell 7% or $2.6 billion compared to the 20% cut in provincial transfers. What does that say? The government cut its own spending by 7% and cut transfers to the provinces by 20%.

The dichotomy of all this in Liberal priorities extends throughout their time in power. Between 1993 and 2001 the finance minister and Prime Minister tag team increased spending on the Ottawa bureaucracy by 16% or $6 billion. Transfers to businesses increased 9% or $330 million. That was some of the money I talked about going to Bombardier and others. Transfers to the provinces increased just 6% or $1.9 billion. It is clear that the Liberal government cut deeper where there would be less political backlash and reduced expenditures the least where repercussions would be stronger.

The government cut transfers to the provinces. It off-loaded its problem to the provinces to let them deal with it. The dramatic off-loading forced the provinces to reduce their own budgets and resulted in the premiers bearing the brunt of the backlash. This was not done by accident. I suggest the Liberal government knew very well what it was doing. Thus the expenditure reductions were shaped by political expediency rather than good policy.

Members may be thinking that the government cut taxes too and that is true. After six years of tax increases, the Liberals did reduce taxes just before calling an election.

In early 2000 the Canadian Alliance proposed a $100 billion tax reduction program which the Liberals claimed was not affordable. We all remember the ridicule that went on in the House. I remember in 1993-94 the Canadian Alliance, and the reform party before it, had the zero in three program; we would balance the budget within three years. I remember the ridicule that came from across the way. The Liberals said it would be impossible. When they were forced to bite the bullet, the Liberal government actually did it in two years, but we must remember how the Liberals did it. The government did it on the backs of the provinces.

Getting back to the tax cut I mentioned earlier, in early 2000 the Canadian Alliance proposed a $100 billion tax reduction program which the Liberals claimed was not affordable. There was an election in the offing and to ensure electoral success following strong Alliance polling numbers, the Liberals introduced their tax plan to appeal to the growing number of Canadians demanding a tax cut. Although the Liberal plan was smaller than the Alliance plan, it stole several key proposals to augment its political expediency. Members must remember those words, political expediency, because they come up quite often.

The former finance minister and the Prime Minister focused their cuts disproportionately on social transfers and dealt Canada's health care system a body blow. At the same time they increased taxes over 60 times, including bracket creep and CPP premium increases, before capitulating to electoral demands to reduce the tax burden. Yet they still managed to add $40 billion to the over half a trillion dollar federal debt.

The Liberals came to power on October 25, 1993. The federal debt at that time was $508 billion. The Liberal government ran it up to $583 billion in a short period of time before it was stopped. The government has reduced it down to $536 billion I think, but by those numbers that is still a net increase of some $28 billion from $508 billion to $536 billion.

That is the Liberal legacy. They have increased the debt by more than $36 billion. They put taxes up some 60 times in order for Canadians to pay back the debt, but it is still $28 billion higher than when they took office. Out of every tax dollar, 23¢ goes just to pay the interest on the debt. Imagine what we could do with that if that debt was not there, yet there is no real program to pay it down. It is just by accident; if there happens to be a surplus at the end of the year, the government will put it toward the debt. There is no overall plan in the budget to do that.

I ask the Canadian public how the Liberal government would fare as a private company. It gives a lot of advice to private companies these days about getting their corporate governance in order. When I asked the former finance minister before he lost his job last spring about lecturing Canadian businesses in Toronto, he was pretty meek and mild. He knew the Auditor General had been on his case and had said that corporate governance of the federal Liberal government was not that good. In fact I would suggest the Liberals are not good money managers at all. That is being exposed more and more every day.

The gun registry has had overruns from $2 million to over $1 billion and counting. How could that happen? Not only that, the Auditor General said that it was not just an accident, but that the Liberals kept Parliament in the dark in those areas.

I suggest the Liberals are not being responsible when Revenue Canada does not pursue GST fraud by companies and individuals scamming the government. They were not responsible during the HRDC scandal.

The Liberals were not responsible when it came to the advertising contracts. In fact, Groupaction even got in on the advertising for the gun registry. It got a piece of that pie. The Minister of Public Works said that he cut it off, that it got no money but we still see money flowing to it even after it was supposed to be cut off.

I ask the rhetorical question, how would the government fare as a private company? What would its stock be? Perhaps its stock would be 62¢ on the dollar.

The Liberals got 38% of the popular vote last time, and the way they are going I suggest it will be less the next time as they are exposed for what they really are, poor managers. They are back to tax and spend with no regard for hardworking Canadians who feel very heavily taxed. Canadians are among some of the highest taxed people in the industrial world in terms of personal income taxes.

Canadians deserve better. I suggest it is time to turf those guys out of office.

Prebudget ConsultationsGovernment Orders

11:15 a.m.

Progressive Conservative

Peter MacKay Progressive Conservative Pictou—Antigonish—Guysborough, NS

Mr. Speaker, I rise on a point of order. In keeping with efforts to modernize debate in this place, of which I know the Speaker is a big fan and has always embraced, I am wondering if the hon. member would agree to take some questions on his statement before the House. I wonder if I could seek unanimous consent for that.

Prebudget ConsultationsGovernment Orders

11:15 a.m.

The Deputy Speaker

Does the hon. member for Pictou—Antigonish—Guysborough have the consent of the House?

Prebudget ConsultationsGovernment Orders

11:15 a.m.

Some hon. members

No.

Prebudget ConsultationsGovernment Orders

11:15 a.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I would like to begin my speech on the prebudget consultations with congratulations to the Bloc Quebecois for their wins in Berthier—Montcalm and Lac-Saint-Jean—Saguenay. I wish to congratulate Roger Gaudet and Sébastien Gagnon, who will soon be joining us to defend the interests of Quebec and promote its sovereignty.

Prebudget ConsultationsGovernment Orders

11:15 a.m.

Some hon. members

Hear, hear.

Prebudget ConsultationsGovernment Orders

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Bloc

Pierre Paquette Bloc Joliette, QC

I would also like to thank the people of Berthier—Montcalm and Lac-Saint-Jean—Saguenay. Yesterday evening they again made it clear that they reject the Liberal government's policies and are fed up with being shackled to the federal government, and reaffirmed the relevance, not only of the Bloc Quebecois' presence in Ottawa until sovereignty, but also the relevance of the sovereignty project itself.

Certain people, the Minister of Justice among them, spoke yesterday of a moral victory for the Liberals. I hope the future of Quebec will be paved with more such moral victories, as well as real victories, with the election of Bloc Quebecois members, true defenders of the interests of Quebec and great sovereignists. I am therefore most anxious to see these two colleagues come to reinforce our Bloc Quebecois team.

This ties in with today's debate on what the Minister of Finance's priorities ought to be for the government's budget.

As I said, the people of Berthier—Montcalm and Lac-Saint-Jean—Saguenay again made it clear yesterday that they reject the federal Liberal government's approach and want to see an approach much more closely aligned with their priorities and realities.

In the report submitted by the Standing Committee on Finance, there is unfortunately nothing to reassure the people of those two ridings. Their only reassurance is the knowledge that they will have two fine representatives in the House of Commons.

The report of the Standing Committee on Finance is a kind of shopping list which leaves the Minister of Finance with all the leeway. Not only is it a shopping list, but it is one where the only common denominator is the fact that the provinces are being required to be accountable to the federal government for any policies within their own areas of jurisdiction.

In health, without giving any figures, they talk about restoring funds and about the provinces being accountable to the federal level. When I travelled with the Standing Committee on Finance, I was surprised to see that the people in English Canada believed in the validity of the Canada Health Act. This legislation has never stopped the Liberal government from making unilateral cuts in transfer payments to the provinces and from creating most of the problems we faced today in health, in all provinces of Canada, and in Quebec in particular.

You know that four Canadian provinces are at risk of running a deficit this year. This is not just a problem in Quebec. It is a problem across Canada. Most of the blame for the financial problems of the provinces, Quebec especially, can be placed on the Liberal government, the federal government.

Absolutely nothing in the report addresses this reality. The Bloc Quebecois has rejected outright the approach by the Liberal majority on the Standing Committee on Finance, except for two small measures that I wish to point out nonetheless because I feel they are Bloc Quebecois victories.

In the report there is a recommendation that the disability tax credit be refundable. The Bloc has been asking for this for several years. We are currently campaigning, with the member for Laval Centre, throughout Quebec, and collecting signatures not only to make the tax credit refundable, but also to improve access to this tax credit.

You know that recently the finance minister wanted to introduce draft legislation to limit the definition of a disabled person. More than 100,000 letters were sent to people throughout Canada who had to provide or re-submit evidence of their disability. There were situations that were morally unacceptable.

The tax credit has to be refundable because 65% of disabled persons earn less than $20,000. They do not pay taxes, so if the credit is non-refundable, they do not benefit from this help from the community or the State, towards the costs associated with their disability. I support the measure proposed by the Standing Committee on Finance, although I feel it is too restrictive because it does not question the federal government's current criteria for defining a disabled person.

A second measure that is a victory for the Bloc Quebecois, particularly for my colleague and friend, the member for Saint-Hyacinthe—Bagot, is a recommendation on reducing the excise tax for microbreweries.

It was inconsistent and made no sense, considering the recent legislation that reviewed all of the excise tax structure. It was our feeling that microbreweries were, strangely enough, forgotten, thanks to pressure from the big breweries. This is an injustice that could be rectified in the next budget.

Other than these two very specific measures, the rest, as I was saying, is unacceptable. First, I would have expected—and the Bloc Quebecois would have expected—that this government's finance ministers would have been called to order for the way they assess government finances, and the surplus in particular.

There is a blatant lack of transparency. Allow me to give a few examples. In 1999-2000, the Minister of Finance at the time, who now has his eye on the Prime Minister's job, forecast a $3 billion surplus. The real surplus was $12.7 billion. That is a margin of error of 324%. Some would say, “That was the economy. It could not be predicted”.

The next year, in 2000-01, he forecast a $4 billion surplus. The surplus ended up being $18.1 billion. That is a margin of error of 345%. That was the second year in a row. Some might say, “He did not have much luck”. Let us hope that he is more lucky in the election for the leadership of the Liberal Party of Canada. For the third year, in 2001-02, he predicted a surplus of $1.5 billion, and the surplus was $8.9 billion, 494% off the mark.

The average margin of error over the nine years that the former Minister of Finance held the job is 170%. I will never be convinced that the federal government with its bureaucracy and the Minister of Finance with all his resources did not deliberately underestimate the surpluses.

The Bloc Quebecois, with our relatively modest means, was able to forecast these surpluses with a margin of error of only 11%. Last year we forecast a surplus of $8.3 billion; the actual surplus was $8.9 billion. We were off by 7%.

This is clearly bad faith on the part of the Minister of Finance. The Standing Committee on Finance should have called on the minister to rectify the situation.

What is the result of these deliberate mistakes? The government tells us—and the Prime Minister has said this many times here in the House—that non-projected surpluses must be used to pay down the debt. I would remind him that there is no legal obligation to use greater than anticipated surpluses to pay down the debt. This money is obviously being used to reduce the debt. However, it can just as easily be used to increase the government's assets.

Furthermore, with the $65 billion error since 1994-95, the government has paid down the debt by $45 billion. If it had had the legal obligation to do this, then it would have reduced the debt by $65 billion and not $45 billion.

There is more evidence that there is no legal obligation to pay down the debt. In the December 2001 budget, the government announced that future surpluses, obviously unpredictable at the time, would be used to increase the Canada Strategic Infrastructure Fund and establish an Africa fund.

So, there is a political capacity to choose to invest these surpluses in provincial transfer payments. The flexibility is there, but not the political will. The Bloc is forecasting a $10.4 billion surplus for this year. Over the next three years, we are forecasting a $33 billion combined surplus. These are numbers that, I guarantee you, are much closer to reality than those presented by the current Minister of Finance, who has once again underestimated his surplus.

The Minister of Finance talked about a $1 billion surplus for this year. A few months ago, about midway through the fiscal year, the surplus had already reached more than $7 billion. So, the Bloc Quebecois' proposals are based on reality and not on creative bookkeeping.

As I mentioned, we are forecasting surpluses totalling $33 billion for the next three years. It is interesting to see in the Minister of Finance's statement, recently tabled in Halifax, that for the next six years, despite constantly underestimating revenues and surpluses, he is nevertheless forecasting a $71 billion surplus.

What is most surprising is that this $71 billion surplus, despite every effort to hide the real figures, is twice the amount forecast by the Séguin commission and the Conference Board. For the next six years, it was around $30 billion. So we can see that the federal government is swimming in surpluses, and conceals this at times in a way that I would describe as almost childish.

Given that it was clear to the Minister of Finance that the surplus was already huge, despite the fact that he had a tendency to do everything possible to inflate spending and cut back revenues to avoid a surplus that would be too tempting for the provinces, he reintroduced a contingency reserve in his budget statement. This is a $3 billion reserve that the former Minister of Finance had introduced. Obviously this was not enough and there was still far too great a surplus that the public and the provinces would be eyeing. He therefore invented a new category of reserve for economic prudence.

In the House, when we asked him what the difference was between the contingency reserve and the additional economic prudence, he was unable to answer. There is no difference, except to say that the contingency reserve is a reserve for prudence, and that the additional economic prudence was created for contingencies. In fact, this is simply a clumsy way of concealing the broad leeway available to the federal government.

As I was mentioning, the government can clearly afford to provide money again. Of the $33 billion that we are forecasting for the next three years, we propose that the federal government provide $4.5 billion this year for the Canada Social Transfer or as tax transfer points or GST points for the provinces. Over a three-year period, we are proposing that transfers to the provinces, be they in the form of the CST or tax points or GST transfers, which we prefer, be in the order of $15.5 billion. If the government is serious, roughly half of the expected surplus could be allocated to the provinces to help them meet their responsibilities in health, postsecondary education and income security.

I would remind all those listening to us of how totally the federal government has disengaged. That is why the Canada Health Act is, to my mind, a kind of hypocrisy. I was, moreover, most surprised at how much Canadians had been taken in by the government's strategy on this. At the present time, the federal government pays a mere 14 cents of every dollar the provinces spend on health and 8 cents of every education dollar. I hardly need point out how unacceptable this is.

This transfer of $15.5 billion over three years, $3.7 billion of that going to Quebec, would be a first response to fiscal imbalance. It is worthy of note that this figure of $15.5 billion was more or less the number Mr. Romanow came up with in his report which was tabled just a few days ago. It spoke of $15.3 billion over three years. Everyone except the Liberal government agrees on the additional money needed.

Nevertheless, we obviously find the conditions set by Mr. Romanow for this additional funding totally unacceptable. I think there is consensus in Quebec on this, not just among the political parties, but also among all stakeholders in the health field, and the general public. This is therefore the number one priority.

The second priority is that the federal government stop dipping into the EI fund. Since 1989, the government has not been paying into this fund, but has managed remove the equivalent of $45 billion out of the pockets of workers and employers, small and medium businesses in particular.

As we know, EI premiums are an extremely regressive payroll tax, because a ceiling is imposed. Low wage earners and small businesses have therefore been penalized by this highjacking of the EI fund. As I have already said, a total of $45 billion have been used by the federal government for purposes other than those intended by the Employment Insurance Act. As everyone knows, the Auditor General has recently said again that the spirit of that act has been distorted.

In our opinion, it is extremely important to get the federal government's fingers out of the EI till, so as to protect contributions and ensure that they are used for benefits. This government's EI reform is such that, at this moment, only 4 contributors out of 10 qualify for benefits. Six are excluded even if they have contributed. They are unemployed, but penalized by this government, which helps itself to $45 billion to pay down the debt when it has no legal obligation to do so.

In the meantime, seasonal and older workers are being penalized. We have met many such workers, in Lac-Saint-Jean—Saguenay and in the northern part of Berthier—Montcalm in the Matawini region.

I feel that the response given by the people of those ridings last night was a very serious warning that the federal government ought to move quickly to rectify the EI fund situation.

I would say that there is something rather surreal about the Minister of Immigration, the very person who went to Chicoutimi in November 2000 to promise changes to employment insurance, going to Lac-Saint-Jean—Saguenay to give wrap up the Liberal campaign. I believe he was well received by the public, particularly the construction workers, who reminded him of the promises he made two years ago, and never kept.

If we are to keep the federal government's hands out of the employment insurance fund, the fund must be removed from the public accounts and a separate fund created, one which is administered by the contributors, that is the employers and worker representatives.

I remind members that the Minister of Finance reduced the premium rate by 10¢, from $2.20 to $2.10 per $100 of insurable earnings, as he announced a few days ago. This amounts to yet another forecast surplus of over $2 billion. It is doubtful that people who know from the start that they are charging too much have totally lawful intentions.

The last time anyone sought his advice—he is no longer allowed to say what the premium rate should be to sustain the plan—the actuary for the fund was talking about $1.75. This represents a 35¢ per $100 of insurable earnings tax grab by the government, at the expense of workers and businesses.

A separate EI fund would reduce the surplus by some $2 billion or $3 billion this year. Over three years, we have forecast $9 billion. This would still leave $2.9 billion for other measures.

We are proposing that the Minister of Finance extend the infrastructure program, among other things. We think that, much as it did with the first two programs, the federal government should invest $500 million a year in this program, be it for water, sewers, roads or urban transit; with Kyoto, this will become very important. Ratifying Kyoto will also determine a new social contract between people and nature, the economy and the environment. There will therefore be needs in terms of infrastructure.

There will also be needs directly related to conversion resulting from Kyoto. We are proposing that $500 million be earmarked for the conversion of hydrocarbon industries as well as for the creation of renewable energy industries.

I have had the opportunity to mention previously in this House that wind power holds great promise, with the potential to create 15,000 jobs in Quebec alone. We are suggesting that, for the next five years, $500 million a year be invested in the infrastructure program and another $500 million in the environment.

Incredibly, there is still money left over. We suggest other priorities such as international aid. This House already voted that the objective of 0.7% of the gross domestic product should be reached by 2010 or 2011. We propose that this objective be part of the budget.

Like many people, we ask that the air security tax be abolished. There is no evidence to indicate that this tax was anything but a new tax in disguise, somewhat like the employment insurance premiums.

We also propose that the GST on books be abolished. There is talk about a knowledge economy, the need for the public in Quebec or elsewhere in Canada to have a significant level of general culture. It is inconsistent then, to tax culture. As Quebec has already done with its sales tax, we propose that the GST on books be abolished.

Finally, once all that has been taken care of, we estimate that there would be roughly $1.5 billion remaining in the so-called economic prudence category. Obviously, if this amount were not spent, it would be there to offset unanticipated economic conditions, or it could go toward paying down the debt.

We do not subscribe to spending for the sake of spending, but we do believe that paying down the debt is not a priority right now. Canada currently ranks third among the G-7's least indebted countries.

We think the priority should be to reinvest in transfer payments to the provinces for health, postsecondary education and income security. We think it should go to the unemployed and that a certain number of measures should be included in the next budget out of pure and simple compassion and justice.

Prebudget ConsultationsGovernment Orders

11:35 a.m.

NDP

Dick Proctor NDP Palliser, SK

Mr. Speaker, it is a pleasure for me to rise in the House today and speak to the presubmission of the budget, which we understand will be coming down in February. I will be sharing my time with the member for Halifax.

I would like to summarize the majority report, which, after having read it, seems to suggest that this is a great economy. However we would underline that there is no new money for programs other than for tax cuts.

In the fall of 2000, leading up to the federal election, there were $100 billion in new tax cuts to come in over a five year period. Now we have been told that $70 billion has been forecast for the next five years of surplus in our budget. This indicates that perhaps the finance department does not count as well as most other Canadians. Again we see that 14 of the 51 recommendations are to be based on lowering taxes even further.

However, when it comes to social programs, it is an entirely different story. We do not see money proposed to be spent on health care or other existing programs unless it can be reallocated from current programs. In short, this is taking money from one program to pay for the $15.3 billion that Mr. Romanow has indicated health care needs in additional funds over the next five years.

My colleague from Acadie—Bathurst will know that even though the cod fishery has been closed down, not a single penny from the $45 billion surplus in the employment insurance fund will go into a transition program to assist workers who will suddenly and unceremoniously be thrown out of work.

Homelessness is a disgrace in a first world country like Canada. According to my colleague from Vancouver East, almost 1,000 people every night live and rely on the gratitude of shelters to survive. When I arrived yesterday in Ottawa I had to wonder if anyone had frozen to death because of the -20° temperature in the city overnight.

When I thought about why I was concerned, I realized that this was not something I would have worried about in any city in Canada 10 or 15 years ago. Why is it that we are suddenly worrying about it? It is because it is happening with all too much frequency. That is why my colleague from Vancouver East has suggested that we spend at least 1% of our budget on housing and homelessness.

I mentioned the health care issue and the fact that there is nothing proposed in the budget to deal with the money that Mr. Romanow and, for that matter, Senator Kirby are saying is required to begin to fix what is wrong with our vaunted health care system.

On a slightly different note, the Canada Customs and Revenue Agency reports that there are currently $16 billion in unpaid taxes. That amounts to twice as much as last year. I point out that this is not on money that is foregone because people are not paying personal income tax on their wages or salaries. In the terminology of the CCRA, it is because 20% of the corporate sector is at risk of non-compliance.

On the other hand, we note how the Canada Customs and Revenue Agency goes after people with a vengeance who have been entitled in the past to a modest disability tax credit of $960. However, when it comes to making sure that unpaid taxes of $16 billion in the corporate sector is collected, it seems to me that there is a significant difference in the emphasis on which this government goes after the corporate side compared to those who are trying to maintain and enjoy a very modest credit on their disability taxes.

Today the Liberals and the Alliance have been talking about reducing taxes. I would point out that without any further changes to our tax regime our taxes by the year 2005 will be 5% lower than Washington, but according to the majority on the committee, this is still not good enough.

I listened with care to the member from the Canadian Alliance who was lamenting all the ills and shortcomings in Canada; the fact that our productivity is lower than the United States; that we have a significantly weaker currency; and that we do not spend enough money on research and development. The litany was very good but what was lacking was the perspective as to why that has occurred in recent years.

I think one of the reasons that has occurred is something called the North American Free Trade Agreement, which celebrated its 10th anniversary yesterday. I note that in a poll 47% of Canadians said that we as a country were the losers in NAFTA.

I maintain that we cannot do sufficient research and development, something else that the Canadian Alliance pointed out, when we are required to send so much of our raw materials, our natural gas and our oil, to the United States. We cannot have a two price system for wheat to develop prairie pasta plants because we have signed on to an international agreement that prohibits that.

The majority report says that drug patents must be vigorously defended. We must remind ourselves that the increases in drug prices are the biggest driver now in the costs of our health care system. Because we do not have the ability to have generic drugs in the way that we did before, thanks to Bill C-93, and we are protecting a multinational industry here, it is forcing us to have much higher health care costs.

I think other political parties simply are not connecting the dots. They do not see the connection with what has transpired over the last 10 years. I encourage them to look at that.

The government set targets to eliminate the deficit and to reduce the debt. It has done that, but we on this side of the House are encouraging it to also set realistic targets to put money into the shortcomings that we are beginning to see in our safety net and the unravelling that has occurred in recent years. We need to see much more money put into health care. We have called for 25% in federal cash transfers immediately, moving toward the fifty-fifty funding that the provinces once enjoyed with the federal government. We need money for national home care, for pharmacare and we need better programs for wellness and disease prevention.

Also, still with health care, we need new investment to attract, train and retain nurses so that we can build the model, which Mr. Romanow talked about in his report, with more nurse practitioners and less on reliance on doctors as the gatekeepers of our health care system.

We also need to ensure that Canada's health care system is protected against international trade agreements. When I met with the Canadian Health Coalition yesterday I was surprised to learn that in Calgary it is very difficult now for patients to receive cataract surgery because the entire eye industry has been basically contracted out and the ophthalmologists are intent on doing laser surgery as opposed to cataract surgery.

Time does not allow me to talk about the farm issue, the Canadian Wheat Board and supply management which is also at risk under international trade. However I will conclude by saying that I believe Canadians want to see more money being put into social spending, health care, post-secondary education and social programs. They want to help farmers and rural Canadians. They want to improve the environment for air and water quality. I am proud to be in a caucus that continues to push for these kinds of advances.

Prebudget ConsultationsGovernment Orders

11:45 a.m.

Liberal

Sarkis Assadourian Liberal Brampton Centre, ON

Mr. Speaker, could the member tell us if he has a way of detecting on which programs the provincial governments spend the money transferred from the federal government, in cash form or point form, especially on the programs he mentioned toward the end of his speech, medical use, social programs or education, which are very important programs?

Prebudget ConsultationsGovernment Orders

11:45 a.m.

NDP

Dick Proctor NDP Palliser, SK

Mr. Speaker, I do not think it is difficult. In fact, if I understand the advertisements and public comments made by premiers over the last couple of years, they are concerned about the reduction in transfers from the federal government. As the people who have to account for and administer the health care system, they are prepared to indicate that the x amount of dollars received from Ottawa has indeed been spent on the program for which it was intended.

We have to understand that health is a shared jurisdiction and money is coming from Ottawa. More money is required, but the money that is coming from Ottawa needs to be accounted for. I do not see that there is any significant difficulty with doing that.

Prebudget ConsultationsGovernment Orders

11:45 a.m.

Canadian Alliance

Philip Mayfield Canadian Alliance Cariboo—Chilcotin, BC

Mr. Speaker, the hon. member raised some important issues concerning support to those who would be dependent upon the employment insurance scheme if they had the opportunity in relation to the east coast, but I think that also is true for the west.

I think of the people in the forestry and lumber industry who have been seriously hurt by the failure of our softwood trade agreement with the United States. I would like to see the government, which has, according to the Auditor General, a $40 billion surplus in this account, use that money to support those people who are in need of that kind of support, and to support the companies that are looking for a means of opening up new markets.

The second thing that concerns me also relates to the forestry industry in British Columbia. We have an enormous pine beetle infestation. I am told that there is approximately $9 billion worth of merchantable timber that is infected but still standing. The federal government has a fiduciary responsibility to care for the infected wood on its own federal lands. The provincial government has requested $120 million but the federal government has said that it will only provide about $35 million, about half of that for research. Does the hon. member include that kind of concern in his comments?

Prebudget ConsultationsGovernment Orders

11:45 a.m.

NDP

Dick Proctor NDP Palliser, SK

Mr. Speaker, I agree with the hon. member. The employment insurance fund, whether it is $35 billion, $40 billion or $45 billion, comes from companies and it comes from the workers in all those companies, and it is to be administered by the federal government. It was never intended to be used to pay down the debt or to finance any other programs. It should be there for forestry and lumber workers who have been laid off as a result of the softwood lumber dispute. As I indicated, due to the death of the cod fishery it should be used to help the people on the east coast and it should also be used to help farmers.

A good indication is that the government is, I think, scared to death of the possibility of retaliation by the Americans under our free trade agreement and NAFTA. It does not want the retaliation or the fear of the retaliation. It think it is for that reason that we have not seen money going into addressing the sorts of things the hon. member has outlined, whether it is softwood lumber, the forestry industry or the cod fishery.

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11:50 a.m.

NDP

Alexa McDonough NDP Halifax, NS

Mr. Speaker, I am pleased this morning to have a chance to participate in the debate on the upcoming budget and specifically on the report of the parliamentary committee on finance, which is now before the Canadian people.

The majority report that the parliamentary committee on finance has put forward is profoundly disappointing for a couple of reasons. The best way for me to explain why I feel that way--and it is not only the New Democratic Party that will be critical of this report but the overwhelming majority of Canadians--is to go to the scene of the parliamentary finance committee hearing in my own riding of Halifax six weeks ago on October 30.

On that occasion there were 14 witnesses who appeared before the committee. I will not pretend to have read all of the proceedings of all of the committee meetings held across the country. On checking with my colleagues, many of whom sat with the finance committee at different venues across the country, it is our assessment that the very weight of recommendations that the parliamentary finance committee has brought forward is reflective of probably 20% of the views brought forward across the country before the parliamentary committee. On balance if we average out across the country, 80% of the Canadians who appeared before the parliamentary committee had a different set of priorities. They were appealing, and it is not an exaggeration to say pleading, with the finance committee to communicate to the Government of Canada their priorities.

Of the 14 witnesses that I referred to, two of them would embrace enthusiastically the majority report from the finance committee because it is a reflection of what the chamber of commerce in my city had to say and another organization, the Financial Executives Institute Canada. The latter argued for the tax deductibility of stock options. The chamber of commerce argued for tax reductions and a restraint on public spending.

The other witnesses spoke about the social deficit that had accumulated since the government started its hacking and slashing in 1995 of social housing, poverty programs, child care programs, various aspects of the health care system, post-secondary education, elementary education and interestingly the Coast Guard. There was a common thread in those presentations. They all said that an enormous deficit had accumulated because of the misplaced priorities of the government and now that we were in a period of surplus budgets it was important to reinvest in these programs. It was not a question of whether we had sufficient funds to do it, it was stated that we could not afford not to do it.

The reality is that every single year for almost a decade Canadians have heard the same tired song from the finance minister. He has said we have the greatest economy in the world but we just do not have the money to invest publicly.

Two years ago, when the government was projecting a surplus of $95 billion over five years, what did the government do? It made the decision that the priority would be a $100 billion tax cut. Everyone loves tax cuts but clearly the beneficiaries of those tax cuts, overwhelmingly 80%, were people who did not need tax cuts.

Today, with a projected surplus of $70 billion over the next five years, what does the government want to do, supported by the majority of the committee members? It argues it wants more tax cuts. In fact the same old song it thought that Canadians were singing. I do not think the evidence is there at all to support that.

It is a sad day that the majority of committee members have embraced the official fiction that the federal budget has no room for important spending initiatives. The finance department seems absolutely totally blind to the reality that when it comes to figuring out its expected budget balance every year, it simply cannot count. In every single year, since the government was elected in 1993, the government has exceeded its projection on the budget balance to an accumulated total of almost $80 billion. If people could think of it as the government being $10 billion out on its projection each and every year for the last eight years. It is mind boggling if we really think about it.

After a good session in Halifax of hearing from a wide range of voices about the desperate need to reinvest in our health care, education, other social programs and the Coast Guard, what did the finance minister do that afternoon? He appeared before the committee to enlighten Canadians on the fiscal state of the nation and he projected a budget surplus for the next year of $1 billion.

The motive and intent behind that was clearly to quash any public expectation of what was reasonable to expect the government to do. It would almost be funny if it was not such an act of deception. Maybe it is not proper to say an act of deception, but the only alternative is that it was grotesque incompetence, so we can take our pick. In the meantime we have serious priority issues being ignored by the government.

I want to speak directly to what is acknowledged to be the number one priority by 93% of Canadians. It was reflected in poll result after poll result, and that is a public not for profit health care system.

There are about 400 representatives from every corner of this country, every province and territory, who are on the Hill today to speak directly to health care priorities. They represent advocacy groups, health providers, health research bodies, and a whole range of interests embraced by Canadians with respect to health care. They are very frustrated.

They are frustrated with the fact that in the majority report of the finance committee 14 out of 51 recommendations were for further tax cuts. What is worse is that there were only two recommendations that dealt with health care whatsoever. What is beyond belief is that the recommendations of this report actually reserved the strongest wording for the further protection of patents.

Who would be the chief beneficiary of that? The most profitable corporations in the world, the multinational pharmaceutical industries. The committee was concerned to ensure that their rights were vigorously defended. Forget that rising drug prices charged by multinational drug companies are the single biggest driver in rising health care costs in Canada.

The government needs to listen and listen carefully today to the voices and the recommendations of the hundreds of people who have come together, under the umbrella of the Canadian Health Coalition and the Canadian Labour Congress, representing the vast mass of Canadian interests and priorities with respect to health care.

That means not cherry picking from this report and that report and another report on addressing the future needs of health care. It means standing behind the Romanow commission report, running with it and getting on with the re-investment, and the rebuilding of what can again be the best public not for profit health care system in the world.

Canadians deserve no less. We have the means and foundation to do it. Let us get on with implementing it and in the process lament the fact that the finance committee did not see fit to reflect those kinds of priorities that are so widely shared by Canadians.

Prebudget ConsultationsGovernment Orders

Noon

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, I would like to ask the leader of the NDP her view of the private operation of the Sunnybrook Hospital in Toronto.

For the benefit of members, that is a public hospital that is currently being used at night as a cancer diagnostic centre by a Doctor McGowan. The output of that hospital in terms of the number of patients being diagnosed for various cancers has doubled as a result of this level of flexibility and the ability for Dr. McGowan to privately operate that facility at night. As such, thousands of Canadians are able to, in a timely manner, receive the cancer diagnostics they need.

I would appreciate the leader of the NDP explaining to the House how it benefits Canadians to prevent, by wearing ideological blinders, the operation of the Sunnybrook Hospital from participating in some level of private delivery in order to deliver better health service to Canadians.

Prebudget ConsultationsGovernment Orders

Noon

NDP

Alexa McDonough NDP Halifax, NS

Mr. Speaker, when the Romanow report was tabled I genuinely hoped and welcomed the fact, because I believed it to be true, that we had put the ideological debates behind us. We now had before us a detailed, evidence-based blueprint, a set of concrete well researched recommendations widely supported by Canadians, and we were going to get on with rebuilding and strengthening our public not for profit health care system.

I heard a question from a member of the Conservative Party. I commend him because it is an accurate reflection of where his party stands. It is hell bent to remain on an ideological track arguing for the private delivery of health care when the evidence shows that it is not only more cost efficient for these health services to be delivered through the public not for profit system, but it is safer.

A team of outstanding highly respected medical researchers in this country said last night at a public meeting and again this morning in my office:

Why is any government in this country allowing private for profit investor owned health care corporations to put the health of Canadians at risk? Because the evidence is absolutely clear that the reason we are not going to go farther down that road is because people die in what is a less healthy, less safe, less efficient, less effective health care delivery mode and that is the for profit investor owned health corporation model.

Now is the time that Canadians want us to put this ideological debate behind us and they want us to deal with the facts. The facts are that the rate of death of people in for profit investor owned hospitals in North America is dramatically higher. We are talking about thousands of people who will die if we go farther down that road.

We need to reverse course. We need to get back onto the public not for profit system and that means dealing with the crisis that has been caused by the federal government. Back in 1995 it started the massive unilateral withdrawal of funds to our public health care system, the demarketing of confidence in public health care, and allowed the cannibalization by profit seekers of vulnerable pieces of the public health care system. It needs to stop with the re-investment of public dollars into our public not for profit system.

Prebudget ConsultationsGovernment Orders

12:05 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, it with pleasure today that I rise to speak on the prebudget report of the House of Commons finance committee.

I am a member of that committee. I ultimately was disappointed in the fact that the report of the committee failed to address some of the most significant issues facing Canadians. People talk about the disengagement that Canadians feel toward federal politics today. In particular, young Canadians are disengaged with politics in general, particularly federal politics.

I think part of the reason why Canadians are disengaged is that for the last nine years there has been nothing in which to be engaged. We cannot be engaged in a non-debate. For there to be debate about the future of the country, there has to be a government with a vision, with some ideas and views about the future and with some policies, some of which would be agreed with or disagreed with but all which would represent change and a different approach.

Whether we look at the governments of Pierre Trudeau or Brian Mulroney, in both cases we could have agreed or disagreed with their visions, policies or ideas. However Canadians were engaged in debates about the future of their country under both the Trudeau and Mulroney governments. There were important debates about issues, for instance under Mulroney, about free trade, the GST and the deregulation of financial services, transportation and energy.

If we look back, those courageous and visionary steps by the Mulroney government, particularly free trade, the GST and the deregulation of financial services, transportation and energy, helped lay the groundwork for the economic growth, prosperity and the elimination of the deficit, which has occurred under the watch of this caretakership, cruise control, Sunday drive sort of government which we have had opposite now for nine years.

It is sad, not just from the perspective of bad public policy for Canadians but from a political perspective, that we are disengaging a whole generation of young Canadians in political debate and discussion because of this sort of lackadaisical approach to vision, courage and public policy of the government.

I would argue that over the last 10 years there have been more changes globally in terms of economic change, much of which has been precipitated by technological change, trade agreements, technology and greater integration of economies. Companies, individuals and governments have radically changed the way they do things. One of the few countries in the world that has not kept up with that change and has done nothing during a period of unprecedented rapidity of change globally is Canada under the Liberal government. In that 10 years the government effectively has been more focused on next week's polls than on the challenges and opportunities facing Canadians 10 or 20 years from now. There has been great economic damage to the country as a result of that.

The fact that the Canadian dollar has lost 20% of its value under the watch of the Liberal government is the price tag that Canadians are paying for a government that has not updated or reformed its tax system, its regulatory policy, its competitiveness policy, or its research and development policy. When other countries have been investing in education and health care, this government has made the wrong choices, has slashed transfers to the provinces for health care and education and at the same time has not tightened its own belt or addressed wasteful spending in its own government.

Canadians could have a well-funded health care system and a strong military if we had a government that had the wisdom to invest in the priorities of Canadians and the courage, competence and integrity to cut wasteful, non-core spending. However this is not that kind of government.

We are all familiar with the HRDC scandal and the fact that under the government billions of dollars were wasted, misdirected and lost for a time, and the Auditor General helped us identify this at the time. However from a basic competence issue, this is a government that lost billions of dollars for a period of months. It is pretty hard for a Canadian to consider how a government loses billions of dollars. What happened in the next budget presented by the finance minister? The minister for HRDC received a $1 billion increase as a reward for her gross incompetence.

We are all familiar with the public works scandal and the millions of dollars that were wasted, misdirected and misappropriated by Minister Gagliano, who was of course punished by being sent off to Denmark to represent our country. I do not know what Denmark ever did to Canada to deserve that kind of treatment, but I hope it does not reciprocate by sending us one of its worst crooks.

Whether it is Public Works, or HRDC or a gun registry, billions of dollars have been wasted. Over $1 billion has been wasted for a misguided, poorly designed long gun registry program that from the beginning was destined for failure and has achieved that end in a very flamboyant way, and we have a government that has worked assiduously to hide the information about that waste from Parliament.

This is a government that is looking for the trust of Parliament to ratify and implement a Kyoto agreement. It is atrocious. This is a government that could not organize a two car funeral, let alone implement a Kyoto agreement in terms of domestic engagement within Canada.

There are significant problems that need to be faced by the government on fiscal and social issues. I would argue that the productivity issue is absolutely key for us to have the sort of prosperous economy that Canadians need to provide the wealth to afford the kind of health care, education and social investment that Canadians value and treasure as Canadians.

We have a tax policy that attacks hard work and investment. We should be celebrating success. Instead, we apologize for it. We have to address some of the fundamental flaws in our tax system, both on the corporate and personal side. On the personal side, we have to address our marginal tax rates. There is something fundamentally wrong with a tax system that pummels people as perniciously as this one does.

For instance, let us look tax bracket when people go to the $30,000 range. When they cross what I think is the $35,000 tax bracket and their incomes have increased a little, and those are not high incomes, they lose all their child tax benefits. They are taxed at a higher marginal tax rate. The impact is that they make less money ultimately than they did at the lower pre-tax income. What a terrible way to punish Canadians or Canadian families who are trying to bootstrap themselves, achieve success and pull themselves forward into a more prosperous and sustainable life for themselves and their families. That is the reality of our marginal tax system.

If we look at what happens when we go up every marginal tax bracket, what we do to Canadians is absolutely immoral and fundamentally wrong as they are try to succeed and prosper in Canada. It is little wonder that our tax system and some of our other antiquated economic policies are sending tens of thousands of young Canadians to the U.S. seeking greater opportunities and prosperity.

The top marginal tax bracket in Canada is hit at about $100,000, which is equivalent to about $62,000 U.S. The top marginal tax bracket in the U.S. is not hit until about $380,000 Canadian.

We cannot maintain that level of disparity between our tax systems if we expect to keep Canada's best and brightest here. We are gutting the future competitiveness and productive capacity of our country if we cling to an antiquated, out of date, anachronistic tax system that simply does not work to create greater levels of prosperity, opportunity and promise for Canadians.

We need regulatory reform. Out of date and oppressive regulatory burden works in a very similar way to how oppressive and out of date tax policy works. Canada has a regulatory policy that encourages bureaucrats, without parliamentary scrutiny, to develop and introduce by stealth every year hundreds of new regulations. Hundreds of regulations are introduced with very little parliamentary scrutiny or perhaps no parliamentary scrutiny at all. This adds significantly to the cost not just of Canadian businesses doing business, but also adds significantly to the cost for Canadian consumers when they are paying for these regulations ultimately through higher prices for goods and services without making a case for why these regulations make sense.

The government is not making a case for these new regulations nor is it forced to make a case for them. They are introduced by stealth without any level of parliamentary, bureaucratic or governmental scrutiny. That is costing Canadian businesses and consumers significantly.

We need to take a serious look at our competitive policies as a country. We have to consider what other countries have done in the past 10 years.

In the last 10 years Canada has achieved a 5% growth in GDP per capita. During the same period of time, Ireland has achieved a 92% growth in its GDP per capita. Why is that? Because Ireland was willing to reform its tax system. Ireland was willing to tear down barriers to success, opportunity and investment in Ireland.

While this government increased barriers to success, increased a tax burden through much of its mandate and failed to reform, simplify and streamline its tax system, Ireland and most countries in the industrialized world reformed and updated and improved their tax environments. They knew to attract capital and investment and to be competitive and improve productivity, they had to have more competitive tax regimes.

In the old economy high taxes redistributed wealth. In the new hyper competitive global economy high taxes redistribute people and capital. Capital and people, particularly talented people, have never been as mobile as they are right now.

It is not an option for us to choose whether we want to reform our tax system. We have to do it. The price tag Canadians will pay for a government that has done nothing for 10 years to improve the Canadian economy in a substantive way and make the kind of courageous structural reforms that are necessary will be demonstrable and evident in 10 years, 15 years or 20 years.

We have to address not just the tax burden but tax structure. Reforming our tax structure is extremely important. The Mulroney government had the courage to replace a manufacturer's sales tax, which was hurting industry and our competitiveness, with the controversial goods and services tax. It was one of those taxes fought vociferously by members opposite, a tax now embraced by them. On international travels the Prime Minister has even claimed having invented the GST because he likes it so much. The fact is the GST, the free trade agreement and the deregulation of financial services, transportation and energy have enabled this Liberal government to pay off the deficit.

Canadians need to have the same opportunities for growth, prosperity and opportunity that other countries have because their governments have made courageous choices to reform regulatory authorities and have taken some steps forward to change their economies.

One issue which the federal government ought to be working on but is ignoring is that of a national securities commission. Canada is the only industrialized nation without a national securities commission.

Having a securities commission in every province and territory in Canada represents a significant impediment to capital formation for Canadian entrepreneurs and businesses. Trying to raise capital, encourage investment and receive the kinds of investments necessary for businesses to buy the productivity enhancing equipment and technology they need to be more successful and more competitive globally is made more difficult by the tremendous barrier to capital formation of having all these securities commissions in Canada and the tremendous bureaucratic overlap and inconsistency across Canada.

In addition, the recent corporate governance crisis has impacted and reduced the confidence that Canadians and also Americans and any capital market participants or investors around the world have in the capital markets. This makes it even more compelling for Canada to have a national regulator which would work with the provinces to achieve a national regulatory authority. It would ensure that there were standard rules across the country in terms of the regulation of our capital markets and our securities industries.

Canadians could then depend on a regulator with the resources required to regulate and make sure that Canadian companies and capital market participants were playing by the rules. Currently, that is very difficult to do with the mishmash of securities regulations and the balkanized resources that we have in Canada.

When I speak of a national securities regulator, I am not talking about taking the OSC across the country. I am not talking about a federal regulator. I am talking about a truly national regulator that respects and works with the provinces to achieve input and develop a consensus. It is very possible that we could achieve that, with respect for the provinces in a cooperative federalism.

Some people see a federal regulator as the answer. I do not think that is either realistic or a good idea particularly. I do not think that simply imposing the OSC on everybody is the best way to move forward.

In terms of the health care debate, the government has delayed, dilly-dallied and avoided making decisions on health care for far too long. It is the government which in 1995 unilaterally slashed transfers to the provinces, turning health care into a crisis in every province in Canada. At the same time, it did not tighten its own belt. Only when the health care crisis reached such a point that Canadians were in a turmoil about it did the government, because of political pressure, pretend to act with the Romanow commission. It really has not acted yet; it simply sought more advice.

There is the Mazankowski report, which is a very substantive report from the provincial government of Alberta. There is the LeBreton-Kirby report. I call it the LeBreton-Kirby report in deference to my colleagues in the other place, particularly Senator LeBreton. She made a significant enough contribution to that erudite and perspicacious report that she deserves equal billing to Senator Kirby. And there is the Romanow report.

I would say that of those three, while the NDP may crow about the Romanow report being the one that was most substantive, I believe the Romanow report was in fact the least responsible of the three. There was absolutely no addressing of where the money would come from. I thought it was incredibly irresponsible for Romanow to develop a set of proposals that only focused on more money with no significant and substantive reform.

Regarding greater accountability for the provinces, the provinces were not at fault when the federal government failed to be accountable and slashed the transfers to the provinces and threw health care into a turmoil. It is not the provinces that have an accountability problem today. We have to be able to speak the truth about the future of health care in Canada if we are going to ensure that Canadians have a sustainable health care system that they deserve.

Prebudget ConsultationsGovernment Orders

12:25 p.m.

Liberal

Shawn Murphy Liberal Hillsborough, PE

Mr. Speaker, as a student of economics, the previous speaker will fully acknowledge that in 1993 when this government took over, the economics of the country were in a mess. He has heard the figures before. Our annual debt was at $42 million. Unemployment was close to 12%. Interest rates were around 11%. Our debt to GDP ratio was in excess of 71%. We were being watched by the World Bank. The long and the short of it was the situation was totally out of control. Corrective action needed to be taken; corrective action was taken.

The previous speaker indicated what has happened. We now have a GDP growth of close to 3.4%. Some $46 billion has been paid down in the accumulated debt. Interest rates are at an all-time low and are between the band of 1% and 3%. We have created hundreds of thousands of jobs this year.

My question for the hon. member is how can we, as parliamentarians, ensure that the policies and the programs of the previous government are never ever implemented again? How can we ensure that the people who were responsible for implementing those policies and programs are never near the levers of power in government again?

Prebudget ConsultationsGovernment Orders

12:25 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, I thank the hon. member for his softball question.

First, it was the policies of the previous government, and I named the GST and deregulation of financial services, transportation and energy along with the monetary policy of that government which wrestled inflation to the ground. Those were difficult choices, ones for which my party paid a significant political price, that enabled the member's government effectively to go on the public policy equivalent of a nine year Sunday drive and do nothing and actually eliminate the deficit.

It was the economic growth from free trade that enabled his government to eliminate the deficit. It was the revenue generated by the GST that enabled his government to see the end of the deficit.

The fact is the Mulroney government inherited a deficit as a percent of GDP that was 9%. It was reduced to 5% of GDP by the end of that government and for the first time in around 15 years there was an operating budget surplus, if we take out interest rates. At the same time, that government was able to wrestle inflation to the ground through the monetary policy.

The member asked how we could prevent the policies of that former government from ever being introduced again. He is sounding more like the Liberals did when they were in opposition because every single initiative that was proposed by the Mulroney government was vociferously opposed by the opposition, including the GST, free trade, deregulation of financial services, transportation and energy. In fact, when the Mulroney government cut back on spending, it was the member for LaSalle—Émard and his colleagues who were crowing the loudest about the cuts.

The member should not be criticizing those policies but should be waking up every morning and thanking God that there was a Progressive Conservative government that had the vision, foresight and wisdom to do that which his government would never have had the ability to do.

Prebudget ConsultationsGovernment Orders

12:30 p.m.

NDP

Dick Proctor NDP Palliser, SK

Mr. Speaker, when the member for Halifax was speaking, the member for Kings—Hants was trying to convince us how wonderful Dr. McGowan's private health care clinic was, to be used in the evening at Sunnybrook. He suggested there were ideological blinders that were preventing us from seeing that.

I note that the Ontario provincial auditor found that the Ontario system was paying $500 more per case to the Sunnybrook cancer care clinic compared to public clinics in the province.

The member for Kings—Hants has urged all of us to speak the truth in this debate and certainly we would want to do that. I wonder if he would comment on why it is costing Ontario more money to run Dr. McGowan's private clinic at night than it would cost to run a public clinic during the day.

Prebudget ConsultationsGovernment Orders

12:30 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, if Dr. McGowan was not operating at the Sunnybrook hospital at night, thousands of Ontario cancer patients would not be receiving the treatment they are receiving now.

The ideological blinders are not being worn by me. I am interested in seeing the best possible health care system for all Canadians.

I would like my hon. colleague to consider whether or not it benefits the Canadian system to have Canadians taking their money and buying health care from the U.S. What could be more Canadian than attacking the U.S. health care system and then buying health care services from the U.S.?

There is something fundamentally wrong with a system that does not allow an individual to use money out of his or her own pocket to purchase health care for his or her mother in her own country in a timely manner.

The ideological blinders are being worn by the New Democratic Party on this issue. The fact is we do have a multiple tier health care system in Canada. Part of it is the result of unilateral and draconian cuts by the Liberal government. The fact is that Canadians are choosing to purchase health care. Because of the cuts to health care by the government they are choosing to buy it in the United States.

If we create a system that continues to underfund the public system and if we fail to recognize that some level of flexibility can ensure better health care for Canadians, we will continue to send more Canadians across the border to buy health care with their money. In doing so, we will be sending more Canadian doctors to practise in centres of excellence across the border. If want to gut the Canadian public health care system, the best way to do it is to wear ideological blinders and prevent any level of private participation in the Canadian system.

Prebudget ConsultationsGovernment Orders

12:30 p.m.

Canadian Alliance

Darrel Stinson Canadian Alliance Okanagan—Shuswap, BC

Mr. Speaker, being from British Columbia I know that this is a fact. There is a new study which says that Canadians in every province except Alberta face more unnecessary taxes and bureaucratic regulations than in any other state in America. It goes on to say that Canada's lack of economic freedom caused by big government and high taxes costs the average Canadian thousands more in taxes every year than it does people in the United States.

This is of great concern in the province of British Columbia. I wonder if the member hears this back in his home province as much as we hear it out there, that it is time the government started to loosen up on the Canadian taxpayers and let them have the freedom to invest their own money instead of running roughshod over them and investing their money for them.

Prebudget ConsultationsGovernment Orders

12:35 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, the report on economic freedom was very important. The economic freedom and the future prosperity for any country are closely correlated.

We need to ensure that we have regulatory policy and tax policy that effectively do not prevent individuals from investing and developing the best technologies and approaches to maximize productivity. In Canada, we do not have that currently. We are falling behind in that regard. There is less economic freedom in Canada now than there was 10 years ago. That is a dangerous trend. Probably the best way for governments to help both in terms of regulatory policy and tax policy is to simplify regulatory policy, to simplify tax policy, and to seek to reduce the burden in both cases.

We need to find a way in Canada to celebrate success and stop apologizing for it. We need a tax system that rewards hard work and investment, not one that attacks ambition and initiative. The federal government ought to be working with provincial governments across Canada to ensure that we introduce policies that create this culture of opportunity and plan for prosperity for all Canadians.

Prebudget ConsultationsGovernment Orders

12:35 p.m.

Parkdale—High Park Ontario

Liberal

Sarmite Bulte LiberalParliamentary Secretary to the Minister of Canadian Heritage

Mr. Speaker, I am delighted to rise today and participate in the prebudget discussion. I will be sharing my time with my hon. colleague, the member for Hillsborough.

This is a great opportunity to stand up and share with members of the House of Commons the results of the prebudget consultation, which I conducted during the late summer and early fall. In fact, since being elected in 1997, I have conducted prebudget consultations every year, to the point that my constituents actually call and want to know when they will be happening. They are always quite interested in participating.

One thing we also always do with the prebudget consultations is look at the input and then the effect that the consultations have had on the final budget. I would say that over the last five years my constituents in Parkdale—High Park have been quite happy with the results.

Let me explain a little about how the prebudget consultations work in my riding. I will go through how the process was started, the main points that are raised and look at how the consultations change from year to year. Then I would like to elaborate on one of the issues that the finance committee put before all Liberal members. The committee asked us to go out and talk to our constituents and listen to what they wanted to hear.

There were two things the committee asked us to find out. One was how Canada could best ensure greater levels of economic prosperity to be widely shared by all Canadians. The second was how the federal government could best ensure the highest quality of life for all. I would like to elaborate on the second point. If there is time remaining I want to speak in relation to that issue and about how important I and the people who live in my riding feel that continued investment in the arts is, and how it is integral to the quality of life, not just for individual Canadians but also for communities.

My office always asks a third question: If there are any discretionary funds, what would constituents suggest the government do with them? For example, we asked if the government should go into additional spending, look at tax cuts or look at paying down the debt.

In my riding the process starts when we send out questionnaires to the 300 or 400 people who have participated so far. We highlight the prebudget in our householder. We also make sure that the householder is dropped off at all community events. We distribute budget charts along with the prebudget consultation so that people can actually see where the money is coming in, where it is being spent and also where it might best be spent.

Let me start with the main points raised in this year's consultation. This year the main consensus was for increased social spending in the areas of health care and urban infrastructure such as public transit and low cost housing. As well, debt repayment, which has been the top priority in my constituency from 1997 to 2000, was still very widely advocated although it was not viewed as being of the same priority as perhaps social programs were.

I must admit that there were relatively few calls for further tax cuts at this time. It is important to note that many constituents believed that the federal government had sufficient resources for both social investments and debt repaying and that there did not have to be a trade-off between the two. No one suggested that the government should ever go into deficit to finance what it is that we want to undertake.

Investment in our artistic sector and cultural industries continues to be well supported by my constituents. Many constituents see a vibrant artistic and cultural sector as increasingly important in today's world of globalization. Accordingly, they value supporting the CBC and our artistic creators and maintaining and improving our cultural infrastructure. They also felt it was vital to continue the reinvestment in the arts that the government first announced in May 2001.

Other measures receiving considerable support included environmental programs, assistance for low income families, reduction in employment and professional barriers confronting new immigrants, job creation and also defence.

While the calls for significant tax cuts were relatively few, several constituents favoured allowing cities to levy direct taxes.

What were the changes from previous consultations? From 1997 to 2000 there was a fairly uniform consensus, with debt repayment, increases in health care spending and programs for lower income Canadians, and cultural investments being the top priorities. My 2001 consultations largely took place after September 11 and the top priorities at that time were anti-recessionary programs, security measures and support for low income Canadians.

This year there were many more calls for a larger federal role in urban infrastructure projects. A tie-in to environmental measures was also more pronounced. For example, public transit spending was often recommended to reduce air pollution rather than just to facilitate travel between urban centres.

The advocacy for increased defence spending is also relatively new, notwithstanding the results from 2001.

In the time I have remaining I would like to look at the issue of how the federal government can best assure the highest quality of life for all.

On May 2, 2001, the Prime Minister and the Minister of Canadian Heritage, Sheila Copps--

Prebudget ConsultationsGovernment Orders

12:40 p.m.

The Acting Speaker (Mr. Bélair)

I must remind the member that names are not to be used.