Mr. Speaker, it is a pleasure to join in the debate on the opposition motion, the last opposition motion before we break for the summer recess.
If the government decides to demand the $3.3 billion in capital gains refund overpayments from the four provinces including the $121 million from British Columbia it will be a massive blow to those provinces, particularly British Columbia. I will focus my remarks on the devastating economic and moral impact repaying the overpayments would have on the province of B.C.
Clawing back $121 million could not come at a worse time for British Columbia. The provincial finance minister announced earlier this year that for the first time in recent history B.C. has become a have not province. Finance minister Collins also announced that British Columbia's budget deficit for the coming year would be a record $4.4 billion.
If that is not bad enough, the Conference Board of Canada predicts real GDP growth in B.C. this year will be a paltry 1.8%, the weakest performance of all provincial economies. The board also said the softwood lumber dispute with the United States is keeping the outlook for forestry gloomy and that rising interest rates would suppress housing starts next year. Furthermore, the value of B.C. exports declined 24% in the first quarter of this year mainly because of the major reduction in demand for energy products.
To battle the bleak economic forecast the B.C. government has had to make tough cuts and spending halts. The government will cut all ministries except health care and education by 25% over the next three years. The provincial government is currently restructuring education and health care. Given this depressing economic climate the federal government's demand for $121 million for its own mistake will have a negative effect on the lives of all British Columbians.
Time and time again the federal government has demonstrated a callous neglect for B.C. It is turning its back on British Columbia on almost all major industrial fronts. Farming is under threat due to the recent U.S. farm bill and the dramatic increase in subsidies to U.S. farmers. What is the federal government's response? It has done nothing.
Offshore drilling for oil and gas is another issue. B.C. is dependent on the co-operation of Ottawa to start exploring for oil and gas. This is an opportunity, given the success in Newfoundland, for the federal government and the B.C. government to work co-operatively and be proactive on this front for the betterment not only of British Columbians but all Canadians.
I have raised the issue of the mountain pine beetle time and again in the House. The mountain pine beetle is eating up massive amounts of forest in the B.C. interior. Yet the request for $60 million of federal assistance over five years to help solve the problem has been ignored. Where is the federal government's help? It is nonexistent.
There is also the potential impact of softwood lumber tariffs on B.C.'s economy. The forestry sector directly accounts for about 9% of the province's total economic output. Approximately 20,000 forest sector jobs province wide, or one in five, are expected to be lost as a result of restructuring in the industry between 2001 and 2003. Up to 50,000 jobs could be adversely affected by the tariffs. What has been the government's response? It has directed less than $100 million toward the softwood lumber crisis. If the situation was not so serious it would be laughable.
How can the government justify giving $158 million to three marketing companies in Quebec for advertising and sponsorships, companies which could not possibly employ more than a few hundred people, while giving only $100 million to a situation affecting 50,000 potential jobs in B.C.?
Now more than ever the province of British Columbia needs co-operation and a little understanding from the federal government. It does not need an economic blow that would require it to take $121 million out of its budget to repay a mistake made by the federal government.
This brings me to another point: The new finance minister justified his decision to ask for the overpayment to be repaid by saying it is common practice and that the government is maintaining its fiscal policy of reducing the national debt. Why does the minister find it acceptable to hide behind the Liberal policy of reducing the debt while overseeing a ministry that has been diverting funds to foundations to avoid paying the surplus toward the debt? I am speaking of the roughly $7 billion that has been hidden away in foundations which are largely unaccountable and which, by the auditor general's own accounting, she cannot get at to see where the money is going or where it is to be spent.
These types of justifications and hypocritical actions, like the government's dishing out of hundreds of millions of dollars to Liberal friends and contractors while in the same breath it demands an economically strapped province to pay for a mistake it did not make, only add to the growing perception that the federal government does not care about British Columbia. The government's arrogant and dictatorial style of governing is fueling the increasing sense of cynicism and hopelessness Canadians from coast to coast have toward our federal political system.
This brings me to the morally negative impact the federal government's actions are having on the province of British Columbia, an impact it will further by demanding repayment of the $120 million.
By and large the people of British Columbia read the same news stories as people in Ottawa. Do members think British Columbians are uplifted when they read that B.C. must pay Ottawa $120 million and then turn the page and read that the Prime Minister paid $101 million for two new Challenger jets he did not need? Are they uplifted when they read that over $158 million was awarded to three Quebec marketing agencies that coincidentally happened to have donated $246,000 to the federal Liberal Party since 1997? Are they uplifted when they read that the former defence minister paid his ex-girlfriend $36,000 to produce a 14 page report on post traumatic stress disorder when his own department was also studying the issue? Are they uplifted when they read that $1.6 million was given to Groupaction Marketing for three contracts? As if that were not enough, the public then finds out two of the reports were identical. One cost $575,000. The other, which the government never received, cost $550,000.
Why would the government demand the money back just to give out billions of dollars in federal programs that have been proven to be deeply flawed like the HRDC billion dollar boondoggle, Shawinigate or the sponsorship program? Does the government think its demand for $121 million from B.C. will restore hope and trust in the political system among British Columbians?
The new finance minister should follow in the footsteps of his predecessor who advocated forgiving past revenue overpayments to the provinces. Political gains and leadership infighting should not be allowed to adversely affect millions of people's lives, jobs, hopes, education and health care.
Given the callous disregard the government displays on a daily basis for the tax dollars with which it is entrusted, is it any wonder Canadians have given up on democracy? They do not bother to vote anymore. Before he became Prime Minister the current Prime Minister promised Canadians in the red book of 1992-93 that he would restore trust and integrity to government. Yet time and again he has done everything possible to destroy that trust. Is it any wonder Canadians throw their hands up in despair and say the system is so wrong they might as well vote Liberal and have it all?
It is frightening to see this happening in a supposed democracy. Why would the federal government want to rub salt in the wounds of British Columbia as it struggles with the damaging softwood lumber tariffs? British Columbians would not mind repaying the money if they felt Ottawa would manage it wisely and contribute tax dollars fairly to all the provinces. However with the federal government's track record why would B.C. want to give the government its hard earned money and be forced to cut social programs so the money could be burned up in smoke by some Liberal government spending boondoggle?
In conclusion I will quote from Mark Twain's autobiography because it is pertinent to my point about Canadians giving up on the system and the actions of the federal government affecting the morality of Canadian society. Mark Twain said:
To lodge all power in one party and keep it there is to insure bad government and the sure and gradual deterioration of the public morals.