Mr. Speaker, I am pleased to say a few words in the debate today on budget 2003.
First, the budget does include some good news dispersed throughout various parts of the budget. The first piece of good news is that the child tax credit was increased in the budget. The House is on record as being committed to the eradication of child poverty. We all remember back to a number of years ago when we said that we would eradicate child poverty by the year 2000. Of course that deadline has long passed and we are certainly playing catch up on our commitment to eradicating child poverty by the year 2000.
About three years ago I was part of a committee that travelled the country between Newfoundland and Vancouver looking into the issue of poverty and child poverty in particular. We held public hearings all across the country. It was a real eye opener for me. A number of people who came before our committee told us personal stories about poverty and how an individual or a family could get into a cycle of poverty from which they could not escape. A lot of it has to do with the fact that the federal government, and governments generally, are not coming up with good programs to address the whole issue of poverty in the country.
The faces of poverty are many in this country. We have the working poor. We have people who cannot find jobs and who sometimes live in a state of poverty from which they cannot escape. Children, in particular, are hurt by poverty. Impoverished children, as we are all very much aware, come from impoverished families. The government is not entirely blameless when it comes to the various causes of poverty that we see today.
In my part of the country, in Newfoundland and Labrador, people were negatively affected when the fishery closed down a number of years ago. We also had people who were negatively affected by some of the programs brought in by the federal government, namely the employment insurance program, which the government cut back on drastically. It was probably instrumental in causing the out migration of roughly 70,000 people over a seven or eight year period. These were people working in seasonal industries and who had seasonal employment.
I have always been disappointed to see some of the policies of the federal government as it pertains to seasonal employment. We have to recognize that in certain parts of the country seasonal employment is very important. The fishery is important but, by its very nature, it is seasonal and therefore employment is seasonal. It cannot be done sometimes in winter months in some areas. The same can apply to the forestry or mining industries. The federal government has hit those industries particularly hard because of the various changes that it has brought about through employment insurance.
Another area for which I have been concerned has to do with the massive cuts to the federal transfers to the provinces for health care. That has hurt a lot of provinces and the territories. It has hurt people of all ages.
The cuts in transfers to post-secondary education is another area on which we need to concentrate. These cuts to post-secondary education, for instance, have resulted in provincial student grants being changed to provincial student loans. It is heart-rending to see students coming in to my office on occasion who have just graduated and who have a $50,000 student debt. They are looking for jobs and very often the first job they acquire is a low paying job because of lack of experience and what have you.
When we speak of poverty we have to look across the spectrum. We will see that many students out there today are living in poverty after they graduate because of the massive debtloads they are carrying and trying to pay off. How do we expect the average graduates to get homes, mortgages or cars which they will need to travel back and forth to work? How do we expect them to marry and raise families when they are carrying those kinds of massive student debtloads?
Those are important areas and contribute to the various steps that we see regarding the number of people who are living below the poverty line. The government in essence helped create a generation of impoverished students and debt-ridden graduates, which is not fair. The federal government should be looking at that a little more closely.
Any kind of government initiative that puts more money into the hands of low income families with children will get my applause. The child tax credit increase is an initiative that I was pleased to see. As well, I applaud the funding for day care and early childhood education. It will help low income families. When our committee travelled these were things that we heard. Single mothers told us that it was very difficult to find a good day care for their children so that they could go out and pursue employment and try to get out of debt and the cycle of poverty in which they find themselves.
I am pleased as well that the budget incorporates the latest arrangements between the premiers and the Prime Minister on revitalizing our national health care care system. While the current health care arrangement is an improvement, most commentators today, as I am sure members have heard, indicate that much more funding is necessary if we are going to fix our health care system and bring it back to what it was prior to 1992.
Because the funding is done on a strictly per capita basis, again I have to refer back to the effect that it will have upon my own province because the funding is done on a strictly per capita basis. Newfoundland's slice of the multibillion dollar pie is a paltry $200 million over a three year period, or about $70 million a year. That is not a great deal of money when we put it into context, because the population is aging and shrinking at the same time, and it is spread over a huge geographic area. This is definitely a losing formula for Newfoundland and Labrador.
The government, as we are all very well aware, replaced the established program financing formula, the old EPF system of transfers, with the Canada health and social transfer, called the CHST.
Under the old EPF system of financing, moneys were transferred specifically for health care and the formula would take into account the difficulties of delivering health care to the many scattered communities all over Newfoundland and Labrador.
The CHST which is allocated to the province is without regard to the age of the people or population or how the population might be spread over a very large geographic area. In our case, we have 400,000 square kilometres with 520,000 people. That is quite a large area.
The old EPF system took into account the huge geographic area to which it had to deliver these health care dollars. However the new formula, the CHST, does not take any of that into account. As a result we are under a losing formula when it comes to CHST.
The simple fact of the matter is that in the province, as I said, we have an aging, shrinking and geographically dispersed population. The health care transfer system needs to be adjusted to reflect that fact. How many times have we said that? That would be fair. It is only fair to reflect the fact that there is a huge geographic area to deliver limited health care dollars. These are a few of the areas for which I have some concern.
When we speak of health care, recently the Prime Minister went on record as saying that the per capita funding formula does not serve well in the case of the territories. I could say to him as well that it is not only the territories. He is right when he says that it does not serve the territories very well, but it does not serve large areas of the country that will receive limited health care dollars. As I said and will repeat, there are 400,000 square kilometres in Newfoundland and Labrador.
Another area which I want to touch on is the whole area of equalization. How many times in the six years I have been here have I spoken on the current equalization formula. I would imagine I have spoken on that one subject alone at least 20 times. The budget was silent again on equalization and the clawback provisions in the equalization formula.
Newfoundland and Labrador does not reap the full benefits of development of our natural resources. What else is new? For example, the income from oil or mining royalties is clawed back through reductions in the equalization formula. In other words, we have a formula whereby if a dollar is earned, a dollar is also lost. A dollar will be clawed back by the federal government from the resource revenues that are generated. It may not be exactly a dollar, but it is almost a dollar. It is a formula that one could accurately describe as: earn a dollar, lose a dollar.
Today in my province, we are bringing down a $4 billion the budget. Guess what? It will have a real deficit of about $600 million on a $4 billion budget. The only reason that the credit rating agencies are keeping the credit rating of the province in a fairly good position is the fact that our growth has been quite good over the last three years in particular. I believe we led the country in growth over a three year period. I know we are leading the country in growth this year and probably did last year as well.
Here is a little province with a $4 billion budget leading the country in growth. It has a $600 million deficit and a decent credit rating because its future looks pretty good. We have a Voisey's Bay development coming on stream in the next couple of years, the largest nickel find in the world. We have an oil industry. We have a crab and a shrimp industry that is worth in the neighbourhood of $1 billion. We are doing decently well in mining and forestry. Therefore we are generating quite a lot of revenues. However that revenue was clawed back by the federal government dollar for dollar, practically.
We have a $4 billion budget, a $600 million deficit, we are leading the country in growth and we are the poorest province in Canada. How do we figure that one out? Producing oil, producing the largest mining operation in the world like Voisey's Bay, $1 billion crab and shrimp industry, only 500,000 people, people leave the province in droves, $600 deficit and we are the poorest province in Canada. Obviously it is because of the way the funding formula for equalization is set up: earn a dollar; lose a dollar.
We very often hear the federal government say that it cannot do anything about changing the formula because provinces like Ontario or Alberta would not agree, provinces which are net contributors to the country but are not really getting too much out of equalization. I cannot figure out how it is in the best interests of the federal government, Alberta or Ontario to have a province like Newfoundland and Labrador as the poorest province in Canada when it is producing so much in the way of fish, oil and mining royalties.
It is not in the best interests of the country to have that equalization formula punishing the poorer provinces like Newfoundland and Labrador, Nova Scotia, Prince Edward Island or New Brunswick.
The government has said that it cannot act unilaterally on equalization to improve the clawback to the equalization from the poorer provinces. That did not stop the government from unilaterally lifting the ceiling on the total cost of the equalization program back in the year 2000, which was an election year. The government lifted the cap on equalization unilaterally, then once the election was over, it unilaterally again reimposed the program ceiling. So much for the theory that it needs widespread consent.
This has always been the thing, the government needs widespread consent from places like Ontario or Alberta to change the equalization formula, but it changed the ceiling unilaterally back in the year 2000. It did not stop the federal government tinkering with the equalization program back then, and once the election was over it tinkered again and put the cap back on equalization.
Yes, it can unilaterally change the equalization formula to make it a bit easier on the have not provinces like Newfoundland, Nova Scotia and the Atlantic area generally. We should deal with this terrible formula of the province earning a dollar and the federal government taking a dollar. By doing that a bit of fairness can be injected into provinces that are struggling, that are making money, that are working very hard, but cannot keep the money because of this despicable formula, this unfair way of dealing with provinces like Newfoundland and Labrador.