Mr. Speaker, I am extremely pleased to take part in this debate on this stunt known as Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health. This is typical of the federal government, the Liberals and the Prime Minister. The sole purpose of this bill is to get votes, nothing more.
First, contrary to the bill introduced in the previous session, this bill combines two things that have nothing to do with one another.
On the one hand, there is the one-year extension of the current equalization program and, on the other hand, there is the $2 billion transfer first promised by Jean Chrétien, then by the hon. member for Ottawa South and, finally, promised and delivered by the current Prime Minister.
Obviously, the Bloc Quebecois is not only in favour of this $2 billion transfer, it has been demanding it for a very long time. In fact, we demanded it back when the federal government and the finance minister, both old and new, were telling us that the federal coffers were empty and that the government was scraping the bottom of the barrel to find this money for Quebec and the provinces.
We are therefore in complete agreement. Not only are we in agreement, but I wanted to make an amendment in the Standing Committee on Finance to ensure that this $2 billion was a recurring item, to rectify the fiscal imbalance and help the provinces and Quebec fulfill their health care commitments.
Consequently, we have no real problem with this aspect of the bill. However, with regard to the one-year extension—I want this to be clear, because the bill clearly indicates an extension until March 31, 2005—the current equalization program is not acceptable to those defending Quebec's interests. The loss to the provinces is several billion dollars; the loss to Quebec is about $1.4 billion.
It is out of the question to ask those with Quebeckers' interests at heart, such as the Bloc Quebecois, to approve of such extensive cuts. This would totally contradict the mandate that Quebeckers have given us.
Obviously, the Liberals knew the Bloc Quebecois were opposed to the extension of this equalization formula. As I said, we had made that clear from the time the previous bill on the same subject was introduced. So they thought that, by putting the transfer of $2 billion into the same bill, they would probably manage to trick us, trick the people of Quebec and make us feel obliged to support such a bill.
We are, however, capable of walking and chewing gum at the same time. We are capable—as Quebeckers are clear on that—of explaining that, while being in agreement with the transfer of $2 billion for health, we can be opposed to extending the equalization formula for the coming year, because we will be penalized in the long run, both in Quebec and in the Atlantic provinces.
We asked the committee to split the bill, so that we might vote separately on extension of the equalization formula on the one hand and on the $2 billion transfer for health on the other. The committee refused. The Liberals refused.
As I said, the result of this is that they are making us speak out against the whole bill although—I repeat—we agree with the $2 billion transfer. I even tried to propose that this be a recurring amount, but for procedural reasons, unfortunately, that was not possible.
So, the first stunt was to combine two things that have nothing to do with each other, except that they both have to do with money. The Bloc's position on the two are diametrically opposite.
The people of Quebec are intelligent people and were not taken in by such a stunt. We will not play the government's, the Liberals, and the Prime Minister's game.
Then, there is the second stunt. By combining the two, the Liberals, the Prime Minister, the Minister of Finance, are suggesting to the provinces, Quebec and the Atlantic provinces in particular, that in the end the equalization formula is really not very advantageous. “But, with the $2 billion we are going to transfer to you, you will stand to gain”, they say.
This is false. No matter how one looks at it, Quebec and the Atlantic provinces in particular, stand to lose with Bill C-18.
Let me give an example. There are several ways to evaluate this loss. Let us look at what is happening with the equalization estimates made by the federal government, by the Department of Finance.
In reality, what the federal government, the Liberals and the Prime Minister are doing is this: on the one hand, they are giving $2 billion for health but, on the other hand, they are taking back that money through the equalization program. As I said, we are not fooled by this scheme.
Here are the October 2003 equalization estimates for Quebec. For 2002-03, it was estimated that Quebec would receive $4.662 billion. In February 2004, according to the most recent estimates released on Monday, the amount is down to $3.985 billion for 2002-03. This is a loss of $677 million to Quebec, based on estimates made by the federal government itself.
For the year 2003-04, the estimate made in October 2003 was for a payment of $4.525 billion to Quebec. In fact, it was on that basis that the Quebec finance minister Séguin prepared his budget. Now, based on the February 2004 estimate, under the equalization formula that the federal government wants to extend for a year, we are finding out that the amount of $4.525 billion is down to $3.802 billion. This is a loss of $723 million to Quebec. And the government would want us to approve that?
For next year we have an initial estimate, therefore we cannot compare it to a previous estimate, but there is talk of equalization for Quebec of $3.691 billion. That means that in addition to the cut in equalization for 2003-04, in 2004-05 an estimated $111 million more will be cut. In total, based on its own estimates, the federal government is telling us that this year it is giving Quebec $1.4 billion less. That is the current estimate.
Of course the Minister of Finance says he is going to spread this out over time. Nonetheless, this is a loss. In the coming years, the Government of Quebec will have to make do with a lot less money in transfers from the federal government.
I remind this House that the February 2003 agreement is expiring soon. This year Quebec will receive only $365 million under that agreement. It is clear that the money situation in Quebec—and in the Atlantic provinces—is going to be especially difficult, if not disastrous this year and in the years to follow.
This is all because of the federal government's own estimate. Now, as for Quebec's expectations, what was in Mr. Séguin's budget? For 2001-02, we expected to receive $5.336 billion from the federal government. Just imagine. I am talking about the 2001-02 budget. That money was spent. Ottawa turned around and said it would not be $5.336 billion, but $4.690 billion. That is a net loss of $646 million in terms of what Quebec was expecting and what Quebec spent based on estimates.
For 2002-03, we expected to receive $5.315 billion from the federal government in equalization. On Monday, we were told it would be $3.985 billion. That is a loss for Quebec of $1.330 billion. That money has already been spent.
For the coming year, we are being told we will be given a little more. Quebec had anticipated a cut in equalization. In his September study, Mr. Séguin had reduced his equalization expectations to $3.290 billion, given the problem with this formula. We were told that there would be a little more money, $3.802 billion. Note that this is less than we expect to spend this year.
In total, with respect to Quebec's expectations, with respect to the money that has often been spent on health, in accordance with Quebeckers' priorities, it amounts to $1.464 billion less.
With the exception of Alberta, this is taking place in an extremely fragile financial situation. That is true for Quebec and for all the provinces. There is a risk that some provinces, particularly the Atlantic provinces, will find themselves with a deficit. And they want us to approve that? Whether we look at it from one angle or another, Quebec will be losing about $1.5 billion with this equalization formula. That is the money that was lost in the past; imagine what it will be in the future.
All provinces that receive equalization payments will be affected. If we look at all the provinces, in October 2003, the forecast equalization payment for 2002-03 was $9.709 billion. On Monday, we were told that it would be $8.73 billion, or a decrease of $976 million; the provinces will receive nearly $1 billion less.
For 2003-04, the current fiscal year, the payment forecast last October was $10.097 billion. Now we hear that it will be only $8.779 billion, or a loss to all provinces of $1.318 billion. In total, with the forecasts and the estimates that were published on Monday, this amounts to $2.2 billion less that the provinces will receive in transfer payments because of this equalization formula.
And they want us to agree to extend this for a year, because an election is coming up? No, Mr. Speaker. It is particularly hard on Quebec and the Atlantic provinces. I shall explain it to you, and since you are an extremely intelligent person, Mr. Speaker, you will understand right away.
There are two major transfer payments in the Canadian system. There is the Canadian health and social transfer, which is calculated on the basis of a percentage of the population, and there is equalization, which is based on the goal of reducing the gaps between the provinces' fiscal capacities. In this context, consideration is given not only to population figures, but also to the socio-economic status of the provinces.
Thus, they take $2.2 billion out of the equalization system that helps the poorest provinces, and, they put $2 billion back in, through the Canadian health and social transfer. But the CHST funds are divided proportionally among the provinces, based on population, not taking into account the socio-economic situation in the various provinces.
I see you are signalling me to stop, Mr. Speaker.