House of Commons Hansard #158 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was provinces.

Topics

Business of the HouseGovernment Orders

4:50 p.m.

Some hon. members

Agreed.

(Motion agreed to)

The House resumed consideration of the motion.

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4:50 p.m.

The Deputy Speaker

Pursuant to Standing Order 38, it is my duty to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Cumberland--Colchester, Foreign Affairs; the hon. member for Vancouver East, Post-Secondary Education.

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4:50 p.m.

Bloc

Jocelyne Girard-Bujold Bloc Jonquière, QC

Mr. Speaker, it is a pleasure to rise to speak to the Bloc Quebecois motion, which states:

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.

We all know that the Séguin commission, which was asked to consider and investigate the causes of the fiscal imbalance in Canada, as well as possible solutions to that problem, tabled its report a few days ago.

It is sad to have to ask the federal government to acknowledge the existence of a fiscal imbalance in the country. We have to ask the Liberals to recognize a fact recognized by 64% of all Canadians and 74% of Quebecers, as well as all the political parties in Quebec, namely that the money is in Ottawa while the needs are in the provinces. Again, I find it sad that we have to spend a day of debate on something that is so obvious to everybody except the Minister of Finance, his parliamentary secretary, and the Minister of Intergovernmental Affairs, who deny this situation.

Even his former university colleague, the MNA for Chapleau, Mr. Benoît Pelletier, went as far as asking the Minister of Intergovernmental Affairs to stop denying that reality for he was sinking into ridicule. Those words were not mine, they were from his colleague in the Quebec Liberal Party.

Here are some other quotations. Bernard Landry said “The Séguin report gives an absolute, clear and easy to understand proof that Quebec, like other provinces, is being suffocated by the Government of Canada.”

Jean Charest, the current leader of the opposition in Quebec, said “There is clearly a fiscal imbalance.”

Mario Dumont, the ADQ leader, said “Now, even before thinking of decentralizing the federation, it is imperative to point out the major fiscal imbalance between Quebec City and Ottawa.”

What are the causes of the fiscal imbalance? The three main causes are: first, the imbalance between expenditures and access to revenue sources; second, the inadequate federal transfers; third, the federal spending power.

It is very simple, the federal government is piling up revenues largely exceeding its expenditures. As an example, in 2000-01, its revenues exceeded its expenditures by $59 billion. That shows that this government is increasingly bulimic, as pointed out by my hon. colleague for Charlesbourg--Jacques-Cartier.

Moreover, as soon as they came to power, the Liberals started to cut unilaterally into the health and social transfers to provinces. In summary, the federal transfers account for a decreasing share of the revenue of the Quebec government from the early 1980s on.

In 2000-01, that share was only 16% of Quebec's revenues, compared to 28% in 1983-84. That is a 12% revenue shortfall.

What are the impacts of the fiscal imbalance? The Bloc Quebecois has identified five major impacts. Essentially, taxpayer dollars stay in Ottawa, while the needs are in Quebec and the other provinces. That jeopardizes the health and education systems. People's needs are not well covered. Services delivery is not as efficient as it should be. The autonomy of Quebec and the other provinces in terms of decision-making and budgeting is compromised.

With its staggering surplus, the federal government is restricting the provinces' flexibility. Quebec, for example, will no longer be able to provide quality health care because its fiscal balance will be very precarious, according to the Séguin commission.

The impact on the regions of Quebec results directly from the other factors I just mentioned, which will have an exponential negative effect on the survival of the regions and their balance.

Moreover, it is clear that the impact on the development of Quebec's regions will be terrible in the years to come.

Representing as it does 25% of the total population of Canada, Quebec should normally be able to benefit from transfer payments in keeping with its demographic weight. This is, alas, far from the reality. At present, there is an under-representation of what are termed “structuring” expenditures, such as the purchase of goods and services, investments and grants to businesses.

Based on our estimates, Quebec receives $3.5 billion less than its demographic weight entitles it to, which allows us to state that this deficit might at least partly explain the historical gap between the unemployment levels in Quebec and in Canada.

If we refer to the Institut de la statistique du Québec, for every $100 million in expenditures by the central government, some 920 direct jobs and 381 indirect jobs are created.

If this $3.5 billion shortfall were done away with, Quebec could hope to see 45,500 jobs created. This amount represents one third of the jobs in Saguenay--Lac-St. Jean. It represents a 1.4% increase in the activity rate for Quebec and close to 1% decrease in the unemployment rate.

Inevitably, the consequences of fiscal imbalance are extremely harmful for the regions of Quebec. In addition to the federal cutbacks in health, education and social services, the $3.5 billion shortfall in structuring expenditures has a very negative impact on the economy of Quebec and the regions.

This is also the case for capital investments in the various regions of Quebec. In light of these figures, it seems obvious that the regions of Quebec are being abandoned by the central government and that they get back but a tiny portion of the taxes they send to the federal capital.

Let us talk about the Saguenay—Lac-Saint-Jean region alone. In 1998, taxpayers in my region sent $508,464,000 to Ottawa in personal income taxes. In terms of capital expenditures, the federal government spent $763,000 in my region in 1999, which is less than one half of 1%, even though we account for 3.9% of Quebec's population.

Since 1993, the Government of Canada has slashed transfers to the provinces. In Quebec, cuts in health transfers alone totalled $1 billion. For my region, this represents a $38 million shortfall since 1993, which is equivalent to the total budget of the Centre hospitalier de Jonquière.

It means fewer nurses, fewer doctors, less equipment and fewer direct services to the public. It has become increasingly difficult to get medical care quickly. Waiting lists for surgery keep getting longer. This is the direct result of what is happening now. People have no choice but to go to the United States to get medical care.

We are not asking the federal government to give us the moon. We are merely asking that it recognize that there is an imbalance, that the needs are in the provinces and that it is taking too much money from these same provinces. We are merely asking that it give back to the provinces what is rightfully theirs and stop denying the fact that a fiscal imbalance does exist. Everybody else agrees on that.

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5 p.m.

Chicoutimi—Le Fjord Québec

Liberal

André Harvey LiberalParliamentary Secretary to the Minister of Transport

Mr. Speaker, it is my pleasure, after my colleague's speech, to request clarifications on certain points.

In health, the premier of Quebec said the problem was not only a money and abudget problem. He said that it was also a problem related to resource management. Obviously he was referring to the thousands of people forced into retirement, which made it difficult to deliver services because of the lack of resources, nurses, doctors and so on. That was the first point recognized by the premier of Quebec.

My colleague from Jonquière often raises the impact of the Canadian government on regions. In her own region, our region, our university, a study was recognized by all economists. Lecturer Sergieh Moussaly proved that the impact of the Canadian government is much greater than the impact of the government of Quebec in remote areas.

He quantified his assertions in this way. There is an essentially positive impact of more than $300 million, dollars impacts are essentially positive, compared to a deficit of approximately $300 million in transfers by the province. These are the economic data. Mr. Séguin has his own data and we have an economist in our region who has proven that the impact of the Canadian governement is largely positive.

I would like the hon. member to comment on this.

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5 p.m.

Bloc

Jocelyne Girard-Bujold Bloc Jonquière, QC

Mr. Speaker, I am always pleased to answer to the hon. member for Chicoutimi--Le Fjord. We both come both from the same region, the most beautiful one: the Saguenay. The new city of Saguenay was created on February 16. I am proud to say this will be the name of the new city.

Even his former colleague, now the opposition leader in the national assembly, has said so. He said that the Séguin commission was right, and he acknowledged the existence of a fiscal imbalance in Canada. Canada was grabbing too much money while providing no direct services to the people. His former colleague and leader of the Quebec Liberal Party confirms what the Séguin commission said and what we, in the Bloc Quebecois, are saying.

As for Mr. Moussaly's report, I have no idea where he got his data. He is the only one in Quebec saying that. However, Mr. Séguin is not the only one saying it and he is a former Liberal minister. I do not think that he has become a sovereignist. He agreed to do a job and he said, “Now, in 2002, we must get the facts straight about what is happening in Canada”. It is not only Quebec that is suffering because of this imbalance. All the other provinces are as well.

Mr. Séguin is not a member of the PQ nor of the BQ. He is someone who carried out a credible study and listened to witnesses. The commission sat down and listened to the people. People testified and said, “Yes, there is a fiscal imbalance.” The federal Liberals are the only ones to deny it. All the provinces say there is such an imbalance.

They are going to have to admit it. The finance minister will have to talk about it at the next finance ministers' meeting. That is all we want.

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5:05 p.m.

Canadian Alliance

Brian Fitzpatrick Canadian Alliance Prince Albert, SK

Mr. Speaker, there have been references made to the view of fiscal federalism of professional economists. I would like to bring forth one study with which I am familiar.

Mr. Mansell, chair of the University of Calgary economics department, has made some fairly extensive studies on fiscal federalism in the broad sense. He published a paper in 1998 that studied the period 1961 to 1998.

There were some interesting findings in that report. Only two provinces were net contributors to federalism under his study. There was Alberta with an average per capita contribution of $2,000 per year and Ontario was second with $244. Every other province was a net taker from the system.

There are some real disparities. Manitoba and Saskatchewan had the same standard of living as New Brunswick and Nova Scotia, but they received considerably less in the way of transfer payments, equalization payments and other benefits from the federal government.

One of the really perverse findings which relates to a comment that was raised by the member is that Alberta actually has a law which prohibits the provincial government from giving direct subsidies to a corporation or government. The federal government takes money out of Alberta and then turns around and gives grants to entities such as Bombardier.

I heard the member make comments that she thought Quebec was being shortchanged in that regard. I have a difficult time understanding her point. If I understand the Bombardier situation correctly, a whole lot of loans have never been repaid. They seem to be loans that nobody ever calls in. They just sit on the books and so on.

In her mathematics about Quebec being shortchanged on subsidies to corporations did she include these loans that never seem to have to be repaid by Bombardier?

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5:05 p.m.

Bloc

Jocelyne Girard-Bujold Bloc Jonquière, QC

Mr. Speaker, I am quite happy that the member of the Canadian Alliance has asked that question. However I believe he has not read the Séguin report. I will send him a copy of the English translation so he can read it. I am sure he will find it very interesting.

He is talking about one thing and we are talking about about another. It is a credible study carried out by credible people. Moreover, the finance ministers of all provinces, as well as other credible people, said there was a fiscal imbalance in Canada.

Therefore I cannot answer his question. I do not know what he is talking about. However I will send him a copy of the Séguin commission report.

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5:05 p.m.

Liberal

Mac Harb Liberal Ottawa Centre, ON

Mr. Speaker, the Bloc members still know only one tune. I do not think they listen to what we have to say. As my colleagues said earlier, federal-provincial relations are balanced in Canada.

I think we can say that the government's financial situation is better than it was before, and it makes us very proud. Our government has done a remarkable job in balancing our public finances. Caution and efficiency have paid off for the government.

Surpluses have been a long time coming. My colleagues from the Bloc have a short memory. We had deficits from 1981 until 1997. All in all, over $506 billion in deficits. In comparison, deficits from 1993 to 2000 totalled $35.8 billion. We have to continue to be careful.

Fortunately, this is something the governing party, the Liberal Party, has realized. My colleagues from the opposition parties and the Bloc in particular have a long way to go. We should not forget that the provinces also have surpluses, as well as a whole series of tax measures. They can collect personal income taxes, corporate taxes as well as sale taxes. They also get revenues from the lotteries, the sale of alcoholic beverages and the development of natural resources.

Transfers to the provinces also go to show how balanced our federation is. For instance, equalization payments help the provinces provide similar services to everyone in Canada. The federal government is assuming its responsibilities. It is providing all Canadians with equal opportunities through transfers and programs. These strategic investments are well targeted, something the public appreciates.

Under the various transfers, the provinces are free to set their own priorities. My colleagues from the Bloc are quoting those conclusions of the conference board that serve their own purposes. I would remind the House that this study shows that Quebec will have a deficit in 2002-03. However, on March 13, Le Soleil reported that the Quebec finance minister keeps saying that there will not be a deficit this year.

I am interested to know what the Bloc Quebecois thinks about this. Do my friends from the Bloc still totally support this study? We believe that a 20 year forecast is a very long period. Most forecasters do not go beyond two years in their studies. Moreover, the conference board assumptions are unrealistic. They take for granted that in the next 20 years there will be no recession, no tax cuts and no new spending. It is unrealistic.

One does not need an degree in economics to know that this is not going to happen. Things change.

The Bloc has joined with the Seguin commission to ask for the abolition of the Canada health and social transfer. Why abolish a program that is working so well? Quebec gets a lot from this program, from a financial as well as a social standpoint. Thanks to this program, the province has more money to invest in health and social programs, based on Quebecers' needs.

For example, in 2002-03, Quebec will get $8.5 billion, and during the next few years, this amount will go up. Following the agreement of September 11, 2000 , there will be a $5 billion increase over five years in the cash transfers through the Canada health and social transfer. Once again, the Quebec government will be able to use that money as it sees fit.

Furthermore, I believe my friends from the Bloc Quebecois should have a long term rather than a short term vision. However, it is true that the way things are going the Bloc might not be here for a long time.

If the provinces kept revenues from the GST, this would be a disadvantage for Quebec. Such a change would result in increasing inequities among the Canadian provinces. The Liberal Party has always wanted to ensure equal opportunities for all Canadians. Moreover, such a transfer would be difficult to apply to provinces other than Quebec.

My colleagues from the sovereignist party can campaign on this issue but I am sure they will not reach their objective. A consensus with the provinces outside Quebec is not possible.

With the Séguin commission and the resulting demands, my colleagues from the Bloc and the Parti Quebecois believe they have found a way to embarrass the federal government. They say they want to improve federal-provincial relations and, consequently, the federation. Come on. The Bloc improve the federation? No one is fooled. The prime objective of my colleagues of the Bloc and the separatists of the Parti Quebecois is to make Quebec a sovereign state. All they want is to dismantle Canada. This is their objective.

A new fiscal arrangement would help to increase the autonomy of the Quebec government and to put aside the Government of Canada. For my colleagues, the sovereignists, greater autonomy boils down to a greater independence and, consequently, to Quebec's sovereignty.

They should stop using roundabout means to reach their objective. They should tell the truth. They should be honest with Quebecers. They would soon realize that the members of the Bloc are not speaking on Quebec's behalf, but on their own.

I always heard that the Bloc was a leftist party, but what a surprise it is to hear its members talking about balance. They are not taking the economic element into consideration.

I will say this in another way. The federal government is constantly trying to maintain the balance in public finances and in the common good. The prosperity and happiness of a society are not measured only by the thickness of one's wallet. We have understood this well.

This is why we have developed various social initiatives such as the strategy against tobacco, the antiterrorist legislation, the anti-gang legislation, the new immigration legislation and the employment insurance reform.

I will stop here because I know an hour would not be enough for me to list everything. I believe that it must be understood that our government has an overall and long term vision, which makes the difference. This is certainly why the Liberals are in office and Canadians continue to put their faith in us. Can the Bloc Quebecois make the same claim? I do not think so.

My colleague spoke earlier about transfers and economic development. We have seen what the provinces and municipalities across the country can do in these areas. Finally, when it comes to transfers between the federal government and the provinces, the majority of these transfers, as I mentioned earlier, are in the fields of health and social programs.

Let us look at other things the federal government has accomplished thanks to the different ministers. Let us take the example of the Minister for International Trade. Thanks to his quite practical policies that show such extraordinary vision, we have managed to increase revenue levels in Canada. Before, international trade revenues accounted for around 25% of our GDP, now international trade revenues make up more than 45% of Canada's GDP.

These federal government policies yield direct benefits to the provinces, and also to Canadians, in the end, whether they be from Quebec or anywhere else in Canada.

Another issue. Let us take the example of the Prime Minister and the Minister of Finance's policy in the field of taxation. We have seen how federal prudence has led to extraordinary benefits, particularly when it comes to interest and inflation rates, which are very low now. Both of these federal fiscal policies benefit the provinces directly, and Canadians too, including Quebecers.

If we take these two examples alone, the government's international trade policy, which brings in lots of revenues to Canada, and the government's domestic fiscal policy, these two issues provide direct benefits to the provinces and to Canadians.

As regards confederation and the different areas, the provinces, including municipalities across Canada, have all of the means necessary to try to find opportunities for citizens in their province or municipality. It is not always entirely up to the federal government. When things go well, everyone is happy to take the federal government's money, but when there are problems, then they begin to blame the federal government.

The provincial, municipal and community levels all have their responsibilities. Finally, we should all take our responsibilities seriously. The provinces should take their responsibilities seriously too, and set up fiscal and economic policies that meet the needs of their citizens.

My colleague from the Canadian Alliance said that Alberta paid out much more money than it should. So they will be very glad to discuss federal transfer payments to the provinces. Mr. Harris, in Ontario, will probably be quite glad and will probably agree with my colleague from the Bloc Quebecois that we should discuss federal transfer payments.

That is not the way this federation was built. It is based on more solid ground than just transfer payments between the federal government and the provinces. This federation is based on equality for all citizens, on justice and on the feeling that we are at home throughout this country.

Examples abound. It is just never said that something is perfect. We say we keep striving for the ideal system. Canada is an ideal country. There is a good reason for the fact that, five years in a row, the UN said that Canada was the best country to live in.

I wonder why my colleagues from the Bloc Quebecois have never realized how beautiful this country is. They have never come to their senses to tell us “We made a mistake”. We will forgive you. That is fine. Everybody makes mistakes. Nobody is perfect.

We are saying that we will do our utmost to build a Canada that is strong, that is fair and that provides equal opportunities for all. It is possible to be Quebecers, to believe in Quebec and in Canada. Let our colleagues rise and say “We love Canada, we want to build a strong country, a Canada that provides equal opportunities, a Canada that takes care of its people”. I guarantee that, on this side of the House, we will applaud. But saying that discussions will start all over between Canada and the provinces to resume an old battle will not meet the needs of Quebecers.

Let us go back to the nineties. Mr. Speaker, you were a member of this House then, as you are today. We remember the issue of federal transfers to the provinces. Had the cuts imposed by the Conservatives been maintained, next year and the year after that, there would have been no money at all transferred from the federal government to the provinces for health and education.

We went through difficult times, no doubt about that. Times were hard. We had a $42 billion deficit and a debt of more than $500 billion. Something had to be done.

As soon as we succeeded in having a surplus, in balancing the government's budget, we started investing in education and health. What is more, for the first time in modern Canadian history, the provinces were given something they did not have until then: certainty. When a transfer is made to the provinces, they can now plan for five years without any fear of federal government cuts. This is something that did not exist before. This has been accomplished through the leadership of this government and the ministers responsible for Human Resources Development, and others.

My colleagues should rise and applaud the work that has been done by the federal government, the leadership it has shown over the past nine years. They should say that this federation is one of the best in the world. I am certain that my colleagues on this side of the House will applaud them. This is the reason for the difficulty with this motion.

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5:25 p.m.

NDP

Libby Davies NDP Vancouver East, BC

Mr. Speaker, I listened with great interest to the hon. member for Ottawa Centre. He has strayed far from the motion. It is a finely worded motion which puts forward a critical issue: Why are our social, educational and health care programs in jeopardy?

The hon. member has failed to acknowledge in any way the critical situation facing Canada today. He can crow all he wants about the great Liberal government but it has lost the moral high ground in the debate. It has lost its vision about what is taking place.

Let us look at the evidence of the Romanow commission. Why do we have a royal commission on health care? It is because our health care system is in crisis due in large part to a lack of federal funding.

Why do we have a 30 year low in federal financing for educational programs? Why do we have the widest gap between rich and poor in Canada that we have seen for 30 years? It is because of these fiscal arrangements. I am disappointed the hon. member has not acknowledged this in any way.

Would the hon. member look at the evidence and discuss the situation as it relates to health care? A royal commission is studying the question. Surely he must acknowledge that one of the reasons we are in crisis is the federal government's massive devolution and retreat from public funding of health care. We have gone down from 50 cent dollars to 14 cent dollars.

The hon. member should take an honest hard look at what is going on in many communities. People are hurting as a result of the imbalance.

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5:30 p.m.

Liberal

Mac Harb Liberal Ottawa Centre, ON

Mr. Speaker, my colleagues in the Bloc applauded my colleague in the NDP. That is because they have two completely different agendas.

My colleague in the NDP posed an important question. However I would remind her of when the NDP government was in power in Ontario. She knows full well it is easier said than done. Members in opposition can call on the government to do all kinds of things, but when it comes to governing we must take our responsibilities seriously.

We saw what happened when the NDP was in power in Ontario. The government moved from a positive fiscal situation to a huge deficit in excess of $60 billion a year. The province of Ontario was literally wrecked. I am not surprised that as a result Ontario is seeing the kind of ravaging that is taking place under the Tory government of Mike Harris. In part he claims to be repairing the damage done by the NDP. Members can see the rationale. If we go to the NDP at the extreme left of the political spectrum we could wreck the government. If we go to the extreme right of the political spectrum we could ravage the province.

Another case in point where the NDP governed, supposedly with heart, is the province of British Columbia. The province was one of the richest in Canada. Sadly, as a result of its NDP government British Columbia is one of the have not provinces. I say this in all fairness and not to pick on my colleague. Her question is a legitimate one. It is imperative to recognize we have gone through a difficult time. It is also important to recognize the difficult time is behind us. We must now look ahead.

In the nineties when we came to power we acknowledged we had to make cuts. We started at home. With the exception of the Department of Indian Affairs and Northern Development every department of the Government of Canada has seen cuts. We had to clean house. We had to prepare for the next century. Otherwise we would not need this debate. We would not have money to pay for even the basic and necessary expenses of our citizens.

We had to go through a difficult time so we could have a bit of a surplus. Now we are in a position where we can start investing in the future of Canadians. During the difficult times when we had a deficit none of my colleagues on the opposition side were asking for anything more than for the government to continue to work to establish a fiscal balance. We have done that because Canadians told us they wanted a fiscal balance. They wanted a healthy economic situation and we have done that.

Now we are saying we must work with Canadians to improve on the services we are providing. Mr. Romanow's report is being made public. We asked Canadians to give their input because we are Liberals. Being a Liberal means always having an open mind to ideas and looking ahead to the future. We do not close the doors and say we know it all. We never claimed to know it all. If there are recommendations that will improve the health care system and the services we provide to Canadians we will surely follow through with them.

My colleague knows full well the government is committed to social justice. She knows full well the government has a heart and responds to the needs of Canadians. We have turned a corner. We are in a situation where we can use some of the dividend for which Canadians have worked so hard and invest it in the future of Canadians. That is why we are securing to the provincial governments the transfer payments and tax points we have already committed to them. We will continue to work with the provincial governments and territories to ensure the federation truly works.

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5:35 p.m.

Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Mr. Speaker, last week when it went to -37

o

in my riding I promised some of my friends if they voted for me I would solve the mosquito problem. Lo and behold, we saw no mosquitoes last week. That is the same as the hon. member claiming the government did such wonderful fiscal work in balancing the budget, posting surpluses and making a mediocre paydown of the debt. It is exactly the same as the Liberals claiming they have done a great job. They had no more influence on the deficit than I did in solving the mosquito problem in Alberta. The economy was flying. We would have done a lot better if the tax and spend Liberals had not been in power.

The Liberals took $30 billion in EI surpluses. They took $30 billion out of the pension funds of civil servants. Some $60 billion is missing. Where did it go?

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5:35 p.m.

Liberal

Mac Harb Liberal Ottawa Centre, ON

Mr. Speaker, before I answer, my distinguished colleague from Quebec brought an interesting point to mind. Perhaps my colleagues in the Bloc who put the motion before us today want to pass a message to their Quebec colleagues on this side of the House that it is time to go to the people of Quebec and ask for another mandate to see whether the people of Quebec agree with what my hon. colleague is proposing to the House.

My hon. colleague asked a question about missing money. There is a myth in the public domain about the EI fund. Allegedly there is a separate box sitting somewhere into which the money goes and into which someone could come and tap the account.

The reality is that there is no such account per se because every dollar that comes to the government goes into the general revenue fund. On an annual basis when the government does its budgeting plans it looks at what it has received in terms of income and what it has in terms of expenses.

The myth in the public domain that we are sitting on some huge surplus in the EI fund is frankly totally inappropriate. It is my hope that somehow we come to a non-partisan understanding that there is no such thing. There is the general revenue fund, period. There is no money missing anywhere.

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5:35 p.m.

Bloc

Antoine Dubé Bloc Lévis-Et-Chutes-De-La-Chaudière, QC

Mr. Speaker, our Liberal colleague wants us to applaud. Most of all I think he wants members of his party to applaud because we are all aware of his hopes for the presidency of the Liberal Party of Canada.

However, with all due respect, I did understand that he was telling Quebec to tax lotteries and alcohol even more if it wants to replenish its treasury; he did not mention tobacco, but that goes without saying. The bottom line is that the member is suggesting that Quebecers pay for their health care by making themselves sicker. That is the member's theory. As a national vision it is not very impressive.

He said that by our motion—he attacked Bloc members—we want to talk about sovereignty. What about his very partisan attack on the NDP member who basically asked the same question as we did?

In closing, I would like to ask the member what he thinks about the federal intrusion into provincial jurisdictions, and especially about the last thing the Minister of Finance dreamed up, financing the municipal infrastructure program through a foundation in order to get around provincial jurisdiction. I could also talk about the Canada Millennium Scholarship Foundation but there is little time left. I will just ask him to answer the question.

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5:35 p.m.

Liberal

Mac Harb Liberal Ottawa Centre, ON

Mr. Speaker, my colleague mentioned several things. I do not know if I will have enough time to answer, since I only have one minute left.

I will mainly focus on the last point, that is, infrastructure. I am convinced that the member will agree that federal investments in infrastructure are outstanding.

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5:35 p.m.

An hon. member

Talk about the provinces.

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5:35 p.m.

Liberal

Mac Harb Liberal Ottawa Centre, ON

Whether we are talking about the provinces or about the citizens in all the provinces, whether it is municipalities or MPs, like my colleagues, at the end of the day, we all have opinions and visions; we all have ideas; we all want different things in different places. It is important, therefore, to have infrastructure programs, and this is why the government has implemented various infrastructure initiatives.

I hope that, as soon as we have the details, my colleague will co-operate with the minister responsible and the government to ensure visible results in his area and to create jobs.

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5:40 p.m.

Bloc

Robert Lanctôt Bloc Châteauguay, QC

Mr. Speaker, I will be sharing my time with the member for Terrebonne--Blainville.

In rereading the motion, I think that we will be able to understand clearly the impact of the statement and we will be able to conclude that it is not without foundation. On the contrary, it is very serious, worrisome and urgent.

The motion reads as follows:

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.

We acknowledge that this imbalance is real and that it will not go away of its own accord. On the contrary, it will keep on growing. In fact, what is real is that there is a consensus as to the existence of this fiscal imbalance.

The polls clearly show that 64% of Canadians—these are not just sovereignists—and 74% of Quebecers acknowledge that there is a blatant fiscal inequality between the federal government, Quebec and the provinces, and all are critical of it.

We can obviously conclude that those surveyed included ardent Liberals. So I have trouble understanding why the Liberal MPs duly elected to represent them are still refusing to do so. I wonder about the real intentions of parliamentarians who refuse to acknowledge such a clear consensus and denounce the unacceptable actions of their government.

The opinion of Quebecers and Canadians is clear: the money in Ottawa's coffers should be redirected towards Quebec and the provinces in order to ensure the continuity of social programs. We will be able to restore balance between the amounts of money lying idle in Ottawa and the health and education needs of Quebec and the provinces. This is what 72% of Canadians and 74% of Quebecers are calling for and the federal government is doing nothing. In fact, it shows no intention of doing this, which is a major concern. What are the elected representatives of all these people doing? What sort of representation are they providing their constituents?

How can there be such a great divide between the federal and provincial Liberals. On the one hand, all political parties in Quebec, including the Liberal party, are critical of the fiscal imbalance created by the mismanagement of the federal Liberal government and, on the other, this same party completely refuses to acknowledge it. I cannot understand how there can be such a difference in opinion between the federal and the Quebec wings of the Liberal Party.

There is also unanimity among the premiers and the finance ministers of Quebec and the other provinces. They have spoken repeatedly about the crisis, but Ottawa has been slow to respond. Again, I cannot understand how so many premiers, finance ministers and citizens can be wrong, while only the federal government is right.

It might be appropriate to review the origins of the fiscal imbalance so that we can understand its scope and direction. First, we have to realize there is a marked difference between spending and the accessibility of funding and sources of revenue, for each level of government. Second, transfer payments to Quebec and the provinces are clearly insufficient. Finally, the intrusion into Quebec and the provinces' constitutional jurisdictions through the federal government's spending power is another source of this fiscal imbalance, which is penalizing us.

There are also other facts that magnify the imbalance between Ottawa and Quebec and the provinces. It has to be pointed out that, on the one hand, federal government revenues are steadily increasing while its expenditures are stable and its debt service is diminishing, and on the other hand, Quebec and the provinces' expenditures are steadily increasing, as well as their debt service.

That is how the federal government managed to find significant budget flexibility. Thoee are the causes of the fiscal imbalance.

Now, it would be appropriate to look at what the impacts will be. Because of the scope of the fiscal imbalance, the wheels of the Quebec government are affected in terms of the delivery of services in health and education.

The federal Liberal government is not doing anything to correct this situation, which as been persisting and which is deteriorating.

Based on this, it is obvious that Quebec must have real budget independence. To totally reject this independence means is tantamount to not giving due consideration to Quebecers in decisions that concern them. This is unacceptable. To act in this fashion results in the inappropriate development of public policies.

In spite of the jurisdictions that they enjoy under the Constitution, Quebec and the other provinces are often forced to act in compliance with the requirements of the federal government, even in their own jurisdictions. Why? Because Ottawa pulls the purse strings.

As I just pointed out, there are situations where federal requirements do not reflect Quebec's priorities. Since the Constitution gives exclusive jurisdictions to Quebec and the provinces, it is urgent that related resources be also given to the entities that are responsible for the fair distribution of these resources, namely Quebec and the provinces. Otherwise, it becomes impossible to do justice to the public because of a lack of resources.

So, because of the federal government's miserliness, the public is penalized regarding priority services such as health, education and income security. What is the federal government's response? Is the Liberal federal government receptive to people's needs? Is the Liberal federal government even listening to the public, to its voters? I doubt it. This government completely rejects the public's wishes, as shown in the polls.

The commission that reviewed Quebec's fiscal imbalance tabled its report on March 7, the Séguin report. As members know, Mr. Séguin is definitely not a sovereignist. He worked for federalism and he is able to look at the Constitution in a consistent manner. It is not being respected. There is a fiscal imbalance. The report is supported by figures. I am asking all members of this House to read this report, even if they come from western, central or eastern Canada. Read the report. Each member of parliament, in his or her province, has the same problem.

This report addresses four sectors of recommendations. First it recommends restoration of fiscal balance. This is to be done by increasing the funds available to Quebec and the provinces by at least $8 billion. Note that this is an annual figure. For Quebec, this represents $2 billion in the medium term and $3 billion in the long term.

Second, equalization payments must be improved, taking into account the fiscal capacity of Quebec and the provinces, rather than that of five provinces as is the case at present. This would, among other things, require elimination of the existing ceiling and floor provisions, as well as being reality based.

Third, it would be essential to restrict the federal government's spending power. To that end, Quebec would be justified to exercise its unconditional right to opt out with full financial compensation in respect of any federal program which, by its power of expenditure, encroaches on areas of Quebec and provincial jurisdiction.

Finally, the Séguin report recommends the prevention of any potential future imbalance. It is recommended that there be a transparent process as far as the relationship between Quebec and Ottawa is concerned.

We have the facts before us and the proof is on the table. How can the federal government deny them? Fiscal imbalance exists today and will only continue to grow if nothing is done, so something must be done right now. Health and education cannot wait since our young people are the ones who will bear the brunt of this.

The position of the national assembly is clear, as is that of the provincial first ministers. It is now up to the federal government. It is high time for the federal Liberal MPs to act like true representatives of the people of Quebec and to finally respect the parliamentary process.

It must be kept in mind that we were elected to represent our fellow citizens.

We are answerable to them. That is why the Bloc Quebecois will continue to speak out against the unacceptable actions of the Liberal federal government, this government which is mocking the people of Quebec. The Bloc Quebecois will then show that it is the one and only party providing responsible representation of the people of Quebec in Ottawa.

SupplyGovernment Orders

5:50 p.m.

Liberal

Clifford Lincoln Liberal Lac-Saint-Louis, QC

Mr. Speaker, I would like to put a question to my colleague. I know the Quebec Liberal Party decided not to join the Quebec government coalition because, even though it agrees with the issue in principle, it thinks this study will only be about sovereignty and that the Quebec government will only use it as another tool to promote its main objective which is sovereignty for Quebec.

Maybe my colleague from the Bloc could tell us once and for all why, since it has been in place for four years now, the government does not call a general election in Quebec and give all its citizens, like my colleague and myself, the opportunity to express their opinion on this issue and choose the government they want for Quebec.

That could be the solution. Why is the Parti Quebecois so unwilling to call a general election?

SupplyGovernment Orders

5:50 p.m.

Bloc

Robert Lanctôt Bloc Châteauguay, QC

Mr. Speaker, it is really strange to hear a former Quebec MNA ask when the Quebec premier will decide to call an election.

First, it is up to the premier of Quebec to decide when he is going to call an election. This will surely happen during the coming year.

Here is my answer to the hon. member's first question: it is the provincial Liberal leader, Jean Charest, who refused to be party to the coalition. He thus showed an incredible lack of vision and inability for someone who wants to realize the best interests of Quebec. Because of his partisanship, his militancy, he refused to make use of such an important commission that submitted real data. He is making a terrible mistake, and this goes to prove how unsuited he is to be the premier of Quebec.

It is time for people to realize that this person—you gave me the opportunity to say so—does have duties and should read the report. He himself recognized there was a fiscal imbalance but today he is refusing to make use of an essential instrument like the Séguin Commission. So I fail to see how this man could ever lead Quebec.

SupplyGovernment Orders

5:50 p.m.

Beauharnois—Salaberry Québec

Liberal

Serge Marcil LiberalParliamentary Secretary to the Minister of Industry

Mr. Speaker, the imbalance that exists in Quebec is not fiscal, but political. In 1998, the Liberal Party of Quebec got more votes, but the Parti Quebecois got more seats. Therefore, there is a deficit, a political imbalance.

The fact is that the Government of Canada, the federal government, has the responsibility of wealth distribution, and to do that, it has a tool called equalization. It is through equalization that the Government of Canada can intervene in some provinces in order to support the delivery of various services to the people, such as education, health care, and so on.

Before 1995, the Bloc Quebecois criticized the Liberal government then in power for its successive deficits. Today, it criticizes the government for running surpluses. Yet, I am at a loss to comprehend how one can say that there is a fiscal deficit or imbalance between the provinces, between Quebec and Ottawa when the Government of Canada has a debt of over $500 billion. It is fairly clear to me that normally surpluses should be used to pay down the debt.

Moreover, the Government of Canada must pay off a debt that is owed by all Canadians: Quebecers, Ontarians, Manitobans, etc. We cannot talk about a fiscal imbalance when the Government of Canada has to pay off a debt of more than $500 billion. Canada's debt is, on a per capita basis, higher that Quebec's.

SupplyGovernment Orders

5:55 p.m.

Bloc

Robert Lanctôt Bloc Châteauguay, QC

Mr. Speaker, actually, my government colleague did not ask a question, he just made a comment. I would have preferred a question from him. I will try to analyze his comment to find out if there was anything he did not understand.

Speaking about equalization, one should first consider the ability to generate revenues, as well as the health and education needs. The equalization system needs to be reviewed. That is what is mentioned in the Seguin report. The member should read it.

He says that there is no fiscal imbalance, so I would ask him—but I cannot because I have to answer, and I am having a problem due to the lack of questions—I will simply tell him that in the 1970s the federal government was sharing health costs on a 50:50 basis. The provinces were paying half of the costs, and so did the central government. Today the latter pays a meagre 14%.

While on the subject of tax points, the parliamentary secretary referred to 30% and 32% only. If I asked my kid, a first grader, whether there is an imbalance, given the fact that I used to pay 50% while I now pay only 30%, he could easily answer. The government reduced the transfer payments beginning in 1993. There is no denying it.

Transfer the money to the provinces, transfer all the tax points--

SupplyGovernment Orders

5:55 p.m.

The Deputy Speaker

I am sorry to interrupt you, but the hon. member for St. Albert is raising a point of order.

Points of OrderGovernment Orders

March 18th, 2002 / 5:55 p.m.

Canadian Alliance

John Williams Canadian Alliance St. Albert, AB

Mr. Speaker, I rise on a point of order with regard to several items contained in the supplementary estimates (B) for 2001-02. I am rising at this time because in Marleau and Montpetit, at pages 734 and 735, it states:

—Members raise questions about the procedural acceptability of Estimates as early as possible so that the Chair has time to give “intelligent” consideration to these questions.

Speaker Jerome suggested that this take place on the next to last allotted day of a supply period, which is today.

On page 125 of the supplementary estimates (B) for 2001-02 there are a number of votes listed under the Department of Public Works and Government Services. I am referring specifically to votes 6b, 7b, 8b and 9b, which are all one dollar items.

On page 733 of Marleau and Montpetit there is a significant amount of information on one dollar items. It states:

Dollar items may be used to transfer funds from one program to another; to write-off debts; to adjust loan guarantees; to authorize grants; or to amend previous appropriation acts.

Marleau and Montpetit continues to state on the same page:

The inclusion of one dollar items in the Estimates also gave rise to the issue of using Estimates to “legislate” (i.e., Estimates going beyond simply appropriating funds and attempting to obtain new legislative authority which would otherwise require separate enabling legislation through the regular legislative process, outside the Supply procedure).

Continuing on page 735, Marleau and Montpetit states:

The Chair has maintained that Estimates with a direct and specific legislative intent...should come to the House by way of an amending bill.

I would like to quote Speaker Jerome who, on March 22, 1977, ruled:

—a supply item in my opinion ought not, therefore, to be used to obtain authority which is the proper subject of legislation.

Indeed, Speaker Jerome ruled an item that sought to extend and exceed a sum of money to be paid out according to the provisions of a statute was out of order.

Let us now examine the items I mentioned earlier. I will first deal with Department of Public Works and Government Services vote 6b of the Supplementary Estimates currently before the House.

Vote 6b for the optional services revolving fund in the amount of $1 states:

—in accordance with section 12 of the Revolving Fund Act R.S.C. 1985, c. R-8, to amend subsection 5.5(3) of the Act by reducing from $75,000,000 to $35,000,000, effective March 31, 2002, the amount by which the aggregate of expenditures made for the purpose of the fund may exceed the revenues.

Let me first quote subsection 5.5(3) of the Revolving Funds Act:

The aggregate of expenditures made under subsection (1) shall not at any time exceed by more than two hundred million dollars the revenues received in respect of the purposes mentioned in that subsection.

I believe I have the most recent copy of the Revolving Funds Act taken from the consolidated statutes and regulations on the Department of Justice's website, and according to the website, last updated on August 21, 2001.

Mr. Speaker, you will note the discrepancy of amending the supplementary estimates (B) from $75 million down to $35 million effective March 31, 2002 when it appears that the statute currently reads $200 million. I fail to see how one can amend a number that does not exist in the statute. Therefore, for that reason, vote 6b should be struck from the supplementary estimates.

Let me also quote section 12 of the Revolving Funds Act. It states:

The provisions of this Act may be amended or repealed by an appropriation act.

I repeat again from Marleau and Montpetit, which states that Speaker Jerome ruled an item that sought to extend and exceed a sum of money to be paid out according to the provisions of a statute was out of order.

There is a long parliamentary tradition which states that supplementary estimates cannot be used to amend an appropriations act. Yet section 12 of the Revolving Funds Act states that it may be amended by using an appropriation act. Clearly, we have a conundrum where the House of Commons reserves to itself only approving money through the appropriations act yet legislation says that a bill can be amended through the appropriations act.

Therefore, Mr. Speaker, I ask that you rule on this issue with sufficient rationale provided because no doubt the ruling I am requesting will be used as a precedent from this point forward.

It is clear that vote 6b of the Department of Public Works and Government Services seeks to amend already existing legislation by way of a supply bill. The government should seek this legislative authority by amending the legislation already in place but not with a supply bill, as indicated by your predecessors in the chair.

In Speaker Jerome's ruling of March 22, 1977, he stated that it was his view that:

--the government receives from Parliament the authority to act through the passage of legislation and receives the money to finance such authorized action through the passage by parliament of an appropriations act.

Today, we have an instance where a supply bill is being used to amend legislation. No one is disputing that point but the question is, is it appropriate for the legislation to contain a clause which allows it to be amended by an appropriations act?

The same rationale applies to votes 7b, 8b and 9b of the Department of Public Works and Government Services.

Mr. Speaker, this might seem to be a trivial matter to the government across the way but, as you know, I maintain an active interest in assuring that the supply process is properly carried out. Indeed, your ruling of November 22, 2001 on the matter of Canada Foundation for Sustainable Development Technology was a clarion call that indicated that the government cannot take parliament for granted and break the rules when it sees fit.

Therefore, Mr. Speaker, I would ask that you give serious deliberation to the conflict between parliamentary procedure, parliamentary tradition and parliamentary supremacy on one hand and a piece of legislation on the other hand.

I do hope, Mr. Speaker, that you will uphold the supremacy of parliament and rule Department of Public Works and Government Services votes 6b, 7b , 8b and 9b of the supplementary estimates (B) for 2001-02 out of order and send a message to the government to get its house in order so it does not treat this House as an afterthought.

Points of OrderGovernment Orders

6:05 p.m.

The Deputy Speaker

I thank the hon. member for St. Albert for his intervention. The Chair will give this matter the serious deliberation that he suggested and even, hopefully, meet the test of that intelligent consideration he also referred to in his earlier remarks.

I will take the matter under advisement and will return to the House if necessary.