Debates of Oct. 28th, 2004

Supply

[Christian Simard, Bloc, Beauport, QC]

I thank my colleagues. I knew I would get help in this respect. What is happening here is that we have this astronomical surplus, while Quebeckers and Canadians in the other provinces are suffering and have real needs. We must speak out with one voice against the arrogant and stubborn attitude of this government, which refuses to see reality and keeps money which does not belong to it. The money belongs to taxpayers and must be returned to them, the provinces and Quebec. It is extremely important .

Since I have only two minutes left, I will conclude. When we talk about Quebec being financially strangled and we compare that to the hidden surpluses, the mistakes that have been made are shocking. Right now, as we speak, a fake budget is being put in place. We are talking about $12 billion in hidden surpluses, or $10 billion to $12 billion according to the experts, which are accumulating, and we cannot even discuss how to use this surplus because it is hidden in a calculated, premeditated fashion.

The government cannot pretend it is a mistake, a miscalculation. For years, since 1997 as a matter of fact, it has erred by 500% to 600%. It is a disgrace. In the meantime, it tells Quebec and the other provinces that there is no money. It stubbornly refuses to give them more arguing there is no money. No one, no Canadian, no Quebecker believes this government which has a huge credibility deficit into which it is plunging deeper.

It managed to eliminate its deficit not by being more efficient in the areas under its jurisdiction, not by spending more wisely, but simply by strangling the unemployed and smothering Quebec and the provinces under en extremely disgraceful fiscal imbalance. That is the reason why I will enthusiastically vote in favour the Bloc Québécois motion—and I hope my colleagues from the other opposition parties will follow suit—to force this government to listen to the people who timidly elected it.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I would like to make a comment and then ask the hon. member a question.

When the government took office back in 1993, the national debt was approximately $480 billion and the annual deficit was about $42 billion. It took three years to turn that around and get the first balanced budget. Today we have paid down a little over $50 billion on the debt. We are still at a national debt level higher than we were 10 years ago. The single largest expenditure in the annual accounts of the government is debt interest, a little over 22% of the overall expenditures of the government.

When we got into this situation of balancing the budget, people started to talk about the fiscal dividend. The fiscal dividend to Canadians, I believe, is not having a surplus in a year but rather taking that surplus to pay down debt and save interest expense on the debt. That is the permanent savings. That is what can be reinvested in new programs.

My final comment is simply that the surplus of $9 billion in the last fiscal period was ostensibly due to increased corporate revenues from corporate taxation. It is not guaranteed for next year, so we could not come up with a program for Canadians of $9 billion and have that expense of $9 billion each and every year because we cannot count on it. It is only a one time savings.

The member asserts in his speech that the $9 billion surplus is the people's money and it should be paid back. Does he not agree that paying down the debt and saving about $3 billion of interest since this government took office is an important investment to make so that we can have ongoing programs for all Canadians?

[Christian Simard, Bloc, Beauport, QC]

Mr. Speaker, my colleague across the way thinks that people have different views. We would love to be a nation, to have all our instruments of development and to take care of all that. Unfortunately, I do not think that Quebeckers would benefit from an increase in their deficit or an end put to the balanced budgets in Quebec, because they have chosen, without any discussion about it, to apply the whole surplus to the debt. We are not against the idea of applying part of the federal surplus to the debt, but we should first know how big it is.

We know the scope of these surpluses. My colleague from Saint-Hyacinthe—Bagot, our finance critic, has for a few years now, been able to forecast the surpluses, to within 10%. We now know that surpluses are being accumulated after two quarters. It is a fact. It cannot be denied.

I come from the community and housing sector. In 1993, the Minister of Finance, who is our current Prime Minister, cut all funding for social housing. The employment insurance surplus was stolen. The deficits were transferred to the provinces. Was all that done to slightly reduce the debt of the federal government? No. This surplus was not obtained at the expense of efficiency and respect for the minister's own qualifications, but at the expense of the unemployed and the people in need of housing, on the backs of the provinces, at the expense of their responsibilities. It is totally shameful. I feel that we must correct that.

Year after year, we give in under this kind of arguments. I think that we are going nowhere with that. I abhor this government's self-satisfaction and the fact that it is not in touch with the reality of Canadians and the needs of the people in Quebec and the other provinces.

I think that the government must recognize what everybody sees, that is, the existence of an incredible fiscal imbalance and the fact that there are never any discussion on the use of hidden surpluses. All that discourages people about politics. I have an extremely difficult time accepting the confusion between the work done by opposition MPs or by honest Bloc Quebecois members and what the government is doing. Often, were are put in the same bag as politicians, who go from cynicism to cynicism and refuse to admit a reality obvious to all economists, to all the people who have to pay their rent and to all low-income workers from Quebec and elsewhere in Canada. There is a fiscal imbalance, which an arrogant government refuses to distribute. Instead, it continues to misspend and mismanage and, above all, to steal its brother's toys.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I am very pleased to participate in the debate and I thank the Bloc for introducing this very constructive motion.

Before I begin my comments, let me say that this is actually my first major speech since the election. I certainly would not want to miss the opportunity to thank my voters in Winnipeg North for their support in re-electing me to my third term in this place. I must say that I am very encouraged by the possibilities that are offered to all Canadians by this 38th Parliament.

The beginning of the 38th Parliament makes us all reflect on why we are here and what we are attempting to change. I take great strength from the people of Winnipeg North who have battled against great adversity to achieve some quality of life, some modicum of decent living in an area that has been hit hard by economic and social systemic barriers. As I know many of those constituents are watching today, I want to thank them. I hope we honour their expression of faith in the democratic process.

I also want to acknowledge, in the context of the debate today on fiscal imbalance, three young men from Winnipeg North who are watching today, my son Nick, who has a major disability and who has just moved out of our home to start a place of his own with two other young men, Eric and George. Those three men have found a place of their own thanks to a government that has tried to overcome the negative impact of a federal government that has downloaded so much responsibility. In fact, it has demonstrated what it means to put people first and the investment in communities first and foremost.

These three young men, Nick, Eric and George, are able to live in the community despite facing many obstacles and challenges because of a commitment by our whole community and a government to invest in places where one can be a part of the community. My hat goes off today to Nick, Eric and George who represent that fighting spirit in Winnipeg North.

The debate today is of critical importance to our whole country, not just the community of Winnipeg North. As the members from the Bloc know, we are certainly in support of this motion and want to join with all members of the House in making this very constructive suggestion a reality. We are talking about nothing more than a motion that describes the fiscal imbalance in the country and calls for a committee, part of the finance standing committee of the House, to address this issue and come up with tangible solutions to the problem of fiscal imbalance.

I have understood from media reports that the Liberals may not support the motion. I am shocked. I cannot understand how something so basic, so accurate in terms of describing reality and so constructive in its purpose would be opposed by the Liberals. In a minority situation, such as the one we have today, one would think that the government would understand by now that it is a minority government and that it requires cooperation and listening to the voices of opposition members who bring positive and constructive suggestions to the House.

Maybe the Liberals will get it eventually. Maybe we need a few more close votes in the House. Maybe they have to understand that Canadians really do not want an election. Maybe they have to realize that there is a real yearning in this place and in the country for a new cooperative spirit to achieve solutions that are long overdue. I hope the Liberals get it soon.

Two recent developments bring into sharp focus the relevancy of the motion and the need for the motion to pass. The first has to do with this acrimonious, strained relationship between the Government of Canada and the province of Newfoundland and Labrador, a strain that has been caused by an arrogance from the Liberal government that refuses to acknowledge its commitment around recognizing the oil and gas offshore resources of that province and to agree to a reasonable proposition in the context of this equalization debate that we are dealing with.

It is unbelievable that we do not have a government that can even sit down and talk or a Prime Minister who can even pick up the phone to contact a partner in this federation and sort out such a problem. I liken it, in very simple terms, since this equalization debate is so difficult to understand, to the case of a family on social assistance, through no fault of its own, because of economic and social barriers. When a family member does get a job that brings in a bit of money, the social assistance is clawed back so that the family is no further ahead.

That is precisely how the people of Newfoundland and Labrador are feeling. They are working very hard to ensure that the resources in their province are used to benefit the people of that region and not to be used as a disincentive to enhancing the quality of life in that region. That is the first glaring message that must be put in the context of this debate.

The second, interestingly, also has its origins in Newfoundland and Labrador, which is the Supreme Court decision today stating that pay equity does not necessarily have to be adhered to if the jurisdiction in which the case rests is facing fiscal difficulties. We are talking about a bedrock principle in terms of Canadian human rights. We are talking about an ironclad principle, which is part of the Charter of Rights and Freedoms, that has now been thrown into question. Why? It is because of a government that has refused to address the issue of fiscal imbalance to ensure that a province, like Newfoundland and Labrador, can provide for all of its citizens and so that no fundamental principle has to be cast aside because of practical circumstances.

When we signed on to the charter and said that women's rights were fundamental, that respect for people with disabilities had to be entrenched in everything we do, that the needs of aboriginal people had to be considered, and that the fundamental freedoms for all people, regardless of race and religion should be respected, surely that meant something. Surely those rights should not be squandered away because of a government's inability to ensure that wealth is distributed fairly and equally across the land. That is precisely the situation we find ourselves in today, and it is a shameful, shocking situation.

The decision today to put aside pay equity in the face of so-called fiscal realities is a setback to women and sets a dangerous precedent for all people who are vulnerable in Canada today: people living with disabilities, minority populations, aboriginal people and certainly women.

The other reason we need this debate today is that the Liberal government just does not get it. Not too long ago I went to a finance committee meeting where the Parliamentary Secretary to the Minister of Finance had the audacity to suggest that there was no such thing as a fiscal imbalance.

Members on that committee will recall that we tried hard to advance some wording around questions that we posed to people in the prebudget period to ensure that they were engaged in these consultations. We ended up spending valuable time and money because the government could not just say that yes, there is a fiscal imbalance. Therefore the debate has to take place in this chamber and I thank the Bloc for making it a reality.

We are here today because of a very critical situation in many parts of this country. It is a serious threat to the state of federalism, a serious challenge to the fundamental rights for women and many other critical issues which are growing all around us. The pursuit of solutions to resolve the fiscal imbalance should be done on a regular basis as a matter of course. It should be done on periodically to ensure that we are addressing growing tensions, concerns, issues that happen naturally and are expected because we are a federation that changes and grows and needs that kind of nurturing.

That kind of analysis was done many years ago, in 1981, as referenced earlier by my leader. It was known as the task force on federal-provincial fiscal relations. My colleague from Elmwood—Transcona was part of that task force as the NDP member. It was 24 years ago, shortly after the member had been elected to this House. He has just celebrated his 25th anniversary in this place and is now the most senior statesperson in Parliament.

That episode in our history was valuable. It proved absolutely essential in terms of moving this nation forward, in terms of a universal approach to providing health care for everyone. It was essential for us to be able to move forward in terms of the Canada Health Act and to make many other improvements to programs that cover the ambit of federal-provincial relations.

Here we are 24 years later with a review being proposed not by the government of the day, but by the opposition. Not only that, the members of the government are saying apparently that they are going to oppose it. It does not make sense. I hope that during the course of the debate and over the weekend the Liberals will wake up and will come to this place next Tuesday and decide to vote in favour of this constructive proposition.

There are a couple of things we have to look at in the context of this debate. We have to ask ourselves why we are dealing with this motion today. Why did the Bloc feel it had to bring it forward? Why do we feel so strongly about it?

One only has to listen to the debate to ascertain that all of us are concerned about the way the Liberal government has managed the economy over the past 10 years. We are talking about a history of financial mismanagement and poor budgeting by the Liberals.

Federal-provincial financing has always been an issue and is one which we should revisit on a regular basis. However, the current acrimony and tension have arisen in the wake of the Liberals' severe cuts to transfers when they came to power in 1993 and as reflected in their mid-1990s budgets.

We only have to look at the CHST and the accompanying transfer cuts done by the present Prime Minister's 1995 budget which proved to be a devastating attack on health, education and social assistance. It sent provincial governments reeling. Still to this day the provinces are trying to pick up the pieces. It did not just hurt the provincial governments; it hurt Canadians and the most vulnerable Canadians most of all. Let us look at some statistics.

The Liberals cut education funding by about 17%, driving up student debt. Students are now leaving four year programs with almost $25,000 in debt. Fees have accounted for almost 20% of education costs. Statistics Canada reports that between 1992 and 2002, fees increased by 135%, more than six times the rate of inflation.

If we are not prepared to invest in our young people, if we are not prepared to deal with the need to establish lifelong learning opportunities, if we are not prepared to ensure that in this great country of ours we share our resources so that the provinces can provide for those educational opportunities, we are doomed as a nation. We are cutting our own throats. We are cutting off our nose to spite our face.

Surely the government could understand the importance of at least investing in education, ensuring that every student, every child, every youth in this country has the opportunity to pursue his or her dreams, to be whatever he or she wants to be and contribute back to this country.

Let us take it a step further in terms of the beginning of this whole lifelong learning process. Let us look at child care. Here we are dealing with it again. I do not know how many times I have stood in the House to talk about a national day care program.

[Libby Davies, NDP, Vancouver East, BC]

Thirteen budgets.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

My colleague from Vancouver East says it is 13 budgets. It is the longest running broken political promise in the history of this country.

[An hon. member]

And the provinces won't support it.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, it has nothing to do with the provinces not supporting it. It has to do with a federal government that lacks the political will to do it . The government does not see the importance of ensuring that the youngest citizens of this land are able to get the kind of education, care and nurturing that they need during those very important developmental years. There is nothing more important that we can do.

Shame on the Liberals for promising it year after year and never living up to it. They always find a scapegoat and blame it on the provinces. Enough of that. Let us get on with doing it. The Liberals say they will do it this time. Let us hope they do it this time, because if they do not, we will have a huge problem.

Just look at the fact that only 20% of children in child care under the age of six are in regulated care in this great, wealthy country of Canada. Compare that to 60% in the United Kingdom and 78% in Denmark. We have to deal with this problem now. It is very much a part of the issue of fiscal imbalance.

I could go on. I could talk about cities and municipalities. The government is backing away from its gas tax promises which again is driving up provincial costs, offloading on to municipalities, offloading on to citizens. It is making individuals responsible instead of the government doing what the government is meant to do, which is to ensure equality of conditions, equality of opportunity so that everyone in our country no matter where they live, whether it be in the north end of Winnipeg, downtown Vancouver or suburban Toronto, is able to contribute according to their abilities.

I want everyone to know that we are not supporting this resolution to drive another stake into the heart of this country, a strong federal nation. We are not advancing the notion to decentralize more programs and destroy a strong central nation. For that, we may differ a bit from the Bloc. However I think we all have one concern today, which is that we find ways to better distribute the resources of this nation, the wealth that the federal government is now sitting on. This year alone the government is sitting on a $9.1 billion surplus, never mind the $86 billion in surpluses that have been accumulated over the last 10 years and have gone into the debt, only because the government refuses to do this upfront. It has decided to engage in a deliberate lowballing process so there is no public debate and no parliamentary input.

I will conclude by saying that two wrongs do not make a right. The further neglect of federal responsibilities is not the answer to the problems from earlier neglect. No strings federal funding, chequebook central government is not an acceptable answer. National standards with asymmetry for Quebec are still needed to ensure that when the federal government does invest in health care or child care, the money goes toward improving those areas.

A serious parliamentary study of existing imbalances may be worthwhile as long as it does not turn into a platform for undermining the responsibilities of our federal government, responsibilities which the Liberal government apparently would rather continue to ignore.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, back in 1993 the election platform included a provision for creating 150,000 child care spaces and that was still not enough. As a matter of fact, today it is estimated that it would cost from $12 billion to $15 billion to provide all the estimated child care spaces.

The member raised the important issue of child care. Based on the latest reports, the problem is that the child care that has been provided by the provinces in their provincial jurisdiction has been poor quality child care. Part of the solution to child care is not simply to create more of these inadequate babysitting services but rather to deal with the issue of early childhood development.

The member is very familiar with Dr. Fraser Mustard. She is also familiar with the fact that the first year of a child's life is the most significant in terms of early childhood development. That is one of the reasons the House and the government agreed to double maternity and parental leave to a full year. This allows parents to give their children that secure, consistent attachment with an engaged, committed adult. That is what affects children more than anything.

Do we have to fix somehow the problems in the existing system? How are we going to address the situation where communities do not have the accessibility to child care because of their geographic location or community situation? What about the equity for those who choose to provide care in the home to their own children? What benefits should we give to the growing number of people who want to care for their own children?

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, first, I do not accept for one moment the premise behind the hon. member's question when he made a blanket statement and suggested that child care facilities in the country are of low quality. He has just insulted thousands of people who are committed to providing quality child care and have done so over the years despite the refusal by the government to participate and support those initiatives. He has just insulted organizations like the Manitoba Child Care Association which has made an incredible contribution to the country by supporting and working to ensure the achievement of one of the best, second only to the Quebec system, models anywhere in the world for providing quality child care.

The problem is that when a province has to do it on its own there is only so much it can do. The Manitoba government has made a huge pioneering effort, a huge inroad into this area, and has provided quality, non-profit, accessible, regulated day care spaces where children get safe care and parents do not have to worry.

When the member makes that kind of disparaging remark, we know exactly where he is coming from. He is trying to drive another nail in the coffin of this election promise, never mind the fact that it is a Liberal promise. That Liberal member has the audacity to stand up and begin to tear apart his own party's suggestion and in fact is doing what he can to kill this idea before it even gets off the ground. We are not going to let that happen.

We do have a problem in some provinces because there has not always been the same commitment in every province as we have seen in the provinces of Manitoba and Quebec. That is another reason why we need a national day care program with national standards and legislation to ensure that care is provided on a quality not for profit basis. That is the whole point of the Liberal promise. That is the whole point of this debate. That is why we are so devoted to it and why we want to make it happen this time once and for all.

This initiative is about addressing the concerns of working families and ensuring that those families who choose to work, those mothers and fathers who choose to work or must work, which is largely the case, are able to put their children in safe, loving, caring, child care centres which must be made available to meet the needs of the changing workforce, to address the concerns of part-time women working in the workforce, the needs of shift workers, and those who must work only at night. It is something that is there where it is known that the kids are safe.

This is not a program about addressing the needs of every single person in the whole society. We have other measures to address the concerns of those families who choose to have a parent staying at home full time. We do that through tax provisions. We do it through extensions in terms of maternity and parental leave. We do it through decency in terms of leave for school activities and other commitments, and ensuring that we have caring arrangements in the event that there are elderly parents or people with disabilities.

We do not do it by playing one group off against the other and leaving this most fundamental question out to dry yet again. That is a disservice to the country and the children. It is contrary to everything the member believes in terms of ensuring that those at the very youngest ages are able to get that loving environment and care that they need to proceed, grow, mature and be responsible and committed citizens of the country.

[Loyola Hearn, Conservative, St. John's South, NL]

Mr. Speaker, let me congratulate the member for Winnipeg North on her speech. She raised a tremendous number of important points this evening in her speech and in her answer to the question from the member opposite.

I would like to thank her for making reference in her speech to the battle that is going on right now between our province and Ottawa with respect to offshore revenues. I certainly appreciate the support she and her party have given our province in that regard.

In her speech she talked about the increasing costs of education. A lot of people talk about the costs of tuition. There is a lot more to education than just tuition, as she knows, for people who live outside the university towns in particular. Is she finding, as I am, that more and more families in the rural areas are finding it very difficult to finance the education of their children?

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, the hon. member identifies a very serious issue in our society today, and that is the question of access to educational opportunities wherever ones lives in our country. We are finding the same phenomenon that often occurs in the area of health care, where in fact people who live in rural, remote, or northern communities have neither the access in those communities to post-secondary education institutions nor the resources to pay for the rapidly rising costs to enter an educational facility. It is becoming about the most serious and fastest growing concern in this country today.

We used to say that health care was the number one issue. It is still a big concern but we are seeing some movement. I believe that education and access to educational opportunities are reaching a crisis situation.

That is part of the fiscal imbalance. The member may not agree with me on this point, but I would suggest to him that fiscal imbalance is also about what we do with our fiscal dividend. We have heard from the Liberals the promise of splitting the dividend. Years ago they said it should be split on a fifty-fifty basis. They claim they have done that, but it seems they have put 90% of that dividend into tax cuts and reductions, and 10% into programs like education.

We would like to see this fiscal imbalance addressed and ensure that we can actually, at this glorious moment in this seventh year of a surplus, put some money into the very foundation of lifelong learning.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Mr. Speaker, I will share my time with the member for Châteauguay—Saint-Constant.

The fiscal imbalance relates to a situation. The federal government collects too much money for its responsibilities. Witness its year after year surpluses. However, Quebec and the provinces do not have enough revenues to assume their own responsibilities.

For years the Quebec government has been strangled fiscally under the orchestration of the Minister of Finance and the Prime Minister. Since 1994, Ottawa has been collecting astronomical surpluses, more and more taxes in Quebec, but has given back less and less money where it is needed. This means that the federal government is doing less and less of its share in funding of health and education systems.

When the current Prime Minister was the Minister of Finance, federal government spending increased by 45%, while transfers to Quebec and the provinces rose by only 1.9%.

Meanwhile, federal government revenues increased by $1,569 per capita in Canada, while health, education and social transfers were reduced by $34 per capita.

On the financial level, Ottawa is awash with cash. It has accumulated a surplus of $60 billion since 1997-98. Even worse, the Conference Board is forecasting another $166 billion by 2015.

Despite the fact that it accumulated surpluses by cutting in areas that belong to the provinces, the Prime Minister is hailed as the champion of sound management of public finances.

It is important to note that the federal government's margin goes beyond the budget surpluses. It also includes the excessive increase in federal operating expenditures.

When the Prime Minister was the Minister of Finance, the federal government lost control of its operating expenditures. These expenditures increased by 7.8% annually, compared with an average annual inflation rate of 1.9%.

At the same time, there was a greater concentration of federal jobs in the national capital region. Indeed, since 1994, the number of federal jobs has increased by 11% in that region, while it decreased by 1% in the regions across Canada.

Here are a few examples which show that Ottawa is enjoying huge surpluses. These examples are taken from the 1997-98 to 2002-03 period.

While federal operating expenditures increased by 30%, those of the Quebec government only went up by 20%.

While the Quebec revenue department reduced its expenditures by 47% during this same period, the Canada Customs and Revenue Agency increased its spending by 57%.

The Quebec health department increased its expenditures by 33%, while its federal counterpart increased them by 78%.

During the same period, the Quebec education department increased its expenditures by 12%, and the culture department by 12.8%. Meanwhile, the Department of Canadian Heritage increased its spending by 38%.

Total operating expenditures for the federal Department of Justice increased by 67%, while those of the Quebec justice department only went up by 12%.

The Prime Minister relegated the problems to the provinces and to the unemployed. From 1995 to 2003, the Liberals took $45 billion from the employment insurance fund. On an annual basis, my region of Saguenay—Lac-Saint-Jean was deprived of $157 million.

In the case of Quebec, this fiscal imbalance takes on a special meaning because we are different, because Quebeckers are a nation. The fiscal weakening of the only state they control is a concern for the future, the more so because the precariousness of Quebec's financial situation was deliberately caused by the former finance minister, the present Prime Minister, who can truly say that he is the architect of the fiscal imbalance.

This situation is largely due to the cuts made by the federal government in transfer payments to Quebec and the provinces. The Prime Minister did not take advantage of the premiers' conference in Ottawa to fulfill his promise of addressing the whole issue of the fiscal imbalance.

The Prime Minister did not have the political will to respond to the needs of the people. Instead, he responded to the wishes of his caucus, which accused him of giving too much already.

The new era of cooperation announced with great fanfare by the Prime Minister is stillborn. The fiscal imbalance is hurting the people of Quebec. When will the government recognize it?

The regions of Quebec and my region, Saguenay—Lac-Saint-Jean, are suffering from the effects of the fiscal imbalance. Some of its effects are that we cannot take care of our sick people and that we cannot invest in education and social programs. When will the federal Liberal government take note of this reality and recognize this deplorable situation?

The disintegration of the regions is very real and its effects are undeniable. No one can argue with the fact that our young people are moving to the big cities, that poverty is expanding and that endemic unemployment is hurting Quebec's natural resources areas.

When will the Liberal government recognize that Ottawa has too much money for its needs, and that Quebec is under-financed and cannot face its obligations?

[Diane Marleau, Liberal, Parliamentary Secretary to the President of the Treasury Board and Minister responsible for the Canadian Wheat Board]

Mr. Speaker, what a problem we have. It is terrible. I came to this House in 1988. I recall the crying and the tearing of the shirts over the deficit. We were going to hit the wall.

Separatists did not want to have anything to do with the Canadian government because it had a large deficit. They were not talking about fiscal imbalance then, because there was none. We never heard about that. Today, because we managed to turns things around and be in a good fiscal position, there is a lot of wailing and complaining.

Are we losing sight of the equalization program, which helps provinces most in need? It may not be perfect, but it certainly helps provinces like Quebec.

I am from Ontario. I am an Ontario taxpayer. We do not get equalization payments. I pay, and gladly so. But I think we are being blackmailed.

This whole topic is a myth. I wonder what would happen if they pushed us back into a deficit. How would they speak about the country then? I want to know that.

If we ran a deficit, what would you say? I would like to know. Is that what you would like? I do not agree.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Mr. Speaker, I think the hon. member opposite should recognize there is a fiscal imbalance.

This fiscal imbalance has been recognized by a Quebec commission led by Mr. Séguin, who is now a Liberal minister in Quebec.

[An hon. member]

Right on.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

The parliamentary secretary must also admit that Quebec does not have sufficient fiscal resources to meet its obligations. Year after year, the federal government keeps accumulating a surplus, and each is larger than the last.

The Prime Minister has championed public management because he balanced the books and then ran surpluses. But surpluses were at the expense of the provinces and the unemployed. We should not forget that the government scooped $45 billion out of the EI fund. Fiscal imbalance is bad for Quebec. If it is bad for Quebec, it is also bad for Quebec regions.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Mr. Speaker, when we talk about equalization and about fiscal imbalance, they are certainly not the same thing in my view. The member who asked a question earlier was not wrong when she said that a few years ago, Canada had a deficit.

Members will recall that to remedy that deficit situation, the Liberal government of the time slashed expenses. It cut back on transfers to provinces and forced provinces to tighten their belt and to rethink their funding. Thus the fiscal imbalance appeared over time, as Canada solved its own deficit problem at the expense of the provinces.

I would like to ask the member for Chicoutimi—Le Fjord to repeat to me, because I did not understand well, how much the problem of the fiscal imbalance costs his region.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Mr. Speaker, I will reply to the member, who asked me a question, namely how much this government's plundering of the employment insurance fund is costing my region. First of all, we know that at the national level, this government plundered an amount of $45 billion. Thus, in my region, this theft represents an amount of $157 million every year, and unemployed people in my region of Saguenay—Lac-St-Jean are deprived of it.

[Denise Poirier-Rivard, Bloc, Châteauguay—Saint-Constant, QC]

Mr. Speaker, I will look at the issue of fiscal imbalance with Quebec's farming community in mind.

As the BlocQuébécois leader put it, the Prime Minister did not use the premiers' conference in Ottawa to tackle the entire issue of fiscal imbalance, especially with regard to agriculture and agri-food.

My colleague the member for Saint-Hyacinthe—Bagot contends that the PM did not have the political will to meet people's needs. He chose instead to cater to the wishes of the Liberal caucus, which blamed him for having already given away too much, and to tighten the fiscal imbalance stranglehold on Quebec and the provinces. Go tell Quebec cattlemen, extremely hard hit by the mad cow crisis, that Ottawa has given Quebec too much.

Here are some numbers. Faced with problems in agriculture because of fiscal imbalance, the Quebec government is forced to fill the space left vacant by the federal government's lack of support. Let's look at this in context.

The OECD, the Organization for Economic Co-operation and Development, measures the support given by various countries to their agricultural sector. It publishes yearly a manual on agricultural policy follow-up and evaluation in member countries, The manual contains a set of indicators measuring various facets of support.

An analysis of these different indicators clearly demonstrates the following. The level of support provided in Canada is among the lowest, and is far lower than in the U.S. or Europe. The level of support has been markedly on the rise in the U.S. in recent years, contrary to the drop already referred to in Canada. On May 2, 2002, Congress passed a bill providing an increase of $31 billion over six years in subsidies to American farmers.

Now, to look at the situation in Quebec, where the government compensates for insufficient level of federal support, which is not the case most of the other provinces. In Quebec, 63% of public expenditures in the agrifood sector are assumed by the Government of Quebec.

When this support is expressed as a percentage of the agricultural gross domestic product or GDP, if we exclude Newfoundland, where agriculture is not a major activity, only Quebec provides support in excess of 20%. The figure is around 10% in Ontario and only 6% in B.C.

We in the Bloc Québécois are of the opinion that the federal government must accept the idea that there is fiscal imbalance in Canada. The federal government must recognize that Quebec farmers, particularly those hard hit by the mad cow situation, are victims of that imbalance.

In its brief to the Quebec commission on fiscal imbalance,the Union des producteurs agricoles made the following statement:

The problem of fiscal imbalance, which this commission is mandated to examine, is defined as the result of the fact that the provinces have insufficient revenues to meet their responsibilities in the areas over which they have jurisdiction, while the federal government has funds surplus to its needs for the funding of activities within its own areas of jurisdiction. It is very obvious that the roots of the problem are not to be found in agriculture or agrifood.

What are the consequences for agriculture? Overall, the problem for agriculture relates to the fact that the level of government with money to spare seems to have an increasingly poor grasp of the role it ought to be playing in agriculture, which is in particular to help Canadian producers compete on an equal footing with their counterparts elsewhere.

Support for the agricultural sector in Canada is in decline. Some people believe the federal government does not have a good grasp of its responsibilities in the agricultural sector. This statement is based on information reported in documents taken from the Public Accounts of Canada, collected over a number of years, and the budgets of the Department of Agriculture and Agri-Food in its Farm Income Data Book .

The figures show that between the beginning of the 1990s and the 2000 decade, federal government expenditures on subsidizing the agricultural sector were cut in half. Relatively, the proportion of the federal budget going to agriculture and agri-food dropped from nearly 4% to less than 2%.

I will say it again, the analysis of various OECD indicators clearly shows the following facts. The level of support in Canada is among the lowest and is much less than that offered in the United States or in Europe. Subsidies have been increasing in the US for several years, in contrast to the decline in Canada as reported previously.

Let me tell you about the trends in three OECD indicators: estimated producer support per full-time farmer equivalent; producer support estimate per capita; and finally, total transfers as a percentage of GDP.

In Canada, producer support per full-time farmer equivalent was US $9,000 in 1999 and much less than the US $21,000 offered in the United States or the US $17,000 in the European Union.

Over the past 10 years, the size of Canada's subsidies has dropped substantially and then had a slight revival. During that time, while support in the United States did decline, by 1999 it was above 1986-88 levels.

In order to measure the effects on the public of the levels of support provided in various countries, the OECD estimated the total aid to the agri-food sector on a per capita basis.

Canada offered a subsidy of US $163 per capita in 1999, only half as much as did the United States, at US $350, or Europe, at US $336.

Over the period of a decade, per capita support for agriculture has dropped by US$105 in Canada, while it has increased by $73 in the United States, $11 in Europe and $18 on average for OCDE member countries.

The third indicator, the total in transfers in percentage of the GDP, also shows that Canadian government support for agriculture is among the lowest in the world. In 1999, Canadian government transfers to the agriculture sector totalled .78% of the GDP, compared to 1.05% in the United States and 1.49% in the European Union.

All this information suggests the same thing: the level of support for the agriculture sector in Canada has declined substantially over the past decade while our major competitors have maintained or increased their support. At the time, the current Prime Minister was the Minister of Finance and, thus, responsible for this significant decline.

As we mentioned earlier, the Government of Quebec compensates for the federal government's disengagement, but that is not the case in all the provinces.

In Quebec, as you probably know, for decades now, the work done by our farmers and their representatives has contributed to convincing Quebec governments to provide better support for the agriculture sector. The Government of Quebec compensates for the extremely low support from the federal government.

This situation paints a very good picture of what we describe as the fiscal imbalance in Quebec, particularly how the shortfall affects the farmers.

The data mentioned earlier indicate that the agriculture sector is receiving almost half as much support in Canada as it does in the main competing countries, despite the efforts made by Quebec to compensate for the inadequate federal support.

As trade between countries becomes increasingly freer under international trade negotiations, one wonders whether in the medium and long terms, Canadian farmers will be able to sustain such unfair competition. It is not surprising, in such a context, to see that for almost a decade in Canada, one crisis after another has hit farm income.

[David Smith, Liberal, Pontiac, QC]

Mr. Speaker, the Bloc Québécois critic for agriculture and agri-food is telling us tonight that there is a fiscal imbalance in this area in Quebec. It is true that there are pressures in the agricultural industry.

Being a native of the Haute-Gatineau Valley region, I was brought up on a farm and I represent the beautiful Pontiac riding where many cattle producers live. Problems are bound to occur.

[An hon. member]

The French word is “bovins”, not “boivins”.

[David Smith, Liberal, Pontiac, QC]

I am sorry. I am anglophone but I make an effort to speak French. I ask you to forgive me if I have insulted anybody. Mea culpa.

This being said, the issue is still there. The Pontiac region is located between Quebec City and Windsor, in the corridor that is home to 80% of the Canadian population. The pressure felt in the cattle industry—I cannot be wrong—is due to the border closure. The Minister of Agriculture and Agri-Food has found solutions to support this industry by providing the opportunity to open new slaughterhouses.

I can tell you that in my riding for example, we have looked into this opportunity to see if we could slaughter our own cattle, locally, and sell the products of the beautiful Pontiac region, the largest riding in Quebec, an integral part of Canada.

I am getting to my question. Would this solution of offering $60 million, new money, to allow us to slaughter our own cattle and sell our products here in Canada, not be an ideal solution to relieve this tremendous pressure that already exists?

I would like to know what the member thinks of the fact that our farmers from Quebec or anywhere else in Canada cannot even slaughter their own cattle and sell their meat because their slaughterhouses are too busy.

[Denise Poirier-Rivard, Bloc, Châteauguay—Saint-Constant, QC]

Mr. Speaker, in reply to my colleague opposite concerning the creation of slaughterhouses, I wonder if it would be possible to arrange for the slaughter of our cows which sell for 7¢ each. Last week, you must have heard about a producer in the Lac-Saint-Jean area who received 7¢ for a cow.

I don't think that establishing slaughterhouses will solve the fiscal imbalance in the agriculture sector. That is my view. I said it earlier and I repeat it, the level of support for the agriculture industry has substantially diminished in Canada over the last decade, whereas our competitors have maintained it. If we had maintained it, we would probably not face the problems we have now, not only with our cull cows, but also with our beef. Our main competitors have continued their support and have even increased it.

Let us recall that at the time, the Prime Minister was Finance Minister and, hence, responsible for this significant decrease. The decrease is still there.

I do not think that building slaughterhouses is really the solution and will lower the fiscal imbalance. It may be a solution, but we should not proceed on a case-by-case basis.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Mr. Speaker, this is not the first time that we hear about a lack of money in agriculture. I say a lack of money because, when I was a little girl, my grandfather had 119 acres of land. I bought this land afterwards, in the 1980s, and I farmed it for a few years. In addition to a woodlot, part of it was used for livestock and another for crops.

I come from the Mascouche, Terrebonne and Saint-Roch region. On these lands, there are now practically no woodlots, but there are pigs, beef and cows. When I was a little girl, people in my region were on the side of Maurice Duplessis. Why? Because Maurice Duplessis was fighting for Quebec's farmers. From the time that he was there, we would hear farmers saying, “Ottawa does not think about us”.

If the federal government was thinking about Quebec's farmers, it would not have attempted to close the school of veterinary medicine in Saint-Hyacinthe, because it would have wanted to help our farmers. It would also get going on the supply management issue. Then, it would pay attention to our maple syrup producers—