Mr. Speaker, I rise today to speak on Bill C-18, whose purpose is double.
It is somewhat surprising that, in the same bill, we find one part that finally transfers the $2 billion promised by Jean Chrétien and promised again by the current Prime Minister. This amount really should be transferred one way or another. It is a good idea in itself, but the amount is clearly inadequate. It is rather paradoxical and, I believe, unacceptable that this same bill is being used to extend the equalization agreement.
The equalization period is usually five years, and the current period ends on March 31, 2003. They want to extend it from 2004 to 2009, but without having real agreements with the provinces. It is rather like having an old collective agreement with a few holes and things that need fixing. We would like it to be improved. They assure us that the old agreement will apply for the entire period, unless something new is negotiated.
We would have preferred that the current government had done its homework on time and that we had a new equalization act that included the results of negotiations and agreements with the provinces. But the past predicts the future. We know that the Liberal government has not always kept its word on this.
Today, this is very frustrating. We can see that the surplus for the current year, ending March 31, 2004, will probably be in excess of $7 billion. The former finance minister, who is now the Prime Minister, deliberately underestimated the surplus year after year, and the new Minister of Finance is doing the same thing. On March 31, 2004, at a time when a number of provinces will be in situations where they cannot avoid a deficit, where they will be looking for money to spend on health care, the federal government will have $7 billion.
This is a government that acts as if it were a corporation. It is trying to have the largest profits possible, but it is the only stockholder. I think that the results are not what our society wants. It is true that the government must be well managed, but the bottom line is that, if the surpluses piling up do not make it possible to provide adequate services, there is no sense to it.
Yesterday, Quebec's finance minister was unable to refrain from saying so in the consultations he is holding on his own budget. It is frustrating to hear from farmers and people in social housing or other sectors in committee and see that the Quebec government does not have the money it needs to meet their needs.
Quebec and the provinces shoulder the responsibilities, and they do not have the means to obtain the money. The federal government is not responsible for front-line services in health, education, social housing nor a number of other things such as the current mad cow crisis. The federal government has not listened carefully, or it would have provided adequate funding.
In terms of this bill, we agree with the clause to invest $2 billion, as long as it is understood that this is insufficient. Additional funds are needed, and the federal government has the money. However, equalization, as it exists currently, is not sufficient for Quebec's needs and should be reviewed.
An amendment would have been a good idea. It would be appropriate. The $2 billion for health referred to in the bill should be made a recurring item. In the Bloc's opinion, such an amendment would improve the bill, make it more acceptable and ensure our support for it.
If this were a recurring item, funding would be more secure and dependable. As a result, the provinces would have a guarantee that they will not have to rely on the government's good will from one year to the next. It would be recognition that this threshold must be integrated into the health transfer payments. It would be good to have this in the bill.
We will ask that the bill be split so that these two distinct issues can be considered separately. This will be done in committee. We will likely move an amendment to make the $2 billion a recurring item.
That way, there would be two bills coming back to the House, one which would ensure that the $2 billion is paid to the provinces on a recurring basis and the other, which we will not support as it stands, to renew the equalization payment agreements.
In this part, an additional effort needs to be made over the weeks and months to come. It does not look very professional, in a country like this one, which claims to be a leader in public administration, to be living from hand to mouth. Next month, the provinces will be having to define what sort of budgets they will have for the coming year, and to make five year plans as well. Yet they do not know what they will be receiving from the federal government.
We have memories of episodes in the past when the Government of Quebec, no matter what party was in power, learned in February that it would be $200 million or $300 million under, or $500 million over.
This leads to terrible frustrations. When one learns that there was $500 million more that could have been spent in the previous year, on health for example, one sees a number of needs that could have been met. It would have been put to use if one had known it would be there to use, and people would have been pleased. Worse yet is the situation when amounts are taken away.
As for the part about equalization, it is estimated that a one year extension of the current formula would represent a net loss for Quebec. Consequently, we cannot support this legislative measure that would cause Quebec to suffer. Let us hope our suggestion to split the bill does not fall on deaf ears.
With respect more specifically to the equalization issue, the current formula is extremely flawed. It must be changed as soon as possible. We have been defending this point of view for some time now and we hope the government will listen.
This formula penalizes Quebec, gives the advantage to the federal government and accentuates the fiscal imbalance that has been established and recognized by a commission in Quebec. This commission is considered to be very reputable. It was chaired by Quebec's current finance minister, Mr. Séguin, who, in his current role, has noticed that what he saw in his task force he now sees on a daily basis in his responsibilities as finance minister.
Yet the government has not budged in this area. This would have been a good opportunity for the current government to stand out, but, as in other sectors, it is hard to see the difference between the practices of Mr. Chrétien and the new Prime Minister.
Nothing has changed on the equalization issue. The new finance minister flat out rejected the formula proposed by the provinces, and now we are faced with a no man's land. We do not know what exactly will happen. No solid proposals have been made.
The Bloc Quebecois is calling on the federal government to come back to the table with the provinces as quickly as possible in order to enter into a satisfactory agreement on equalization that would meet the provinces' needs.
If the new Prime Minister is serious about wanting to be more open toward Quebec and the provinces, he has a good opportunity to prove it by quickly negotiating in good faith so that the provinces will have the information they need to prepare their next budgets and plan for the next five years. That is what we would expect from a responsible federal government looking to implement a practice that is different from the one that existed under the former government.
The new administration is currently using the exact same practices the former administration used, and the provinces still have to beg for the money they need, money that taxpayers have paid in taxes, in a very complicated process.
The federal government collects taxes, much more than it needs, and gives a certain amount back to the provinces through the equalization program, but it controls everything. It can decide whether or not it will open the tap, depending on all sorts of conditions.
We witnessed that in the past. When provincial governments are not of the same political stripe as the federal government, the latter turns off the tap just in time. This means that the provincial government does not have the money to table a responsible budget and voters make that government pay the price, when in fact the one that is responsible for this situation is the federal government.
The current Minister of Finance said that the next real formula would be retroactive to April 1, 2004, so that, in the end, no one would lose.
However, at this point, this is still only a promise. There is no guarantee in the bill that the government will live up to that commitment. We do not know when the negotiation will conclude. In the meantime, the provinces have a sword of Damocles hanging over their heads, and this is why the Bloc Quebecois is opposed to the bill in its current form.
The $2 billion health transfer must be paid as quickly as possible and this must become a recurring payment.
However, there is still a lot of work to do as regards equalization. Before we give our support to an equalization formula, we want to make sure that it will benefit Quebec.