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.