Mr. Speaker, I appreciate the chance to speak to Bill C-54, an act to amend the Federal-Provincial Fiscal Arrangements Act.
Let the record show that the parliamentary secretary does not know the answer to the hon. member's question about what year. It is pretty obvious.
At any rate, this is an important issue. I am happy to weigh in on the debate. Many Canadians are curious about why at this stage in the cycle of equalization the government is bringing in amendments that would extend the current fiscal arrangements between the federal government and the provinces for another year. Why at this point would the government be doing this? This is almost without precedent. In fact, I think it is without precedent at least in this form. I think the question is why.
A minute ago the parliamentary secretary was saying that extending the current formula and the agreement for another year is insurance. I understand that argument. We are not arguing against taking that step. He argued that it is prudent to do it. In a sense he is correct, but it is only prudent because the federal government did not get an agreement with the provinces over the last four and one-half years.
The government has had all kinds of time to come to an agreement, but it failed to do it. That in itself was not prudent. Now the government has come to a point where we have to rush the bill through to ensure that the provinces have comparable services, if they do not have the fiscal capacity to provide them themselves, through equalization. This is a program that the official opposition supports. In this case we have concerns about how the bill is being rammed through.
Later on I will speak in some detail about some of the changes we would like to see to equalization. However, I do think the government should be taken to task. A minute ago the parliamentary secretary said that the Prime Minister and the finance minister have had very good meetings with their counterparts in the provinces. That is fine, but it is a little late in the year to get to this point where now we have to ram through something that by anyone's admission is not acceptable to the provinces.
The provinces are unhappy with this formula. However, because the government dithered for so long we are in a position where we now have to bring forward this unprecedented legislation to ensure that in fact equalization payments can continue, so we can provide basic services in those provinces where they do not have the capacity to provide them themselves.
The official opposition is very critical of the government's performance. It points to a deterioration in the relations between the federal government and the provinces over the last many years. Over and over again we see provincial elections where the campaign is more and more about improving relations with the federal government. This bill is just one more example.
I want to speak about some of the concerns that we have about the actual equalization formula as it is today. Many provinces have big concerns about the formula.
Not long ago on television I was watching the new premier of Newfoundland, Danny Williams, talk about the concerns in Newfoundland about the formula. He pointed out that oil and gas has created about $14 billion in revenue out of Newfoundland, but what is the net positive effect for Newfoundland? It is $300 million. Why is that? It is because, unbelievably, the equalization formula today claws back almost every dollar that comes out of non-renewable natural resources.
Let us think about that. Non-renewable natural resources are resources that cannot be renewed, unlike hydro and other types of resources, forestry for instance, that are renewable. Once those resources are gone, they are gone.
In its wisdom, or lack of wisdom, in the past the federal government has insisted that every dollar that comes out of non-renewable resources be clawed back. A province such as Newfoundland which is trying very hard to get on its feet and be a net contributor to the equalization formula cannot do it or it is impeded by the current formula. That has to change.
We have to extend a hand to provinces like Newfoundland and Nova Scotia which have resource wealth and ensure that when they start to develop those resources, they are not penalized by an equalization formula that claws back virtually every dollar they get from the development of those resources. That is completely unfair. That has to change.
It is not only Newfoundland and Nova Scotia that have concerns. Many other provinces have big concerns about the equalization formula as it is today.
In British Columbia people have concerns about the fact that property values are calculated as a way of determining the relative wealth of a province and that figures into whether or not they should get equalization payments. In Vancouver there are very high property values and very high property taxes as a result of that. That is not necessarily an indicator of how well the province is doing economically. British Columbia has struggled over the last number of years, but it still has very high housing prices. As a result of that, it probably does not end up in a situation where it would get equalization where otherwise it would. I know British Columbia wants to see that change. We support those kinds of discussions.
There is a lot of interest and a lot of people are saying that maybe we should change from a five province formula to a 10 province formula so that we get a better sense of what the actual average standard of living or capacity to provide services to the public really is. The five province formula which measures the relative capacity of the five provinces in the middle of our 10 provinces to provide those services may not be a very good indicator of actual capacity to provide services. We favour a debate about going to a 10 province formula.
Let me emphasize again that my party supports equalization. It is part of our constitution. As an Albertan, my province contributes more than any other province per capita to equalization. I always say that I think Albertans are probably more patriotic than any other citizens. I say that because they have to pay a pretty high admission fee to be in Confederation. We pay a lot of money into Confederation.
Other provinces, and I am not knocking them, are net recipients and that is fine. However, I do like to point out, when people say that Albertans are sometimes a little standoffish about Confederation, that we pay a very high price to be in Confederation. We are happy to be Canadians. It is also important that others recognize that Alberta pays a tremendous amount of equalization into Confederation to ensure that other provinces have services that are comparable to the national average.
Having said all of that and that I favour equalization, I want to point out that equalization is really a safety net. It is like a social program in a sense. It provides a safety net to ensure that no province gets itself into a situation where it cannot provide basic services. The Canadian Alliance believes, the official opposition believes, that no matter where we go in the country we should be able to get good health care. To me that makes sense. I think Canadians agree with that. We should be able to get all kinds of government services that are important to the proper running of a society. We believe in that. We have no problem with equalization. It should be there.
I think all members in the House would agree that the ideal would be that every province would eventually get to the point where it had the fiscal capacity to provide those services on its own, without the need to rely on equalization. That should be the goal. I would like to say that we are getting closer to that, but unfortunately we are not. I do not know if members have had the chance to read some of the newspapers today that pointed to the fact that Canada is falling further and further behind in its capacity to compete in the world.
I do not know if members realize this but in 2001 Canada was third in the world on the global competitiveness scale as produced by the World Economic Forum out of Geneva. Today, two years later, we have fallen to sixteenth place, from third to sixteenth. Why is that? Is it because we have had some big natural disaster that has set us back? No, according to the World Economic Forum it is because of government policies.
While we are having a debate today about equalization, I am going to argue that the most important way to help Canadians is not through equalization, it is through a strong vibrant economy that is more and more competitive, because we are in a global competition. Unfortunately, however, the government, despite its rhetoric about wanting to improve our capacity to be innovative and to compete, has failed utterly and completely to address those problems. That is why we have fallen from third to sixteenth in two years.
I want to quote from this morning's Globe and Mail , which in turn is quoting from the report:
Canada's quick fall can be traced mainly to “a perceived decline in the quality of public institutions”.
It goes on to say:
As well, Canada fell to 24th this year from ninth last year on the forum's public institution sub-index, which compares countries based on how conducive to business competition their governments and other public institutions are.
It goes on and on and talks about how Canada has failed to address some of the big problems that it needs to address to ensure that our country is more competitive.
When we talk about being more competitive, we are not just talking about businesses competing. We are talking ultimately about the ability of a country to provide a higher standard of living for its citizens. That is what government should be focused on.
It is one thing to talk about rearranging the wealth we have, which is what equalization does. It is quite another thing to talk about making the pie bigger, creating more wealth and ensuring that Canadians not only have access to that wealth but that they have access to the jobs that allow people to exercise their great talents and God-given abilities. Unfortunately in Canada today with an 8% unemployment rate, that is not an option open to millions of Canadians. They are unemployed as a result of poor public policy and lack of planning that comes from the government.
The current finance minister has failed to meet the challenges that have been laid before him, despite all the talk about wanting to address those things. The industry minister and the human resources minister headed up an initiative that was designed to address our competitiveness and innovation challenges. Rather obviously they failed.
I am not going to let the former finance minister off the hook either. He was here in 2001 when we were ranked third. By 2002 we had fallen way down the ladder, and if I remember correctly it was right down to eighth or ninth. The new Liberal leader who wants to become the prime minister was in charge at the time. He cannot escape unscathed when it comes to ensuring that someone is held to account for this wretched performance by our economy. The blame for this has to fall squarely at the feet of the new Liberal leader. He has failed utterly and completely to address these issues.
He gave a speech in Montreal the other day. He laid out some of his vision for addressing these kinds of problems. One of the problems with the speech was that he had about a $50 billion hole in his accounting as to how he would pay for all of the things.
The report that I have been referring to talks about the credibility problems of public officials. It specifically talks about the credibility problems of public officials in Canada. I want to argue that the new Liberal leader, the soon to be prime minister, the member for LaSalle—Émard, the former finance minister, has a massive credibility problem. He is contributing to this fall in Canada's competitiveness versus other countries.
All of this is more than just an academic debate. It is not an abstract debate. It has to do with the ability of government to provide good, well paying jobs for ordinary rank and file Canadians, for people to grow up in this country and pursue their dreams.
For many people, unlike when I grew up, it is very difficult to simply step out of high school and find a good job. They have to go to university and even then it becomes difficult. Many Canadians end up going elsewhere to find jobs. That is unacceptable.
There are many people in this place who have families that have moved elsewhere in the world. Many of them have moved to the United States but not only there. They have left in some cases to go to Ireland and other countries because that is where the opportunities are for them in their particular fields. It is time that, as a Parliament, we start getting serious about addressing our competitiveness in the world.
The debate we are having today is about equalization, but the greatest help that we can provide to Canadians is not to redistribute income. The greatest help we can give is to create an economy that is conducive to attracting investment, that creates jobs and gives people some real hope. That is not what is happening in Canada today. We are falling further and further behind.
Some people say we are measuring ourselves against the United States. It is true that we have fallen behind in terms of our ability to compete against the United States. Our standard of living versus the United States has fallen dramatically. Even the current finance minister, when he was industry minister, pointed out that the standard of living in Canada had fallen to the point where it was now equal with the poorest of the poor American states like Mississippi, Alabama and Georgia. That is a shame, given the wealth that we have as a nation and the fact that we have unfettered access to the wealthiest market in the world, the United States.
It is not just the United States we are falling behind. We have fallen behind the Finns, the Danes, the Swiss, the Dutch, the Irish and the Icelanders. They are all surpassing us. Why are they doing it? Is it because they have all kinds of resources that we do not have? Obviously not. In Iceland, there are hardly any resources. It is because Iceland makes better public policy decisions.
What we will find when we look at all of those countries I have mentioned is that they have reduced their taxes dramatically, to the point where they are attracting investment from all over the world. This allows them to create businesses that provide jobs and incomes for millions of their citizens.
We need to be doing the same. If Ireland, in the middle of the North Sea, can do it with no resources, surely Canada can do it, with its massive resources sitting atop the United States with an $11 trillion economy and the wealthiest economy the world has ever known.
However, we keep falling further and further behind thanks to poor public policy planning on behalf of the Liberal government, the former finance minister, the current finance minister and the current Prime Minister. They are all in it together. It is a disgrace. It is a lost decade. It is a poor legacy for the Prime Minister who will be departing soon.
In closing, this debate has been about equalization. We want to see changes made to equalization and we want to see equalization continue, but we cannot make that our focus. Our focus must be on creating an economy where Canadians can have good, well paying, long term jobs. That is the real answer in helping people in all parts of this country achieve their goals ultimately to live fulfilled lives.