Mr. Speaker, it is my pleasure to take part in the debate. First, I wish to congratulate my collegue, the member for Drummond and one of our finance critics, for her excellent speech on the fiscal imbalance and, among other things, on the Séguin commission and its report.
I am particularly glad to speak to all Quebecers who are listening today and, at the same time, to give information to Canadians. In a previous life, I was president of the Union des municipalités du Québec.Today, I want all Quebecers, all mayors, all councillors, all school trustees from Quebec to remember.
Canada, the federation we know, operates in a way that makes it hard for its citizens to find their way around the complex issue of taxation. The federal government collects its own taxes: the personal and corporate income taxes, the GST and the excise tax on gas; the province does the same thing and collects personal income taxes, corporate taxes, QST and excise tax on gas; the municipalities, as we all know, collect the property tax from the landowners. People also see their rent go up when taxes are increased. The school boards also collect the school taxes.
In this morass of taxes, it is hard for people to find their way about and understand the impact that it has. There is one thing I want to tell the House today: remember 1994. My colleagues explained it clearly, 1994 was the beginning of federal cuts in transfers to the provinces. This is clear. No one in this House can question that health and social transfers fell from 18%, or 18¢ per dollar spent, to 14% between 1994 and 2002.
This is a reality, and all those who had to administer budgets in the province of Quebec had to deal with the aftereffects. We cannot forget that school boards and municipalities are created by the Government of Quebec. They are the ones that must provide services to Quebecers.
All too often, we forget that the water that flows from our tap, residential garbage, wastewater, sidewalk and street maintenance, public transit, all of these responsibilities come under municipal governments. These powers were delegated to the municipalities. For example, when it comes to public safety, some municipalities have their own police forces, others use the Sûreté du Québec. These powers are delegated by the province to municipalities and school boards.
In 1994, mayors and city counsellors had to deal with the infamous Ryan reform, which resulted in a $200 million fiscal burden being transferred annually to the municipalities. They had to live with that and either cut services or raise taxes.
When we try to find our way through the complexities of the taxation system in Canada, we realize that the transfers from the province of Quebec to the municipalities were tied directly to cuts in federal transfer payments to the provinces for social programs, health care and education. To try to make up for the loss, the provinces had to rely on their creatures, the municipalities and school boards.
I pleased to be able to explain that today, and demonstrate to my former colleagues who are still mayors or city councillors that it is all too easy today for municipalities to negotiate with the federal government agreements on infrastructure. The federal government is trying to make up for its errors by bypassing the provinces.
It has decided to negotiate programs directly with the municipalities. Before this year, these tripartite programs were negotiated with the provinces. But from now on, with the infrastructure fund, the federal government will deal directly with the municipalities.
That is the reality. Once again, it is trying to make people forget about the fiscal quagmire in the Canadian federation. The federal government does not give back to each province the fair share it deserves. That fair share was demanded by all premiers and provincial finance ministers.
At recent meetings, the premiers and the provincial finance ministers unanimously called on the federal government to increase its contribution to health care, among other things, to the 1994 level, that is from 14% to 18%, or from 14¢ to 18¢.
This is an unanimous request made by the premiers and the finance ministers, despite the fact that an agreement was signed in 2000 by the provincial premiers. Of course, this solution is the lesser of two evils. Instead to getting nothing, they sign an agreement. An agreement was signed, but immediately afterwards, there was a meeting of the premiers and the finance ministers, where they asked that the federal government review its contribution through provincial transfers. This is the harsh reality of the Canadian federal system. This is what councillors, mayors and school commissioners must understand when the federal government does not transfer its fair share of health related costs.
Earlier, the Parliamentary Secretary to the Minister of Finance gave us the following answer when we asked him what he believed the federal contribution was. Let us remind the House that, in 1977, there was a federal-provincial agreement and tax points were transferred, that is, the federal government did not get into a specific tax field to allow the provinces to get into it. He was asked what the federal contribution in health care was in 2002. He replied that it was between 30% and 33%, or 30¢ and 33¢. That is what he said. This is the reality.
We are at 14¢, as the provincial premiers said. Of course, the federal government is getting into another field of taxation that it had agreed not to get into. This is virtual money. When you do not get into a field of taxation, you leave it to someone else. The fact still remains that there is fiscal imbalance. When the federal government says, and the parliamentary secretary tells us that he himself believes that the contribution is between 30¢ and 33¢, this is a hard reality. There is still 17¢ missing to achieve parity and for the federal government to contribute half of the expenses in health, education and social transfers.
In the meantime, if it does not happen, if this transfer does not happen, the pressure from the provinces will come to bear on municipalities and school boards. The federal government will then tend to try to bypass the provinces and try to deal directly with mayors and town councillors to score political points. This is why I am calling on my former colleagues the mayors and town councillors.
Do not fall for it. Our people, our constituents, Quebecers will not have increased health services if the federal government works out agreements with the cities to solve certain infrastructure problems or issues. This is not the way to go. The federal government must pay its fair share. This is a fact.
If ever it does pay its fair share, the astronomical $17 billion surplus in 2000-01 will dwindle to over nine billion in 2001-02. In spite of the repeated demands by the Bloc Quebecois, the Minister of Finance will not make an announcement. He wants to wait and see. We know it will be over nine billion dollars.
In the meantime, the federal government is accumulating surpluses and the parliamentary secretary even dared tell the provinces “You just have to raise your taxes. We are not responsible if you are unable to pay for health care costs”. This is the harsh reality.
We live in a federal system where the federal government decides on its own how much it will give the provinces. It unilaterally decides to transfer money. It does it when it sees fit, but mostly when it can score political points. Right now, it will not play politics trying to help the provinces deal with the health care issue. It is too expensive. It is trying to score political points by dealing directly with municipalities, those with big infrastructure programs or just by increasing—it is essentially what the minister of Finance said in his last budget speech—doubling health research.
They are doubling health research but they will not double their funding of health care costs. They will do more research but they will not invest in order for people to benefit from the results of this research. What is costly is not so much to do research but to pass on the results of the research to individual Quebecers to improve their health. The federal system does not allow that. As it stands today, the Liberal government is not thinking about Quebecers. It is thinking about scoring political points.