Mr. Speaker, I am very pleased to have this opportunity to say a few words about the government's agenda in this new and very different Parliament and about the subamendment that is now before us from the Bloc Quebecois.
The government's agenda flows directly from commitments made to Canadians in the June election campaign. That is now embodied in the Speech from the Throne. It is an ambitious agenda for an ambitious country.
Beginning with health care, we will implement the historic agreement which the Prime Minister reached with all first ministers in mid-September. By that agreement the Government of Canada will provide the provinces and territories with more than $41 billion in new health care funding over the coming decade. That is on top of some $36 billion per year which the federal government currently invests directly and indirectly in the health of Canadians.
This means that we have met and surpassed all of the federal financial obligations laid out by the hon. Roy Romanow in his landmark report on health care. We have a long term agreement duly signed by every premier from every province and territory. It provides the best terms ever on transparency. It is a triumph of successful Canadian federalism and it allows all of us to focus all of our efforts at long last on the real substance: shorter waiting times, more health care professionals, better equipment, improved primary care, home care and catastrophic drug coverage, better services in the north and for aboriginals, more health innovation, and improved public health and wellness.
To a very large extent, that is what the throne speech and that is what this session of Parliament are all about, but there is more.
There is equalization, the Canadian way of building equity and fairness among all our provinces and regions. Equalization has been an integral part of federal-provincial fiscal arrangements since 1957. It has been in our Constitution since 1982. It typically transfers some $8 billion to $10 billion annually from the Government of Canada to those less fortunate provinces whose revenue raising capacity falls below a certain calculated standard.
The existing equalization system is based upon a hugely complicated formula with at least--count them--1,320 constantly moving parts. Provinces are concerned that it lacks clarity and predictability and it sometimes works retroactively.
When equalization payments go down, as they do on occasion according to the formula, even though that means the gap between the have and the have not provinces has narrowed, and that should be a good thing, provinces still worry about the adequacy of the system. To meet these concerns, we have tabled the biggest changes in equalization in all of its 47 years.
For this current year we will put two new financial floors under existing calculations, boosting overall payments from what was expected to be about $9.2 billion this year to about $10.8 billion all together, well above the average value of the equalization program over the past five years.
For next year and going forward, we will go further to create a new equalization base amount which will then be indexed to increase automatically year by year into the future. The new base amount for fiscal year 2005-06 will be set at the highest level that equalization entitlements have ever reached, that is, $10.9 billion. The index factor on top of that base will be 3.5% per year and we will review the arrangement every five years.
We have thus addressed all three concerns about clarity, predictability and adequacy with what amounts to an estimated $33 billion in improvements in federal contributions to the provinces and territories over the coming decade. First ministers will meet again on October 26 to finalize the details.
There is more. We have outlined important plans for early childhood development, learning and care; for seniors, the disabled and their caregivers; for aboriginal Canadians; for cities and communities; for rural Canada, agriculture and natural resources; for the north; for the environment; and for Canada's place of respect and distinction in world affairs. Still there is more.
Our commitment is to balanced budgets, fiscal discipline, steady and sensible debt reduction, and just as we have done in every budget since 1996, further reductions in federal taxes especially for lower income Canadians, and to enhance the competitiveness of the Canadian economy.
The fact that Canada has been a strong fiscal, economic and social performer over the past seven years is the direct result of our successful battle in the 1990s to beat the deficit. It is a battle that we fought and a battle that we won.
After nearly three decades of chronic red ink, no growth, high interest rates and lost jobs, we balanced Canada's books in 1997 and we have kept them balanced every year since. We are the only G-7 country to be operating solidly in the black. Our triple A credit ratings have been fully restored from where they were in the mid-1990s and later.
Since moving into surplus, the average standard of living of Canadians has increased at a faster pace. There has been more improvement in the past seven years than in the previous 17 years.
Our careful planning and prudent budgeting have given Canada the strength to deal with expensive and unpredictable crises like security threats, natural disasters, the SARS outbreak, and of course BSE in the livestock sector.
We have also had the wherewithal to invest in primary Canadian priorities like health care, learning, families and innovation while also paying down debt, cutting taxes and always balancing the books. However, we can never take our fiscal and economic success for granted. It is crucial to the well-being of Canadians everywhere but it is not automatic.
That is why I was very pleased to see a substantial portion of the Speech from the Throne devoted to the challenge of how we maintain and build upon our economic strength, because that is the enabler for everything else that Canadians want to do. It is the enabler for the things we do in common with our provincial colleagues and partners, things like health care and equalization, but also post-secondary education, certain other social programming, infrastructure, the environment, agriculture, immigration, regional development, housing and alleviating homelessness, innovation and research.
Our economic success is also the enabler behind our direct federal responsibility for things like the public pensions of an increasingly aging society, international diplomacy, foreign aid and world trade, national defence, national security and dealing with national emergencies. Of course there is still that federal debt of more than $500 billion, which incidentally is nearly double the size of all provincial and territorial debt combined. Just keeping that debt current consumes about 20¢ out of every dollar of federal revenue. It adds up to about $35 billion a year, probably the biggest single expenditure item facing the Government of Canada.
No one should doubt the serious responsibilities carried by provincial governments. Of course, their jurisdictions, just like the federal jurisdiction, must always be respected. At the same time, in fairness, it also needs to be noted that both orders of government have access to all of the same major tax bases.
It has to be noted that some provincial revenue sources, like royalties and the proceeds from lotteries, are not available to the federal government. It has to be noted that provinces have complete autonomy in setting their own fiscal policies. It has to be noted that federal fiscal responsibility, balanced budgets and debt reduction save interest costs not just for the Government of Canada but for all Canadians, including provincial governments.
It has to be noted that recent improvements in national economic performance will boost not only federal revenues but also provincial revenues. It has to be noted that the Government of Canada is already committed to substantial increases in its annual multibillion dollar transfers to assist other governments, most notably for health care of $41 billion, and equalization of $33 billion, not to mention other things yet to come, such as child care, communities and others.
It has to be noted that, just like the provinces, the Government of Canada too has serious responsibilities to discharge, as I have already outlined.
It is interesting to note that international comparisons show that Canada, as a very successful country, a very successful federation, is one of the most decentralized federations in the world.
On the money side of the equation, total provincial revenues, that is, their own source revenues plus federal cash transfers every year, have substantially exceeded federal revenues for more than two decades now and they are expected to continue to do so.
For all of these reasons, I have profound difficulty with the motion from the Bloc Quebecois, which is now before the House. Both its premise and its remedy are, in my view, fundamentally wrong. It denies recent progress on things like health care and equalization. Most seriously, it ignores the duties and the responsibilities of the government and the Parliament of Canada by proposing essentially the delegation of a huge portion of national fiscal decision making on an unaccountable and absolutely open-ended basis to one single provincial premier acting alone.
Let me make it clear. I have enormous respect for the premier of Quebec. I had the honour of sitting in the House with him and working with him on such things as the environmental challenges, for example. He is an outstanding leader of his province and he did a superb job at the recent first ministers conference on health.
I think we are all very proud of Mr. Charest, but that does not change the fact that it would be a distortion of our democracy to bind federal fiscal policy to the pronouncements, past, present or future, of any person or authority outside this chamber and not accountable to this chamber.
Further, to single out the premier of one province, as this motion does, is a fundamental disservice to the leaders of every other province and territory. The premier of Quebec, I suspect, is not the only premier with some pretty strong views on financial matters and it is probably true that among the premiers there are many and varied opinions. It is not a case of one size fits all.
On the question of equalization, for example, I know the premier of Quebec has a very strong position and I respect that position. However, with the greatest of respect, I also know that the premier of Newfoundland and Labrador has a very strong position, as does the premier of New Brunswick, as does the premier of Saskatchewan and, I suspect, on the other side of the equation, so does the premier of Alberta and so does the premier of Ontario.
The issue here is not speaking for provincial premiers. My point is this: it is simply not acceptable to enshrine the view of any authority outside of Parliament as the basis of federal fiscal policy. It makes no sense from the perspective of responsible government because this is the place where those fiscal decisions are ultimately made, and it makes no sense from the perspective of fairness and understanding within our federal system.
Therefore, I would urge all hon. members to support the thrust and the fundamental direction of the throne speech itself and to defeat the subamendment in the voting later tonight.