Mr. Speaker, a lot of discussion is taking place in the House and in the media right now regarding the fiscal pressures of the provinces and federal transfers. There is no question that these issues are very important to the governments of each of our 10 Canadian provinces and to all Canadians right across the country.
It is for that reason that we must be very clear when we use the term fiscal imbalance. I believe it is being confused with the whole term of horizontal fiscal imbalance, which does exist between the provinces. The government has been dealing with that issue very aggressively by ensuring all Canadians have access to equitable essential services. To do that the federal government contributes significant amounts to the provinces, including the province of Quebec, allowing them to better fund their provincial responsibilities.
However there is a significant difference from what is being proposed in the motion. What the motion suggests is that there is a vertical imbalance between the federal government and the provincial government. Simply put, this is not the case and cannot be the case under our present Constitution.
When the country was formed in 1867, certain powers were devolved to the federal government, such as defence, fisheries and oceans, and certain powers and responsibilities were devolved to the provinces, such as health and education. I will admit that in recent years a lot of the areas of the fastest growing responsibility are those areas under provincial responsibility.
However the important point that is being lost in this whole discussion is that under our Constitution the provinces and the dominion basically have the same taxing powers. If the provinces want to tax corporate income they can do so. It is the same for the federal government. Both levels of government can tax personal income, impose capital tax and impose taxes on consumption. In fact when we look at it, the taxing powers of the provinces are greater. They have lottery revenue and property taxes, but again, that is not a significant item for this debate.
In Canada, both the federal and provincial governments have access to all major sources of revenue. If the federal government and the provincial government can access the same tax bases, it is impossible to see how a vertical fiscal imbalance can exist.
The example I gave in a question to the previous speaker was that the federal government, whether it was right or wrong, decreased corporate and personal taxes over the past five years. If any of the 10 provinces wish, in their wisdom, to raise taxes they can do so. One can make the argument that taxes are too high, that federal taxes are too high or that provincial taxes are too high, but that is a policy issue. It has nothing to do with the whole concept of fiscal imbalance. There is no limit to the taxing power of any province.
Still, from province to province there are significant differences as to how much revenue they can potentially generate. That is where the imbalance exists, but that is a horizontal imbalance, which I suggest is being addressed very adequately by evolving federal programs. One clear example of this is the new health care deal which will see billions of federal dollars going to the provinces for improving health care across the country. As well, the government recently announced a new framework that will increase the support provided to provinces through equalization programs by $33 billion over the next 10 years.
The new equalization framework will provide predictability, stability and increased funding, all aimed at decreasing the horizontal fiscal imbalance that exists between provinces.
There are further programs that target areas of inequity such as child care, early childhood education, money for post-secondary education, cities and infrastructure. These plans have been developed in the framework of fiscal responsibility--