Debates of March 18th, 2002

Supply

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

Mr. Speaker, I will go back to what I said during my speech. It has to be remembered that the federal government has shown that health care is a priority. It has shown it by the increases that were made in September 2001. It was a time when we directed specific funds, especially funds for technology that were required and for additional frontline nurses and doctors and also to ensure that the needs of the provinces were met.

Let us look at those figures for 2001. Lots of money has been allocated and will continue to be as the needs require and as the surpluses continue to increase.

[Scott Reid, Canadian Alliance, Lanark—Carleton, ON]

Mr. Speaker, I will be dividing my time with the member for Calgary Southeast.

In my presentation I will talk first about some directing principles of the Canadian Alliance policy in this area. Second, I will talk about health care and how the motion applies to health care. Third, I will talk about the spending power.

Whatever motivated the government in the past, it is clear that the complex fiscal agreements signed between the federal government and the provinces over the years cannot be abruptly set aside without causing some serious problems.

We, in the Canadian Alliance, believe that the governments should first and foremost try to reach an agreement on the appropriate relations to establish. Then, the current agreements would have to be reviewed to see how different they are from the goals set. Finally, a step-by-step problem solving plan would have to be developed. It will not be easy, but it is in the interest of all governments to be able to rely on rules-based long-term stable planning.

We recommend that the federal and provincial governments agree on the following five issues before embarking on a reform of their financial relations.

First, there is only one taxpayer, and Canadians do not want to pay for any overlap and duplication; second, the federal government should respect the provincial areas of jurisdiction as set in the constitution; third, wherever they live, Canadians are entitled to reasonably similar services; fourth, the federal government's involvement in services provided in areas for which it provides financial support should be proportional to its financial contribution; and fifth, rules regarding federal contribution to the provinces should promote provincial autonomy.

I will turn now to the second part of my presentation regarding health care.

We in the Canadian Alliance believe that normally the provinces, as the level of government closest to the people being served, should have the right to determine day to day administrative policies in their area of responsibility, including health care.

Moreover, clear respect by Ottawa for provincial jurisdiction would promote efficiency since remote federal bureaucracy will never have the same knowledge as will provincial governments of local conditions and local priorities.

We believe that the federal and provincial governments should jointly develop national standards in health. One way would be to consider a national standard when it is supported by a majority of provinces representing a majority of the Canadian population. When the standards are established there must be an impartial arbiter to decide whether the standards have been respected.

The current situation where the federal government, under the Canada Health Act, is the judge, the jury, the prosecuting attorney, the executioner and the complaining party with regard to alleged violations of the Canada Health Act, is clearly arbitrary and unacceptable.

What Ottawa can do better than the provinces is provide the research and the expertise necessary to determine how our national standards compare with international trends. Another role for the federal government is to assist in rationalizing the delivery of services across provincial borders. We therefore support the transfer of tax points from the federal government to the provinces. This would ensure stable, long term funding and would grow as provincial economies grow thereby ensuring that provinces enjoy the increase in funds over time that is necessary as their populations age to ensure satisfactory health care.

I should say that the four provinces for which the transfer of tax points is insufficient, it would be necessary to provide additional block funds for those supplementary amounts.

I turn now to the spending power.

Although financial agreements work well in practice—after a few major battles—few issues undermine more federal-provincial relations generally, and relations between Quebec and Ottawa in particular, than spending power.

Ottawa has a habit of interfering directly in areas of provincial jurisdiction, and Quebec is insistent when it comes to the division of powers established in 1867, which provide for Quebec to establish priorities as it sees fit.

Even Pierre Elliot Trudeau, prior to entering federal politics, believed that spending power should only apply in areas of federal jurisdiction. However, when he became Prime Minister, he understood the “virtue” of federal spending in areas of provincial responsibility.

In 1969 he proposed launching a new program in an area of provincial responsibility only if there was a real consensus among the provinces. As well, no province that wanted to opt out would suffer any financial penalties.

All of the governments of Quebec, since Maurice Duplessis at least, have called for restrictions on federal spending power. This request is always raised at constitutional negotiations.

The Canadian Alliance believes that the rules should be clear for everyone and are therefore suggesting that the federal government adopt the following three rules unilaterally. One, Ottawa could only impose a cost shared program in an area of provincial jurisdiction only if it had the support of seven provinces representing 50% of the population, in other words, a consensus. Two, the provinces that opt out of a program should be under no obligation to implement it to be compensated based on comparability; and three, compensation should be equal to federal spending per capita in the provinces that do take part.

We are also proposing that the federal-provincial cost shared programs be subject to review periodically.

I think that if one were to use these general principles, they would go a long way toward dealing with the fiscal imbalance that exists between the federal government and the provinces in a way that is sensitive to our federal structure and to the diversity that exists between the needs of the various provinces while maintaining a healthy and necessary respect for those programs that unify us all and in which we all seek to have some form of national consensus or national standard, such as health care.

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

Mr. Speaker, I am pleased to address this very important issue, namely the role of the federal government versus provincial governments, regarding taxation.

Let me say from the outset that we will be pleased to support the motion of our Bloc Quebecois colleagues.

It is too easy for the government party to criticize the principles that brought Bloc Quebecois members to Ottawa, and to discredit their motion today and other motions. The parliamentary spirit displayed in the replies given by the government party will not promote a solution to the situation.

First, I would like to state a fact. The issue is the credibility of the existing tax imbalance. There is a lot of talk about the Séguin report. I hope that the majority of government members from Quebec took the time to at least read the summary of that report. I think they will learn a thing or two.

However, they should be careful when they criticize the Séguin report on the grounds that there is a PQ or sovereignist flavour to it. I remind them that, in October, the Quebec Liberal Party, which, as far as I know, is not sovereignist, said the following regarding the tax imbalance between Ottawa and the provinces, on page 86 of a document:

This is why we believe that it is critical that the federal government and the Canadian provinces, particularly Quebec, agree on a new distribution of the tax base. Indeed, new fiscal arrangements would ensure a better balance between the revenues and the responsibilities of the federal and provincial governments.

I continue reading from page 86. This is not from the Séguin commission, it is from the Quebec Liberal Party. The expression “tax imbalance” is not used only by one political party, but by all the stakeholders in the Canadian provinces, with the exception perhaps of the government party. The Quebec Liberal Party says:

This is why, in order to address this tax imbalance between the federal and provincial governments, the committee is asking for an in-depth review of tax fields, particularly as regards personal and corporate income tax, and a transfer of tax points, without reducing equalization payments.

This is from a document released by the Quebec Liberal Party, in October 2001. The Séguin report says essentially the same thing.

Before talking about the Séguin commission and the motion put forward by the Bloc, let us ask ourselves what the other provinces think about that.

The Atlantic provinces called for adjustments in the equalization system. The poorer provinces want to become richer and are asking to be given the tools they need to do so. The government said no. The former premier of Newfoundland, Mr. Tobin, who came back to the federal cabinet and then made a hasty exit to go to the private sector said, “I promise you that, in returning to the federal scene, I will deal with the issue of equalization to eliminate the ceiling for natural resources, so that the provinces have access to this development tool”. The provinces say that there is a fiscal imbalance. That is what we hear.

The government always shows the same kind of arrogance. It says, “Of course, the provinces want our money. The federal government has money and the provinces want it. But it is ours. It is our responsibility”.

However, we have to understand the provinces. When the federal government decided to slash, who had to bear the brunt of the cuts? The provinces. Now they say that the federal government has more money than before and that it would just be normal for them to get their fair share.

In 1997 and in 2000, we, in the Conservative Party, were in favour of restoring transfer payments to the provinces to their 1993-94 level. We did not want a piecemeal approach. We wanted a long term vision. The federal government said that tax point transfers were not a solution. However, as soon as we talk to it about the CHST, it replies that we also have tax points. This means that tax points are a development tool for the provinces.

That requires cooperation. During question period, our leader asked “Could the government, the Minister of Finance, sit down and examine the issue with its provincial counterparts?” They are completely sidestepping the point when they say there is no fiscal imbalance.

In Quebec, two separate reports, published within six to eight months, prove the contrary. Atlantic provinces premiers have said the contrary, and so do all the premiers of the country. At the federal level, people are blind to that. All opposition parties are saying it. The truth is on the other side of the House according to them.

As I said to the Parliamentary Secretary to the Minister of Canadian Heritage, each time they move forward one row, their arrogance increases exponentially. Each time the federal government talks with the provinces, it displays the same arrogance. They discredit the provinces. If that is what federalism is all about for the Liberal Party, it is high time for a change.

They could at least look at the report and say that it is not so easy to transfer the GST to the provinces. They could even have a dig at the Quebec government and talk about the provincial sales tax rate, because it is a well-known fact that, in 1979, the Quebec government took part of the sales tax from the municipalities of the province. They could say that. At least there would be a debate. As things are now, there is no debate. The problem is only being swept under the rug.

It is relatively easy to summarize the conclusions set out in the massive report of the Séguin commission. The provincial governments are calling for a reform of the tax base to enable them to meet the needs under their jurisdiction according to the constitution. That is all. They have suffered cuts of tens of billions of dollars since 1993-94. They are now saying “Listen, we have been fleeced for almost a decade. We will not ask for money anymore, but we will call for a total reform of the tax agreement in Canada. We will write it down”.

This is why the provinces are asking for tax points They are afraid of being tricked again. The federal government always uses its spending power to say it invested in health. It criticizes the Bloc, as I was saying earlier, it criticizes the Conservatives and all the parties when it says that the 14¢ is not true. Even the government does not know. Can we talk?

We can put other solutions on the table. We suggested that the total amount of the Canada social transfer be eliminated. At the health standing committee I asked Mr. Romanow if he thought it would be a good idea that before making a major change we agree on figures so that our friends, the people opposite, could have the same figures as everybody else. It might be a good idea to separate the envelopes that are reallocated so that we know where exactly the money is going. That being said, there is a great need to review the agreements.

Incidentally, I wish good luck to my hon. colleague for Saint-Hyacinthe--Bagot in his reflection over the next few weeks, not knowing whether his riding will be faced with federal byelections. Surely, whatever the hon. member does, he will always have something useful to contribute and will always be an ace in politics, at both the federal and provincial levels. The hon. member has done and continues to do a very good job here in Ottawa. I am sure that if he decides to run in Quebec, even though we do not share the same point of view about the country and Quebec within Canada, he will be an asset for the government of Quebec.

That being said, let us look at what some other provinces have asked. Earlier on, I was talking about the Atlantic provinces. On March 23, 2001, Premier Hamm said, “For Nova Scotia to be successful, first, we have to enhance our Canadian colleagues' understanding and awareness”. I think the Premier of Nova Scotia is right. Here in Ottawa, we should be more open-minded toward the provinces, stop being arrogant and show some leadership. We have been asking the government for a long time to show leadership when there is a problem.

As an aside, wait and see what will happen if pressure is applied, if the pressure is strong enough. Before the House is prorogued, if it were to be prorogued, the government will start talking about it, but in different terms. We will see what will happen then.

If ever the House were prorogued and there was a Speech from the Throne, I cannot bet on it as it is illegal, but I would still take you out for supper, Mr. Speaker if the government were to talk about new tax arrangements for the country and seize the opportunity for all kinds of good and bad reasons.

The pressure is mounting. It is not partisan. It does not come from Quebec only. It comes from everywhere. When we talk with our colleagues across the way on an individual basis they acknowledge it. Taking away tens of billions of dollars from the provinces is not something that goes unnoticed. In their ridings Liberal members are being chastized for having a Minister of Finances who cannot count when it comes to surpluses.

The member for Saint-Hyacinthe—Bagot explained it quite well. They say there is no surplus, and that times are tough. I remember back in December when the budget was introduced, the Minister of Finances said they would establish a foundation with a budget of several billion dollars for major infrastructure projects if they had any money left. I remember everybody burst out laughing saying he had money hidden all over the place. Nine months later, $13 billion appeared out of nowhere, times were not that tough after all. He is hiding it for two reasons. He knows his Liberal friends well: they want to spend the money too. We know how they like to spend, not invest, spend. Second, he wants to avoid too much pressure from the provinces, so he hides it all over the place, one billion here, one billion there; they would use so many billions should this or that happen—

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

He is a squirrel.

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

My colleague from Saint-Hyacinthe—Bagot is saying the minister is a squirrel. I do not know whether he is a squirrel or a chipmunk with a big tail, but this is another issue.

We are asking the federal government to sit down with the provinces in order to examine the fiscal issue. Call it an imbalance, or a modernization of fiscal arrangements within a country, it does not matter, but the existence of a problem must be recognized. When, for all sorts of reasons, a central government decides to divest of an area, to divest financially, and to divest indirectly of areas which, by the letter and the spirit, come under provincial jurisdiction, there is a problem, and a serious one.

The Séguin Commission strictly underlined a reality which exists, and not only with Quebec. Indeed, as I said a moment ago, I appreciate the fact that the Bloc added “and in the other provinces”, because this is a reality. However, the problem is different. After the Séguin report came out, some provinces said: “We are now experiencing a more difficult time than other provinces; what is happening with equalization?”

For the time being, equalization is the answer for some of the poorer provinces. This is why, when discussing the new fiscal arrangements, the new fiscal agreement that should be discussed and negotiated between the federal government and the provinces, each party can have satisfaction.

For instance, if Quebec can have more leeway to do things in a certain way, so much the better. If Newfoundland and Labrador need something else, why not? The “à la carte” was used, and why not? Canada is such a vast country that trying to standardize everything might be difficult. However, we on this side can complain all we want, move all the motions we want, ask all the questions we want, if the need for a new fiscal arrangement is not recognized, we will get nowhere.

One thing has to be understood: if the federal government had been in the provinces' place and had experienced a huge and unilateral cut in its revenues, the Liberals would have protested vociferously. We maintain that this fiscal rebalancing is more than needed.

To get back to the Séguin commission, some people are sure to play politics with it. We all are political animals.

We have to look at the basics of the report. Basically, and there is a consensus everywhere in Canada on this issue, it asks that the provinces be given the same revenues as in fiscal 1993-94 and that these revenues be adjusted over a certain period. The Bloc Quebecois talked about a five year period. In our campaign platform, we also talked about a five year period to review this.

Actually, we said that it made no sense to hand out a cheque right away. In our campaign platform, and even before, we had mentioned five years. Five years would be sufficient to determine the effects and to find new mechanisms for fiscal arrangements between the federal government and the provinces.

So, clearly, everybody agrees to ensure that the same amount of money should be made available and that the federal government cannot pull the plug on these revenues, as we know what it is like. So, we are talking about a new agreement including a protective clause.

Protection can take two forms. Transferring taxes is one thing, but transferring the GST is another. However, a dispute settlement mechanism is needed. Within the federation, we need to be able to communicate on a permanent basis. The House will recall that this is what we said in our 1997 election platform as well. There needs to be a permanent entity so that the federal government and the provinces can communicate with one another and reach agreements.

The Séguin report makes the point that there must be consensus. Quebec cannot go to the bargaining table alone. All the provinces must be there. Quebec has allies in Nova Scotia, in New Brunswick, on Prince Edward Island, in Newfoundland, in Alberta. It has allies everywhere. The richest provinces will benefit from a new fiscal arrangement. All provinces will.

It will provide our western friends with an opportunity to talk about issues that have frustrated them for years and to do so at the same table. There is consensus on this in Quebec. Quebec will become a leader with the other provinces. It is up to us, here, to convince the government to sit down with its provincial partners. If there is consensus in Quebec, I am sure that there is consensus in Nova Scotia and in all the provinces, all the way to Alberta.

If there is consensus in the provinces, all that is missing is national consensus in this parliament. Again, one player is missing right now; the Liberal members opposite. They are denigrating what is being done. They are playing with the figures. Whether the federal government is putting 14¢, 20¢ or 25¢ into health—we cannot even get accurate figures—that is not the problem. It is a consequence of a problem. The problem is the way the federal government handles its fiscal relations with the provinces. It must review and reinvent its entire approach.

I ask the House to consider the motion put forward today. I urge the government opposite to vote in favour. Why would the government not vote in favour? What a wonderful message it could send. The best signal the government could give would be to say, “Yes, we are going to review that. We barely avoided a recession and we are going to review the fiscal arrangements in this country”.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, I want to thank my colleague the member for Richmond--Arthabaska for his statement. It was very interesting.

I agree with him when he says that, regarding the Séguin report or fiscal imbalance, the members opposite keep rehashing the same old arguments. That was obvious in the debate on the Canada Health and social transfer.

These two arguments are equalization and tax points. It is clear that members from the government side who speak to this issue have not read the Séguin report. I have a feeling they do not know what we are talking about when we speak about fiscal imbalance. I think their texts were written by senior officials who always use the same line about equalization and tax points.

I would like to ask my colleague from the Progressive Conservative Party/Democratic Representative Caucus Coalition, the hon. member for Richmond--Arthabaska, to explain what are tax points and why they were created.

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

Mr. Speaker, I am not an economist—I do not have all the faults nor all the qualities—but essentially I know that a tax point is an agreement between levels of government. Tax points are dollars in the pockets of taxpayers. Governments agree to say that the money in the pockets of taxpayers is like a pie divided into a number of pieces, each taking its share of it.

Tax point agreements between the federal government and provinces allow levels of government to have revenues that follow the economic and, of course, demographic evolution of their area. That allows for some sovereignty, in the right sense of the word, for the various levels of government. Fiscal imbalance is essentially a fear of decisional imbalance—that is what it is—between the federal and the provinces.

When Quebec or other provinces ask for tax points, it is to secure revenues based on their own growth without any decisional imbalance from Ottawa. The poorest provinces are afraid of that. However, if the poorest provinces have additional development levers, then there will be a harmonious balance in the country.

Therefore tax points are agreements; in the end it is the flexibility that enables a government to get the money it needs and, I repeat, gives it balance and a certain sovereignty.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I listened with great interest to my colleague from Richmond--Arthabaska. I agree with just about everything he said. The motion before us today is a very finely worded motion. I thought it was quite diplomatic in putting forward the reality that a fiscal imbalance is jeopardizing our social programs of today.

We can think about the fact that we have the Romanow commission. There is a crisis in medicare, a crisis in the funding of health care. This is why we have a royal commission.

We can think about post-secondary education and the crisis there. We are at a 30 year low of federal funding for post-secondary education. Tuition fees are skyrocketing. When it comes to social programs it seems like the Liberal government has completely abandoned that field altogether.

Would the hon. member comment on the question of how these programs are now being jeopardized by the fiscal imbalance or the complete erosion of federal transfers?

We heard the Parliamentary Secretary to the Minister of Canadian Heritage say earlier that health care was a priority of her government. Yet it seems to me that we have a crisis on our hands. Would the hon. member speak about how he believes health care is being jeopardized by the fiscal arrangements?

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

Mr. Speaker, I want to thank my hon. colleague from the NDP. As I always say, New Democrats are the social conscience for parliament. We need them, not too many of them, but we do need them.

Anyway, over $25 billion—

[An hon. member]

We have to double the caucus.

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

You can double your caucus as long as we triple ours.

Anyway, over $25 billion have been slashed from transfers to the provinces—and I say “over” $25 billion because there was no indexing at the time and needs have grown—and it has led to a crisis. Money is not everything. Of course, it is easier to make decisions when you have money. As I said before, after making these cuts, the government decided to ruthlessly slash into provincial areas of jurisdiction.

To whom will the people complain? When I was city councillor, I used to say “It is the city councillors who have the backside closest to the taxpayers' boot”. In second place are the MLAs, and farthest from the taxpayers are MPs. So, when the federal government makes cuts to a provincial area of jurisdiction, who do the people turn to to complain? The provinces.

Announcements are made in economic statements and in budgets which the government only bothers to introduce every two years these days. New measures are not necessary, proper financing for current measures is. The Liberals claim that everything is hunky-dory. It is not true. They also argue “There is no fiscal imbalance, no decision imbalance. Everything is fine. There is a lot of money in the system”. They even go as far as to say “Everything is going so well that we have asked Mr. Romanow to head up a royal commission on health care”.

They want to revamp the health care system in Canada. Very well. But what about the fiscal arrangements? Do we not get to discuss them?

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

Mr. Speaker, I agree with the motion put forward today by a member of the Bloc Quebecois. The motion is on fiscal arrangements. It is a very important issue.

The whole area of fiscal federalism, how we arrange our finances, has always been a debate. It has always been very fundamental to the fabric of Canada. It was a great debate at the time of the founding of Canada. We have had a royal commission on fiscal federalism. We have had many debates in the 1960s and 1970s, as well as the patriation of the constitution in 1980 which had as part of it the constitutionalization of the whole principle of equalization. These are very important questions.

I remember back in 1968-69 when then Prime Minister Pierre Trudeau brought in the Department of Regional Economic Development to address some of the regional inequalities or inequities that existed and the debates that followed thereafter.

I remember when medicare was founded. I was in high school in Saskatchewan. I remember the great debate over health care and the leadership of the Tommy Douglas and Woodrow Lloyd governments in 1960, 1962 and 1963 in Saskatchewan, the funding of health care by themselves, and the royal commission on health care appointed by Mr. Diefenbaker and headed by Mr. Hall. Finally Lester Pearson took it up at the federal level under pressure from the NDP caucus of that day.

We had a national health care program that was cost shared on a 50:50 basis: 50¢ paid by the federal government and 50¢ paid by the provinces. That was our vision in those days of fiscal arrangements, our vision of co-operative federalism.

If we look at what is happening today we see the gradual erosion of the importance of the role of the federal government in terms of paying the costs of programs. In terms of cost shared programs the federal government now pays around 20% and the provinces pay roughly 80% of the cash for these programs. Health care is a good example in terms of cash transfers. The federal government now pays about 13% or 14% and the provincial governments pay 85%, 86% and 87% depending on the province.

This is a very important issue. If we look at the tax base in the country, the provincial governments and the municipalities deliver probably twice as many services as does the federal government. Yet the federal government has about 60% of the taxing room in terms of income tax. I am talking about individual income tax and the corporate tax. There is a great deal of maneuverability for the federal government compared to the provinces.

If we look at many studies, not only the Séguin report but also a study done for the western finance ministers and the western premiers recently, we find the same conclusion: the gap between the wealthier provinces and the poorer provinces is widening. We also find that the ability of provincial governments to deliver services particularly in seven or eight of the provinces is diminishing.

In my own province of Saskatchewan there is now a financial crisis, a fiscal crunch, because of the drop in farm income as a result of the drought, European subsidies and the drop in gas and oil revenues. The federal government is paying fewer of the bills, which makes it difficult for smaller provinces like Saskatchewan, Manitoba, the four Atlantic provinces, and to a lesser extent the province of Quebec, to meet their obligations to the people of their regions.

We have to look at the fiscal arrangements. There is a growing consensus based on the data that the federal government has to play a much more important role. If it does not play a much more important role we will see the erosion of national unity.

In my part of the world, for example, we have a great deal of fiscal inequity between Alberta and Saskatchewan. We just do not have the resources of the province of Alberta. Alberta has been blessed with a lot of oil and gas. One of the problems is that we will have a different level of services based on the ability to pay.

One important thing about being Canadian is that we have comparable services at comparable costs no matter where we live in the country. Having comparable taxes and comparable services is what being Canadian is all about. Whether we live in New Brunswick, Ontario, Saskatchewan, Manitoba or Quebec, we should get roughly the same level of services for roughly the same costs in terms of tax dollars. That is eroding very quickly.

That is one reason in the big constitution debate back in the 1980s, which took place in 1980, 1981 and 1982, it was decided with the support of all parties in the House to constitutionally enshrine the obligation of the federal government to pay equalization payments to the poorer provinces that needed the extra cash.

The principles of equalization were enshrined in our constitution. Every four or five years the equalization formula is renegotiated. The last time the federal government put a cap on equalization payments to the provinces. In terms of prosperity there is a cap, but when the economy goes into a recession we find that the poorer provinces fall further and further behind.

The next negotiations take place in the year 2004. It is very important that the federal government with the extra money it has looks at removing the cap and making sure the negotiations that follow provide a fair amount of services and funds to every province.

There is a fiscal imbalance between the federal government and the provinces and that gap has grown dramatically. I mentioned that about 60% of the income tax was now collected by the federal government.

The conference board has done studies not just for the Séguin report but for other reports. It says that the gap is likely to widen rather than narrow. The conference board projects that if the revenues and expenditures of the federal government are maintained in the next 10, 12 or 20 years we will see a widening of the gap between the abilities of the provincial governments to operate and provide programs and that of the federal government. It also projects that we will see a continuing expansion of the federal government' s surplus.

Last year there was a surplus of some $17 billion, all of it put against the national debt. In the first nine months of this year the surplus is estimated at about $13.4 billion. I suspect that unless legislation is brought in that too will be put against the national debt.

We have some flexibility in terms of having a greater transfer of some of the cash to the provinces by the federal government. My vision of federalism is similar to that of Lester Pearson, Tommy Douglas and Robert Stanfield back in the 1960s when they talked about co-operative federalism. They talked about a strong federal government and strong provinces that would share, co-operate and work together for the benefit of the Canadian people. We have seen that turned on its head in the last few years, in particular by the government and the Minister of Finance.

In 1995 we had the largest cutbacks in our history in terms of transfers to the provinces and transfers to individuals for social programs. It was something that was very un-Liberal, something that I am sure would have scandalized the people in the Pearson government, let alone the Trudeau government, in terms of the vision of where the country should go.

The Prime Minister was in the Trudeau government as a junior minister for most of the period of time between 1968 to 1984. Yet we have had a break in terms of the philosophy of the federal government where the provinces pay more and more of the bills and the federal government pays less and less.

If the government is to be paying less and less of the bills, it obviously will get less and less of the say and less and less of the clout. That is happening now in health care. The time will come when Ralph Klein, because of the wealth of Alberta, will say to hell with the federal government, forfeit the 13% or 14% cash for health care in his province, and devise his own two tier health care for profit system similar to that of the United States.

What could the federal government do? If it were footing more of the bill a province would not do that. It would not be able to afford to do that. That is why it is important we get back to a system where cost shared programs are on a 50:50 basis. We should be moving immediately to health care being funded 25% by the federal government in terms of cash payments, and within a few short years to being funded 50% by the federal government and 50% by the provinces.

The same is true for post-secondary education. The member for Vancouver East has spoken very eloquently in the House several times on the lack of federal cash in transfers to the provinces for post-secondary education and the increase in tuition fees. I have met with students across the country in the last four or five months who are concerned about the rise in tuition fees and accessibility on an equal basis to post-secondary education. This is a result once again of the diminishing contribution by the federal government to post-secondary education.

When that happens provinces compensate for these cutbacks and lack of revenue from the federal government. They do this by increasing user fees. We see that all over the place, for example, provincial cutbacks in transfers to municipalities.

Two weeks ago I was in Regina for the SARM convention, the Saskatchewan Association of Rural Municipalities, where the Minister of Finance was the guest speaker. One of the concerns there was the cutbacks on funding for rural and urban municipalities. The Minister of Finance heard that when he was in Regina speaking to some 2,000 delegates from rural Saskatchewan.

Then of course the municipalities are in trouble. The city where I come from and the member for Palliser comes from, Regina, is now debating a motion to have a flat tax on the collection of garbage. That will be $100 per household for the collection of garbage in the city of Regina. That may be okay for a wealthier person living in one of the wealthier parts of the city, but what about a lot of people in low income areas in the inner city and the city core? Many parts of Regina have a lot of low income people who cannot afford $100 to collect their garbage. That idea is not worth the rubbish it is supposed to collect. It is a flat tax.

We have had the rejection of the flat tax idea that was put forward by the Canadian Alliance. When we have cutbacks on transfers by the federal government to the provinces and cutbacks from the provinces to the municipalities, then the municipalities have to come up with ideas like a flat tax to collect the garbage. That is the domino effect and that is what we are debating in the House today.

We are seeing much of this happening without proper consultation between the federal government and the provinces. The federal government unilaterally decides what the transfers would be.

We do not know when the federal budget would be presented. It seems to me it is only common sense to have a fixed budget date where a budget comes down every year on approximately the same date. It used to be that way by convention or by practice. We should have a fixed budget date by statute, perhaps the first part of February each and every year.

By having a federal budget on the same date every year the provinces could do their planning and so could the municipalities, school boards and hospital boards. That is not a radical idea. It is called common sense and co-operative federalism by planning and working with our partners in confederation.

There was a period of 20 months between budgets in the House by the Minister of Finance. People do not know what will happen nor what are the plans of the federal government.

I have mentioned medicare. That is the funding crisis we are facing today. There are other problems in medicare too, but a funding crisis is at the centre of the health care crisis. The federal government used to pay 50¢ on the dollar and now pays 13¢ or 14¢ on the dollar in terms of cash transfers. There is obviously a funding crunch which creates a lot of inequality between richer provinces and poorer provinces. Ontario can afford to fund health care a lot easier than the province of New Brunswick. Again, we get the two tiers or the three tiers. Soon we will have a ten tier health care system where the people's service will be dependent upon the resources of their province to pay for that particular service.

I mentioned the cap on equalization which is an important part of being Canadian. It was an important part of the constitutional debate back in 1980-81 when the constitution was patriated. When the Queen signed the patriation papers on the lawn of parliament back in April 1982 the equalization commitment was constitutionalized by the federal government. The gap has widened as the federal government put the cap on equalization and put less money into the equalization program according to demographics, inflation and the program obligations of the different provinces.

Those are some of the problems we are facing. This country needs co-operative federalism and this is where I differ with the Bloc Quebecois. We need a strong central federal government. At the same time we need strong provincial governments that work and plan together and bring in cost shared programs that they would be funded on a 50-50 basis.

The federal government has the resources. Last year alone $17 billion went to the national debt. Can members imagine what could have been done if only $7 billion was put on the national debt and the other $10 billion was transferred to the provinces for health care, post-secondary education, social programs and the farm crisis. We could have stimulated the economy and created more justice and equality for every single Canadian. These are things that could have been done if there was some vision across the way.

The federal government talked about balancing the budget. We had the Parliamentary Secretary to the Minister of Finance boasting in the House about an accumulated surplus by the federal government in the last few years of $35.8 billion. The government has a surplus only because it is overtaxing employees in terms of employment insurance premiums. There is now a surplus of $46 billion in the employment insurance account.

The surplus is being funded out of the EI account. In other words, we would still have a deficit if it were not for the extra premiums that were being paid by ordinary working people and by their employers into what was supposed to be an insurance fund when workers were laid off or unemployed. That is the kind of smoke and mirrors that is being used.

We want a country where we have justice, equality and fairness for all, where we have co-operative federalism. It is about time the federal government started paying its bills, its share of the plans, its share of the costs so Canadians are treated equally from sea to sea to sea.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, I listened attentively to my colleague across the way. I must say that one of the things that struck me is that our fiscal house is now in order and because of that we were able to come up with the agreement with the provinces in September 2001 of $21.5 billion in support of the CHST. From 1981 to 1997 we had a $560 billion cumulated deficit. We are now able to transfer additional dollars to the provinces because of good fiscal management.

The issue is not just one of dollars. For example, last year Ontario announced $1.2 billion in new health care funding. It forgot to say that $1.1 billion was federal transfers. It is a question of management.

The national round table on health care said it years ago. The issue is not simply money, it is how its managed. Who manages the health care system? The provinces, not the federal government. We notice in the latest Environics poll that Canadians are now saying that maybe the federal government should be involved in managing the health care system and managing education. I notice my friend from the Bloc is getting agitated which is always good to see.

Would my friend from the NDP comment on the issue of management of those programs and not simply on the issue of dollars?

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

Mr. Speaker, I am not sure what the answer is. The provinces manage many of these programs. Some manage them well, some do not manage them well, some make mistakes and some do an exceptional job. Under our constitutional arrangements the obligation of administering the programs goes to the provinces.

The federal government, by using its spending power when it brought in national health care, made a commitment back in the sixties to fund 50% of health care. It is reneging on that obligation over the last few years. One reason that we have a crisis in terms of health care is because the federal government is withdrawing a major part of the funding. Whether we have good administration or bad administration the federal government does not pay the bill it should be paying.

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

Mr. Speaker, I have a question for my colleague from Regina--Qu'appelle. The hon. member is well known for his wisdom and his ability to defend the interests of the people of his province.

If he was given assurances that the Canada Health Act would be respected, as all the premiers and finance ministers said it would be, would he agree that sufficient funds be transferred either via the GST or the federal income tax or the tax point transfers so that the provinces can administer the health sector, which is their constitutional jurisdiction, without the risks mentioned by the hon. member?

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

Mr. Speaker, the answer is yes, for the most part. At present, the federal government is collecting nearly 60% of the taxes in this country, while the provinces and the municipalities have twice as many programs as the federal government to administer. This is one imbalance in our country.

2002 Arctic Winter Games

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, this past weekend I had the opportunity to personally join the many athletes, coaches and volunteers of the 17th Arctic Winter Games in Iqaluit.

I congratulate team Yukon for the wonderful spirit they have demonstrated so far for Yukon and Canada. Not only are the north's athletes showcasing their skills, there is also a large cultural and artistic component to these games. From Yukon, an international audience will be watching the colourful performances by the Tagish First Nation Dancers. They will also enjoy viewing snow sculptures, photography, storytelling, theatre and musical performances.

It is estimated the Arctic Winter Games will be broadcast to 12 million viewers across Canada and around the world. I urge all Canadians to watch the games. The unique culture of the north will be on display as never before.

I congratulate the people from Nunavut, our newest northern territory, for the spectacular opening ceremonies and the largest events they have ever hosted and to remind everyone that the 2004 Arctic Winter Games will be held in Wood Buffalo Regional Municipality.

Taxation

[Monte Solberg, Canadian Alliance, Medicine Hat, AB]

Mr. Speaker, the Canada Customs and Revenue Agency is requiring over 100,000 people who are currently receiving the disability tax credit to requalify. The reason is, according to the CCRA, that between 1985 and 1996 the governments of the day did not properly scrutinize the claims.

What is the effect of this bureaucratic bungling? For starters, let us consider the impact on the health care system. In order to qualify people must have confirmation from a doctor. That means hundreds of thousands more visits to the doctor at a time when Canada's health care system is stretched to the breaking point. Then there is the huge inconvenience for the 106,000 people affected whose disabilities run the gamut from paralysis, missing limbs and blindness to chronic debilitating diseases like multiple sclerosis.

No one denies that there must be standards for tax breaks like the DTC. What galls me is that the government is asking disabled Canadians and Canada's health care system to clean up yet another Liberal government mess.

Conestoga College

[Janko Peric, Liberal, Cambridge, ON]

Mr. Speaker, the last three years Conestoga College has been ranked first out of 24 Ontario colleges on its performance indicators.

In recognition of its high number of graduates who are working and employers who are happy with the education of their workers Conestoga College has been awarded a gold medal. For the second year in a row Conestoga College had the lowest student loan default rate of any community college.

Only one of two Ontario post-secondary institutions to be registered by the international quality standard Conestoga College continues to work closely with local industry. Currently, Conestoga College is working toward the introduction of two new applied degree programs and is positioning itself to become a polytechnical institute.

Clearly Conestoga College is the best Ontario college and continues to produce highly trained and qualified employees in my riding of Cambridge.

Christine Hamilton

[Beth Phinney, Liberal, Hamilton Mountain, ON]

Mr. Speaker, I want to pay tribute to Christine Hamilton, a dynamic woman and beloved resident of the city of Hamilton.

Christine passed away recently just a month shy of her 81st birthday. Working with senior citizens, she saw the good and the bad sides of growing old. However, she was convinced that old age did not mean the end of life. Beginning with the establishment of a senior's choir in 1979, Christine built her group into a musical comedy known as the Geritol Follies. Immensely popular in our city and far beyond, they have brought smiles and laughter everywhere they have gone.

Christine Hamilton was a bright spirit and an inspiration to many seniors and residents of the city of Hamilton. Her commitment, creativity and, most of all, sense of humour will be missed. We know that the Geritol Follies will continue performing and in doing so will honour her dream, her life and her contribution to the city and citizens of Hamilton.

Elvis Stojko

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, I rise today to commend Elvis Stojko, a native of Richmond Hill, on the occasion of his retirement from competitive figure skating.

Mr. Stojko has made a great contribution to the sport by bringing awareness to the sport and by raising the bar. The three-time world champion and two-time Olympic silver medalist made history in the 1991 world championships when he became the first skater to do a quad-double combo in competition.

I have always found Elvis to be a true gentleman who has given generously to his community. The mayor's gala celebration for figure skating in Richmond Hill is the venue that he has participated in to promote local skating talent and the town's sports awards.

We wish him the very best in his second career as a professional skater and in his other personal endeavours.

The Economy

[Werner Schmidt, Canadian Alliance, Kelowna, BC]

Mr. Speaker, the House should take note of an alarming new report from Statistics Canada. The report, “The Evolution of Wealth Inequality in Canada, 1984-1999”, shows that young families with children are falling behind and struggling to provide for their families and their future.

From 1984 to 1999 real wealth for young families declined by 36%. To emphasize the point, families with a mom and dad aged 25 to 34 had a net worth of $44,000 in 1984. In 1999 the net worth of young families had declined to a little over $30,000, $14,000 less.

Statistics Canada has proven that the economy under the Liberal government is punishing young families who are struggling to raise the next generation of Canadians. Is this the legacy the Prime Minister wants?

MetroStar Gala

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Mr. Speaker, the MetroStar Gala was held last evening. This great evening of joy and elegance was an opportunity for the public to recognize its favourite personalities. In all, 14 awards were handed out.

The top winners were Sophie Lorain and Véronique Cloutier, who tied for the MetroStar for female personality of the year, as well as each receiving a trophy in other categories. Marc Labrèche came away with male personality of the year.

A number of others were honoured: Simon Durivage, Paul Arcand, Patrick Labbé, Élise Guilbault, Rita Lafontaine, Benoît Langlais, Patrice L'Écuyer, Paul Rivard, Michel Barrette and Clodine Desrochers, as well as Jamie Salé and David Pelletier.

My colleagues and I join with the Quebec public in congratulating all of these people for their excellence. This is, once again, evidence that Quebec is absolutely brimming with talent and originality.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Mr. Speaker, last night, viewers of the 17th annual MetroStar Gala on TVA were able to see the love Quebec audiences have for their television performers, as shown by a people's vote in which a very high number of members of the public participated.

Actress Sophie Lorain and program host Véronique Cloutier tied for female personality of the year, and each won another trophy. Véronique Cloutier was voted best variety show host, and Sophie Lorain best female actor in a television series. A special moment award, the MetroStar coup de coeur, went to the skating pair of Jamie Salé and David Pelletier for the top television moment of the year.

I extend my congratulations to all the other award winners, including Marc Labrèche, top male personality, Simon Durivage, best news reader, and Patrick Labbé, Élise Guilbault, Rita Lafontaine and Benoît Langlais, for best actors.

The Bloc Quebecois thanks all of the artists who contribute their talents to making television in Quebec what it is: entertaining, intelligent and instructive.

Cindy Klassen

[John Harvard, Liberal, Charleswood—St. James—Assiniboia, MB]

Mr. Speaker, it is my pleasure to rise today to congratulate Cindy Klassen of my home city of Winnipeg who followed up her Olympic bronze medal with a silver medal at the World Speed Skating Championships in Heerenveen, Netherlands this past weekend.

Ms. Klassen won medals in four events, earning her the silver medal overall. This is the best Canadian showing in 26 years in long track speed skating and it caps an outstanding competitive year for this young athlete.

Our Canadian speed skaters continue to make us all very proud and to show the world that Canada is an emerging power in this sport. I congratulate Cindy and thank her for making us so proud.