Mr. Speaker, I appreciate the opportunity to speak to the motion moved by the Bloc Quebecois with respect to the perceived and alleged fiscal imbalance the Bloc members say is jeopardizing health care and other key social programs.
It surprises me how some hon. members of the House and the provincial governments are able to get the facts so wrong on health care funding. They compare apples and oranges and hope that Canadians will not notice the gross errors in their arguments. Today I want to set the record straight.
The provinces and some hon. members bandy figures about but never divulge exactly how they arrive at their numbers. The Bloc uses the often heard 14¢ and this is where I want to begin. We heard the finance critic for the New Democratic Party speak about this 14¢ which allegedly the federal government spends on health care. The claim is that we spend only 14¢ which is absolutely not true. Those members condemn it on the grounds that there was an undertaking when medicare originated to pay 50¢ on each dollar. Let us examine their claims very carefully.
The Bloc would have Canadians believe that it is straightforwardly adding up all the funds which the federal government transfers to the provinces for health care and then comparing that to the total the provinces spend on health care. This purports to be the simple arithmetic we all learned in school. Only 14¢ of every dollar is the answer that pops up from this simple arithmetic but is it correct? I would submit it is not correct at all. What the Bloc is doing is not simple arithmetic but, I would submit with all due respect, is more like a conjurer's trick meant to deceive the onlooker.
How do those members get the 14¢ answer they claim? They look at the $35 billion Canada health and social transfer and then disregard the tax transfer of $16 billion. The finance critic for the Bloc spoke about that today. The tax transfer is very much a part of the 50¢ of former days. I emphasize the fact that it was part of the former days. With an enormous sleight of the hand they completely disregard the $16 billion and it does not seem to bother them at all.
Next, they look at the remaining $19 billion in the Canada health and social transfer. They then disregard the entire evolution of fiscal relations with the provinces over many recent years and suggest that they can identify an amount earmarked especially for health care. This could be done in the much more highly conditional cost sharing arrangements of the 1960s and 1970s because back then there was a specific share of transfers earmarked for health care.
My question for the Bloc members is, are they suggesting that we should return to the days when the federal government was much more stringent in what was done with money transferred to the provinces? Would the provinces themselves be happier if the federal government turned back the clock on block funding, which today provides the provinces with so much flexibility on how and where they spend federal transfers? Sometimes, especially when I hear the 14¢ argument, I think they would.
Let me remind the House that it was the provinces that wanted the flexibility that goes with block funding. They each wanted to determine according to their own priorities how much to spend on health care, how much to spend on higher education and how much to spend on social assistance. Moreover, the provinces wanted to escape the accounting, the rigidity and the dysfunctional incentives that 50:50 cost sharing regimes tend to create over time.
Block funding was therefore created. First there was established program financing in 1977 and then the Canada health and social transfer, a more encompassing block fund in 1996.
The federal government has shared the view of the provinces that the flexibility block funding offers is a sign of the maturing relationship between the two orders of government. However, with that goes responsibilities for the priorities one chooses.
It is the provinces alone that decide how much to spend on health care. Accordingly, today it is a falsehood to pretend that a certain share of the Canada health and social transfer is the amount that the federal government provides to the provinces for health care. It is also a falsehood to assume,as the 14¢ argument does, that not one cent of the $11 billion the federal government transfers to the provinces each year in equalization payments goes to help fund health care. This is far-fetched in the extreme.
So far I have shown that the 14¢ claim rests on a misleading fabrication with respect to federal transfers for health care. Now let me reveal another startling fact.
We would think that this fabricated number is then compared as depicted by provinces, to the total amount that provinces themselves spend on health care. After all, that is the story. The federal government allegedly only pays 14¢ on the dollar toward provincial health care costs. But no, provinces then take the fabricated federal contribution number and compare it to total provincial spending not on health care but on all social programs. This includes their spending on primary and secondary education. It includes everything they choose to spend on in the social domain.
I would submit that this is very strange. Let me suggest to hon. members that the provincial governments would be quick to condemn any notion that the federal government should be involved in funding primary and secondary education or indeed that it should be involved in the whole domain of social spending by the provinces. Where does the Bloc stand on this issue? I have to believe it would also fervently condemn such a notion. If so, then the 14¢ argument lies in shambles. Let us therefore put aside the 14¢ bogus argument.
As hon. members know, health care remains a priority for the federal government. Since balancing our budget, more than 70% of new federal spending has been for health care, education and innovation.
Just two months ago the Minister of Finance brought down his 2001 budget. That budget confirmed that the $23.4 billion in funding to support health and early childhood agreements by first ministers in September 2000 is fully protected. On top of all this the federal government also provides $4 billion a year in direct spending for health protection and promotion, health research and for health care services to first nations people, the RCMP and the Canadian armed forces.
The 2001 budget further strengthens the federal government's contribution to Canada's health care system by providing $95 million to the Canadian Institute for Health Information and a further $75 million increase to the annual budget of the Canadian Institutes of Health Research.
Time precludes me from discussing this issue much further but let me leave members with a few thoughts. First, the premise of the motion is wrong. There is no fiscal imbalance in Canada. Second, we have fostered a maturing relationship with the provinces according them flexibility in allocating federal funding to meet their priorities as they see fit. They are responsible for the decisions that they make.
Without a doubt health care continues to be a priority for our government. Our actions underscore that. If the debate is to be a constructive part of the intergovernmental dialogue, it has to be based on fact and not fiction. One part of getting the facts straight is to acknowledge the full federal government commitment to provincial and territorial transfers. The debate must reflect the nature of federal-provincial relations today and not hark back to what was in place decades ago and since abandoned because it no longer reflected the increased flexibility which the provinces themselves desire.
For all those reasons I am unable to support the hon. member's motion.