Debates of March 18th, 2002

Business of the House

[The Speaker]

It is my duty pursuant to Standing Order 81(14) to inform the House that the motion to be considered tomorrow during the consideration of the business of supply is as follows:

That, in the opinion of this House, the government should not ratify the Kyoto protocol, or bind Canada to its emissions reduction quotas, since:

(a) Canada's principal economic competitor, the United States, together with most of the world's developing countries, would not be bound by the protocol's emission reduction quotas;

(b) ratification of the protocol would impose massive costs on the Canadian economy and result in severe job loss; and

(c) the Kyoto protocol would do little or nothing to benefit the environment.

This motion, standing in the name of the hon. member for Red Deer, will be votable. Copies of the motion are available at the Table.

It being 11.07 a.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

Ten Cent Coin

[Gerald Keddy, Progressive Conservative, South Shore, NS]

moved:

That, in the opinion of this House, the Royal Canadian Mint should restore the schooner Bluenose to the Canadian ten-cent coin immediately in the year 2001 as an uninterrupted commemoration of our seafaring and fisheries heritage.

Mr. Speaker, when I originally put this motion in private member's business it was timely but I would now like to amend the wording of the motion. I move:

That, in the opinion of this House the Canadian Mint should make the schooner Bluenose the permanent image on the Canadian ten-cent coin as a commemoration of our seafaring and fisheries heritage.

[The Speaker]

Does the hon. member have unanimous consent to amend the motion?

[Some hon. members]

Agreed.

(Amendment agreed to)

[Gerald Keddy, Progressive Conservative, South Shore, NS]

Mr. Speaker, before engaging in debate I would like to thank my colleagues from all the parties in the House for agreeing to change my motion. For the public who are listening I will read my original motion so they may understand why I wanted it changed. As most Canadians are aware the schooner Bluenose was taken off the ten cent coin in 2001. My original motion read:

That, in the opinion of this House, the Royal Canadian Mint should restore the schooner Bluenose to the Canadian ten-cent coin immediately in the year 2001 as an uninterrupted commemoration of our seafaring and fisheries heritage.

Obviously 2001 has come and gone. My original motion was put forward on September 13, 2001. Since it is 2002 it would seem more timely and make more sense to everyone, including myself and the people who support the motion, that the wording was changed. Once again I thank my colleagues for allowing me to change the wording.

The reason for Motion No. 385 to restore the schooner Bluenose to the ten cent coin is that it should be recognized that it was in recognition of the 50th anniversary of the March of Dimes that the Royal Canada Mint chose to change the image of the ten cent coin.

I agree that was a worthy cause and a worthy celebration particularly since it was in 2001, the International Year of the Volunteer. I do not have any problem in recognizing the March of Dimes. I understand the Royal Canadian Mint's predicament that it was an apt way to recognize the March of Dimes via a celebratory dime.

However the Bluenose was on the dime since 1937. Canada has the longest uninterrupted coastline in the entire world with three oceans on all sides, east, north and west. For those unfortunate not to have a coastline I suggest that they come to Nova Scotia, in particular the town of Lunenburg, and visit ours at any time. It is always a treat.

Seafaring, sailing, the fishery, back to the days of the explorers and whalers who opened up much of the Canadian north and eastern Canada, is a part of our history and heritage. Most Canadians have some link to that part of our heritage.

I believe the Bluenose should remain on the dime as a reminder of that heritage, that history and the long association not only with the ocean but with wooden boats. All Canadians have heard the comment “iron men in wooden ships”. Literally those were the days of iron men and wooden ships. Individuals who have a bit of seafaring blood in their veins and a bit of knowledge of history understand the terms and conditions that those men worked under. It was very often not only the skill of the skippers, the seamen and the fishermen but it was the seaworthiness of the boat itself that allowed those individuals to make it home to port under times of great duress. They survived absolutely horrific storms. They saw their comrades lost in dories for days at time in fog. Some never returned. It was the skill of the skipper and the seaworthiness of the schooners built at the time that brought our men back to shore.

For many of those reasons and others which I will state, I believe the Bluenose should remain on the dime. As Ziner says in Bluenose, Queen of the Grand Banks :

She represented not only beauty, speed and love of craft; she represented those indispensable ingredients of all great lives--hard work, modesty, and endurance.

These are lasting qualities that aptly represent what the Bluenose meant to Canadians and why this symbol has an enduring connection to what it is to be Canadian. I remind members of the House who may not be aware that the Bluenose is the first non-human to be inducted into the Canadian Sports Hall of Fame.

The Bluenose was a famous racing boat. We always knew that the depiction on the dime was the Bluenose . We would have no problem causing quite a row in any part of Nova Scotia by saying that some other ship was on the dime. It has been recognized for years. The mint itself has submitted as late as last Friday, March 15, that the Bluenose is the image on the dime. That bodes well for the surviving crew members of the Bluenose and certainly for all the skippers who sailed her down through the years.

There are some great quotes, legends, and stories that come from the Bluenose . I do not know how many members in the House have had the good fortune and pleasure to read the write-up on the Bluenose in the National Post on the weekend. Clem Hiltz was interviewed. I have the honour of saying that Clem Hiltz is a friend of mine. He sailed and worked on the deck of the original Bluenose when he was 13, 14 and 15 years old. Clem has been a stalwart in his fight to have the Bluenose put back on the dime and to have the real recognition that the Bluenose deserves as a permanent image on the dime.

We should consider and understand the conditions people worked under in those days. They left towns all along the shore of Nova Scotia. I referenced Lunenburg because the Bluenose was built in Lunenburg by James Roue, a naval architect out of Halifax. There is a long list of wooden boats that Roue had built.

The Bluenose was built for the Grand Banks but she was built specifically for another reason. The international schooner races were introduced in 1920. The Americans won the first year. Canadians thought that they would be able to win that race. I do not want to this to be taken in any way, shape or form the wrong way but there was a real competition between the pleasure boaters, the blue water sailors and the fishermen of the day. The international races often did not happen if there was foul weather or if a big storm come up. A lot of the racing boats from around the world would be towed back to shore. There was a certain amount of disdain on the part of the real fishermen out there and people who made their living on the water . They felt that there was no need of this.

The Bluenose was built specifically to race in the international competition. In order to qualify she had to fish for a year on the Grand Banks. She had to be a Grand Banks schooner. The Bluenose made the trip to the Grand Banks, filled her hold with the largest catch taken on the Grand Banks and returned to Lunenburg. The reason we had many schooners out of Lunenburg and towns like Lockeport, Barrington, Shelburne, up and down the length of Nova Scotia, was their speed.

They were able to get to the Grand Banks when the fishing season opened and salt their catch of cod. The first boat to dock often received the most money for its catch so there were a few more cents a pound to be gained. The first boat to port would benefit from that. There was terrific competition not only among the skippers and the men on board to see who had the best crew and the fastest boat but the fastest boat and the best crew also got to represent Canada at the international races. The Bluenose never lost. That is a record that bodes well and stands well for the skippers.

I would like to read the names of the skippers of the original Bluenose I . They were: Angus James Walters, who was the master of the maiden voyage, had been fishing for a number of years and was the Bluenose skipper during all of the races; John Sonny Walters; Lavinus Wentzell; James Eddy Whynacht; Abraham Miles; Harry Demone; Moyle Crouse; Amplias Berringer; James Meisner; Henry Burke; George Corkum; Lawrence Allen; and Wilson Berringer. These were great skippers who were able to sail a great ship.

There are some additional points that I would like to make about the stories and legends that grew up around the schooner Bluenose . The original skipper, Captain Angus Walters, stated many years ago that the wood that would be cut to build the ship that would defeat the Bluenose was still growing. I predict that it is growing still.

We must imagine life's hard times before the rain gear as we have it today. The men worked with wool socks and mittens. Most of the sailors could knit and would knit their own mitts while at sea. There was no such thing as rubber gloves to keep the cold ocean off their hands. They wore the original oil gear, which was simply cloth soaked in linseed oil. It repelled the rain but did not do the job that our rain gear does today.

These people invented the sou'wester. For anyone who has ever had to work in rain gear the sou'wester is a salvation. People can actually see out the end of it and the back comes down to cover the neck keeping the rain from running down the back of the neck. In the Christmas tree industry I grew up in we worked in a lot of foul weather, including rain and snow. Those of us who were fortunate enough to have sou'westers certainly used them.

The wives, families and women of the men who waited at home and supported them lived a life that really came from another time. Many of us cannot imagine the conditions they lived under. The men left their home ports for a month to six weeks at a time, many of whom were mere boys,11, 12, 13, 14 years of age.

I would like to quote Clem Hiltz about the feeling that all Nova Scotians, especially those of us from Lunenburg county, have toward the dime. He stated in the National Post :

They used to say it was just any old ship on the dime. They wouldn't even admit it was the Bluenose. It wasn't right. She's a famous ship. She has done a lot for this country of ours. She was a great ambassador for our country, known all over the world, and she is something that should never be forgotten.

We should all remember those words. The Bluenose is more than a wooden ship. She is part of our heritage, background and tradition. Every school child in Canada knows that the ship on the dime is the Bluenose . We now admit that amongst ourselves and it would be my wish that the Bluenose always remain on the dime.

[Joe Jordan, Liberal, Parliamentary Secretary to the Prime Minister]

Mr. Speaker, it is an honour to participate in the debate today on the motion of the hon. member for South Shore.

It is sometimes easy to dismiss cultural symbols as benign. However anyone who listened to the hon. gentleman's speech understands the Bluenose is an important symbol. It holds a great deal of importance especially in Atlantic Canada in terms of the pride its people feel about the accomplishments of the vessel. We on this side have no argument with that.

This is the first occasion I have had to speak to the motion on behalf of the Minister of Infrastructure and Crown Corporations. As most members know, the minister's new mandate is broad and diverse. It includes the Royal Canadian Mint, the crown corporation central to the substance of the motion.

The intent of the motion is to permanently restore the schooner Bluenose to the Canadian ten cent coin as an uninterrupted commemoration of our seafaring and fisheries heritage. We have amended the motion appropriately to reflect the passage of time. However I want to shed light on the debate. I will take a few minutes to accurately reflect the events surrounding the substance of the motion, as did the hon. member.

Two years ago the government approved the use of a new design on the ten cent coin to celebrate the 2001 International Year of Volunteers. As an eastern Ontario MP even I received petitions from people concerning the fact that the schooner image on the dime had changed. My understanding is that the commemorative issue dime was a one year thing. However perhaps the message was not communicated as strongly or appropriately as it should have been. I was taken aback by the substance and quantity of contacts and correspondence I got regarding the issue.

The year 2001 was the 50th anniversary of the March of Dimes. Periodically the mint will rotate symbols on the coins. In 1967 we changed the coins to reflect various aspects of Canadian culture. It is something the mint does not take lightly but it does it at times when it thinks it is appropriate.

To paraphrase the hon. member, I do not think anyone took issue with the selection of the March of Dimes as a commemorative piece. It was the displacement of the schooner that seemed to have triggered the motion. However the mint has always tried to promote traditional Canadian symbols. The maple leaf, the beaver, the schooner and the caribou which were introduced in 1937 have become icons to all Canadians as have the loon and polar bear so many years later.

Many of us still have vivid memories of the fundraising initiatives of the March of Dimes. It was a wonderful victory for volunteerism in Canada when a group of mothers raised millions of dollars to put an end for all intents and purposes to the polio epidemic that was causing such hardship among Canadian families. The commemorative coin acknowledged the hard work of the volunteers. Volunteers are critical and crucial to the fabric of our society, our health care system, our schools, sports, et cetera.

Regarding the matter before the House, the traditional schooner is one of the great symbols of Canada. I sincerely enjoyed listening to the hon. member reflect and tell stories of the Grand Banks, fishing, and the schooners. I learned things. When our national caucus went to Atlantic Canada for its summer caucus my wife almost did not come back with me because she enjoyed her time there so much. As we listen to the hon. member speak we can tell he is speaking from the heart. These symbols really are important.

Since 1937 the traditional schooner design on the ten cent circulation coin has been an icon. It is often referred to as the Bluenose . It is close to the hearts of all Canadians but particularly the people of Nova Scotia's south shore. We have had a strong representation from the hon. member about the issue as well as from certain members of the other place who feel a strong connection to the ship. It was in Nova Scotia that many such schooners were built and launched, the most famous of them being the

Bluenose.

Thanks to Heritage Minute on CBC we have all seen the final race of the Bluenose off the coast of the United States, a race it won. As the hon. member said, its racing career saw not one loss.

The schooners, long gone but not forgotten, were a central factor in establishing maritime communities such as the Bluenose home port of Lunenburg. For decades they could be seen plying their trade from the Grand Banks. The faster the schooner the quicker it could get back to port and the more it could get for its catch. That is why I am pleased to inform the House it was always the intent to return to the traditional design on the ten cent coin in 2002.

As members may have noted, until now I have been cautious in referring to the design of the traditional schooner. However for a variety of reasons the Royal Canadian Mint now refers to the design as the Bluenose . I am happy to report this will no longer be the case thanks to the Bluenose II Preservation Trust. The trust provided the Mint with valuable information that assisted it in identifying the schooner on the coin as the Bluenose . Members may think this is a small point. They may have thought it was the Bluenose all along. However these accredited steps help reinforce the importance the vessel had in Canadian history, and we take these victories where we can get them.

In 2002 the government is not only reintroducing the traditional schooner. It is officially recognizing it as the Bluenose . These actions may not appear at odds with the hon. member's motion, and for all intents and purposes they are not. The only exception I take to the motion is the rewording of permanence. The motion would take away the Mint's ability every decade or 25 years to use Canadian coins as commemorative issues, put something else on them for a year and then return to the default which in this case would be the Bluenose . This does not undermine the importance of the Bluenose . It is clear the Canadian dime is the Bluenose coin. It merely allows the Mint some flexibility.

For the reasons I outlined earlier the Mint must be given the flexibility to consider and under proper authority choose to introduce new but temporary designs for our coins. I agree with almost everything the hon. member said. I congratulate him for bringing the issue forward. However there is the issue of permanence. We must allow the Mint the flexibility to recognize groups like the March of Dimes, which incidentally is why we chose the dime.

[Peter Goldring, Canadian Alliance, Edmonton Centre-East, AB]

Mr. Speaker, I am pleased to speak in support of Motion No. 385 made by the hon. member for South Shore.

The hon. member seeks the support of the House to collectively express its opinion that the Royal Canadian Mint should restore the schooner Bluenose to the Canadian ten cent coin immediately as an uninterrupted commemoration of our seafaring and fisheries heritage. A modification has been made to the original motion. It is now asking for more permanency.

The motion is a particularly appropriate one for the hon. member given that his riding includes Lunenburg, home to both the Bluenose and the Bluenose II .

Many Canadians may not realize the Bluenose was for a short period of time no longer on our ten cent coin. For as long as I can remember the ten cent coin, the dime, has had on its reverse side an image of the magnificent tall ship. The dime was introduced in 1937. The Bluenose has remained on the coin almost continually since that time save for a short period in 2001 when the Royal Canadian Mint decided to eliminate the Bluenose to commemorate the International Year of Volunteers with an image of three women intended to represent marching mothers. It goes without saying that the image on our ten cent coin of women volunteers is hardly more representative of our country than was the symbol of the Bluenose .

Many Canadian families have been associated with the majesty of ships and the marvels of ship travel, having travelled by ship to immigrate to Canada since well before Confederation. My family's ancestors arrived by ship to Upper Canada in the 1830s before Confederation, having come from England.

In the early 1920s my great uncle Richard Goldring sailed a commercial schooner aptly named the Maple Leaf out of Port Whitby. In Whitby where I grew up a street is named in his honour. I have spent many days filled with fond memories at Whitby's harbourfront. Many across Canada share my fondness for the ships that ply the world's waterways, particularly those of Canadian registry. The Bluenose personifies the essence of Canada's seafaring excellence.

Canada's history is intimately connected to ships. When the original Bluenose ran aground in 1946 an exact replica, the Bluenose II , was constructed and launched in 1963. It was built from the same plans, at the same Lunenburg shipyard and by some of the same persons who constructed the original Bluenose .

After its Lunenburg launch in 1921 the original Bluenose enjoyed a reputation of consistent and undefeated glory in the International Fisherman's Trophy race. It won every International Fisherman's Trophy between 1921 and 1938 except for the 1928 race which was declared no contest. The race became such a rivalry that the Gloucester fishermen and their financial patrons built and launched several ships, all with the objective of defeating the Bluenose and all without success. In addition to its racing prize money the Bluenose earned its keep by being a superb fishing schooner.

At the outbreak of World War II the Canadian government unfortunately showed little interest in saving the Bluenose from the financial stresses the Great Depression had caused its owners. A suggestion that the Canadian government take over the Bluenose was ignored. In 1942 it was sold to a West Indies trading company. A humbled Bluenose was consigned to carry freight between the islands of the West Indies. In 1946 a tired Bluenose struck a reef off the coast of Haiti and went to a watery grave.

I believe I speak for all Canadians when I say I am deeply offended to have seen the Bluenose dime altered in the way it has been altered. Like the hon. member for South Shore I want to ensure it does not happen again. It is time to consider how important symbols are to our sense of ourselves as a nation and ensure they are respected, promoted and viewed throughout Canada.

Not only the Bluenose dime is of concern. Many Canadian symbols merit similar commemoration on our coinage and similar protection from politically correct altering agendas.

For example, similar to the lack of historical appreciation and understanding shown by those who want to remove the Bluenose from our coinage, Senator Vivienne Poy wants to personally undo the progress of history by selectively finding fault in today's O Canada lyrics where it says “In all thy son's command”. Rather than reinforcing the correct definition of a son, which is a defined as a person for which the famous five so aptly pointed out also includes all females, she has chosen to ignore Canada's history, its legislators and our dictionaries in a misguided zeal.

The son, as in the son of America, is used for both males and females. By meddling with the anthem and wanting to use the wording of an earlier 1908 version, Senator Poy opens the anthem to many more changes that even she may not appreciate. Specifically, the modern government approved version has the line, which was not in the 1908 version, “God keep our land glorious and free”. Is the senator's intention to remove this reference to God from our national anthem too?

The point is that the national anthem was debated and approved by learned people at great national expense in 1968. Senator Poy wants to change the words to suit a very limited edition, non-specific dictionary in an effort to put political correctness before linguistic accuracy.

Canada's crown corporations must be brought under similar protection from liberalists to protect both song and coin. There must be some Canadian absolutes in our national song and our national currency.

First, the monarch's representation must be on all coins and paper currency. This is essential to remind us of our royal beginnings that affect our presence and guide our governing in the future.

Second, symbolic national representatives must be consistent with their national importance. To suggest that female volunteers, while important, are comparable to the wind, sail and seafaring commerce and immigration suggested by the Bluenose is very narrow, politically correct thinking. Supplanting Canadian maritime commercial enterprise and distinct seafaring, world leading culture with domestic volunteering is an odd way to promote a country to encourage a ravaged shipbuilding industry.

Coins that aptly represent Canadians include not only the Bluenose dime but also the beaver on the nickle and the caribou on the quarter. Each has its importance to our heritage as well as the maple leaf on our lowly penny.

I support the member for South Shore and his concerns to retain historical images on our coinage and paper currency. The dime should specifically be reserved to depict the Bluenose on the reverse as well as the Queen's image on the front. These are important symbols for our heritage and indications of our past. I also support the member for South Shore in his insistence that representation be retained on the dime. However we must be very careful to ensure that representation of our historical past be maintained on other forms of currency as well.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, I am pleased to speak to Motion No. 385, put forward by the member for South Shore, Nova Scotia. I can understand why he moved such a motion.

I can also understand the desire to mark the year of the volunteer. Canada chose currency for that purpose. Be it the 25 cent coin or other denominations, there are always changes in what is depicted on the reverse side of coins. There is real significance to it. Since everyone has small change in their pockets, it really meant something.

The member for South Shore is moving his motion just as the government is deciding to go back to the Bluenose . His motion is therefore welcome.

In Nova Scotia, the Bluenose will never be forgotten. Nova Scotians are proud of it and they have every reason to be. It is a boat which was built with incredible speed. It could be used for fishing and for racing. I am sure that it saddened Nova Scotians when the Bluenose was taken off the ten cent coin.

Clearly, it was not in vain that my colleague moved this motion in the House of Commons, especially now that we hear the good news that the Bluenose will be back on the ten cent coin.

I remember when I was small looking at dimes and thinking what a superb sailboat it was. I am still young, but although a few years had gone by, the Bluenose continued to feature on the ten cent coin. I can understand how the people of Nova Scotia felt when it was dropped. That was something.

I think that it is symbolic of the work of Nova Scotia's fishermen, those who went out to sea. It is deeply symbolic. As we know, fishing is not easy work, and it certainly was not easy in the past, in the days of the Bluenose . How many fishermen have lost their lives at sea?

It has meaning for Nova Scotia. I am sure that if other provinces could have something similar on Canadian currency, their inhabitants would be proud. I can understand the people of Nova Scotia and the member for South Shore, who put forward this motion. He is asking that something which was recognized for years be restored. No one had asked that it be removed.

The Bluenose is also representative of shipbuilding in Nova Scotia.

Shipbuilders have done much work not only in Nova Scotia but throughout the Atlantic provinces. People have worked and made their living building ships.

Today when we talk about Nova Scotia, we still talk about the Bluenose and the people who want to see it. They recognize what has been done in Nova Scotia and across Atlantic Canada. Many people, men, women and children, live off the fishery. This is an example of it.

How many people have lost their lives at sea? They did not have the equipment that we have today when they went fishing. Even today we are still losing people at sea. It is not an easy job, even if people believe it is. Personally, years ago I went to Shelburne and fished for tuna in the gulf stream. I was gone for three and a half days. I lived at sea as the fishermen did.

I do not think I would make a good fisherman, especially if I went three and a half days without seeing land. We were over a hundred miles out to sea and we could not see the land. I thought people would have to be stupid to get on a boat to go fishing. If they decided they wanted to go home at night, how would they get there? They could not walk on the water. They could not go home. There was no taxi for them to take. When we are on land, if we are not happy where we are, we can jump in a car or call a taxi and go to where we want. After two days on the sea, I could not call anybody to take me home.

I sympathize with all those fishermen and the hard work they do. They put their lives in jeopardy all the time. Previously I was a miner. I know how dangerous it is to work in a mine. I have sympathy for all those people who do those hard jobs. That does not mean that the jobs of others are not hard. We talk about the woodcutter, for example, and the number who are killed in the woods.

Coming back to the fishermen, I personally thank the member for the motion he brought before the House of Commons to put the Bluenose back on the dime. This would set the example of the hard work of those in the past.

It is truly important, because this is a symbol that we want to keep forever. It is not only a symbol for all these people, all these fishermen who went to sea, but also for all these jobs that were created for fishermen, particularly in Nova Scotia.

Fishermen got work everywhere, whether in the Atlantic or Pacific region, whether in Vancouver or elsewhere. Through their work, these people were able to put food on the table to feed their children. People living in these regions did not have an easy life.

The reason the schooner Bluenose was removed from the ten cent coin in 2001 is a good one. It was to recognize all the volunteer work that had been done in previous years. I can understand that. However, today, it is nice to think that the schooner could appear again on ten cent coin.

For years, the caribou appeared on twenty-five cent coins. We no longer see it. Now, when we look at a twenty five cent coin, we do not know what it represents, unless someone tells us. Before, we knew that the caribou represented—in my opinion—the great Canadian north, the people who lived there and who hunted the caribou. For example, how many people lived off its meat? That symbol represented something that almost everyone was familiar with, just like the Bluenose , which used to represent Nova Scotia fishermen, work at sea and in fish plants.

This representation has a meaning, particularly for people from the region. Other Canadians are asking themselves the same question when they see a ten cent coin. They wonder what it represents and the locals can explain it to them when they travel around the country.

The Bluenose is a great Canadian symbol that makes us proud. It was designed by a Canadian architect and built by Canadian workers. It could not be more Canadian. It is a model, a way of recognizing the industries of our regions.

I am certain—and I know I am repeating myself, but it is worth doing so—that the people of Nova Scotia are happy to see the Bluenose back on the dime. But they cannot possible be happier than our colleague from South Shore, who has taken the trouble to introduce a motion here in the House of Commons.

Just before this debate on the motion began, the decision was made to put the Bluenose back on the ten cent coin. I would like to personally congratulate our colleague from South Shore for the initiative he has taken to bring back this source of Canadian pride. By so doing, something from our past is being preserved, for this schooner reminds us of the fisheries, those who ply the sea, and others. I thank you for this opportunity to express my views on this motion.

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

Mr. Speaker, I too am extremely pleased to have an opportunity to speak to this important motion brought forward by my colleague and friend from the South Shore. I want to leave ample time for him to conclude his remarks.

As was so aptly expressed by my colleague from New Brunswick as well, the Canadian symbol of the Bluenose has become such that we burst with pride. It is truly, for all Atlantic Canadians, a symbol of superiority. There is a sense of historic pride for that time, and the fishermen and fisherwomen who took part in the industry hearken back to a time of prosperity, to a time when we were seen as perhaps much greater contributors to the Canadian economy. When the Grand Banks and the nose and tail of the Flemish Cap were bustling with cod and schooners like the Bluenose were there with other ships, manned with crews from Nova Scotia, New Brunswick and Prince Edward Island, there was truly a boom in that region of the country. There will be again.

When we have symbols like the Bluenose we have an opportunity to rally round and to speak of the prosperity, the opportunity, that existed then and can exist again if a proper approach is taken in developing all the regions of Canada.

The Bluenose , as my friend indicated, was built in Lunenburg on the south shore of Nova Scotia. It was designed by William Roue, a naval architect from Halifax. The ship itself had incredible prowess. It was the fastest and best ship of its type. It competed internationally and never lost a single race. It won the coveted Fisherman's Trophy and raced from 1921 to 1938. It was of course the pride of the area and it became a symbol for those who participated in the bustling industry and fishery of that era.

The Bluenose was but one of a large fleet of over 150 bankers, as they were known, built at a time when the days of sail were starting to give way to steam. Yet this ship was a particular icon for those who knew her, who sailed her and who saw her. It continues to be so today, as evidenced by the effort brought forward by my friend from the South Shore.

I will say as well that the Bluenose was known all over the maritimes but also in an area in Guysborough County just off the coast, the Sable grand banks and the Sable shore, where the fabled Sable Island exists. It was one of the most treacherous areas on the east coast, one where the Bluenose on several occasions aptly skipped through that treacherous water known as the graveyard of the Atlantic, captained by Angus Walters. There are tales of how his skill and navigational ability saved his crew as he went through those highly treacherous waters.

I can tell the House that in Guysborough today, in Canso, Nova Scotia, people are still trying to eke out a living in the fishery. It is symbols like the Bluenose that allow them to cling to that heritage, that culture, that sense of who they are.

Again I reiterate the words of earlier speakers who have indicated their support for the motion. This cherished symbol of Canadian pride, the Bluenose , should remain on the dime. We are glad to see that it will happen and I commend my friend for his efforts to see that such is the case.

[Gerald Keddy, Progressive Conservative, South Shore, NS]

Mr. Speaker, again I would like to take a few moments to thank the members of the House for their support of the motion and my colleagues who spoke to it.

Certainly there is one point I would like to stress in closing, that is, this is not about the March of Dimes. This is about the schooner Bluenose . I would like to illuminate, to show more clearly if possible, my position that the Bluenose should remain on the dime. In no way, shape or form is it about having anything against the accomplishments of the women, the volunteers, with the March of Dimes. Certainly I understand the Mint's position in wanting to put the volunteers and the women who founded the March of Dimes on the ten cent coin. I would, however, disagree with the Mint that there is no better way to do this.

If we had wanted to mint commemorative coins such as the dime for the March of Dimes, there is no reason we could not have minted them simultaneously with the regular Bluenose dime. We bring out commemorative coinage every year. I would suggest that since we use the silver dollar all the time as commemorative coinage it may have been a better symbol. Also it would have more closely and truly represented the value of the dime received by the women who marched for the March of Dimes in the early 1950s. A dime was worth something in the 1950s. Quite frankly, the dime is not worth a whole lot today. Perhaps the silver dollar would more truly represent that.

The symbolic rendition of the marching mothers who went door to door in the 1950s to raise money for polio in the March of Dimes campaign is not what this discussion is about. Certainly the March of Dimes has played an important role in Canada, and we recognize that, not only with its inaugural task of funding research that helped develop a vaccine against the disease but also its development into an organization for the disabled.

Once again I want to make it very clear that this is not in any way, shape or form against the celebration of the work that those volunteers did with the March of Dimes. This is about restoring and maintaining the Bluenose on the dime and at the same time finding other ways to recognize the valuable contribution that the March of Dimes has brought to all of us.

The other point I would like to make is in recognition of some of the work done by the Bluenose II Preservation Trust to have the Mint itself recognize a fact that all of us knew all along: that the image of the sailing schooner on the ten cent coin is in fact the Bluenose . Quite frankly, the Royal Canadian Mint resisted that recognition for many years. It was only on March 15 that it finally admitted it actually was on the dime. I realize we are not allowed to name colleagues in this place or in the Senate, but I also would like to recognize the work of a senator who helped to bring that about. It was extremely important to get that recognition from the Royal Canadian Mint.

Our lives, heritage and history are represented by the Bluenose , as well as our long association with wooden ships in eastern Canada and in the country as a whole. Certainly there were thousands of wooden ships built in Nova Scotia, New Brunswick, P.E.I., Newfoundland and Quebec, probably tens of thousands. Our shipbuilding in Nova Scotia actually peaked in 1875, but even after that there were hundreds and hundreds of schooners built from the 1900s to the 1930s.

In closing, to show how important wooden boats were to the east coast of Canada, it was not until 1965 that the first totally metal fishing boat was built in Nova Scotia. We are indeed, without question, a land of wooden ships and iron men.

[The Acting Speaker (Mr. Bélair)]

The time provided for the consideration of private members' business has now expired. As the motion has not been designated as a votable item, the order is dropped from the order paper.

Supply

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

moved:

That this House acknowledge the existence of a fiscal imbalance jeopardizing the continued quality of social programs, such as health care and education, in Quebec and in the other provinces.

Mr. Speaker, I thank my party, the Bloc Quebecois, for the wonderful opportunity it is offering to me and certain of my colleagues in the Bloc Quebecois to address this important matter of fiscal imbalance.

This is a matter of such importance that there is unanimity on it in Quebec. There are, of course,still a very few people who have not fully understood the analysis and the serious nature of the trends observable between the federal government's fiscal overcapacity and the undercapacity of the government of Quebec and of the provinces to fund essential services such as health and education.

In the recently released survey commissioned by the Séguin commission, it was indicated that 74% of Quebecers feel there is a problem of fiscal imbalance, with the federal government having too much money compared to its responsibilities, and the government of Quebec having insufficient money compared to its fundamental responsibilities such as providing health care, education and income security. Even in Canada, 64% of Canadians share this opinion that there is a fiscal imbalance.

In fact, earlier I mentioned those who do not acknowledge the imbalance. What I should have said before is that it is the key player involved, the federal government, that does not acknowledge that there is a problem. They have money coming out their ears. The Minister of Finance is swimming in money. He has so much money that he is drowning even, to the point that he is having problems explaining himself. Incidentally, this is taxpayers' money, not his money. Yet the members opposite do not acknowledge that there is a problem.

This problem stems from different sources. The first one has to do with changes in tax revenues, particularly over the past five years. Since 1995, federal government revenues from all sources have increased by 45%. This is quite a bit. This is a fabulous growth rate.

If we look at the structure of these revenues, we notice that the federal government dominates a tax field that has increased considerably more than all other tax fields over the last years, that tax field being federal personal income tax.

Incidentally, if we look at the tax base from Quebec, the federal government receives approximately 60% of revenues collected from Quebecers, while the government of Quebec gets what is left, 40%.

With the federal government receiving 60% of the tax revenues from Quebecers' personal income tax, and the government of Quebec only getting 40%, it is understandable that if this revenue source grows considerably more than other sources, the federal government will end up getting richer faster than the government of Quebec and that is has an additional way of getting its hands into the pockets of taxpayers.

In the last few years—since 1993, when we started collecting these figures—federal personal income tax revenues have increased by 7% a year on average, whereas other revenue sources, such as the GST, corporate taxes and others, have only increased on average by 5.3% a year.

The end result is that by getting 60% of personal income tax revenues, the federal government has added to the already quite significant trend of 45% revenue increases, that began in 1994-95. However, the structural factor is such that it is accumulating increasingly greater surpluses. This is especially true since 1997.

The federal government has managed to reduce its spending. But we should consider where the cuts have been the deepest. It has cut the transfers to the provinces more than anything else. But the real cleanup in the federal bureaucracy remains to be done. It is primarily at the expense of the provinces that the federal government has balanced its budgets since 1997.

If we had kept the same transfer payments we had in 1994-95 with an annual indexation year after year until 2001-02, the provinces and the government of Quebec would have received $38 billion more to finance health care and education.

And they would have us believe that such a loss had no impact on health care, education, income security and the ability to plan and manage public finances in Quebec and in the Canadian provinces. Only blind partisans could forget about this important point.

By cutting $38 billion and not transferring that money that should have gone to health care, education and income security, the federal government has put even more pressure by accumulating surpluses.

On the one hand, we have federal revenues going up faster than those of Quebec and other provinces because of the very nature of the federal tax base. On the other, we have often drastic cuts without any warning, with rules being changed in the middle of the game, in the federal transfer payments for health care, education and income security.

When we have rapidly rising revenues and spending cuts year after year, with considerable savings for the federal government, it is a foregone conclusion that we will end up with regular, structural surpluses and a major fiscal imbalance.

For the benefit of all those watching us, let me explain what fiscal imbalance is. It is quite simple. The federal government has too much money compared to the responsibilities it has to fulfill, which are clearly defined in the Canadian constitution, the first law of the land that the people opposite claim to uphold. A contrario , the provinces do not have enough money to meet their responsibilities in terms of health care, income security and education, which are also clearly defined in the Canadian constitution.

This is how things stand. The federal government overtaxes Quebecers and Canadians, while Quebec and the rest of the provinces are underfinanced.

The government tells us “We have to be careful. Everyone was asked to make some kind of effort to put our fiscal house in order”. Fine, but as I mentioned a bit earlier, the federal government made the provinces do the work. It was the provinces and the government of Quebec which put the federal fiscal house in order, not the federal finance minister nor the federal government.

Ever since 1997, year in and year out, the unemployed have helped restore fiscal balance through a $6 billion or $7 billion surplus, which the federal government has claimed as regular revenues or tax revenues. That is the harsh reality. These are the two main sources of income that have helped the Liberals balance the budget and are now helping them to generate a surplus year after year.

So many cuts have been made that we have reached an all-time low. The federal government's contribution to education and health care has never been so low; it stands at 14% for health and 8% for education.

We are being told again and again by the other side of the House, “Yes, but tax points must be considered”. No, tax points must not be considered. They were given up in 1964 by the federal government in a jurisdiction that did not belong to it but had been taken from the Quebec government and the provinces to fund the war effort, that is personal taxes. They were given a portion of what had been taken as a tax jurisdiction, which was not that of the federal government. This was done in 1964, and again in 1977 for the other provinces. When you sell your house, you do not claim a property right 30 years later. This is totally absurd.

But let us take this government at its word and include tax points in cash transfers. One will realize that about 30% of the contribution to health, education and income security expenses is made by the federal government and 70% by the Quebec government and the provinces. It used to be 50-50. This is already extremely serious.

Concerning the federal debt, the government says “We must be careful. We do not have such a great surplus. We must pay down the debt. We are under enormous pressure because of the debt”. In the last five years, the opposite has happened. Pressure turned into depression, if you will. There is an annual saving of $2.5 billion in debt service. I still do not understand why, with a AAA rate, the federal government can get funding sources at very competitive interest rates.

How can it be that the money of the same taxpayers, the same people whether they are paying taxes in Quebec, in the Canadian provinces or to the federal government—all the same set of taxpayers—is being used to quickly finance, quickly repay, the debt that is costing the least to carry? I need someone to explain this to me. This is at the Economics 101 level on public finances.

I do not understand the logic which has them continuing to accumulate surplus funds on the federal side, accumulating them without any thought of redistributing them to the provinces and the government of Quebec through the rebalancing that virtually everyone now wants, and continuing to make use of this surplus. Last year the total was around $17 billion, used to pay down the debt that is the lowest rate in Canada. The federal government's credit rating is AAA, while Quebec is A plus. Ontario is AA minus, Nova Scotia A minus, Newfoundland also A minus. Why, with ratings this low, when we and the provinces are seeking financing for their debts, which will be far more costly, is there no rebalancing of the federal surplus in favour of the provinces, which would primarily enable them to pay off their more expensive debts? This totally defies logic.

This is a very serious situation. If nothing is done in the next ten years, to take the government of Quebec as an example, we will end up with a national assembly that will be solely responsible for administering health and education. Why? Because if things continue this way, with this imbalance, we will end up in 2010 with a situation in which the bulk of program expenditures, that is between 85% and 90% of expenditures, will be allocated to education and to health. There will be between 10% and 15% left for all the other priorities of Quebecers. Is it normal for the environment, road construction, the promotion of culture, and international representation to have to suffer from such reductionist logic? It makes no sense. That is why a turnaround is necessary, and promptly.

Incidentally, the conference board recently conducted a study that was commissioned the Séguin commission. The government members are the worst when it comes to boasting and spouting rhetoric. As is the case whenever it comes to the issue of the surplus and forecasting, the Minister of Finance is off by 174% per year. The forecasts for this year will likely be off by 500%. If he worked as a professional forecaster, he would get the boot in a second. But no, he is the Minister of Finance—he is still the Minister of Finance—and he can say whatever he pleases.

He was critical of the conference board. Yet, he himself has awarded contracts to the conference board, because he considers it a credible institution. He disparaged the conference board and said that they were off in their figures for the first five years. These figures that the conference board used are his own figures—figures from the Department of Finance—contained in its December budget documents. The minister has shot himself in the foot. He shot himself in the foot when he said that the conference board, especially in the first years, was off the mark. The conference board used his own figures. In the worst case scenario, the conference board clearly went easy on the federal government. It gave the federal government every possible chance, it is almost unbelievable. It said, “We will even anticipate incredible growth in spending. We will use revenue growth rates that are really conservative”.

Even then, and taking into account the Minister of Finance's assumptions, which do not make sense for the growth of the surpluses for the first five years reviewed, we arrive at an incredible gap between the surpluses to be generated by the federal government over the next 20 years and the deficits that will be accumulated by provincial governments, particularly the Quebec government. It is the order of magnitude that is important. It goes without saying that, with forecasts that are off by 173% or 174%, the Minister of Finance cannot understand these statistical subtleties. It is all too easy to be concerned about one's image, to say just about anything, to contradict oneself from day to day, and to get away with these contradictions.

The Séguin commission identified the situation very accurately. It released a thorough study after holding consultations over a period of several weeks to produce an incredibly thorough and comprehensive document. The Séguin commission proposed various scenarios to correct the fiscal imbalance. One of these scenarios is the one which the Bloc Quebecois recommended when it tabled its submission to the commission, in December.

Other scenarios are also possible, but the result remains the same. For example, whether the responsibility for the GST is transferred to the provinces in the future, along with related revenues, or whether personal income tax points are transferred, the result will be the same. The Séguin commission says that either one of these scenarios must be implemented gradually. But the other side forgot that. They said “If we implement the Séguin report immediately, if we transfer the GST, if we abolish the CHST, we will end up with a shortfall, we will have a deficit”.

The main recommendation of the Séguin report is to go about this gradually, and this is what the Bloc Quebecois has done. Mr. Speaker, as you know, we work intelligently, and you yourself recognized that on a number of occasions, when we tabled our annual forecasts for surpluses, which were never off by more than 3% or 4%.

We came up with a five year scenario to achieve the conclusions of the Séguin report and right the fiscal imbalance. Starting next year, we gradually transferred GST revenue. We could have done the same with the revenue from personal income tax; the result would have been the same.

Beginning in 2002-03 and for the five years thereafter, the GST field was gradually transferred, one fifth each year, to the government of Quebec and to the governments of the Canadian provinces. The cash Canada social transfer was gradually abolished over five years, one fifth each year. The federal government's cash transfer for health and education was abolished and replaced by one fifth of the revenues from GST, which the Government of Quebec and the provinces could keep.

Equalization payments were not changed until 2005-06. The existing memorandum of agreement winds up at the end of 2004; we would therefore wait until then to amend equalization payments. Sometimes, a gradual approach is a sign of intelligence and subtlety. The Minister of Finance sometimes forgets these basic principles of good and stable public finances management.

We, too, created the worst case scenario. We said that we would establish a separate EI fund, that we were going to take advantage of this fiscal reform. We subtracted the revenues and expenditures associated with the EI system, i.e. the federal government surplus, by one fifth each year; so, $1.2 billion in surplus money next year that would not go to the federal government next year; $1.2 billion the following year, and so on. We took everything away from the federal government and really created the worst case scenario.

And what did this produce over the next five years? Despite everything, the government transferred its GST revenues to the provinces, and gave up the surpluses from the EI fund, because there was a separate fund, which is what the Bloc Quebecois has been fighting for year after year. We took away from the Minister of Finance the surpluses associated with the contributions from employers and employees to the EI fund. We gradually reduced the Canada social transfer. And what did we get over the next five years? Even factoring in the tax cuts, the new security measures, everything, using conservative figures year after year for the next five years, we still came up with a federal surplus of between $7 billion and $11 billion annually, and that is a conservative estimate.

Much of the fiscal imbalance problem was solved. Provincial governments and the Quebec government would now have enough money, year after year, because they could count on an independent source of financing for health, education and income security.

We also solved the unemployment problem because this irresponsible government would no longer be drawing on the employment insurance fund, the fund being independent. There was a cut in the CHST to replace all that, but the federal government would still run a surplus estimated between $7 and $11 billion. This is an intelligent application of the extremely rigorous recommendations found in the report of the Séguin commission.

Taking into account this reality and what happened to the fiscal balance model that was tied to the budget balance model that we have presented in the past seven years, no one will be able to continue to pretend, in a demagogic way, that it does not exist, that the problem does not exist, that everything is perfectly fine.

I invite all my colleagues from the other parties to support this motion and to try and find solutions to this thorny problem.

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I noted with interest the many areas my colleague discussed, in particular the Séguin commission dealing with the CHST.

The CHST is a program that currently helps invest in health and social programs for people who live in the province of Quebec, among others. In 2002-03 Quebec will receive $8.5 billion over the next three years. In September 2000 an historic agreement between the federal government and all provinces was signed and those transfers will increase to Quebec by $5 billion over five years.

I always thought the Bloc was a party that had a social conscience. I would like the member opposite to explain how he can reconcile the fact that although he is talking about fiscal numbers, which in my view do not add up, the transfers that the federal government sends to the province of Quebec, particularly in the area of social and health matters, are extremely important in maintaining a strong social fabric in the province of Quebec. I would like the member to respond to that comment.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I do not understand the hon. member's comment, because the figures I have given can be found in the Minister of Finance's documents from last December. They are the figures for cash transfers for funding health, education and income security via the Canada health and social transfer.

If he wants to go further, moreover, the columns that follow give the value of the tax points. Even if this is no longer the federal government's business, even if this field was handed over first in 1964 and again in 1977 for all provinces—and incidentally, this is not even an area that initially belonged to the federal government, but one it took over during the second world war in order to fund the war effort—he can find all these figures in the budget documents.

Yet the forecasts—and I can agree with him on this—differ considerably from the ones of the federal finance minister. He should trust our forecasts more than those of the federal Minister of Finance. As I have just said, every year the federal Minister of Finance is, on average, 173% off in his forecasts, within only a few months moreover.

To give only the last example of his budget, it will be seen that this Minister of Finance was being pretty cute, one might say. Last December, barely three and one half months ago, this wonderful manager, with administrative talents supposedly above average, forecast, that at the end of this fiscal year, that is within a few days, there would be a surplus of only $1.5 billion in the federal government's coffers. I would just like to remind hon. members that, for the first nine months of this fiscal year, the federal government has already amassed a surplus of some $13.4 billion.

Are hon. members aware of what would have to happen within the next two weeks or so? There would have to have been a deficit in the past few weeks, and in the next few days, of $12 billion. This makes no sense. We are talking about $13.4 billion. There would therefore have to be a deficit of $12 billion—illogical as that is—to eliminate the surplus that has already accumulated.

Our forecast is—and this is a very conservative scenario—that this coming March 31, there will be a minimum surplus of $9 billion in the federal coffers. Nine billion is a minimum figure, because for the first nine months the accumulation was already $13.4 billion.

He should trust our figures, then, instead of the minister's.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, I want to congratulate my colleague from Saint-Hyacinthe—Bagot for his most eloquent speech, which gave us a clear idea of the findings and recommendations contained in the Séguin report.

I want to ask him to summarize for us in greater detail the consequences of the fiscal imbalance, which means that the money is in Ottawa while the provinces are struggling to meet the needs in areas under their jurisdiction. I wonder if he could explain that to us and also if he could say a few words about the consensus that exists not only in Quebec but across Canada about the credibility of the Séguin report and the fact that a fiscal imbalance does indeed exist.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I thank my colleague from Drummond for her question. She is assistant finance critic and shows great professionalism. She helped prepare the analyses I presented today.

Yes, my colleague is right in saying that the fiscal imbalance has devastating effects. Over the next few years, in the health sector alone, we are talking about a 7% increase in costs due to various factors such as equipment renewal , the hiring of new staff and the aging population, which is an inescapable reality. This means that we cannot skimp on the quality of health care services offered to the public. We must have quality health care services and sufficient resources to meet existing and future needs.

The same thing goes for education. We constantly hear that education is the spearhead of a nation's future, particularly in the current context of globalization and rapid technological change, which is why the public must have access to services of the highest quality on a consistent basis.

It is not normal that Quebec and all the other provinces, having to deliver these two essential services, do not have an adequate revenue base. However, the federal government has a structural surplus year after year. It does not know what to do with all this money. So, over the last three years, it has spent $15 billion in provincial jurisdictions. This money has not been spent in health care or education, but for initiatives that duplicate or even go against initiatives by the provinces and the Quebec government in their own jurisdictions.

In the next few years, with this pressure building up, the provinces will have three options: they could partially privatize health care because the federal government does not recognize the existence of a fiscal imbalance; they could try to reorganize their own spending and set aside all other priorities in Quebec and other provinces; or they could cut back on services. This is the stark reality. They either have to cut essential services, privatize, or find new sources of revenue.

I am happy that the Minister of Intergovernmental Affairs is no longer part of this debate, because he was talking nonsense. He even encouraged Quebec and the provinces to raise their taxes. One must have some rather strange ideas to say such things; to raise taxes within a context where competition between the Canadian provinces, the United States, and now the world, with the opening up of markets and free trade, is fundamental.

The federal government itself recognized this by having a 20% personal tax differential in Canada compared to the United States, these taxes had to be lowered to maintain some competitiveness and keep high quality managers. That the Minister of Intergovernmental Affairs would encourage the governments of Quebec and of the Canadian provinces to raise their taxes is incredible and odious when the federal has surpluses coming out of its ears. To suggest raising taxes and sending the Quebec government and the provincial governments into a spiral of deficits, year after year, while the federal surplus continues to grow, is total nonsense.

If, to boot, they are federalists and they want the federation to work, there is a big problem. The main components of a federation are the provinces, and they are not even able to respect them. They think of themselves as the leaders of a unitary state, which they are not, unless they want to completely alter the Canadian constitution, which is another debate. But they should initiate this debate instead of acting in an indirect, deceitful and wishy-washy fashion by keeping the surpluses here and ignoring the fiscal imbalance, which is recognized by everyone.

It is so easy to prove this that I still cannot understand why the Minister of Finance would rise in the House and say that there is no problem. This is incredible.

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I will be splitting my time with the Parliamentary Secretary to the Minister of Canadian Heritage.

Though their motion does not mention it explicitly, it is clear that our friends in the Bloc Quebecois want to talk about the Séguin commission. Last week the Bloc Quebecois publicly pointed to the commission's report as yet more evidence that federalism did not work, that federalism was unfair to the people of Quebec. They have held it up as some sort of proof of the alleged fiscal imbalance they refer to in their motion and the so-called jeopardy in which they claim it places on our cherished social programs.

The Bloc suggests that the Séguin commission report offers ways to take this unfair system and make it fair. I have three bits of news for my hon. friends in the Bloc. First, federalism works; second, there is no fiscal imbalance; and, third, the Séguin commission is wrong. In fact federalism works in large part because of the very programs that the Séguin commission attacks: the Canada health and social transfer and equalization. The Séguin commission suggests that these transfers create an imbalance among the provinces and between the federal government and the provinces. I say that these transfers serve all regions of this country equally well and are fair to all.

Other colleagues of mine have spoken to various elements in this discussion, so let me be very specific in my choice of subject. I would like to speak to the recommendations of the Séguin report, specifically those changes it suggests would make the CHST and equalization more fair.

What exactly does it want to change? The first thing is the Séguin commission does not like the CHST. Before I say what the Séguin report would like to do with the CHST, it might be helpful to remind the House of a bit of the background of this important transfer, the first being its goal.

The purpose of the CHST is to provide federal funding to the provinces and territories for their vital programs in specific areas: health care, post-secondary education, early childhood development, social assistance and social services.

Something else we should all remember is that CHST is block funded. That means that while it is targeted for certain areas, those areas that I just mentioned, the provinces and territories can spend it as they see fit among those areas. The CHST transfer is made on an equal per capita basis so that all Canadians get the same level of support. In a nutshell, that is what the CHST is all about: a block fund paid out annually on an equal per capita basis to help finance society's most vital needs.

Just what exactly does the Séguin commission propose we do with the CHST? What changes would it make to the Canada health and social transfer to make federalism more fair? The Séguin commission says we should scrap it. Yes, everyone heard me correctly. It says we should get rid of this program altogether. What does the commission suggest we replace it with? It is simple: the GST.

The commission proposes we hand over to the provinces the revenues from the GST, the goods and services tax. The Séguin commission may think that is a terrific idea. My friends across the floor in the Bloc may think it is a great suggestion. I do not believe many people in any other province would think much of Mr. Séguin's proposal. In fact, if they were helped to really understand the proposal, I doubt many people in Quebec would think much of it either. Here is why.

First, we must understand that not all sales tax points are created equally. That is to say that a percentage point of sales tax in a wealthy province is more valuable than in a less prosperous province. While some might agree with the Séguin proposal, I think it is highly unlikely that Canadians in less wealthy provinces would feel the same way.

In fact, at least one premier has already told us as much. Lorne Calvert, the premier of Saskatchewan, has already said “I think that it would be detrimental to the very nature of Canada.” The premier continued by saying “Simply handing over revenues that they are just based on local economies, I'm not sure is the way to build a strong confederation”.

In spite of this opposition, some of my friends in the Bloc might persist. “Quebec is a prosperous province”, they will say. “Let us benefit from the GST”. They are right. Quebec is a prosperous province. It has prospered and continues to proper, and prospers within the federation I might add. If we did scrap the CHST and replaced it with the GST, which province would do the best? Would it be Quebec? As a general rule, the most prosperous the province the most valuable the tax point.

Under the scenario proposed by the Séguin commission, Ontario would receive 22% more than Quebec. Mike Harris might think that is fair and his cabinet might think it is fair. However most people who really understand what fairness means, and I include most of the people in the province of Ontario, would not. Nor do I believe would most Quebecers.

So having got rid of the CHST, what else would the Séguin commission have in store for us? What else does it recommend we do to ensure the fiscal fairness of our land? The commission has some ideas about equalization.

This, like the CHST, is a form of transfer between the federal government and the provinces, but it is different. It is different because it is a transfer not tied to any particular area of spending. The provinces can spend it in any way they please and it is different because not every province receives it.

Equalization helps ensure that all Canadians, no matter where they live, can receive reasonably comparable services without their tax rates being out of line with those of prosperous provinces. It means that people in Prince Edward Island can reasonably expect to receive from their province the same standard of service as do their cousins living in Ontario.

Calculating this transfer is done with a formula that takes into account the fact that not all provincial economies are the same. Not every province can generate the amount of tax revenue it needs to pay for its programs and services. An equalization program calculates each province's capacity to generate tax revenue. It then takes these numbers and figures out an average capacity based on five middle income provinces. This is known as the standard.

For provinces that fall below that standard, equalization payments make up the difference. At the moment, eight provinces receive equalization payments. Two do not, those being Alberta and Ontario.

What does the Séguin commission have to say about a system that has been in place since 1957 and is entrenched in the Constitution of Canada? It has a lot to say, but little of it is very new.

First, the commission says we should remove the ceiling on equalization payments, that is the maximum amount by which they can rise from one year to the next. For obvious reasons this proposal is unacceptable. It would expose the federal government to significant risk of unsustainable increases of equalization payouts. Unsustainable because it would permit equalization to grow faster than the economy does. Expenditures that grow faster than the economy which must support those expenditures are not sustainable. No government in its right mind could therefore agree to the commission's suggestion.

Second, the commission believes that equalization standards should be based on the average fiscal capacity of all 10 provinces, not just the five middle income provinces as now. Before 1982, Alberta used to be included in the average. Over the course of 10 years, as oil and gas prices rose and rose, Alberta's fiscal capacity expanded dramatically. As a result, the cost of the equalization program quadruped. Similarly, when oil and gas prices fell, the average fiscal capacity fell and equalization payments fell. Simply put, including Alberta in the equalization standard made the system too volatile. Therefore, in 1982 it was dropped.

Still, the fact remains that, on average, using just the five middle provinces to calculate the standard for fiscal capacity brings us to 97% of the 10 province average. Even my friends in the Bloc, for whom the fiscal glass is always half empty, must admit that 97% is close enough.

The Séguin commission tells us that the CHST is not fair. I have shown the House today that it is fair. I have tried to show the House as well that the commission's suggestion to replace it is unacceptable.

The Séguin commission tells us that the equalization program is not fair. I have shown the House that it is. Further to this, I could tell the House that every five years the federal government renews the legislation that governs equalization. That happens next in 2004.

The government is already looking ahead to that date and is working with the provinces to improve an already excellent program.

For these reasons and more I cannot support the motion of the Bloc.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I have a few questions for my colleague.

First, I would like to know if he has read the Séguin report. That is my first question, and I would like him to give me a straight answer.

Second, he is going way too far when he says that the Séguin commission wants to do away with the CHST, the Canada social transfer, when it is an incredible contribution to the delivery of health care and education services. The CHST used to be a good program. Previously, separate funding was provided for health, education and income security. Initially, when it was first implemented, there was a 50% contribution from the federal government for costs associated with health care, education and income security. The remaining 50% came from the government of Quebec or other provincial governments.

Today, CHST contributions are 14 cents for health and 8 cents for education for each dollar invested by the provinces. How is this contribution so wonderful and sufficient that it does not need to be adjusted, given the huge surpluses the federal government has been accumulating?

How is it that all those who are calling for increased health funding and more stability for such funding are wrong, and the secretary of state is the only one who is right? There is a limit to taking people for fools.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, first, I would answer the question, yes, I have the report. Is my interpretation different? Yes. Are we surprised? No. If we had the same interpretation, there would be no reason for this discussion. The fact is, Quebec has benefited significantly from transfer payments.

I did not hear my hon. friend across the way say that during the years 1981 to 1997 we had $508 billion in accumulated deficits. Since 1997 we have accumulated surpluses of $35.8 billion. The federal government has transferred significant dollars to the provinces in recent history.

I again go back to the historic accord of September, 2000, when we transferred over $21 billion through the CHST, in terms of health care funding, to the provinces. Quebec was a signator to that. At that time, the government of Quebec said that that was the amount of money it needed to operate those programs, and so did every other province.

Obviously my colleague across the way may not have the same memory that I do or it is awfully short. Very clearly, Quebec has benefited.

There are obviously differences. My colleague across the way uses the conference board for his benefit. The government of Quebec says, through the ministry of finance, that it will not be in a deficit, although we are led to believe that Quebec will be in a deficit. I am not sure which it is.

The point is, how can we forecast 20 years ahead to say that we will have unlimited resources? It is impossible.

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

Mr. Speaker, the parliamentary secretary said that the accumulated surplus was $35.8 billion for the federal government in the last few years. Meanwhile, the surplus in the EI fund is $46 billion. Therefore, the employers and the employees have been paying for the deficit reduction of the Minister of Finance.

My question for the parliamentary secretary is this. Could he address the question of the fiscal imbalance, which is now occurring in Canada, for cost-shared programs. Health care is a good example. The federal government used to pay 50% of the cost years ago. Now it is down to less than 20% of the cost, about 14¢ or 15¢ on the dollar. The rest is picked up by the provinces. For other cost sharing programs, a similar amount is picked up by the federal government and the provinces. In all cost sharing programs, the federal government now pays less than 20% of the cost. That has increased the gap between the rich and the poor.

The other thing is would he address the idea of a cap on equalization payments, which again has hurt the provinces that are less prosperous and has increased the gap between the rich and the poor?

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, first, my hon. friend across the way is repeating the same thing, which is false, and that is that we only contribute 13¢, 14¢ or 15¢ to health care. That is absolutely incorrect. As the hon. member should know, and I am sure he does know, part of the contributions in health care to the provinces is through cash and the other is through tax points. Clearly, when the tax points are added in they go above 30¢ to 33¢ on the dollar. I see my time is up but perhaps this will come up again later.

[Sarmite Bulte, Liberal, Parliamentary Secretary to the Minister of Canadian Heritage]

Mr. Speaker, I appreciate the opportunity to speak to the motion moved by the Bloc Quebecois with respect to the perceived and alleged fiscal imbalance the Bloc members say is jeopardizing health care and other key social programs.

It surprises me how some hon. members of the House and the provincial governments are able to get the facts so wrong on health care funding. They compare apples and oranges and hope that Canadians will not notice the gross errors in their arguments. Today I want to set the record straight.

The provinces and some hon. members bandy figures about but never divulge exactly how they arrive at their numbers. The Bloc uses the often heard 14¢ and this is where I want to begin. We heard the finance critic for the New Democratic Party speak about this 14¢ which allegedly the federal government spends on health care. The claim is that we spend only 14¢ which is absolutely not true. Those members condemn it on the grounds that there was an undertaking when medicare originated to pay 50¢ on each dollar. Let us examine their claims very carefully.

The Bloc would have Canadians believe that it is straightforwardly adding up all the funds which the federal government transfers to the provinces for health care and then comparing that to the total the provinces spend on health care. This purports to be the simple arithmetic we all learned in school. Only 14¢ of every dollar is the answer that pops up from this simple arithmetic but is it correct? I would submit it is not correct at all. What the Bloc is doing is not simple arithmetic but, I would submit with all due respect, is more like a conjurer's trick meant to deceive the onlooker.

How do those members get the 14¢ answer they claim? They look at the $35 billion Canada health and social transfer and then disregard the tax transfer of $16 billion. The finance critic for the Bloc spoke about that today. The tax transfer is very much a part of the 50¢ of former days. I emphasize the fact that it was part of the former days. With an enormous sleight of the hand they completely disregard the $16 billion and it does not seem to bother them at all.

Next, they look at the remaining $19 billion in the Canada health and social transfer. They then disregard the entire evolution of fiscal relations with the provinces over many recent years and suggest that they can identify an amount earmarked especially for health care. This could be done in the much more highly conditional cost sharing arrangements of the 1960s and 1970s because back then there was a specific share of transfers earmarked for health care.

My question for the Bloc members is, are they suggesting that we should return to the days when the federal government was much more stringent in what was done with money transferred to the provinces? Would the provinces themselves be happier if the federal government turned back the clock on block funding, which today provides the provinces with so much flexibility on how and where they spend federal transfers? Sometimes, especially when I hear the 14¢ argument, I think they would.

Let me remind the House that it was the provinces that wanted the flexibility that goes with block funding. They each wanted to determine according to their own priorities how much to spend on health care, how much to spend on higher education and how much to spend on social assistance. Moreover, the provinces wanted to escape the accounting, the rigidity and the dysfunctional incentives that 50:50 cost sharing regimes tend to create over time.

Block funding was therefore created. First there was established program financing in 1977 and then the Canada health and social transfer, a more encompassing block fund in 1996.

The federal government has shared the view of the provinces that the flexibility block funding offers is a sign of the maturing relationship between the two orders of government. However, with that goes responsibilities for the priorities one chooses.

It is the provinces alone that decide how much to spend on health care. Accordingly, today it is a falsehood to pretend that a certain share of the Canada health and social transfer is the amount that the federal government provides to the provinces for health care. It is also a falsehood to assume,as the 14¢ argument does, that not one cent of the $11 billion the federal government transfers to the provinces each year in equalization payments goes to help fund health care. This is far-fetched in the extreme.

So far I have shown that the 14¢ claim rests on a misleading fabrication with respect to federal transfers for health care. Now let me reveal another startling fact.

We would think that this fabricated number is then compared as depicted by provinces, to the total amount that provinces themselves spend on health care. After all, that is the story. The federal government allegedly only pays 14¢ on the dollar toward provincial health care costs. But no, provinces then take the fabricated federal contribution number and compare it to total provincial spending not on health care but on all social programs. This includes their spending on primary and secondary education. It includes everything they choose to spend on in the social domain.

I would submit that this is very strange. Let me suggest to hon. members that the provincial governments would be quick to condemn any notion that the federal government should be involved in funding primary and secondary education or indeed that it should be involved in the whole domain of social spending by the provinces. Where does the Bloc stand on this issue? I have to believe it would also fervently condemn such a notion. If so, then the 14¢ argument lies in shambles. Let us therefore put aside the 14¢ bogus argument.

As hon. members know, health care remains a priority for the federal government. Since balancing our budget, more than 70% of new federal spending has been for health care, education and innovation.

Just two months ago the Minister of Finance brought down his 2001 budget. That budget confirmed that the $23.4 billion in funding to support health and early childhood agreements by first ministers in September 2000 is fully protected. On top of all this the federal government also provides $4 billion a year in direct spending for health protection and promotion, health research and for health care services to first nations people, the RCMP and the Canadian armed forces.

The 2001 budget further strengthens the federal government's contribution to Canada's health care system by providing $95 million to the Canadian Institute for Health Information and a further $75 million increase to the annual budget of the Canadian Institutes of Health Research.

Time precludes me from discussing this issue much further but let me leave members with a few thoughts. First, the premise of the motion is wrong. There is no fiscal imbalance in Canada. Second, we have fostered a maturing relationship with the provinces according them flexibility in allocating federal funding to meet their priorities as they see fit. They are responsible for the decisions that they make.

Without a doubt health care continues to be a priority for our government. Our actions underscore that. If the debate is to be a constructive part of the intergovernmental dialogue, it has to be based on fact and not fiction. One part of getting the facts straight is to acknowledge the full federal government commitment to provincial and territorial transfers. The debate must reflect the nature of federal-provincial relations today and not hark back to what was in place decades ago and since abandoned because it no longer reflected the increased flexibility which the provinces themselves desire.

For all those reasons I am unable to support the hon. member's motion.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, I listened closely to the speech made by the government member, and I do not know if she read the Séguin commission report. Nonetheless, I wish to hear her comments.

In the report, the consequences of the fiscal imbalance were summed up in three main findings: first, citizens' needs are poorly covered; second, the provision of insured services by governments suffers efficiency losses; and, third, the decision-making and budgetary independence of the provinces is compromised.

On the issue of poorly covered needs, the Association des hôpitaux du Québec had this to say:

The cuts made to federal transfers have reduced the capability of Quebec's health care system to absorb the rising demand for health care as well as the rising costs, which limits accessibility and even threatens the quality of health care.

As for the efficiency losses, we are talking about management and provision of social programs. The director of the World Bank said this:

In many countries, the system of intergovernmental transfers is not based on an established formula, and the government decides, at its discretion, what amount will be transferred. Therefore, the intergovernmental transfer system of these countries is not transparent, and is the object of negotiations.

I would like to hear the member on that.

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, in fact I read with interest the report of the Commission on Fiscal Imbalance authored by Mr. Yves Séguin. As the Parliamentary Secretary to the Minister of Finance said, it is interesting how members on both sides of the House always find something different in these reports.

The Bloc members can pick up on the things they want to in the report but we also have to analyze what assumptions the report is based on. It is based on lofty conference board assumptions and looks at 20 year predictions. Any economist would know that making those kinds of predictions is not valid. Most economic forecasters will not forecast beyond two years.

Let us look at what the report actually ignores. It ignores that there will be any recession and that there will be no further tax cuts. It ignores the fact that there will be no new services required.

We cannot look at reports like that. Life is not lived in a vacuum. We cannot look at conclusions based on what we on this side of the House feel are improper and lofty assumptions that have been made.

Let us look at the facts and see what the increases have been to the provinces by the government from 1993 to the present. Equalization payments increased 22% from 1993 to 2001. Also the Canada health and social transfer increased by over 22%.

I submit that we must look at what has been done in the past and not just go with faulty assumptions as to what may or may not be in the future.

[André Bachand, Progressive Conservative, Richmond—Arthabaska, QC]

Mr. Speaker, I have a comment to make before asking my question. First, the closer the member is getting to the front seats, the more arrogant she is becoming, that is clear.

Second, since she is questioning long term previsions, I will remind her that her colleague, the finance minister, is making forecasts over five years. However, she is suggesting that two year forecasts are essential, and should even be the raison d'être.

The figures given by the Bloc Quebecois are widely criticized. I remind the hon. member that I am a member of the Conservative Party and that I criticize her figures and her approach.

That being said, the hon. member wanted to criticize the 14, 18 and 20 cents of the federal government in health care. Can she tell us how much it is contributing to health care?