Debates of Nov. 3rd, 2003

The Economy

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Speaker, I was always taught that “it is not whether you win or lose, it is how you play the game that counts”. Winning by cheating is not necessarily the best way to do it.

I do not know how the member is coming up with those goofy numbers. If he looked at the tables that we published this morning, our transfer payments to the provinces both for CHST and equalization go up continually over the next five years. If there is a change or an adjustment, adjustments occur to equalization because the formula requires adjustments that reflect the economic reality. That is normal.

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, once again, the Minister of Finance is acting like his predecessor, the future prime minister, by grossly underestimating the government's budget surplus.

The minister is announcing now that Quebec and the provinces will not know until September 2004 whether or not they will be receiving the $2 billion for health.

Does the government not find it improper to wait until September 2004 to confirm that the $2 billion will be forthcoming, when Quebec and the provinces have pressing needs and need to know now, not ten months from now, whether or not they will be receiving this money?

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Speaker, when I met the finance ministers here in Ottawa a few weeks ago, they agreed unanimously, if I remember correctly, that the federal government should not go into deficit.

As soon as we are in a position to confirm that there will not be a deficit at the federal level, we will be able to start paying the $2 billion. Before our books for the current year are closed, we should know if we will be able to come up with this amount without going into deficit.

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, not only is the Minister of Finance contributing to a climate of uncertainty but he is being cynical, because he could very well confirm right now that the $2 billion will be forthcoming. He is not doing so simply to allow the future prime minister to come and save the day, when he was the one who created this whole mess.

Is it not cynical to give the future prime minister the opportunity to say during the election campaign, “By the way, I have come up with the $2 billion”?

Another fine promise rehashed two or three times, in true Liberal fashion. That is all the minister is doing, and nothing more.

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Speaker, if the future prime minister is able to come up with the $2 billion, it will be because Canada's economy has continued to grow.

And this is good news, not only for the provinces of Canada, but also for all Canadians.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, for four years, Canada's finance ministers have been off by 323% in 1999-2000, 353% in 2000-01, 493% in 2001-02 and 133% in 2002-03.

With such scores, is it not despicable of the Minister of Finance to announce that, based on his estimates, he is putting off paying the $2 billion for health until next year, when he knows full well that several credible estimates show a surplus between $6 billion and $9 billion dollars?

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Speaker, first, these estimates were produced with help from the private sector. These are not the finance department's estimates.

Second, I prefer to be prudent with the estimates. I would not want to end up like the former government of Ontario, or the former PQ government of Quebec, in a situation where I promised a balanced budget and delivered a deficit. That is not the best way to manage Canada's books.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, based on his statement this morning, is the Minister of Finance not asking the provincial governments to provide deficit insurance, since it is delaying a payment that should be made immediately, given that the provinces are spending money right now on health?

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Speaker, I believe the provinces will be quite happy because the condition on the promise, as they say, of $2 billion, was to have a federal surplus of over $3 billion.

This morning, I said that if the surplus was only $2 billion, it would go to the provinces. This is even better for the provinces than the promise made in the health accord.

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

Mr. Speaker, the finance minister briefly ran for leader last spring before he took his ball and went home. One might say he should have run to be misleader 2003. Every year he produces unrealistic economic statements and forecasts that do not add up so that he has a cover for his spending sprees.

Is it not true that the finance minister is misleading Canadians about the size of the surplus so that they do not realize how overtaxed they are?

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Speaker, I think Canadians are happy to realize that according to the OECD we now have the third lowest taxes in the OECD as a percentage of GDP. They are also happy with the fact that in five years we have reduced taxes by $100 billion.

Quite frankly, I think Canadians are concerned about ensuring there is a proper balance between economic policy on the one hand, including fiscal prudence, and ensuring that the level of government services remains at a high enough standard that their needs, whether they be health, education or otherwise, are met.

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

Mr. Speaker, what a tangled web we weave when we practise to deceive. The finance minister deceived Canadians today about the level of tax cuts they received. He said that it was $100 billion. Actually it is a fraction of that. He is deceiving them again on the surplus.

When will he admit that his economic statement is about as useful for predicting the surplus for taxpayers as financial statements for Enron were for its shareholders?

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Speaker, I am not quite sure what the member is complaining about. It seems to me that Enron got into trouble because it tried to tell shareholders that things were better off than they were and he seems to be criticizing me because I am telling Canadians that they are worse off than they are.

The truth is that these are forecasts. These are not history. They are the future. We are doing our best to give a good vision of what the future lies, but we have built in, as I explained this morning to the committee, prudent assumptions. We have tried to be cautious because unlike the Progressive Conservative government in Ontario, we are going to do as well as we promised.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, my question is for the Minister of Finance who said that the Liberals respect their undertakings. I think I am quoting him directly. I would hope that he would be prepared at some point to say that about the commitment that was made to VIA Rail, if they respect all their undertakings despite what messages might be coming from other places.

The Minister of Finance knows the need for stability and long term planning in health care. Why would he put the provinces in a position where they cannot be certain of $2 billion? They need to plan how to spend it. I was wondering if he could commit to the House and to the provinces today that they will receive that $2 billion come what may.

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Speaker, I remind the hon. member that the commitment in the first place was a conditional one. It was conditional upon there being at least $3 billion in surplus determined by the month of January 2004. It is clear from the forecast today that we are going to be unable to forecast a surplus that large by January. However, I think the provinces will find that a responsible position was taken today, one to their liking, namely that if there is a surplus, they will get the first $2 billion.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, it seems to me that there is room here for an unconditional promise to the provinces.

The fact of the matter is that we all have reason to worry about this. We are celebrating the 10th anniversary of I do not know how many broken promises, on home care, on day care, on greenhouse gas emissions, on job creation. Just name it, there are broken promises all over the place.

All I am asking is that for once the Liberals make an unconditional promise and keep it, and make sure the $2 billion goes to the provinces for health care. The Liberals could cut the corporate tax cuts for next year and deliver that money now if they wanted to.

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Speaker, contrary to the views of the NDP, I believe that having a balanced budget is very important. I believe Canadians believe that.

If we want to look over the last 10 years, I ask the hon. member to think of the fact that today in Canada there are three million more Canadians working than there were in 1993. I ask him to look at the fact that 10 years ago, 5 years ago, we were the second worst in the G-7 when it came to the level of our debt in relation to our GDP. Now we are the second best. I ask him to look at the fact that year after year we have outperformed the G-7 in growth in our GDP and--

[The Speaker]

The hon. member for Kings--Hants.

Financial Institutions

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, in the summer of 2002 the finance minister gave the green light to bank mergers. Then, weeks later, the Prime Minister said no to bank mergers until after his retirement. Today the finance minister promised that the government will soon “deliver new policy on the financial services industry”.

Will the finance minister admit that his government's new policy on bank mergers is simply that his new prime minister, the member for LaSalle--Émard, will allow Canadian banks to merge?

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Speaker, this is a serious matter affecting an important sector in our economy, as I said to the member in committee this morning. His committee, the finance committee of the House, together with that of the Senate, have studied this matter. The government has responded. We have asked a series of additional questions on which we are receiving the input of Canadians.

We promise that we will respond in a comprehensive way to the issues that affect not just banking but the financial services sector by the end of next June, and that applications to merge institutions can be considered. In the meantime, there have been mergers in that sector, as the hon. member well knows.

The Economy

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, today the finance minister used the $2 billion health care transfer to the provinces as an excuse for his government's decision to reduce the contingency reserve and further reduce its commitment to debt reduction.

Since the $2 billion for health care spending is about equal to the projected reductions in equalization payments, will the minister admit that his government's backtracking on debt reduction has nothing to do with health care funding but everything to do with rampant pre-election spending?

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Speaker, they seem to change ground quite a lot over there. I do not know whether the results are too good or too bad.

What I would say is that the issue of debt reduction remains an important priority for the government. This is not the first time that we have, at this point in the year, been faced with a contingency reserve of less than the full $3 billion. That was the case in the 2001 budget as well. As economic conditions improved we were able to fully restore, not only the contingency but the additional prudence in our statements. I expect that will be the case again.

[Michel Gauthier, Bloc, Roberval, QC]

Mr. Speaker, by announcing his intention of delaying payment of the $2 billion for health nearly a full year, the Minister of Finance is compromising not only the budgetary balance of the provincial governments, but also the quality of health care.

How can the Minister of Finance be so petty as to engage in such a dangerous game, when we all know very well that the hidden agenda is to provide an opportunity for the next prime minister to come in like some super hero and save the day, just before the next election campaign?

[John Manley, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Speaker, to repeat: that promise was conditional. The condition was that the government be able to report a surplus of $3 billion next January.

We will not be able to do that, so what does the hon. member want us to do? Say “No, we cannot pay”? Or wait until we are able to say, if there is a surplus, that the money will be transferred directly to the provinces, regardless of the amount of the surplus, provided it is at least $2 billion?

[Michel Gauthier, Bloc, Roberval, QC]

Mr. Speaker, there is a distinct odour of electioneering in all this.

If the Minister of Finance chooses to low-ball his estimated surplus, as he has in recent years, why not admit that he is just following the strategy of his predecessor, the hon. member for LaSalle—Émard, who invented it and who ordered the minister from off stage to underestimate the surplus in order to maintain the uncertainty and keep people in suspense about whether or not the $2 billion will be forthcoming, so the super hero can come along later and make the announcement?