Mr. Speaker, it is not the first time the Bloc Quebecois speaks up in the House against the dysfunction of Canadian federalism and its negative impact on the provinces.
Since coming here in 1993 we have intervened regularly to show that the line of conduct followed by the liberal government is pushing provinces, especially Quebec, to the limit. Wrongfully, some people resented our position and accused us of politicizing the issue. They know better today because our point of view on the dysfunction of the federative system in Canada is shared by the conference board, an independent non-Quebec organization that cannot be accused of being a natural partisan of ours.
Even if the government refuses to face reality, the Commission on Fiscal Imbalance chaired by Yves Séguin, a former liberal MP, describes very well the problem between the central government and the provinces. It comes to the same conclusions as us, namely that the money is in Ottawa while the needs are in Quebec as well as the other provinces.
Mr. Speaker, I will be sharing my time with the member for Argenteuil--Papineau--Mirabel.
By refusing to face reality, this government is only looking for a fight. Obviously, it is not with this kind of attitude that it will be possible to find solutions.
On what planet are the Prime Minister, his Minister of Finance and his Minister of Intergovernmental Affairs living, when they repeat constantly that there is no fiscal imbalance?
The Séguin commission was praised by all the analysts for the high quality of its work. In Quebec City, the three parties unanimously agree with its findings, which lay the foundations for a fundamental debate on the future of the Canadian federation.
Our fellow citizens know now that the status quo cannot continue. They are the ones who are paying for the inappropriate sharing of tax resources. In Quebec, seven out of ten people believe there is a fiscal imbalance. It is obvious that there are problems in tax resource sharing and that the way this government is proceeding does not correspond to the needs.
How can this Liberal government and its ministers justify the fact that the provinces are literally collapsing under the burden of health expenses while their government is raking in surpluses in Ottawa?
The Séguin commission tried to determine if this was a structural or an economic phenomenon. In the past several years, the provinces have been reacting to the arbitrary nature of the federal transfer program on which they depend to balance their budgets. The program is so arbitrary that the federal government changes the rules as it sees fit.
Must I remind the House of the words of the current Prime Minister who, in 1999, showed how arbitrary his government was in determining transfer amounts? He said, “There are mornings when I want to give them money and then, the next morning, I say no. We will see at the time of the budget”. This was in La Presse on January 16, 1999.
This statement clearly shows that the federal government has total discretion in determining the amounts provided to the provinces, an arbitrary discretion that goes against the very principle of the federation.
The arbitrary nature of the Canada health and social transfer and the federal government's withdrawal, in addition to the enormous surpluses past and future, will maintain Quebec and the other provinces in an uncertain financial situation. The provincial governments will continue to have a very hard time making ends meet and providing health care services, among other things.
The finance minister can say that the provinces are receiving lots of funds through the Canada health and social transfer and the equalization program, but the Séguin report shows that these programs are flawed.
Not surprisingly, prominent government members think that fiscal imbalance is a myth. They are the ones who have assumed the right to spend in areas that are not within their jurisdiction. It is annoying to see how much energy they spend denying the fact that the fiscal imbalance has been growing over the last decade; it is indecent for them to refuse all our proposals for rectifying the situation; it is unconscionable that they would say that provinces have problems because they lowered income tax too much. It is ludicrous.
The government would do well to read the report of the Séguin commission. The arguments it uses to deny the fiscal imbalance are rebutted in that document one after the other. The arguments of the Minister of Finance are said to be unconvincing, since they do not recognize the existence or the size of the fiscal imbalance, which is detrimental to provinces.
The situation has been going on since the mid-nineties when the federal government intensified its cuts in social transfers to the provinces. The government then acted drastically without taking into account their impacts on social, health and education programs. Its investment went from 18¢ to 14¢.
Between 1994 and 2002, the government pulled out. Its share of expenditures for health, education and social services went from 18.1% to 14.1%. I want to stress that its contribution was 23% in 1984-85.
In so doing the Liberal government gave itself some leeway it is using to interfere in areas of provincial jurisdiction. It gradually changed the rules for cost sharing. Thus we went from a system where both levels of government were sharing the costs and risks to a block funding system in which it controls the funding parameters as it pleases.
The governments's withdrawal from its funding responsibilities for health, post-secondary education and income security is a key element of the fiscal imbalance. The drastic cuts enabled the federal government to improve its own fiscal health at the expense of the provinces.
In Quebec alone changes to the Canada social transfer deprived the province of $4.7 billion in revenues just for fiscal 2001-02. Because of that, the impact of federal cuts has been more pronounced in Quebec than in the rest of Canada.
The conclusion is obvious: the federal government has reduced the ability of provinces, particularly that of Quebec, to efficiently deliver services in areas under their jurisdiction. The federal government's backing out is one of the direct causes of the fiscal imbalance.
I am compelled to say that in many cases taxpayers do not know anymore which level of government is responsible for services. The federal government has no qualm about encroaching on areas under provincial jurisdiction, thus creating useless and harmful duplication.
In conclusion, there are ways to rectify the situation and achieve a better distribution of resources. The Bloc Quebecois, in its customary fashion, has put forward solutions to reduce this imbalance without plunging the federal government back into a deficit situation.
At the very least, as we have always asked for, transfers to the provinces should be restored to the 1994-95 levels. It is a short term and very imperfect solution though.
As Quebec has never stopped asking for, the federal government must withdraw from areas under provincial jurisdiction and provide fiscal or monetary compensation.
I know we have a long way to go. This government does not seem to be willing to solve the fiscal imbalance. It is more interested in pursuing its own goals, namely to be interventionist and centralizing instead of meeting the needs of Quebec and the Canadian provinces.
The emergency is real. Quebec society, whose fiscal and economic autonomy is being stifled by the federal government, must rise and fight to avoid being asphyxiated.
The federal government's attitude is one more reason to maintain that Quebec will only truly come into its own when it has achieved sovereignty.