House of Commons Hansard #63 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was billion.

Topics

The BudgetGovernment Orders

3:55 p.m.

The Speaker

The question is on the amendment. Debate.

The BudgetGovernment Orders

3:55 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, it is with a great sense of responsibility that I rise to speak on yesterday's budget presented by the Minister of Finance.

Yesterday, the government missed a golden opportunity to fundamentally change the state of finances and the state of the economy in Canada and Quebec.

The $15 billion in spending announced yesterday for the next two years shows that the federal government had ample leeway to respond to the concerns of Canadians, Quebeckers and the provinces with respect to some of the basic issues that have been debated for the past two or three years.

Rather than tackle the real problems, the government and the Minister of Finance, not unlike the Prime Minister, chose to take an all-over-the-map approach. I found 74 different areas of spending.

He chose to invest in provincial jurisdictions. Once again, he chose to create new initiatives, without really tackling the issues raised by Quebeckers, Canadians and the provinces, especially Quebec.

Although I am extremely disappointed to see that the Minister of Finance and the government did not take advantage of this golden opportunity, given that they had the means to correct a certain number of fundamental problems, I am nonetheless pleased to see that the public and the media, in particular, were not taken in.

In the headlines this morning I noticed for instance that the budget handed down by the Minister of Finance was described as a budget for everybody and a budget for nobody.

One newspaper indicated in its article on the budget that he is trying to please too many people. Another headline referred to hidden defects. A third was entitled, “Promises, Promises” and another, “The Urge to Spend”. Finally, there was one that I found especially striking describing yesterday's budget as a chicken with its head cut off. The government is running around in all directions and has produced a budget without a master plan.

The first thing to note in considering yesterday's budget speech and related documentation is that it has shown the extent of the fiscal imbalance. I think the federal government should have made it a priority to correct this imbalance, whereby this government has much greater financial resources than it needs to fulfill its responsibilities, especially those recognized under the Constitution Act, 1867.

There is also the fact that the needs are in the provinces and that, over time, the past few decades in particular, these needs have caused expenditures to grow, sometimes exponentially.

With respect to health, given the aging of the population, the new technologies and drug costs, we know that health costs are growing faster than the collective wealth, the gross domestic product.

So, the needs are in the provinces, while the money is in Ottawa. This became obvious yesterday when the Minister of Finance announced an additional expenditure of $6.4 billion to be made within a matter of weeks— we are not talking about years or decades here—that is by March 31. That is five weeks from now, six at most.

This goes to show that,unfortunately, the federal government has again kept information from the public, information on the real anticipated surpluses for the current fiscal year in particular. I will come back later to the fact that, for the next fiscal year also, we think that the surpluses will be much larger than those announced yesterday by the minister.

To illustrate this fiscal imbalance, since the Liberals took office, revenues raked in by Ottawa have increased from $123 billion in 1993-94 to $185 billion on 2003-04. That is a 50% increase.

We are not talking about several decades. We are talking about ten years at most, during which the federal government saw its overall revenues increase by 50%.

I think we all agree that this is a lot of money, considering the responsibilities of the federal government.

As I mentioned, for the current year, the minister had told us, in his economic statement, about a $1 billion surplus for strategic planning. Let us be generous and add to that $1 billion for strategic planning the $3 billion contingency reserve. This amounts to a $4 billion surplus.

Yesterday, not only was the minister able to maintain the $3 billion reserve, but he also announced, as I mentioned earlier, additional spending of $6.4 billion by the end of the fiscal year.

The minister himself admits that the surpluses will not be around $1 billion, if we exclude the reserve, or around $4 billion if we include it, but, rather, around $9.4 billion.

Based on the forecasts of the main Quebec and Canadian banks and financial institutions, we had anticipated that the surpluses would be closer to $10.4 billion.

Indeed, for the past several weeks, the Bloc Quebecois has been telling the public, through the media, and also here in the House, that the surplus would be closer to $10.4 billion.

Now, we must also take into consideration the changes tof accounting procedures announced by the minister yesterday, at the specific request of the Auditor General. Following these changes, this year's surplus will increase by $3.1 billion.

While the minister admitted yesterday that the surplus would not be $4 billion but, rather, $9.4 billion, I can assure the House that at the end of the fiscal year, once all tax revenues and expenditures have been calculated, the surplus, before the measures announced yesterday, will be around $13.5 billion instead.

The government is still hiding from the public the real state of public finances. This is totally unacceptable, particularly on the part of a minister who prides himself on being transparent.

This reminds me of a saying that has been around for generations in Quebec and that has to do with culture. We often say that culture is like jam: the less one has, the more one spreads it. It is somewhat the same thing with transparency. The less one has, the more one boasts about it.

I think that the minister and the current government are back up to their old tricks, incapable of acting with transparency and providing accurate information to the public. The best I heard was one commentator who said that it was true that the current Minister of Finance was underestimating the surplus, but not to the extent that his predecessor was. We could at least give him that.

This is not what Canadians and Quebeckers want to see. They want to know the true state of affairs.

As I mentioned earlier, we are projecting a surplus this year of around $13.5 billion. Next year, unlike the minister who has announced an $8.8 billion surplus, we believe that the surplus will be around $12.3 billion.

Yesterday in his budget, the Minister of Finance announced a surplus of $18.2 billion over two years, based on the spending and contingency reserve he indicated; however, we project a surplus of over $25.8 billion for this same period. That is a difference of approximately $7 or $8 billion.

Not only is this observation a sign that the government lacks transparency, but the size of this surplus is eloquent testimony—and no one on the government side can say otherwise—to the existence of a fiscal imbalance. Instead of spreading this $15 billion all over the map, they should have fixed the structural problem of fiscal imbalance once and for all.

Remember that, next year, 7 out of 10 provinces in Canada will be running a deficit. Only Quebec, Manitoba and Alberta will avoid this situation. There is something wrong when the federal government has doubled its revenues over the past 10 years, while most of the provinces, except Alberta, which is a very special case, are running a deficit. Even Quebec and Manitoba are just managing to keep their heads above water. A economic downturn could push us back into a deficit.

I was saying that except for Alberta, Manitoba, and Quebec, all the other provinces are running a deficit. Even Ontario will run a deficit next year.

It is the same taxpayer. It is not a taxpayer with a split personality who has one way of looking at the taxes he pays to Ottawa and another way of looking at the taxes he pays to Quebec City. It is the same taxpayer who pays in both cases.

As I mentioned earlier, we would have liked the federal government to withdraw from part of the tax base and allow the provinces to independently and democratically assume their responsibilities, especially in health, post-secondary education and income security.

The first observation we must make about this budget is the extent of the fiscal imbalance, which was once again demonstrated by the Minister of Finance himself.

The other observation is that since the government has too much money and not enough responsibility, it is inventing responsibilities. I think the second thing we must take from yesterday's budget is that a good portion of the money is going to the wrong priorities.

After the first ministers meeting a few days ago when the Prime Minister of Canada announced $2.5 billion in new money for the Canada health and social transfer, and with the size of the surplus now out in the open, although not news to us, we would have expected the federal government to have done a little more for health.

But it stuck firmly to the agreements that were reached barely ten days ago. As I was saying earlier, we have to use money we set aside for priorities that are questionable, to say the least. I will come back to this.

By the way, just in terms of interference in provincial jurisdictions, in Quebec in particular, with regard to the $15 billion that I talked about earlier, we identified $4.5 billion in new spending in areas that do not remotely come under federal jurisdiction.

This will result in squabbles, confusion and waste. The taxpayers of Quebec in particular, and those in the rest of Canada as well, agree that there was no need of it. The needs are so great, social needs in particular, that this money could very well have been used for more positive purposes, particularly, as I have already said in my first point, to correct the problem of fiscal imbalance for once and for all.

While they were busy invading areas of provincial jurisdiction, and funding a whole series of initiatives in a multitude of areas, many different segments of the population of Canada and Quebec who need immediate assistance failed to receive it.

I am thinking, for instance, of the workers, communities and companies that are victims of the softwood lumber dispute at this very time. There is absolutely nothing in the budget to address this dispute, which has now dragged on for over a year and half, almost two years.

I have asked the question of the minister, but he was not able to answer. He stayed in his seat and deferred to the Minister for International Trade.

We would have expected a number of measures for self-employed workers, particularly in connection with employment insurance. It is as if they did not even exist. We know very well that, within a few years, what is termed non-standard work, that is work that is not regular or not full time, will become the norm. As far as the federal government is concerned, however, it is as if it never existed. They are still living in the 1950s or 1960s, and have not noticed that the labour market has changed.

There is absolutely nothing for aboriginal people in this budget either. I will be told, of course, that there is plenty of money for health. That, however, will not make any fundamental change in the relationship between the federal government and aboriginal people.

In the coming year, the unemployed and the workers contributing to EI will again be having to make contributions that will be used for purposes other than protecting their income if they lose their jobs.

So, a lot of areas have been ignored. There are, of course, some measures that may at first seem worthwhile, in particular the higher limit for RRSPs, registered retirement savings plans. Despite the fact that the limit has been raised to $18,000, it must be kept in mind that only 1.5% of Quebec taxpayers are already contributing the maximum allowed amount of $13,500.

I noticed that several financial analysts have highlighted this initiative, but this does nothing to solve the problem of retirement savings. Approximately 80% of the population is unable to contribute enough to RRSPs. These people have no access to additional pension funds and they may end up in poverty when they retire. In response, the federal government preferred to implement a measure that, at first glance, seems to be good, but that will only help a small minority of people in the end.

I spoke of misplaced priorities earlier. We know that since 1998, the defence budget has increased 53% and there is an additional $1 billion in spending for next year.

Of course we are not against defence spending in principle, but we need to know what this money will be used for. There has not been a review of Canada's defence policy in more than ten years. The debate on Iraq only proves that we do not know what Canada will do; the position of the Government of Canada is unclear. Before throwing billions of dollars at defence, I think we should have had this debate.

And there are other priorities. Take the example of post-secondary education. Federal transfers for education have decreased 30% since 1996. I think that this is a priority need for Quebeckers and for all Canadians. This need could have been met immediately.

I do not have much time left, and a number of my colleagues will have the opportunity to touch on different aspects of the issue, but I would like to talk about the minister's proposal regarding employment insurance premiums.

The minister has made much ballyhoo about the drop in premiums, from $2.10 to $1.98 per $100 in insurable earnings. In fact, he already announced the greater part of this decrease last October during his economic statement, where he said that he would be lowering premiums from $2.10 to $2.00. Now he is announcing that it will not be $2 but $1.98.

In fact, what the Minister of Finance announced yesterday was a decrease in EI premiums of two cents more than previously announced. He will give up $100 million and continue to collect between $2.5 and $3 billion in excess premiums. Obviously, this is before holding consultations. We shall have to keep an eye on the government on this one.

I would like to read from a release by the Department of Finance issued on February 2, 2001—that was just two years ago—which said the following, with respect to the EI premium rate:

In December 1999, the House of Commons Finance Committee concluded that the rate setting process needed to be revised. When Bill C-44 was introduced in September 2000, the Government of Canada announced that it would undertake a thorough review of the EI premium rate setting mechanism.

The same promise was made two years ago by another finance minister, and nothing came of it. What is scary is that the then Minister of Finance could well become the Prime Minister in a few months.

Would it not have been better to immediately resolve the issue of the process to set rates by creating an independent fund? That is what the unions are requesting, as are a good many employers' associations, to ensure that those contributing are the ones managing the fund and making decisions about premium rates and coverage.

Instead, what is announced is a consultation process, which I can predict will go nowhere. Meanwhile, the government will keep dipping into the EI fund and using this money, billions of dollars, for other purposes.

This budget is therefore a big disappointment. It provided a golden opportunity to resolve, in Canada and Quebec, a number of fundamental problems such as fiscal imbalance, misappropriation of EI funds, infrastructure—for which municipalities are requesting huge amounts of money—Kyoto and many others.

As I said, in the next few days, several of my colleagues will have the opportunity to demonstrate that this budget is utterly unacceptable.

Accordingly, I wish to move an amendment to the amendment put forward by the leader of the Canadian Alliance.

I move:

That the amendment be amended by adding after the word “Minister” the following:

“that, among other things, deny that there is a fiscal deficit between the federal government and the provinces, and conceal budget surpluses to the detriment of democratic debate, and”.

The BudgetGovernment Orders

4:15 p.m.

The Acting Speaker (Mr. Bélair)

I declare the amendment to the amendment in order.

It is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Nanaimo—Alberni, Health.

The BudgetGovernment Orders

4:20 p.m.

Oak Ridges Ontario

Liberal

Bryon Wilfert LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, I thank the member for his presentation. There are two areas that come to mind. First, is the issue of fiscal imbalance. There is absolutely no evidence of fiscal imbalance. In fact, the province of Quebec, along with every other province, has the same ability to raise revenue as the government does.

Second, it is interesting that when it comes to the issue of tax points Quebec is demanding more tax points, but it does not recognize the tax points it already receives. Could the member explain to us how that can work? The member wants more but does not accept what is already a fact.

I am absolutely surprised to hear his comments regarding EI. This government has been reducing EI premiums for 10 years in a row. We have now announced premiums at $1.98. In fact, there is now an outline clearly indicating that we want to make it transparent and we want to ensure that EI pays for itself. The minister again announced that today in question period and the member continues to talk about how we are not doing enough with EI.

I hope the member will be part of those discussions when we will be ensuring that EI is used for the purpose for which we have talked about. I would like him to comment on that as well.

The BudgetGovernment Orders

4:20 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, to understand this properly, one must look at the past. In fact, during the second world war, the provinces ceded part of their tax field to the federal government so that the latter could finance the war effort.

Since then, the provinces, particularly Quebec, have been fighting nonstop to recover their tax field. It is true that Quebec was able to regain part of its tax field during the 1960s when the federal government returned tax points to Quebec. But it was Quebec's tax field. The same thing happened in the 1970s: part of the tax points we ceded to the federal government during the second world war were returned to us.

That said, the battle is not over. Yesterday's budget makes this abundantly clear. When additional expenditures of $6.4 billion over the next five years can be announced in the course of one afternoon, it is a sign that the surpluses are astronomical and that part of the federal tax base could be given to the ten provinces, seven of which are currently having financial difficulties.

On the other hand, the fiscal imbalance is also due in large part to the fact that the provinces' responsibilities, which were perhaps less important when the Constitution was written than they are now—I am talking about health, the environment and education—are now the public's primary concerns.

The federal government is all alone now. All Canadians, particularly in Quebec, and all the commentators agree. All that remains is to convince the federal government. That is going to take some time. I know that it is hard to get the government to understand, but it will see logic in the end. The provinces will eventually recover these tax points so that they can assume their responsibilities. The public is already demanding it.

As for employment insurance, I cannot understand the member's reasoning. It is true that the premium rate has decreased over the past few years, but the government has nonetheless managed to build up a surplus of nearly $45 billion in the employment insurance fund. Let us not kid ourselves. The former Minister of Finance was able to balance his budget and build up a surplus on the backs of the unemployed, workers and small businesses. The current premium rate is unnecessary. At $2.10, the government will still have a surplus of $3 to $4 billion in the employment insurance fund. At $1.98, it will still generate a surplus between $2.5 and $3 billion. This is unacceptable. That is not the purpose of the EI fund. We are asking for the EI fund to be managed by those who contribute to it. The federal government got out of that business in 1989, and it should stay out.

They may say, yes, but there were deficits in the past. Well, there was never a $42 billion deficit. These are excuses and specious arguments. If the government wants to be honest, it should transfer the fund to the contributors and find another way to finance itself. It will have to forego $3 billion, part of its surplus. As I was saying earlier, before the measures announced yesterday, we thought that over the next two years the surplus would have been $25.8 billion. In the interests of common sense, they can certainly do without this $6 billion.

The BudgetGovernment Orders

4:25 p.m.

Canadian Alliance

Rob Anders Canadian Alliance Calgary West, AB

Mr. Speaker, I would like to ask my hon. colleague from the Bloc a question.

I share many of his and his party's concerns regarding the federal government taking away money that rightly belongs to the provinces. I think particularly of health care, where in 1966 the federal government made a promise that it would be funding 50% of health care in the country. I know the premier of my province at the time, Ernest Manning, predicted that the federal government would wind up paying substantially less and would leave the provinces holding the bag.

I heard the last question and response, and I would love if the hon. member would take time to elaborate on his concerns regarding the federal underfunding of health care and how bad a position that has put Quebec in not getting its fair share of funding from the federal government. What does the member think the federal government should do to make good on that?

He also touched on employment insurance, an area where the federal government is taking massive over-contributions. I am glad that he touched on the $45 billion surplus that the federal government has amassed from employment insurance.

I would also like him to touch on something related to employment insurance, which is the Canada pension plan. His province was smart to set up the Caisse de dépôt to exempt themselves from the federal government on this. Education is another aspect with regard to--

The BudgetGovernment Orders

4:25 p.m.

The Acting Speaker (Mr. Bélair)

Order, please. We must also provide an opportunity for the hon. member to respond.

The BudgetGovernment Orders

4:25 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, the federal government did withdraw from health and post-secondary education. As we speak, it is contributing 14¢, perhaps 15¢, on every dollar spent. With the investments announced, its contribution might rise to 16%, or 16¢.

That is very far from what it was at the time when the system was put in place, and still far from what the provinces and the Séguin commission are recommending.

The federal government will have no choice: either it reinvests massively in transfers for health—because we now know that there will be such a thing—or it will have to give tax points back to the provinces and let them manage them as they see fit for health care.

There is a democratic problem. From the moment that the provinces depend on the federal government for health care, the legislative assemblies, including the National Assembly of Quebec, can no longer take action on the democratic choices of the people of Quebec, and this is also true of the other provinces.

We are gearing up for an election in Quebec. There will be a debate on health care. Voters in Quebec will make choices. The National Assembly may not be able to afford to take action on the choices made with respect to health care, and this is unacceptable.

The same goes for to education. The federal government did not add a cent for the provinces in the budget. Of course, there is a new grants and loans program and all that, but the provinces are still getting only 8¢ out of every dollar for education.

In closing, a change was introduced with the creation of separate envelopes for health and for social programs and education. I think it will be necessary to review the financing, as was done for social assistance a few years ago. For each dollar that Quebec put into social assistance, the federal government used to put in an equal amount. It was possible then to show imagination and creativity, and we did not have to scrounge around for every dollar, as the federal government is forcing us to do now.

The BudgetGovernment Orders

4:25 p.m.

Chicoutimi—Le Fjord Québec

Liberal

André Harvey LiberalParliamentary Secretary to the Minister of International Cooperation

Mr. Speaker, I have a great deal of respect for my colleague, but I find that it makes little sense to state here in this House—and not just once, moreover—that the Canadian government is only investing 14¢ in the health sector.

The figure prior to the last budget commitment of $35 billion was 40¢, which means that the Canadian government's commitments to health range between 45¢ and 50¢ for each dollar invested.

I would therefore like to ask my colleague whether he is prepared to rectify his statement. I do not believe in all this talk about a great Quebec consensus; we have heard all of this before.

I recall the debates on the young offenders act. It was the end of the world; and yet, once the act had been passed, Quebec got millions of dollars out of it to administer its system.

Then there was the great Quebec consensus on manpower training. Just go ask the rural municipalities and the clients whether they miss having the Canadian government's involvement in manpower training.

I would ask the hon. member this one thing: is he prepared to withdraw his statement to the effect that the Government of Canada is only investing 14¢ per dollar in health? I know that this is wrong.

The BudgetGovernment Orders

4:30 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, the government members are always right, but they are usually the only ones who think the way they do.

Allow me to read from a news release from the provincial first ministers from January 23, 2003.

First Ministers agree to the immediate restoration of the federal CHST funding to at least 18% of total health and social expenditures this fiscal year.

If funding must be restored to 18%, then it cannot already be at 18%. I submit that the current level is 14 or 15%.

I will continue reading:

First Ministers agree that this amount is approximately $5.4 billion—

What was announced yesterday was an additional $2.5 billion for the CHST.

In closing, I would like to read just this short passage from the news release:

First Ministers agree to escalate this federal contribution by 1% per year of the CHST equivalent to achieve a 25% financial partnership by the end of the decade as recommended by a number of eminent Canadians.

It may be that we are wrong and they are right, but they are the only ones who think so. In Canada, most people, like us, believe that the provinces are short on money for health, and that the federal government has not met the demands of the public.

The BudgetGovernment Orders

4:30 p.m.

Some hon. members

Oh, oh.

The BudgetGovernment Orders

4:30 p.m.

An hon. member

That will cause some problems.

The BudgetGovernment Orders

4:30 p.m.

The Acting Speaker (Mr. Bélair)

Order, please. The hon. member for Winnipeg North Centre.

The BudgetGovernment Orders

4:30 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

Mr. Speaker, I am pleased to lead off the New Democratic Party's contribution to the debate on the government's budgetary proposals.

This is my first budget as the finance critic for the New Democratic Party. I am very honoured to hold that position.

I want to pay tribute to my predecessor, the member for Regina—Qu'Appelle, who served as finance critic for many years. He has taught me a great deal. I will continue to rely on him and all my colleagues for advice as I begin these new responsibilities.

Let me also acknowledge the work of Jack Layton, the recently elected leader of the federal New Democratic Party. He is clearly a voice of reason and hope among political leaders in Canada today. Certainly on the question of the budget, he has given a clear message to Canadians that there is hope, that there is an alternative to the kind of mean-fisted approach by the Liberal government and the kind of acceptance of Alliance ideas in the House today.

This is my first budget as finance critic but I have certainly participated in budget debates before. We have been very observant of every budget presented to the House and have critiqued each one very carefully. I must say the budget is proving to be a most difficult one from the point of view of Canadians.

In the past, with the Prime Minister and the current finance minister applauding, we witnessed the former finance minister deliver budgets that could only be characterized as bare knuckle economic assaults on the country's less well off on behalf of the corporate community and the rich.

There was the 1995 Liberal budget that, to quote the former finance minister, set out to redefine government by the most severe cuts to social programs in memory in the name of deficit fighting. There has been the ongoing Liberal deception about a balanced fifty-fifty approach to surplus spending that over the years since 1997-98 has actually turned out to be 90% for tax cuts and debt reduction with only 10% going to program spending.

There have also been years of lowballing and shell games by the government when it comes to budgetary surpluses, with a cumulative total of unrecognized surpluses of $80 billion since 1993. That is according to the statistics provided by the alternative federal budget on the left, and let us look at the other side of the political spectrum. Let us look at the Conference Board of Canada and the Toronto Dominion Bank.

All these experts have recognized the way in which the government has lowballed the surplus numbers and denied Canadians real choices in terms of what needs to happen in terms of the revenues available to the government.

We have had all that history. For me, the culmination, at least until yesterday, was the 2000 Liberal budget with its massive $100 billion tax cuts and debt reduction at the expense of social program initiatives. That budget was delivered in the very same year the government was supposed to celebrate the end of child poverty in Canada.

I can imagine that the current leader of the Canadian Alliance must have been greatly relieved that the finance minister decided to run for the leadership of the Liberal Party and not the Alliance.

Throughout all of that, the New Democrats strongly opposed those budgets and the American-style survivor economics they represented. We worked with and we voiced the concerns of all those other Canadians whose needs were ignored, whose needs were neglected. We worked to get the Liberal-Alliance juggernaut to change course.

Based on the many leaks we heard leading up to yesterday's budget, we thought that maybe we were making some progress. We thought that there had been one of those epiphanies often experienced by leaders on their political deathbeds that would see the Liberals end their romance with the Alliance and begin to repair some of the damage they have caused to the social fabric of Canada.

We actually looked forward to a budget that might offer Canadians some hope. We were hopeful when we heard that the government might finally listen to municipalities, that it might finally listen to the level of government that is closest to people's lives and that the government might make significant investment in the urban infrastructure that is crumbling around us.

The infrastructure component of the Liberal social deficit amounts to $57 billion. Just to begin addressing this need, Canada's cities had called for $800 million per year, rising to $2 billion annually within five years as a minimum. Imagine our disappointment and shock when the budget came forward and we realized we were dealing with a Liberal offer of $3 billion spread out over 10 years.

The BudgetGovernment Orders

4:35 p.m.

NDP

Alexa McDonough NDP Halifax, NS

After 10 years of neglect.

The BudgetGovernment Orders

4:35 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

After 10 years of neglect, as my colleague the member for Halifax has just said.

It was a slap in the face. It was a slap in the face to all of those municipalities that have been struggling day in and day out to improve the quality of life for their citizens.

More than that, it is a sure recipe for all kinds of unacceptable alternatives. We could be looking at user fees, new tariffs, property tax increases and worst of all, privatization of vital public services, such as the water supply and roads.

We were also hopeful that the Liberals would actually start to address housing. We looked forward to a national housing program announcement, a comprehensive budget attack on the shortage of affordable accommodation and decent housing in the country today. We expected this.

In fact, new housing costs have just recorded the highest annual jump in more than 13 years, while Canadians who rent cannot find or afford apartment space. The number of homeless and those who are one paycheque away from homelessness is absolutely intolerable by any standards. It is absolutely shameful for a country whose economy is this strong.

New Democrats along with the housing advocates have been calling for a meagre 1% of program spending to be channelled into a national housing program. Instead what did we get in yesterday's budget? There was no strategy to deal with the housing crisis. There was only the addition of $13 million this year to a previously inadequate five year fund. It is nowhere close to the 1% solution.

The budget utterly fails the many Canadians who cannot afford to put a roof over their heads and feed and raise their children at the same time. Shame on the government for ignoring and neglecting this vital area, this vital need in Canadian society.

With respect to education, funding education is a no brainer. Canada is crying out for highly educated workers. Fully 70% of the labour force growth between 1991 and 2001 was in jobs requiring a university degree or college diploma. Yet the Liberal cuts to post-secondary education have put these opportunities out of reach for more and more young Canadians.

Over the past decade tuition fees have more than doubled. In some courses they are now doubling again over a one or two year period. Students are dragging an average $25,000 in debt when they graduate, yet only one in 24 is able to qualify for debt relief.

We had hoped and believed that there would have been a change yesterday. Instead of the boost to university and college core funding that would keep skyrocketing tuition fees down, the Liberals stuck to their piecemeal millennium scholarship approach.

The same $425 million allocated this year to the Canada education savings grant that does nothing to improve access could have been used to cut tuition fees by close to 15% across the board. That is according to the Canadian Association of University Teachers. Students once again have been left out to dry.

The Liberals could have maintained a balanced budget and still devoted $1.6 billion in 2003-04 to cover need based grants, interest free loans, and to expand and improve debt relief. We had hopes but the Liberals again made the wrong spending choices.

Let me touch briefly on child care. This is an area I have followed for many years. Members will know that when it comes to a national daycare program we are dealing with the longest running broken political promise in the history of the country. We could go back to 1984. Remember the 1988 election with Brian Mulroney and the Conservatives? Then in 1993 there was the red book which said that there was going to be a national daycare program. It was repeated in 1997.

Where are we today? What did we get? Peanuts, barely enough money to pay for 3,000 child care spaces. That is not a daycare program. That is a child care lottery. That is exactly why we raised the question in the House today. It is interesting. At least the Minister of Finance had the honesty to admit that was a piddly amount and hardly up to the task at hand.

What he did not say was that in fact this $25 million in the first year for daycare spaces has to be spread out across the country. Seventy per cent of women who work have children under the age of six and need regulated daycare spaces but only one in ten of those families can access safe, quality, regulated daycare. The rest of those women and families are left to make very worrisome and tough decisions about the safety and care of their kids.

People can understand our frustration today with this budget and our disbelief at a budget that actually would give businesses a benefit by eliminating the capital tax. Let them win the jackpot and make families play the lottery game in terms of basic child care spaces and centres. It is quite unbelievable at a time when there was the fiscal flexibility, the surpluses available to the government to begin to build a national daycare program.

On the environment, as I said earlier today in question period, this budget was supposed to be the showcase for the Liberals. It was to add the muscle to the bones of our Kyoto commitments.

The BudgetGovernment Orders

4:40 p.m.

Liberal

David Anderson Liberal Victoria, BC

It's a skeleton.

The BudgetGovernment Orders

4:40 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

A skeleton is right, as my friend in the Alliance Party has just said.

We are very disappointed and we join with many Canadians in expressing that disappointment. Despite the billions of dollars in economic and health costs the Liberals have acknowledged are coming from climate change, the budget commits less to Kyoto implementation than the amount pledged to ongoing tax cuts. Any serious plan to meet Kyoto has to include public transit, passenger rail and freight rail, but not a penny was dedicated specifically to those solutions.

By the most generous definition possible, there is $300 million a year available for transportation infrastructure. Again, solutions were within their reach, but the Liberals opted to shortchange Canadians.

Moving on to health, I know that this is a matter in which my colleagues across the way will be interested. We have serious concerns about the way in which the government failed to close the Romanow gap. Can members believe it? Here we have an opportunity like never before in terms of surplus revenue, in terms of a fabulous blueprint from Roy Romanow, and the government cannot figure out how to at least adopt the bare minimum.

Close the Romanow gap. Ensure that the government is somewhere close or on the path to achieving a 25% share of the financing of our health care system.

With this budget we are ending up with a share of health care financing that is below the Brian Mulroney and Conservative share of health care. Some legacy. The legacy of this Prime Minister and these Liberals is to be lower than Brian Mulroney on funding of health care.

After seeing the federal share of health funding drop like a stone to around 12% from previous radical Liberal budget cuts, Canadians sent a clear message to the Liberals, through Roy Romanow, to move as quickly as possible to a system that had the federal government involved as a partner, at least on a 25% basis, that ensured accountability measures to prevent money going to for profit investor owned health care services and to ensure that we moved our system from an institutional based, costly, illness focused system to a community based, holistic, preventive health care model.

We had a great opportunity. According to all estimates and reliable sources, all that it would have taken to close the Romanow gap would have been about $5 billion or $6 billion. It is interesting that the government is prepared to put its surplus, about $4 billion, into a contingency fund or what it would call a prudence fund, otherwise probably known as a slush fund, instead of putting it into the number one priority facing Canadians and ensuring that we did everything possible as a nation, as a federal government, to address those pressing concerns in terms of quality care, waiting lists and access to trained professionals and services.

On a related issue, Roy Romanow called for a rural and remote access fund with an immediate injection of $1.5 billion over the next two years. Why did he do that? Because he recognized that Canadians living in the north in our three territories were particularly vulnerable and had particular challenges to overcome because of long distances.

Premiers joined in calling for a similar proposal at the last first ministers conference in January by asking for an additional .5% of the total new health funding, per territory. It was thought that it would take $60 million per year as a minimum to address that fundamental concern of the premiers and the territories. It would help deal with the challenges being faced. Did the government find $60 million to deal with the issues and challenges facing northerners? No. Instead it found millions of dollars in tax relief for big businesses. It has found all kinds of tax relief for the wealthy, who are able to put more into RRSPs, which provides no benefit to 95% of Canadians. Talk about misplaced priorities. I think that says it all.

I know I have to wrap up. We see no vision for our nation in this budget. Spending for spending's sake seems to be the only plan. Just like the previous Liberal Alliance plan of blindly cutting government services and cutting taxes proved no plan to meet the real bread and butter needs of Canadians, this too will fail.

The new finance minister seems to think that randomly scattering a handful of seeds far and wide in the hope that something will grow is the best approach to budgeting. Well, he is wrong. He should take a lesson from the alternative federal budget that carefully crafts economic strategies to invest in Canadians and it does so without running up a financial deficit or especially a social deficit.

By way of concluding, this is the legacy budget of the Prime Minister. To the Liberals and the Alliance it may seem like a positive legacy. However the vast majority of Canadians still see the path of destruction this Liberal government has cut through our social fabric. This budget is not an answer. It is nothing more than a damage report.

The BudgetGovernment Orders

4:50 p.m.

Liberal

Dennis Mills Liberal Toronto—Danforth, ON

Mr. Speaker, over the last 14 years I have sat in the House and listened attentively to the New Democratic Party. I have taken care to listen to the New Democratic Party because quite frankly, I tend to be one of the farthest left in my party. It is no secret. I am a passionist, centralist, and interventionist.

Last night when I saw the New Democratic Party stand and applaud the Minister of Finance, I said to myself that the NDP caucus is true to form. It is high road. It is classy. It is constructive. However I do not know what happened after the NDP members left this Chamber last night because they began to trash the budget without any foundation at all.

I represent the poorest people in downtown Toronto. For the member of Parliament from the New Democratic Party to stand up and say that there is nothing in the budget for the homeless, for cities and that there is not enough for health care, for the environment, for children from low income families and the list goes on, shows that the New Democratic Party is now on a course of criticizing for the sake of criticizing and not one of being constructive.

The great Toronto area alone will get $800 million. How can she stand in the House and say nothing is happening for cities?

The BudgetGovernment Orders

4:50 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

Mr. Speaker, the good news based on that question is the Liberals see the NDP as a threat. Perhaps they have moved from listening to the Alliance and adopting its misplaced priorities holus-bolus to gradually accepting some of the concerns raised by New Democrats.

The bad news is that the member has tried to disregard the clear call from many Canadians for responsible action from the government on a number of very important areas that are suffering because of Liberal cutbacks, going back to their former minister of finance's massive gouging and cutting of the social fabric of the country. He ought to realize more than anyone how important it is to begin a social investment in the country. He should realize how important it is to build communities and to offer real support to families.

When first nations say that this budget does nothing to deal with the third world conditions on their reserves and barely makes a dent in the serious problems at hand, he ought to listen. When mayors of every large city ask where is the long awaited money they desperately need to rebuild their cities, renew their communities and build hope for the future, he ought to listen.

Child care advocates say that this is some kind of joke when there is talk of creating 3,000 day care spaces for the entire country yet they were promised back in 1993. The Liberal government has not made children and families a priority. Government members should stand and say the contribution that working people make in the country ought to be recognized.

The government ought to realize that by investing now in such basics as child care and in such fundamental issues as adequate housing it will save in the future. The government could say that for every dollar invested in a day care space, $2 or $3 will be reaped back because it was there at the nurturing stages of children. The government could say that for every dollar put in terms of high risk needs and special needs children in our society, $7 is reaped back because it was there at the early stages thus ensuring people could make a contribution based on their talents. That has to be understood by the member and all members of the Liberal Party.

Canadians want to see the government address their priorities on a sound, planned basis with the resources necessary to meet the task at hand.

The BudgetGovernment Orders

4:55 p.m.

Canadian Alliance

David Anderson Canadian Alliance Cypress Hills—Grasslands, SK

Mr. Speaker, after the last two speakers desperate attempts to claim their left wing credentials, it has started to become something like a politicians anonymous meeting. I am glad that being conservative, being right wing is not a disease.

I want to talk a little about the Romanow gap about which we keep hearing. I happen to have to live with the results of the Romanow administration and government. When he came to power, we had a hospital about eight miles away. It was a small town hospital that worked well. We had roads that we could drive on, an ambulance service that served us and we had doctors who were willing to come to the rural areas. By the time Mr. Romanow was done with his health reform, the hospital in the local area was pretty well shut down. We have part time medical services in our area.

The roads have been allowed to deteriorate so the ambulance trip over them is a miserable experience. He left us with part time health services. The nearest full service hospital is 90 miles away. It is well over an hour in an ambulance even with the lights flashing. I happen to know that because I was on the ambulance service at home. We are left with a place where doctors are reluctant to come.

Does the member not realize that Roy Romanow has no credibility with those of us who had to live through his regime and his health care reforms? The Romanow gap is really a credibility gap.

The BudgetGovernment Orders

4:55 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

Mr. Speaker, by all accounts the work done by the Saskatchewan government and the government in Manitoba, both of which happen to be NDP, is well recognized for dealing with a very difficult situation of limited federal dollars in the face of growing demand and need. By all accounts, the federal government has failed provincial governments struggling to provide for all citizens.

Roy Romanow offered a solution. It was the result of 18 months of consultations. Thousands of Canadians participated and there was a consensus about what we needed to do as a country to sustain medicare and to ensure that a non-profit, public system of health care would be there for generations to come.

I would suggest that the Alliance join with us in calling upon the government to at least, as a first step, close the Romanow gap which would have the federal government play a role that is beyond the 14% it is investing in our health system now. This would begin to provide the basis for reshaping and rebuilding our health care system.

The member ought to know that the damage done to our health system as a result of this government's cuts back in 1995 has been massive. The work to correct that kind of situation has to begin now. That is why this budget is so critical. We have a chance now with fiscal flexibility, with surplus revenue and with all kinds of room in terms of investing in communities. This is the year and the time to deal with that gap and to put the money into communities that are prepared to provide for the health care needs of their citizens, regardless of where they live and regardless of how much money they earn.

The BudgetGovernment Orders

5 p.m.

Oak Ridges Ontario

Liberal

Bryon Wilfert LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, this side of the House needs no lectures in supporting urban communities. We are the party and the government that brought in the national infrastructure program in 1993 when that side of the House opposed it.

To suggest somehow that the budget does not support cities is a travesty. I hate to hear this nonsense: I do not know what happened to the homeless; I do not know what happened to infrastructure; and I do not know what happened to families with children who live in cities. The RRAP program, air quality, all of these things have been ignored by that member and that party.

The BudgetGovernment Orders

5 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

Mr. Speaker, obviously we have hit a sore spot with that member and others across the way. Clearly they are on the defensive and they ought to listen to the voices of Canadians in their reaction to the budget.

What has to be absolutely understood is that the government, in terms of trying to repair the damage of a decade of cuts, has tried to do a bit of everything on all fronts and has done nothing well. On all of those key areas the hon. member talks about, whether it is municipal infrastructure, housing, health care, child care or the environment, the government has offered at best half a loaf. It is a bit like all this hype and all this talk about social spending and it turns out to be nothing. It is a bit like eating a cheese puff; we bite into it and it dissolves in our mouths. That is what this budget is. That is why Canadians are so concerned and that is why we are speaking out.

The BudgetGovernment Orders

5 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, it is with pleasure that I rise today to speak on the budget. This budget is a return to the 1970s Liberal free-spending habits that have imperiled Canada's economic prosperity. Instead of a vision for the future, the government is reverting to a nostalgia for the past. Last time we witnessed program spending growth like this, the current Prime Minister was the Minister of Finance.

The fact is that since 1998 we have seen growth in program spending that did not always reflect the priorities of Canadians, but this is the first year in which we have seen such a dramatic increase in program spending. Nobody disagrees, and in fact, we want to see a greater level of investment in health care and the military.

Health care and the military clearly represent the priorities of Canadians, but if we take the budget's health care reinvestment portion and military reinvestment portion out of the increase in the spending, the fact is that there is a 7.3% increase in government program spending in the budget, net of health care and the military.

This is far in excess of the economic growth in Canada. We cannot sustain that level of spending growth. It is simply not sustainable and we are imperilling the future of the country. It is like the sixties and the seventies all over again. There are anti-war protesters in the streets, there is talk in the House and elsewhere about the idea of decriminalizing marijuana, and there is a free-spending Liberal government in Ottawa again. The Prime Minister must be having a flashback.

The Prime Minister should have warned his finance minister not to make the same mistakes that he made when he was the finance minister in the 1970s and to simply say no to this Liberal waste and largesse. There was probably not one single Liberal backbencher who did not get something in this budget. There was probably not a Liberal caucus hand in the air that did not get something out of the Minister of Finance in these days when the Liberals are more concerned about the Liberal leadership race than they are about the future of the country.

We do not want to see the deficit at 9% of GDP again. That is where it was when the Liberal government was defeated in 1984. The deficit was 9% of GDP, largely because of that type of profligate, wanton spending by a Liberal government and a finance minister who is currently the Prime Minister. We are back to that level of spending again and Canadians are very concerned, because it is a very ominous sign.

The government is proposing to help fund some of these new spending programs by reallocating a total of $1 billion a year from department and agency budgets. This represents an amount that is equal to the amount that has been wasted so far, a billion dollars, on the failed long gun registry. That is one single government program. If the government would learn how to cut the fat, it would be able to deliver more meat in the budget for real tax reform, for real tax relief for Canadians and for real and significant reinvestment in the Canadian military.

What is really ironic about the budget is that only $1.6 million over the next two years is going toward the Canadian military and $200 million of the reallocated funds that the minister sought from departments actually came from the Canadian military. Of all the departments to identify for waste, who would have thought the Liberals would target the military? It is a department already on the ropes, already fighting to try to maintain reasonable levels of equipment and quality of life issues for the Canadian military.

It is absolutely shocking what the government has done to its Canadian military and to Canadian families. Now, instead of providing Canadians with more money in their pockets and providing the military with the resources it needs to actually do what is necessary to carry out the very important tasks in a post-cold war environment, the government is again dropping the ball.

The finance minister likes to describe Canada as a northern tiger. In doing so, he invites a direct comparison with those economies that have truly earned their reputation as tigers, economies like those of Ireland, Hong Kong and Singapore.

In those countries there were governments that provided revolutionary, courageous and bold tax reform focused on productivity. Canada has all the ingredients, save one, to truly turn itself into an economic northern tiger. As a nation we have the resources, we have the people and we have the knowledge to turn Canada into a world leader. However, the one missing ingredient is federal leadership. Leadership is required to enhance and to implement a bold agenda to strengthen the standard of living of every Canadian.

The finance minister talks about a northern tiger, but with his Liberal incrementalism, with his Liberal pussyfooting, the best we can hope for is to be a northern kitten. The real tigers have focused on enhancing productivity by dramatically cutting and, in some cases getting rid of, corporate taxes, capital taxes and taxes on investment. The true tigers have built tax systems that encourage investment and savings. The tigers have kept their governments responsive but, as a per cent of the economy, as small as possible. Ireland's public revenue as a percentage of GDP is 34%. Hong Kong's is only 10%. Smart, forward thinking, fiscally responsible, focused and effective government has been key to the tigers' success.

In recent years these tiger economies have been growing twice as fast as that of the Canadian economy. In 10 years, Canada's economy grew by 6% per capita. Ireland's economy grew by 92%; think of it, 92% growth in Ireland's GDP per capita. Clearly, due to the government's lack of economic leadership, courage, wisdom and foresight, Canada remains a toothless tiger. Our standard of living is suffering. The 20% loss in the value of the Canadian dollar since this government was elected represents a pay cut for every Canadian. That low Canadian dollar both reflects and fosters low productivity.

By failing to introduce a bold, productivity focused tax reform package yesterday, the finance minister has failed his first test of leadership. Canada needs productivity focused tax reform. We need to eliminate the capital gains tax, eliminate the capital tax immediately, not over a five year period. We need to reform our corporate and personal tax system. This budget involves a little bit of tax tinkering but no tax reform.

If I may, I will speak for a moment on the issue of marginal tax rates. Our marginal tax rates attack investment and attack hard work. We should be encouraging people to work hard, to save their money, to get ahead. Instead, we have a tax system that pummels ambition and initiative. That is simply wrong. We should start celebrating success in Canada, not apologizing for it.

At $7,400, Canadians hit the basic personal exemption threshold where they have to start paying taxes. The government does not have a problem with taking money from people making $7,400 per year. It is immoral. It is counterproductive. It discourages people to go from being on welfare to actually taking a job. We should be rewarding people who make the right decision, who try to enter the workforce and better themselves and their families. Instead, we have a system that forces them to make that very difficult decision: that if they take a job they are going to make less money for their families. That is just shameful.

Then when we look at what happens to the child tax benefit, for instance, we see that it gets clawed back starting at $33,000 of income. This means, because of our marginal tax rate and our clawback of benefits, that somebody around the $33,000 tax bracket, a Canadian family with three children, gets its child tax benefit clawed away from it. The government thinks that a Canadian family with three children that is making $33,000 per year is rich. I can tell the House that any Canadian family raising three children on $33,000 per year is struggling.

The government talks about helping children. The government talks about helping Canadian families. It may talk the talk, but the finance minister and the government clearly do not walk the walk.

Canadian families and all Canadians need a government that reforms our tax system to help them succeed and prosper in an increasingly competitive and difficult global environment.

We have talked about what happens at the $7,400 tax bracket. We have talked about how the government claws away the child tax benefit from Canadian families at $33,000 per year. At $100,000, we hit our top marginal tax rate in Canada. In the U.S., Americans do not hit the top marginal tax rate until around $400,000 U.S.

There are a lot of young, educated, talented Canadians who we need to keep in Canada. Our future productivity as a country is contingent not just on keeping the best and brightest we can produce but also on attracting them. Instead, we are sending them south of the border because a lot of them are high income earners.

We are losing them not just for next year or the year after, but we are losing them for 30 or 35 years of future revenue. Just think what that means to our ability in the future to pay for our health care system, for the retirement plans that Canadians value and for the social and physical infrastructure that Canadians want. How are we going to be able to afford that if our best and brightest continue to leave Canada seeking opportunities elsewhere?

Clearly tax reform is absolutely essential and this is a government that is ignoring the dramatic need to reduce and reform Canada's antiquated, anti-success and anti-productivity tax system.

Earlier I mentioned the low value of the Canadian dollar and the fact that every Canadian has had a 20% pay cut as a result of the loss of 20% of the value of the Canadian dollar since this government was elected. The best way to address the loss in the value of the Canadian dollar is to improve our productivity as a nation. Tax reform is only part of that, but it is the part that is most absent in terms of the government's agenda. Actually, to call it an agenda is a bit of an overstatement because this government really has no agenda. It has no vision and no clear direction. It is more focused on next week's polls than it is on the challenges and opportunities that Canadians face in the 21st century.

Canada's effective corporate tax rates are among the highest in the OECD. This creates a competitive disadvantage between Canada and our international competitors. In today's global economy, competitive corporate tax rates are essential. In the old economy, in the old days before the forces of competitiveness and globalization were as pervasive as they are today, high taxes redistributed income.

In the new economy, the globally competitive economy, high taxes redistribute people and capital. Talent and capital have never been more mobile than they are right now and they flow to the areas of greatest opportunity for growth and prosperity. We are repelling capital and talent in Canada. The minister talks about making Canada a magnet for talent and capital. That is a joke. He is forcing capital and talent out of Canada by refusing to deal with some of these very significant flaws in our tax system.

A tremendous disappointment to our party, to Canadians and to the member for Saint John, who has fought so hard for the Canadian military, has been the fact that the government only made a half measure effort to try to address the significant underfunding issues in Canada's military. Canada's military is cash starved and Canada is jeopardizing its international reputation by refusing to address long term military spending needs. This budget started to address a need for spare parts, but it did not address the capital equipment needs that would define a modern, capable and internationally respected military force.

Any economic growth that Canada enjoyed in the 1990s came as a result of some of the structural changes made to the Canadian economy by the previous government, free trade being an important one. The deregulation of financial services, transportation and energy was very important, and of course there was the elimination of the manufacturers' sales tax and the replacement of that tax with the GST.

However, none was as important as the Canada-U.S. free trade agreements of the late 1980s and the early 1990s. Our economic growth in the nineties was contingent completely on the economic growth and prosperity that resulted from American growth and today our future prosperity is imperiled.

In a post-September 11 we faced a pretty stark reality, either being on the outside of fortress America or working in a leadership capacity with our friends and partners, the Americans, to be inside a fortress North America. Investment in perimeter security and in a new Canada-U.S. partnership on security issues, and economic cooperation, would help ensure that Canadians continue to have access to this vital market.

The best way to protect economic sovereignty is by creating economic growth and prosperity. There is no better way to protect Canadian economic growth and prosperity than to ensure continued access, in fact, improved access to the richest market in the world, the United States.

By only paying lip service to domestic security issues the Liberals are imperilling Canada-U.S. trade upon which Canadian prosperity depends.

The budget is an affront to the provinces that are still shouldering the burden of Liberal downloading. Program spending, including health care and defence spending, has increased by a staggering 7.3% in the budget, including new expensive programs that interfere directly in areas of provincial jurisdiction.

The issue of fiscal imbalance is an extremely important one. It is not a purely Quebec issue as it affects every province in Canada.

It is very important to deal with the issue of fiscal imbalance. It is not fair to have one level of government, namely the provincial level, assume all the responsibilities for health care, social services and education, and another level of government, namely the federal level, assume all the responsibilities for raising money.

The federal government has the means to raise money. In order to solve the problems affecting the health care system, it will be necessary to also deal with the issue of fiscal imbalance.

It will be so important that we as parliamentarians on all sides of the House recognize the importance of improving the conditions for our provinces. Our provinces have the lion's share of the responsibility to provide health, social and education spending, and yet the federal government has most of the taxing power.

The federal government has the capacity to slash transfers to the provinces, as the government did in the late 1990s, and without really facing any political repercussions, throwing health care and education into a crisis in every province in Canada. At the same time that provincial governments were struggling with deficits the federal government was awash in surpluses and not paying a political price for its irresponsible slashing of transfers to the provinces.

The best accountability that could exist for health care and education would be for a provincial electorate to have full knowledge that not only did the provincial governments have the responsibilities which they have now to provide health care and education funding, but also the power to raise the money. We have to take a serious look at how we can ensure that.

There are innumerable other failures in the government. In recent weeks we saw a proposal from President Bush to move significantly on reducing and streamlining taxes on dividend income. There was nothing in the budget to address that. We should have eliminated withholding taxes which would have helped significantly in terms of improving our climate for economic growth, prosperity and investment.

We currently have our greatest trading partner, the U.S., in a recession. We have a world teetering on war, we have Canadians concerned about their declining standard of living, and the government wants to go back to the seventies. Lacking a vision for the future the Prime Minister and the government always revert to nostalgia for the 1970s.

In closing, Canada has a triple AAA country with a single B government. We have an investment grade country but a junk bond government. The best country in the world deserves the best ideas in the world and Canadians thirst for ideas based leadership. I know that our party can provide that leadership and make Canada a winner in the world again.