Debates of March 24th, 2004

The House resumed, from March 23, consideration of the motion that this House approves in general the budgetary policy of the government.

The Budget

[Stephen Harper, Canadian Alliance, Leader of the Opposition]

Mr. Speaker, I rise today to address the tenth budget of a tired, old and corrupt Liberal regime.

It is a Liberal regime mired in scandal. It is a Liberal regime wishing to shake itself of the past. It is a Liberal regime that cannot be trusted to manage our public funds.

There is little in this budget, but this budget tried to make one claim. It tried to make the claim that the government can be trusted to manage public funds, but what is the reality?

We have continued record spending levels, not even spending directed simply to the public good. We have a government that has been exposed as ripping off taxpayers in scandal after scandal. The government has been exposed as wasting dollars in program after program. This budget will change none of those things. Ottawa remains knee deep in cash, keeping its padded estimates, masking its hidden surpluses well into the future.

Only a few short years ago the Government of Canada had projected program spending of just a little over $100 billion. Today this budget projects program spending well over $150 billion. It is an increase of 50% in only a few short years.

There is no return of tax dollars to overtaxed Canadians and their families, no reduction in onerous tax levels. The pledge to do better with management in the future is an empty one. It is empty because the government and the Prime Minister have had 10 years to do better. He was the one writing the cheques for the sponsorship scandal. He was the one writing the cheques for the HRDC boondoggle. He was the one writing the cheques for the useless gun registry. His promises to clean up this mess are simply not credible. He had his chance and he missed his chance.

This government has had ten years to show us what a good financial manager it is. This very Prime Minister has had eight budgets with which to bring in improvements to the way public funds are being managed, but has done nothing.

In previous budget speeches, he kept telling us that he had public spending under control. Yet now, as Prime Minister, he is telling us he had no idea of what was going on in the sponsorship scandal.

This is the 10th budget of the tired, old Liberal government. The first eight budgets were delivered, as Canadians know, by the current Prime Minister himself. Before turning my attention to today's budget, I want to take a small detour through some of those earlier budgets.

In those earlier budgets, the Prime Minister was finance minister at the time and took full responsibility for the spending program of the government. The message in those budgets was clear: the finance minister was in control of taxpayers' dollars.

In his 1995 budget speech, the current Prime Minister said the following, and I am going to quote at length:

The government has just introduced a new and much tighter system to manage its spending.... For the first time, departments will have to prepare business plans for three years forward.... That transparency and that accountability will mark a major departure from the past.... Individual ministers are being asked to alter their funding approach accordingly. They will be held accountable for their decisions and those decisions will be reviewed annually.

Reviewed annually, one can only assume, by the Minister of Finance, or at least by Treasury Board, of which the Minister of Finance was the vice-chair.

The year 1995 was significant because that was the year the Liberal government nearly lost the country. That was also the year in which the Liberal government decided to create the sponsorship program. Let me repeat that. The year that the Liberals created the sponsorship program was also the year in which the current Prime Minister put in place “a new and much tighter system to manage its spending”.

Most Canadians remember 1995 as the year in which the government cut billions of dollars from the health care system. Let me repeat and emphasize that as well. The year that the Liberals created the sponsorship program was also the year in which the current Prime Minister massively cut spending on health care.

The 1995 budget put forward four priorities. The very first priority was “the reform of government programs and procedures, to eliminate waste and abuse and ensure value” for the taxpayer's dollar. That promise was repeated in his 1996 budget speech:

If there is one area where we must never let up, it is the effort to root out waste and inefficiency.

In his 1998 budget speech he said, “The battle to root out waste and inefficiency can never end”. Apparently it can never begin either.

Let me rephrase all of that. The year in which the Liberals created the sponsorship program was also the year in which the current Prime Minister first vowed to root out waste and abuse of taxpayers' dollars. Now this budget once again tries to establish the government as “prudent managers”.

The government has made a number of recommendations to tighten spending. It wants to re-establish the office of the comptroller general. Canadians are rightly asking, does that mean there is not one now? The answer is no, there is not one, because the current Prime Minister permanently cut that office in his first budget as finance minister.

The government wants to appoint professionally accredited comptrollers. Canadians are rightly asking, does that mean they are not accredited now? The answer is no, because the Prime Minister never thought it necessary to establish them.

The government wants to bolster the audit function. It wants real time information systems and it wants “public disclosure of contracts”. All Canadians should rightly ask, does that mean the government does not have any of these things today? The answer is no, it does not, because the Prime Minister never thought it necessary when he was finance minister.

Why should Canadians believe any of these promises when the Prime Minister had 10 years mainly as finance minister to make them happen?

The Prime Minister cannot have it both ways. He cannot claim on the one hand to have a tight rein on spending, and at the same time, not created the most elementary spending control mechanisms that these scandals have finally driven the government to recommend.

The Prime Minister cannot have it both ways. He cannot claim on the one hand to have reformed government programs, to have eliminated waste and abuse, and at the same time claim that he had absolutely no idea that $100 million had been shovelled into the hands of his Liberal friends. That is exactly what the Prime Minister is saying today.

Let me quote from some of his more recent statements. On February 10 he said, “I had no idea what was going on here”. On February 11, “I didn't know anything about it”. On February 16, “Did I know that people were kiting cheques, that people were making payments that were inappropriate, did I know all of those things? The answer is absolutely not. I did not know that”.

These claims to ignorance and innocence are no more believable coming from the Prime Minister than they are coming from Alfonso Gagliano.

The Prime Minister would like to think he represents change, but that is far from the truth. This Prime Minister had 10 years to keep his promises to create an independent ethics commissioner, to hold more free votes, to have a better infrastructure program to meet the needs of our municipalities, and so on. This Prime Minister has missed his opportunity to do all this, and does not deserve a second chance.

Yesterday's budget continues the theme put forward by the Prime Minister in his speech in Quebec City last week. The Liberals want Canadians to believe that they represent change. “Trust me”, says the Prime Minister, usually with some reference to hell or high water. I am going to say it is appropriate that the only theological references from the Liberals are to hell.

Why should Canadians trust the Liberal government? For 10 years the Liberal government has refused to create a genuinely independent ethics commissioner. For 10 years the Liberal government has failed to give its members free votes. For 10 years the Liberal government has failed to allow Parliament the review of appointments. For 10 years the Liberal government has failed to prudently spend Canada's tax dollars. For 10 years the government has failed to deliver municipal infrastructure programs that adequately meet the needs of our communities. For 10 years the government has failed to clean up contaminated sites, like the Sydney tar ponds. I could go on and on.

Those are just some of the promises made by the Liberals repeatedly, made in the first Liberal red book in 1993, made in that book written by the current Prime Minister himself.

Promises of change from the Prime Minister are no more believable today than they were 10 years ago. He had his chance. He missed his chance. That is why Canadians should not believe any of the promises made in the budget. Let me touch briefly on some of the items in the budget.

The budget tries to present the government as a good financial manager. But nothing is changed concerning the Firearms Registry. Government members will continue to fly about in new jets while the army puts up with its old helicopters. The government wants to talk about cleaning up government spending, to hide the amounts wasted in the past 10 years.

The budget makes some positive promises about health care and education, but they are hardly any more than old promises recycled from previous years.

The budget supports more federal interference in provincial jurisdictions, in particular with respect to municipalities. There is no money for the army, no end to the employment insurance scam and, above all, no tax relief for Canadians and their families.

The government has made promises to clean up spending if the Canadian people re-elect it. This promise is little more than empty rhetoric. There are no plans to scrap the gun registry. There are no plans to reduce corporate welfare. The government is still flying around in brand new jets while the military has to make do with dilapidated helicopters.

The Liberals want Canadians to believe they are good managers simply because they balanced the budget. They want Canadians to trust their fiscal management of money, even though they continue to pad the budget with future spending without any controls. The government has a dismal record of fiscal management, and no amount of balanced budgets will gloss over the sponsorship scandal, the gun registry, the HRDC boondoggle, and I could go on and on.

To repeat, it was the current Prime Minister who finished off the comptroller functions of government in 1994. In 1995 the Prime Minister promised a program review, yet he would have us believe that the sponsorship scandal somehow escaped his attention during that review.

The government is no more likely today to clean up spending than it was likely to eliminate the GST in 1993. This is just empty rhetoric to hide the lack of real action to eliminate waste. The EI rip-off will continue with this government. The overspending on the gun registry will continue, and the government creates a tremendous amount of room for the spending scandals of the future. Government spending is still rising at record rates. Spending this year will double the growth in our economy and our population, just as it has over the past several years.

Spending is rising as it has been, but outcomes are not changing. Our taxes are still too high. Our competitiveness is falling behind. Our waiting lines are not shrinking. Our students are still piling up debt. Our soldiers are dangerously under-equipped. The government continues to hide large surpluses and then blow them in end of year bonanzas, and the budget continues exactly this kind of practice.

There is a better way. That better way is to return some of these massive surpluses to Canadians and their families in the form of tax reductions. We should be putting more money in the pockets of hard-working taxpayers, not in the pockets of advertising firms.

What is the government's approach to tax relief? Nothing. Well, not quite nothing, there is one thing: soldiers, military personnel in danger zones can have tax relief. First, we will be interested to see how much money we have to spend to define a danger zone. We have inadequately equipped soldiers who are under fire, with their lives in danger, wearing the wrong coloured uniforms. They can have tax relief. What kind of message is the government sending? Only when their lives are in danger, or worse yet, only when the danger is complicated by their government, can they expect tax relief. By the time they get to that point, they are really not very worried about the taxes they are paying anyway.

The government is at least setting a debt to GDP ratio for reducing the debt. Interest costs are still a burden on our public finances and services and the debt must be reduced so that those interest costs can fall. Can those promises be believed? I would urge the government to copy other governments in Canada by putting a legislative debt reduction plan; to put its promise into legislation so that it can be held to it.

On health care, the government is repeating the promise to provide an additional $2 billion for health care. It is also moving forward on the establishment of a Canadian public health agency. These are developments the Conservatives support. However, I have to ask why the public health agency is taking so long. It has been well over a year since SARS hit Canada, yet the Liberals have yet to appoint a chief public health officer or to start to create the new agency.

The same can be said about the health accord signed with the provinces. While we continue to support the health accord, I am increasingly worried about the inability of the government to follow up on its commitments in that accord or to meet any of the timelines.

On the education front, the budget promises to expand the student loan program. It also promises to remove barriers to low income Canadians seeking to further their and their children's higher education. These are noble goals. I would point out, however, that this is not the first time that the government has promised to increase assistance to students, and its track record has been once again one of underachievement.

This is government has not met any of its education targets set out in the 1998 budget, the Prime Minister's so-called education budget. The millennium scholarship program has been a flop, according to the government's own review of the program. Most of the other programs announced in 1998 have failed to deliver half of the money promised.

On agriculture, the budget promises an aid package for farmers hit by BSE. This aid is long overdue and much needed in this industry, but Canada's case of BSE was detected 10 months ago and our beef industry has been suffering since. Shamefully, the announcement of aid for farmers was a staged campaign announcement instead of a genuine act of support and compassion for our ranchers and their families.

In the past we have seen many programs which looked good when announced, but which do not translate into meaningful monetary help to those who need it. I call upon the government to ensure that the money actually makes it to our ranchers and producers immediately, without delays and without political interference.

On infrastructure, the Prime Minister has spent the better part of the last two years talking a new deal for cities. Yet to date, he has delivered precious little. He wants to keep in place boondoggle programs like the federal infrastructure program. He has already waffled on using gas tax revenues for infrastructure spending, and he has failed to talk about issues beyond Canada's big cities. His failure to deliver on these issues simply confirms that this Prime Minister cannot be trusted to keep his promises.

On the environment, this government is going down the path of making grand announcements without focusing on providing real solutions to real problems. The Liberals say they want to restore Canada to a place of pride in the world. Yet for 10 years, Canada has seen a dramatic drop in its standard of living relative to other countries and a widening productivity gap compared to the United States, Ireland, the Netherlands and many other countries.

The Prime Minister reserved his deepest cuts for the men and women who so proudly serve Canada in the military. This budget restores absolutely none of that spending. This is a strange way to improve our standing in the world.

Then there are the black holes in the budget. There are those programs that are just waiting to be the next sponsorship scandal, the next HRDC or the next gun registry. I refer to $250 million in new money for the Business Development Bank to dole out on corporate welfare. I refer to billions in politically directed infrastructure funds. I refer to $90 million in a so-called northern economic development strategy. I speak of $605 million in undetermined spending in the security contingency reserve.

This is but a partial list of budget items which the tired, old and corrupt Liberal Party put forward to demonstrate change. Only the new Conservative Party is going to represent change in this country.

If Canadians want things to change, and I believe they do, it will not be done through a bunch of recycled 10-year-old promises from the Prime Minister. Change will only come through a change in government.

Only a new Conservative government will change the way tax dollars are spent. Only a Conservative government will return integrity to the political process. Only a Conservative government will put money into the pockets of Canadians, rather than the pockets of ad agencies.

We will accomplish all this and more because we have not been compromised by scandals. We will accomplish all this and more because we were not involved in 10 years of mismanagement. We will accomplish all this and more because we do not have to prove to Canadians that we can manage their money. We will accomplish all this and more because we represent the hopes and wishes of the unheard majority of the citizens of this country.

If Canadians are looking for change, and I believe they are, they are not going to find it in a bunch of recycled 10 year old promises from this Liberal Prime Minister. They are only going to find it by changing the government.

Only a new Conservative government will change the way tax dollars are treated. Only a new Conservative government will return integrity to the political process. Only a new Conservative government will put dollars in the pockets of Canadians, rather than in the pockets of ad firms. Only a new Conservative government will transfer gas taxes to infrastructure projects in all corners of Canada. Only a new Conservative government will give rural communities and rural livelihoods the respect that they deserve. Only a new Conservative government will protect children and respect families. Only a new Conservative government will restore funding to our armed forces. Only a new Conservative government will eliminate, not just cut, the air tax. Only a new Conservative government will stop the EI rip-off.

We will do all these things and more because we are not encumbered by this scandal. We will do these things and more because we are not weighed down by 10 years of mismanagement. We can do these things and more because we do not have to prove to Canadians that we can finally manage their money. We will do all these things and more because we represent the hopes and desires of the unheard majority of the citizens of this country.

We will also do these things and more because for the first time in a decade we can present a united Conservative choice to all Canadians. We will listen to those in Atlantic Canada who desire greater control over their own resources and their own destiny. We will respect those in Quebec and their own unique language and culture. We will hear the unheard majority of Ontarians who are demanding accountability and sound fiscal management of their tax dollars. We will welcome the west into the corridors of power.

New Conservatives represent real change for a better government for all Canadians.

This budget truly demonstrates the difference between the tired old Liberals and our new Conservative Party. The old Liberal Party is so focused on trying to restore its image as financial managers that it has absolutely nothing else to propose.

Our new Conservative Party is not encumbered by scandal. Our new Conservative Party has no obstacle to interfere with the vision of providing good, clean government for the benefit of all Canadians. It is a vision of cleaning up waste. It is a vision of reducing taxes for Canadians and their families. It is a vision of providing sustainable public services. It is a vision of continuing to clean up our water, clean up our air and clean up our land and to do so with a clean government. It is a vision that Canadians will be hearing much more about in the weeks and months to come.

I move:

That the motion be amended by substituting all the words after the word “that” with the following:

This House rejects the government's budget because it is an agenda for underachievement that fails to eliminate wasteful spending like the gun registry, corporate welfare and the $160 million misappropriated at DND; and because, by perpetuating Liberal government favouritism through corrupt programs like ad scam, it is an affront to Canadians funding priorities that would address ever increasing hospital waiting lines, student debt, over burdened and under equipped soldiers, tax relief, and debt retirement.

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, I am pleased to take part in the budget debate because, as the Bloc Quebecois leader said yesterday, this budget is truly scandalous.

It is scandalous because the federal government is once again playing its little game of fiscal hide and seek to hide the true state of public finances. We must condemn this game and this lack of transparency by this government. In this regard, this Liberal budget is the Prime Minister's tenth budget. Indeed, this budget is very much in line with what the Prime Minister did when he was finance minister, which is to hide from Canadians and Quebeckers the true state of federal finances.

For the second time in a few months, we are the victims of the sponsorship scandal. The first time, all of us, parliamentarians, citizens and taxpayers, were the victims of a major misappropriation of funds. As we know, the Standing Committee on Public Accounts is currently looking into this issue. There will be an independent inquiry, but this will not prevent the Bloc Quebecois from continuing to ask questions.

Now, we are the victims of the sponsorship scandal for a second time. Indeed, on the eve of an election, the Liberal government, the Liberal Party and the Prime Minister wanted, through this budget, to create an impression of integrity, prudence and rigour. However, this is not what we are getting with this budget. This budget is not about prudence, but about irresponsibility, considering the needs of the provinces, particularly Quebec. This budget is not about integrity either, because it plays with numbers. I will get back to this later on. This budget is definitely not about rigour, because it includes a series of intrusions in Quebec's jurisdictions, not to mention the fact that federal bureaucratic spending is maintained at its current level.

With this budget, the government is trying to buy votes. However, many observers have not been fooled by this attempt. The federal government would have us believe that it runs a very tight ship, that it does not have much leeway and, therefore, that it could not transfer to the provinces, and to Quebec in particular, any money for health. If we look at the numbers, we can clearly see the figure zero for 2004-05 and 2005-06.

Nor was there sufficient leeway to transfer money to education. There is absolutely nothing allocated under the new Canada Health and Social Transfer. However, about $500 million was found to create a Canada public health agency. But when the frontlines face problems and epidemics, the provincial agencies—Quebec has the Agence de santé publique—are responsible for managing these crises.

Granted, a small committee or coordinating body could have been struck, but certainly not to the tune of $500 million. We know how things work with the federal government. We are told it will cost $500 million this year. But what will this new Canada public health agency really cost? We are talking about an agency, a new bureaucratic elephant created by the Liberal Party. No one can predict the end result.

The former justice minister, the hon. member for Outremont—I am not sure if he still represents that riding today—told us that the gun registry would only cost $2 million. I repeat that we agree with the principle of the gun registry. First, this program has cost over $1 billion. I hope that everyone in this House will agree on this. According to some observers, the cost will soon reach $2 billion.

We have similar concerns about this new Canadian public health agency. Not only is it an intrusion into provincial jurisdictions, but it is also a dreaded bureaucratic elephant.

Consequently, instead of being about prudence, integrity and rigour, this budget is, as I said, about irresponsibility and manipulation, and it provides for numerous intrusions and high levels of bureaucratic expenditures.

I want to come back to the issue of the concealed surplus. I know that some people are sick of hearing about this. Unfortunately, just because a problem has been around for over ten years and people are sick of hearing about it, does not mean that not talking about it will make it disappear. We have a moral obligation to be truthful and to inform the public that the Liberal government is once again underestimating its surplus.

I will not go back over last year, when the government altered its estimates several times. Nevertheless, we have been told for some months that the surplus would scarcely reach $2.3 billion. And what did we learn yesterday? That, from April 1, 2003 through January 2004, the surplus had already reached the $5.4 billion level. The fiscal year was not yet over for another three months. Likely the figure will hit $6 or $7 billion, if not more. We reckon it will be around the $7 billion mark.

So there we have the year end surplus. It was used to pay the so often promised $2 billion to Quebec and the provinces for health care. Some of it also went in one-time assistance—and I emphasize its one-time nature, nothing recurring here—to farmers, particularly cattle farmers. Some of it went to create that bureaucratic monster, the Canadian public health agency, and a number of other initiatives. And still after all that there is $1.9 billion left, which will be used to pay down the debt.

We are two weeks away from the end of the fiscal year. We know the Canadian economy is in good shape, that there is an upturn in the U.S. , that Canadian exports are now picking up as well, that corporate profits are on the rise. So there is not, to my knowledge, much likelihood of any disaster in the next two weeks that would lead to any major reversal of the situation.

So, from that $1.9 billion, without any jeopardy to the federal government's public finances, a certain amount could have been found for additional transfers to the provinces. But that is in the past.

Now for the future. For 2004-05, the Minister of Finance is talking of a surplus of $4 billion, that is $3 billion for his contingency reserve fund and $1 billion for economic prudence. This is a joke. We will generate a surplus of $5.4 billion for the current year, a figure on which every one agrees, despite SARS, the mad cow crisis, a major blackout in Ontario, the worst ever fires in British Columbia, and a marked strengthening of the Canadian dollar. All this despite the fact that we have generated three times the surplus announced by the federal government.

Now that we will no longer have to deal with SARS or the mad cow crisis, and probably no major blackout in Ontario—let us hope not for Ontarians—or any other disasters such as the ones that occurred in British Columbia, the government is announcing that although there will be increased growth and renewed exports to the U.S., the surplus next year will be less than this year's. What do they take the public for? They take them for fools, to say something so absurd.

We cannot accept this. The government's biggest hypocrisy is not giving the real picture on public finances. Without the real picture, the entire debate is flawed. It is truly anti-democratic and this has been going on for 10 years. It has become a farce. Journalists no longer believe these figures. The public does not believe them. This is certainly not the way to fix the democratic deficit the Prime Minister is so fond of talking about.

It is very clear that the federal government's leeway is much greater than what we were told yesterday. It is probably more in the order of $9 billion. That is what we are predicting, $9 billion for next year, and we are not alone. The members of the Conference Board of Canada are neither sovereignists nor overly progressive. They are people who are probably trying to do careful and honest work.

In a study dated February 2004, the Conference Board of Canada predicted a $10 billion surplus for next year. We are not far off. Most reliable financial observers will say that $4 billion is a big joke.

If the government had wanted to do some serious work, with integrity and prudence, it ought to have told the truth to Canadians and Quebeckers. It ought to have told them that our surplus would be around $8 or $10 billion, for example, and that out of that $8 or 10 billion, a reserve would be set aside, perhaps not $4 billion as the government has announced, but a reserve of perhaps $2 to $3 billion for contingencies. It is quite true that we do not know what might happen during the year. Then we would have a margin of around $8 billion for investments in health, education, social housing and infrastructure.

That is not what they told us yesterday. Once again, they have disguised the truth.

Probably, later on, or perhaps very soon, during an election campaign, for example, someone will finally notice that growth is continuing, that interest rates are low, and that the Canadian dollar is doing well. They will say that they did not foresee that a few weeks ago, and now, with that money, they will fulfil their election promises, because they have a healthy surplus in the federal treasury. That is the operation now under way.

This government is trying to mask its true face but no one is fooled. We know very well that, with the room to manoeuvre that the government has, election promises will be made during the campaign and then, after the election, if this government should happen to be returned to power, it will use this room to keep a certain number of promises.

Or perhaps—probably in addition—they will do what they did after the 2000 election. They will promise to invest half the surplus in social programs and transfers to provinces and the other half in lowering taxes and paying down the debt. Overall, about three-quarters of the money will go towards paying down the debt.

I want to remind the House that all the so-called unexpected surpluses of the past ten years, starting in 1997-98, went in large part to paying down the debt. We are talking about approximately $45 billion to $50 billion, money that should have gone to the provinces, including Quebec, for health and education to rectify the fiscal imbalance.

However, the federal government preferred to conceal the truth to avoid a public debate, continue to strangle the provinces, particularly Quebec, and impose its rules when it reinvests, as with the paltry $2 billion promised once, twice and finally delivered to the provinces.

This is totally unacceptable, and we will continue to speak out against it. Nevertheless, we are not alone. In fact, Quebec currently has a government with which we do not necessarily see eye to eye. As the House knows, it is a Liberal and federalist government, but it still tries to defend the interests of Quebeckers insofar as its vision for Quebec's development allows.

Yesterday, for example, as Quebec's Minister of Finance, Mr. Séguin stated the following in a press release—and I think it bears repeating:

Despite the urgent needs of the provinces, the budget contains no new money for health.

Only the federal Minister of Health believes—I said it yesterday, he is Canada's resident optimist—that there is new money.

At the very least, I expected that the $2 billion announced over and over again for 2003-04 would be recurrent. Clearly this will not be the case, although the federal government's surplus, very conservatively estimated at $4 billion, would have easily allowed this.

Quebec's Minister of Finance, a federalist and a Liberal, is the one saying this, not us. We are, in fact, saying it too but it is clear that, in Quebec—and I noticed this in the statements by the leaders of both the Parti Quebecois and the Action démocratique—this vision is shared by all Quebeckers. Only the federal Quebec Liberals fail to see reality for what it is.

I do not know if it is because they have been in power in Ottawa too long, are living in a bubble, can no longer see and are out of touch with reality, but they are the only ones who claim that there is no fiscal imbalance.

Quebec's finance minister points out that the federal contribution for health is currently 16%. The minister was referring to last year. Indeed, after the budget brought down yesterday by the Minister of Finance, the federal government contribution is no longer 16%, but 14.5%. While the Romanow Commission suggested a 25% investment by the federal government through health transfers, this year, to our surprise—I am not really surprised—or rather, to our disappointment, the investment is dropping from 16% to 14.5%. This is unacceptable when the Prime Minister of this government says that health is his priority.

Luckily health is his priority. If it were not, there would probably be disinvestments in health transfers right now. In fact, that is what we are experiencing and it is driving the provinces into debt.

As I mentioned, the federal government is raking in a surplus this year. I am using the Conference Board figures so that I will not be criticized for being subjective. I will try to use figures from a body whose objectivity is beyond reproach.

This year, as I mentioned, the Conference Board predicts that the federal government's surplus for 2004-05 will be $10 billion. The surpluses and deficits for all the provinces combined results in an accumulated deficit of $4 billion. This year, we are looking at a $5 billion deficit for all the Canadian provinces, including Quebec.

So there will be a surplus of $10 billion, and a deficit of $4 billion. The next year, more or less the same situation is forecast by the Conference Board. For the year after that, that is 2006-07, they are talking of a federal surplus of $9 billion and combined provincial deficit of $7 billion, and so on. I will not take it 20 years on, as I could with the Conference Board study. I will stop at 2009-10, when, if there is no change, the provinces will have a combined deficit of $10 billion, and the federal government a surplus of $13 billion.

Where is the logic in the taxpayers' eyes for the federal government to conceal its surpluses, to pay off the debt rapidly by putting the provinces into debt, while the provinces not only have an obligation to deliver health and education services, but also have to pay a higher interest rate? Where is the logic for the taxpayers' debts to be paid off at the level charged the lowest interest rate, while debts are being run up elsewhere at a higher rate?

It is just like an individual deciding to pay off his mortgage as fast as possible. Mortgage rates, as we know, are usually the best interest rate a consumer can get. So, while paying off his mortgage as quickly as possible, the individual goes to a credit union or a bank to borrow for his children's education, at a 9% interest rate instead of 5%. If you were to do such a thing, Mr. Speaker, which I know you would not because you are an informed consumer, you would be truly irresponsible. That is exactly what the federal government is doing.

The federal government has decided to pay off its debt quickly. As the Minister of Finance and the Prime Minister have said, their objective is to achieve 25% of GDP within 10 years. But this will be done by saddling the provinces with debt, making the taxpayer pay heavier debt service fees, because the interest rate the provinces pay is higher than the federal rate. Nothing could be less financially logical.

Yesterday, our resident optimist, the Minister of Health, was walking around talking to journalists, saying that Quebec had made great gains through equalization. I can even say that he was quite convincing. His optimism is probably contagious because some of the journalists said it was true, that it appeared Quebec would benefit from equalization. When one reads the budget documents, it does indeed appear that the government listened to Quebec and the provinces, and that changes will be made that correspond to their demands.

Still, the fact of the matter is that, when one looks at the bottom line, the budget talks about $1.5 billion more for the provinces over the next five years. Looking at this year's figures, it is $175 million, of which $70 million goes to Quebec. Over the last two years, the equalization formula has cost Quebec $1.4 billion. That means that, even if Quebec received the entire additional amount the federal government plans to invest in the equalization formula, it would barely compensate for the loss we have suffered. They are laughing at us.

All that the equalization formula does is soften the losses that are already planned. I can provide the numbers. For this year, the equalization payment made to Quebec will be about $3.802 billion. Next year, with the bonus being touted everywhere yesterday by the optimistic Minister of Health, the amount would decrease from $3.802 billion to $3.761 billion. The amount decreases. Certainly, the amount of the decrease is a bit smaller, $40 million smaller than with the other formula, but it is a decrease nonetheless. Therefore, let no one come and present us with a new equalization formula that, contrary to what we were told yesterday, has not been negotiated with the provinces. It was imposed unilaterally as part of this budget.

Thus, equalization is not only far from meeting the demands of Quebec and the provinces, but also far from solving the problem. It is a band-aid on a cancer, and in that I am speaking very kindly.

Moreover, the Quebec finance minister is not fooled by this operation. I will read from his press release of yesterday. I remind the House that Mr. Séguin is a Liberal and a federalist, as are many MPs on the government side. This is from Mr. Séguin's press release:

With respect to the renewal of the equalization program, Mr. Séguin indicated that the federal budget did not provide satisfactory responses to the demands of Quebec and the provinces.

That is not what I heard the Minister of Health say on television. He seems to have been misinformed. Mr. Séguin said:

The proposed reform is inadequate. While the equalization payments to Quebec decreased by $2.3 billion in 2003-04, federal reform will provide only a $70 million gain for 2004-05.

This is in relation to a decrease that was already substantial.

The press release from Mr. Séguin's office also said the following:

The minister pointed out that the reform proposed by the federal government does not respond to the unanimous demand of the provinces to correct the program's standard and to ensure comprehensive revenue coverage.

I see that this budget does not say anything about transfers for health and education. Equalization is lacking, yet the government is trying to pass this off as a rigorous and respectful budget. As I mentioned, this is an utterly irresponsible budget in that it will cause the provinces to get into debt.

I ask the Chair to please inform me when I have one minute left, because I want to be able to move my amendment to the amendment.

There is another aspect that I would like to address, and that is the manipulation of figures. I will give two brief examples.

Social housing is mentioned, but nothing new is being provided. A short sentence was included, saying that the government will find a way to give Quebec the $80 million it is entitled to, but that is not much of a guarantee. It will insist that it is new money, but that is not true.

With respect to infrastructure, $1 billion over 10 years was announced last year, and now, we are being told it is over 5 years. It is still the same money. Furthermore, it has practically all been spent.

For all these reasons, we cannot support this budget.

I move:

That the amendment be amended by deleting all the words after the words “affront to” and substituting the following:

“the budget priorities of Quebeckers and Canadians such as increased health care transfer payments, funding for social housing, assistance to softwood lumber workers and industries, improvements to the employment insurance program, and full retroactivity for the guaranteed income supplement.”.

[John McKay, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I listened to the hon. member's speech and I recorded words like: “It is scandalous. It is illogical. It is a joke. It is a farce”. I stopped writing after that. It is hard to enter into a reasoned debate when pejorative language such as that is used.

Apparently, it is a joke for the Government of Canada to set aside contingency moneys in the order of $4 million, whether they are contingency, reserves or prudence money. That is apparently a joke.

It was a bit of a joke this year when Canada was faced with quite a number of contingencies for which reserves are set aside, such as SARS, hurricanes out on the east coast, mad cow disease, and blackouts in Ontario.

These scandalous jokes cost Canada $25 billion in terms of economic activity. That is lost economic activity which cannot be recouped. Not only did it affect the fiscal year 2003-04, it will affect fiscal year 2004-05. Apparently, it is just foolishness to set aside moneys such as this.

I point out that the tabling of the $1.9 billion surplus for this year was severely curtailed because in the previous day the Government of Canada put aside $1 billion for one of those very contingencies, namely, mad cow disease.

I fail to understand how the hon. member can think that this exercise in putting together a budget where we actually set up reserves, contingencies and prudence moneys is a joke, illogical or scandalous.

I fail to understand how the hon. member can say that this is an election budget. Canadians are well beyond the notion that we can induce them to vote for us with their own money.

It seems somewhat passingly strange that we are in the fifth year of a tax reduction program and the minister chose not to speak about that during his speech. This was a $100 billion program, 75% to personal and 25% on the corporate side. We are in the tail end of that program and that was not even emphasized. Generally, if we want to secure votes, we would emphasize the tax cutting aspects of our budget. Again, I fail to understand how this is scandalous, illogical or a joke.

The minister announced that this was the seventh balanced budget in a row, the first time since Confederation. We are the only nation of the G-7 countries that is in surplus.

Our net financial liabilities, in terms of GDP to debt, have gone from something in the order of 68% to 42%, which was the number that was booked yesterday. We are set on a path to go down to 25% over the next 10 years. I fail to understand how this is illogical or scandalous. This is arguably one of the best managed countries in the world, if not the best managed, in terms of its fiscal picture.

The hon. member goes on at great length about the so-called fiscal imbalance. The fiscal imbalance in 2002-03 is something for another question.

I put it to the hon. member, how can he argue that this is scandalous, illogical, a joke, or a farce, when we have had all of these things happen to us in this past year and yet, we still maintained a modest surplus after all of those contingencies?

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I think the parliamentary secretary did not listen to everything because he would have understood that what is scandalous and a joke is not having a contingency reserve, it is making people believe that the surplus is only equivalent to this contingency fund.

For example, it is true, as I said, that the Canadian economy took some very hard blows this year. We can imagine how big the surplus would have been without the mad cow crisis, the blackout in Ontario and SARS.

Despite these events, the surplus is three times higher than forecast. Even just a few weeks ago, the Minister of Finance forecast $2.3 billion. It is at least $5.4 billion, and will probably be about $7 billion.

The joke is trying to get us to believe that the federal government is having financial difficulties, that it is scraping the bottom of the barrel.

We must not forget that, over the past five years, bureaucratic expenditures, the federal government's operating expenses, have increased 40%, a more than 8% annual increase. That money too should have gone to health and education, instead of creating an even heavier federal bureaucracy, particularly in Ottawa.

Next year, the surplus will not be $4 billion. Everyone is well aware that the economic situation will be better than last year. In fact, last year, despite the fact that there were a certain number of problems, the surplus was three times higher than forecast. Without those problems, the surplus would probably have been $10 billion or $12 billion. What is scandalous is hiding the true figures from Canadians in order to avoid a very important public debate.

It is also scandalous—I did not have the time to say this in my speech—is having used $45 billion from the employment insurance fund at the expense of workers, by taking contributions from workers and employers to pay down the debt. That is not the purpose of the employment insurance fund. This fund must be used to provide financial security to workers who temporarily lose their job.

We must not forget that, to a great extent, the federal surpluses over the past seven years have come from the employment insurance fund. If the federal government, under the current Prime Minister and former finance minister, had not raided this fund, these surpluses would have been much higher.

I will close with a few figures. If the Liberal government only occasionally went wrong in its estimates, people could say, “Yes but there may have been a particular economic situation that year that caused the miscalculation”, but it is a regular occurrence. It goes on year after year.

Take 2000-01. The estimate by the finance minister of the day was $4 billion; the reality was $18.1 billion. That is what the surplus was. It went to the debt, yet the money came from the employment insurance fund.

In 2001-02, the estimate by the finance minister of the day was $1.5 billion; the reality was $8.9 billion. That too went to the debt, and again in large part came from the employment insurance fund.

In 2002-03—with a new finance minister—there was an estimate of $3 billion; the surplus was $7 billion. This year, the prediction was $2.3 billion, and we are already at $5.4 billion. So it goes on and on. The truth about the federal government's handling of public funds is being concealed. This is scandalous. The figures are farcical.

I realize, however, that there is a political will behind this, a plan to construct a unitary state focussed on Ottawa, to give this central government the means to strangle the provinces and impose its vision of how Canada needs to be developed and built. This is done particularly at the expense of the building of the Quebec nation and this is why Quebec sovereignty is so urgent.

[The Speaker]

The hon. member for Elk Island for a very brief comment, because there is only one minute left.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, I will be very brief. I have noticed that the members from the Bloc, this member included, always speak of Canada as being Quebec and the provinces. I like to think that we are all one big happy family. I happen to come from a province where, as far as I know, in the last 40 years we have been payers into the equalization payments fund and we have not received a penny out of it. We are happy to do so. We are part of the family. I believe in that equalization formula.

I would like to ask the member whether he is not at least slightly grateful for the fact that he does qualify for equalization payments in Quebec to the degree that his province needs them, and he, like I, should rejoice in the fact that it does not need very much because it is already relatively prosperous.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, first of all, the money that is transferred through the equalization program comes from all the taxpayers in Canada. It is not money that comes specifically from Alberta.

It is clear that, because of the way the program is designed, Alberta does not receive any money. We know that it is a province in a very special situation. Still, British Columbia, which previously did not receive anything, now gets some.

I am not happy to be receiving equalization payments. I think that if Quebec had been a sovereign country for some decades, we would have had the means, with our own taxes, to manage our own affairs and be a more prosperous society than we are today.

Still, the hon. member is correct. Quebec has caught up in an extraordinary way. Consequently, in a few years we will no longer need this equalization because we will be a sovereign state.

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

Mr. Speaker, I am very pleased to be able to comment on yesterday's budget on behalf of the New Democratic Party.

I want to start by saying that by all accounts this was a lacklustre budget, a lacklustre budget presented by the finance minister renowned for his ability to smother the many flames and fires of controversy that have previously annoyed and now threatened to burn down the Liberal homestead.

The Liberals have taken every opportunity over the past several months to lower Canadians' expectations to zero and yesterday they delivered. After all, exposed in the storm of controversy around the sponsorship scandal, the government's intention was clearly to make no waves. As a result, a lot of the commentary around the budget has been a shrug.

Although disappointed, many Canadians have been so primed to expect nothing from this budget that they are more stunned than angry. Reaction from the corporate community has been muted, with a quiet nod of approval, I think we could say, at debt reduction. I think there has been only the occasional grumble about insufficient tax cuts. The head of one business lobby even called this budget “boring”. Imagine that.

All quiet on the budget front? It may have been quiet around Ottawa last night, but I have a feeling it was not so quiet in the corporate boardrooms around the country and in fact around the world. I would bet there was quite a racket as corporations hammered together Trojan horses, gifts of corporate assistance and partnerships to offer to Canadians to help us out of the health and infrastructure crises that the government has chosen to neglect in this budget. The din was deafening from the sharpening of corporate knives in readiness to come after public services like health, education and infrastructure.

This budget offered no solutions to the major problems confronting Canadians, serious and life-changing or even life-threatening problems such as a public health system still eroding away because of inaction on the Romanow report, or young people burdened by skyrocketing tuition fees and huge debt loads. Then let us not forget the deteriorating infrastructure, threatening not only individuals wanting basics like safe drinking water, but businesses as well, which rely on public roads and power. Then there is the lack of affordable housing, and of course, still and again, the appalling conditions faced by first nations and aboriginal Canadians.

This budget not only does not offer new solutions on its own, but it also fails to deliver on the Liberal government's own throne speech of just a few weeks ago. How is that for Liberal credibility? We can go back 10 years and talk about the broken promises from the red book. We can talk about the 1993 promise for a national child care program. As we know, that is the longest running broken political promise in the history of this country; it has been 11 years or more. I think even Brian Mulroney promised a national child care program. There is still nothing. There is nothing in this budget.

We can go back 10 years, but that would be sort of pointless, especially since we only have to go back a couple of weeks to the throne speech, that supposed trademark indicator for this so-called new Liberal government.

This play it safe Liberal budget gamble may divert attention from scandals and mismanagement, but it serves to actually focus attention on the bankruptcy of this government's agenda and leadership vision.

For many Canadians who had been holding on, waiting for help from their national government, their disappointment and despair is only heightened by the obvious lost opportunity.

The only plan in the budget? The only national vision in the budget? Pay down the debt. That is all, folks. That vision, if we can call it that, is clearly set out in the budget by the government formally setting the debt to GDP ratio target at 25% within 10 years.

The Liberal plan is the same as it has been all along: keep spending at rock bottom, underestimate surpluses, and then pour every cent that is left into debt reduction. Never mind what Canadians want and never mind putting it on the table and having a debate: lowball the surplus and when the money comes in sock it away against the debt.

Budgets are supposed to be about choices. They are a road map for the future. Spending money to speed up debt repayment instead of on social need is a clear indication of just how lacking in vision and leadership this new Liberal government really is. This decision to spend money to speed up debt repayment is the Liberal choice again this year. This is a choice that is made in full knowledge of all the facts on what Canadians are faced with and what their needs are.

Let me list them: hospital halls still filled with patients; an unemployment rate that has not dropped below 6% in 20 years; student debt averaging $25,000; an estimated one-quarter of a million Canadians experiencing homelessness over the course of a year; aboriginal Canadians with a poverty rate above 50%; women forced to live with violent spouses for lack of alternatives; and a child poverty rate that is still hovering around 20%.

Given all those facts, that reality, the Liberal choice was to spend money on paying down the debt faster. The Liberal choice was to spend a minimum of $30 billion over 10 years on debt reduction to get to a target that would have happened anyway just one year later.

Human need is stagnating in a pool of Liberal inertia. Would Canadians make this choice? They certainly do not seem to favour this direction when asked in the polls. It certainly has not been my experience in talking to constituents. In fact it is like deciding to speed up one's mortgage payments when one's mother is sick, one's son needs tuition and one's roof is falling in. Nobody would make that choice.

But the Liberals just did, and it becomes even worse knowing that the debt to GDP ratio will fall on its own with a strong economy, and as I just said a moment ago, an economy that would be made even stronger by putting budget resources into these other urgent priorities.

New Democrats, like other Canadians, want to deal with the national debt. I do not want my colleagues across the way in the Liberal Party to assume otherwise and to pretend that we are not paying attention to the need to always be vigilant in terms of reducing the debt. But New Democrats want to do so in an appropriate and reasonable way, not as this Liberal government has chosen, not driven by a right wing corporate ideology.

Is this totally a budget to save the government's reputation? I do not think so. I think there is more to it than that.

The Prime Minister, on the day he took office, created a new cabinet position of parliamentary secretary for public-private partnerships, with the specific task of fostering and overseeing the development of public-private partnerships to privatize what have been public services. I do not know why the Liberals are so proud of that sell off of what is so valuable to Canadians.

Let us look at it this way. Given the Liberal's new found zeal for not wasting money, my colleagues are confident that they do not want this parliamentary secretary sitting idol. That is what we have today. We have given that person some work to do because this privatization budget will give that person lots to do.

Of course, we are all aware of the budget's opportunistic privatization of the government's remaining shares in Petro-Canada. However, that is privatization through the front door. That is finishing off what Brian Mulroney started to do. The Liberals are much better at privatizing through the back door. That is what this budget sets up because it is the classic pattern in the Conservative neo-Liberal strategy to starve public services to the crisis point and then welcome the corporate for profit sector in on the pretext of helping out.

The Conservatives tried it with public education in Ontario and with health care in Alberta. The public then ends up adding corporate profits to its costs, but the government does not show big short term investment spending and can keep corporate taxes lower.

Nowhere is this more evident than in health care. Short of a long overdue investment in public health, almost half of which is just a reallocation of Health Canada's resources, this budget does nothing to help stabilize, sustain or save public health care. There is not one new penny for new provincial transfers for health.

Just like the Liberals' throne speech before it, there is not a mention of the Romanow commission on health care. It is really quite incredible. Canadians have been telling the government for years that health care is the number one priority. Finally, after a lot of pushing, prodding and pulling, the government responded with the Romanow commission. Canadians spoke, they expressed their wishes to preserve medicare, a public not for profit health care system.

A year and a half after that report was completed the blueprint is still on the shelf. The system is still wallowing in disorganization because Romanow reforms have not been made. Privatization continues to erode every bit it can, and the provinces are outraged and threatening to privatize even more.

Thankfully, I come from a province where the government has no intention of falling to the lowest common denominator and following this obvious direction that the Liberals have set out, which is to privatize health care. In fact the NDP government in Manitoba, under Premier Gary Doer, has been a leader in the country in trying to convince the federal government to finally, once and for all, live up to a fundamental commitment of a basic 25% share of health care, so the provinces do not have to come begging for money, and we can ensure that patients get the services they need.

I want to quote from Gary Doer's comments to the press yesterday in response to the federal budget. As the news report said, he tore into the Prime Minister's first budget as Prime Minister, warning that the provinces would be unable to deliver the kind of health care Manitobans expect with the dollars Ottawa is offering. He said:

If this was spring training for the federal election on where people stand on health care, I think we as Canadians have struck out.

Premier Gary Doer has said it all. Canadians are the losers, when all is said and done, when it comes to this Liberal budget.

What has been the government's response. Nothing, not a cent, There is no strategic investment raising the federal contribution to 25% of total government spending; a $2 billion one time payment that Liberals took credit for last year on budget day. They have now announced this five times, the same $2 billion.

What the budget provided was just another quiet step along the path to the parliamentary secretary for public private partnership's door.

What a blow to Canadians. What a catastrophic failure of government responsibility. What does it matter that the numbers add up properly if the total still falls way short of what is needed? The government's new accountability budget is small comfort to patients stuck in a hospital hallway.

The president of the Canadian Medical Association said yesterday of the budget, “This says again that Canadians will continue to wait for timely access to care and Canada's position vis-à-vis OECD countries continues to drop. We are now slowly eroding our medicare”.

When asked about the absence of money to alleviate the doctor and nursing shortage, he said that Canadians had identified that Canada had a serious “shortage and doctors”, something the Prime Minister said in the throne speech. Unfortunately, there has been no money to follow up on those words. Words are easy to give, but hard to deliver upon. It is if one is a Liberal.

However, if Canadians on the whole are upset about the government's abandonment of their treasured public health system, most of us can only imagine the disappointment and disillusionment in the aboriginal community. To quote the Liberal government from last month's Speech from the Throne, it said:

There is one aspect of Canadian society, one aspect of our history, that casts a shadow over all that we have achieved. The continuing gap in life conditions between aboriginal and other Canadians is intolerable. It offends our values and we cannot remain on our current path.

Those are noble words. They are absolutely accurate in terms of the reality with which we are faced. Noble words, though probably are all too familiar words to on and off reserve aboriginal communities. Although the budget extended existing programs, there is no sight of the significant investment needed to show any meaningful commitment to back up those words.

The Assembly of First Nations which spent two months working intensively with the government leading up to this budget called the lack of substantive resources disappointing. We could probably think of some other words, the AFN is being a little polite.

Chief Phil Fontaine stated that while the resources proposed were clearly needed, they were not enough. He said, “I am disappointed with the lack of action on urgent priorities like housing, health, economic development and education”. The Speech from the Throne recognized the shameful conditions facing his people. He asked what more compelling reason did we need to take immediate action?

There are alternatives. We presented alternatives in the House on behalf of the New Democratic Party. I also want to reference the alternative federal budget, which presents an annual budget with the needs of Canadians as its priorities. It was able to do so using the government's own economic projections, and it did so to: allocate $20 million over two years on jobs and youth strategies; $500 million over three years on a strategy to improve aboriginal education; $375 million over three years for aboriginal housing; and $200 million over three years on the backlog of land claims cases.

The alternative budget presented just a couple of weeks ago was a balanced budget and it also included a much needed $1 billion into building up the stock of affordable housing, plus an additional sum of money as part of an infrastructure financing program to fund infrastructure capital investment.

What does this government's budget offer in terms of housing dollars? Zero dollars to a problem that even the TD Bank has identified as one of Canada's most pressing public policy issues. One-quarter of Canadians say that they have trouble paying housing costs and that jumps to 40% for renters. An estimated one-quarter million Canadians will experience homelessness this year.

The Prime Minister, when finance minister, pulled the government out of social housing. He appears to pick up where he left off by squeezing public financing for housing completely dry. Why? Let us go back to the privatization budget again. Housing is one of the two primary examples that the parliamentary secretary for public-private partnerships gives as his new mandate.

Canadians are capable of achieving great national goals starting with a national railway to unite the country, a national old age security plan to enable seniors to survive and survive with dignity and our national public health care system to provide care based on need, not income, just to name a few.

Canadians have shown that they are ready to put our collective shoulders to new projects: a national childcare program; a national housing strategy; and social justice for aboriginal Canadians. However, we need a government with vision and commitment, a government to provide leadership. The budget clearly shows that the Liberal government, however honest it may eventually become, is not capable of that leadership. It has had 10 years to prove otherwise and has failed.

Some have said the budget is boring. I do not think it is boring at all. It may be dull, but it is also deceptive and dangerous.

[The Speaker]

Before we proceed with questions and comments, it is my duty to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Burnaby—Douglas, Natural Resources; the hon. member for Renfrew—Nipissing—Pembroke, National Defence.

[John McKay, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I am starting to get a persecution complex from this hon. member. On Monday she tried to get me kicked off the finance committee. She told me it was a matter of principle, not personal. I am touched. Now she is a little upset with my special mandate with respect to public-private partnerships.

I want to address my comments and question to the hon. member about this public-private partnership mandate.

I think the hon. member has it basically backwards. The emphasis with the mandate is on partnerships. If we look anywhere close to the future of governments in the country as a whole, one would realize that this year the provincial governments collectively will run a deficit of about $8.2 billion. The federal government's surplus is pretty modest. It is about $1.9 billion. The municipal governments are basically holding on. Their debt load is not all that significant. However, one can readily look into the future and realize that the fiscal planning horizon for all these governments is pretty modest indeed, especially as the Canadian population ages and the demands on infrastructure increase.

I am told that we have an infrastructure deficit of something in the order of about $57 billion and we annually go behind something in the order of about $2 billion. In addition, I think our highway infrastructure has about a $17 billion deficit.

People who look into public finances realize that this has to be addressed, to wit the mandate about public-private partnerships.

I point out to the hon. member that we have basically put the universities of the country back in the research game in the last number of years. Our funding of university research will be in the order of about $9 billion. Almost all of that research is multiplied by public-private partnerships, and that is frankly the only way to go. There will not be any surplus moneys, or very little surplus moneys, at any level of government for addressing the very real infrastructure needs of the country.

I would think the hon. member would actually rejoice with me that this money will be freed from pension plans and freed from even union movements to go into the public realm to address the crying needs of public infrastructure, for retrofits and things of that nature.

A few weeks ago I was approached by representatives of the union movement. They want to participate in the retrofitting of federal buildings to bring them up to environmental speed, and have their own pension money involved in these plans.

The hon. member seems to have emphasized this whole business of public-private partnerships. Is she fairly limited in her horizons that she thinks we can carry on government as usual? It is not just this level of government. It is municipal and provincial governments as well. Is she not in effect denying the people who she purports to represent the opportunity to participate in these partnerships so Canadians as a whole can actually benefit from these partnerships?

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

Mr. Speaker, I appreciate the question from the parliamentary secretary for finance. This is an important debate about private public partnerships, the P3s.

The kind of argument we have just heard from the parliamentary secretary responsible for privatization is exactly how the government has tried to hoodwink the Canadian public. It has tried to suggest that if we do not get it, we are limited, that our understanding is not very good because we do not get the fact that it wants to find a way, through the back door, to sell off important aspects of our sovereignty and nation state.

The government continues to try to pull the wool over the eyes of Canadians, but it is not going to happen because in fact we are not talking about no flexibility and lack of opportunity to make decisions. In last year's budget, the government put $1.9 billion against the debt, and that is only based on third quarter reports. There is probably another $3 or $4 billion to come in when the fourth quarter reports are in, and the government will either slip it quietly against the debt or use it to fund election promises in the coming election. In total, the government has put $80 billion in surplus dollars against the debt as opposed to investing it in infrastructure, child care, and health care. That is the first point. There is flexibility.

This is about choices and we think it is in the best interests of Canadians to invest in infrastructure and programs that are owned and operated by Canadians for Canadians. In fact, that is the way we can assure the most gain for the Canadian public and avoid the syphoning off of profits and the movement of resources into the private sector where big bucks can be made.

I want to quote from the Canadian Centre for Policy Alternatives. It took this on directly when it released its alternative budget just a short while ago. In a CP article on March 16, it states:

Private public partnerships, dubbed P3s, have been given much more prominence since [the Prime Minister] appointed a parliamentary secretary in charge of the issue last December. Critics have complained such deals, often involving millions of dollars, could be hard to audit and represent a giant step towards privatization of government.

“While P3s would take the debt off the government books, we would leave it there, right in the light of day,” said Russell.

Improving accountability in the federal government is a major theme in this year's alternative federal budget, the 10th issued by the Ottawa-based think tank.

What it is saying is, have we not learned enough from the scandals before government? Have we not learned enough from the sponsorship fiasco? Why do we want to move more money off-book? Why do we want to move more money beyond the accountability of Parliament and the public? Why, when we have the resources and the wherewithal, would we not invest that money to benefit Canadians and, by implication, bring down the debt in the natural way in order to ensure that quality of life is a top priority for the government of the day?

I hope the parliamentary secretary understands how deeply we feel about this issue and how concerned Canadians are by this move to off-load responsibility outside of government, and in fact to give the private sector a huge advantage by being able to own and operate services once in the public domain.

If there was one way to encapsulate this budget, or one slogan that the Prime Minister could have used, it would be “bankers of the world unite”. This is a great day for bankers; it is a great day for the private sector. They are going to get their hands on a lot of low cost money, and a lot of rich programs and resources if the government's plan is allowed to continue. That is what we must stop. That is why this debate is so important.

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, I am pleased to rise today to participate in the debate on budget 2004.

I would like to inform the chair that I will be sharing my time with my colleague, the member for Yukon.

I wish to begin by congratulating the government and the Minister of Finance on the government's seventh consecutive balanced budget. As noted by the finance minister yesterday in the House of Commons, the budget that was presented was a focused budget with two clear objectives.

First, to demonstrate unequivocally the principles of financial responsibility and integrity. Second, to begin to give tangible shape to the goals presented in the Speech from the Throne.

I would like to point out to Canadians that the finance minister specifically noted that with the latter objective, the budget was just the beginning to give shape to the goals presented in the Speech from the Throne.

We should not be too disappointed if all the goals presented in the Speech from the Throne were not presented in this budget. We must remember that the Speech from the Throne is a long term working document, one that is intended to be implemented over a number of years by a government. On the other hand, as members know, a budget deals with a one to two year time framework.

It is necessary to point this out in light of the bulletin that I received this morning from the Canadian Conference of the Arts which began its critique of the budget by noting the following “It's clear that culture is not on the new government's radar! Even though there was news to announce it was hidden deep within the budget plan”.

I would like to remind Canadians that there were significant references to Canada's artists, cultural enterprises, arts and culture policies, cultural institutions, as well as the government's leadership in the creation of a new international instrument on cultural diversity in the Speech from the Throne which was delivered by Her Excellency, the Governor General, on February 2, 2004.

I would also like to point out to Canadians that budget 2004 is composed of much more than the budget speech which was presented by the Minister of Finance in the House of Commons. Whether or not an item appears in the budget speech does not mean that it does not form part and parcel of the budget plan. The budget plan is a thick book. The speech itself is only a few pages long.

I want to use my time to talk about the Canadian Television Fund. I was pleased to note that in the 2004 budget plan the government announced that it will restore its contribution to the Canadian Television Fund at $100 million a year over two years. That is $37.5 million more than what was forecasted for 2004-05, and an extension for 2005-06. In fact, with this new funding allocation, the resources of the fund will be $264 million for the year 2004-05.

The fund is a key instrument to reaching growing audiences for Canadian programming. These increased financial resources for the fund confirm the government's continuing commitment to support the production of high quality Canadian television programming.

The industry's reaction to this announcement was positive. I would like to share its response with members:

Producers are very happy about the budget announcement. It's a real vote of confidence for the CTF. The additional dollars will help address the financing problems inherent in making Canadian-made TV.

This statement was made by Canadian Film and Television Production Association President and Chief Executive Officer Guy Mayson.

I should add that this morning I received an e-mail from two of my constituents, two women entrepreneurs I might add, Mary Young Leckie and her partner Heather Haldane, who have a company called Tapestry Pictures. They too applauded the government for the renewal of the fund. One of the great things about Tapestry Pictures is that it produced very famous Canadian programs such as The Avro Arrow , Milgaard and most recently Shattered City , which is a story about the Halifax explosion. These are true Canadian stories that would not have had a chance to be told if they had not been told by these two incredible women.

Since 1996 the government has contributed more than $800 million to the Canadian Television Fund. This funding has been instrumental in bringing approximately $5 billion worth of quality Canadian programming to the screen and to Canadians.

The fund has supported well known English programs such as: Da Vinci's Inquest; Degrassi: The Next Generation; Franklin; Cold Squad, and Made In Canada. It has also supported well known French programs such as La Vie, la vie; Emma; Un gars, une fille; Le Monde de Charlotte; and Tabou. It also supported Trudeau which was broadcast on both CBC and Radio-Canada.

I would like to take this opportunity to point out that in the report prepared by the Standing Committee on Canadian Heritage entitled “Our Cultural Sovereignty:The Second Century of Canadian Broadcasting” dated June 2003 and tabled in the House, the committee recommended increased and stable funding for a focused Canadian Television Fund. Recommendation 5.10 stated:

The Committee recommends that the Canadian Television Fund be recognized by the government as an essential component of the Canadian broadcasting system. This recognition must include increased and stable long-term funding. The CRTC should be directed to oblige licensees, with the exception of small cable operators, to contribute to the CTF.

I would also like to take this opportunity to encourage all of my colleagues to get a copy of this report of the standing committee and look at chapter 5 which deals with Canadian programming. I am proud to say that this study is being used in universities throughout Canada as a textbook for broadcasting studies.

During pre-budget consultations, I received numerous correspondences from my constituents who work in the film and television industry. They urged the government to top up the Canadian Television Fund in the upcoming budget by $37.5 million, and to reinstate the government's commitment to the television sector by bringing the CTF to its traditional level of $100 million.

I received letters from picture editors, screenwriters, film and television crew members, film and television directors, sound editors, filmmakers, and producers. I would submit that all of the players in the artistic community were behind the renewal of the fund at its higher level.

Constituent after constituent noted that the CTF is crucial to the survival of our domestic television industry and the tens of thousands of jobs that it supports.

I would like to share some of the great success factors of the fund since its inception in 1996. In 2002 the CTF contributed $241 million toward the creation of 583 television and film productions. The 583 productions supported by the fund pumped $802 million into the economy. About 2,822 new hours of Canadian programming were created. More incredibly, the CTF generated 16,000 direct and indirect jobs from production activities.

It is interesting to note that 80% of the CTFs total funding went to programs produced by small and medium sized enterprises, many of which are owned by women. On average, the CTF provides 30% of the financing needed to produce distinctively Canadian programming.

Most important, for every dollar the CTF contributes to the creation of a television production, $2 more are invested by other funding sources, highlighting the fund's role as a major catalyst for the creation of Canadian television.

The importance of the fund has also been recognized by the Canadian Association of Broadcasters. Since 1996 things have changed. While the fund was originally set to expire after a few years, the success of it has been overwhelming. Things are also different than in 1996.

Today, in the year 2004, we have a 500 channel universe. Canadians now have more choice and the demand for Canadian programming has never been higher. The Canadian Association of Broadcasters has noted that if the government is committed to ensuring high quality Canadian programs, then it needs to provide a cohesive and complementary cultural policy framework that addresses program financing. The CTF is part of that framework.

I am delighted to be part of a government that continues to support the arts community and Canadian artists across Canada.

[Darrel Stinson, Canadian Alliance, Okanagan—Shuswap, BC]

Mr. Speaker, with regard to these programs that she talked so fondly about and which are doing so well, why do we not just sell them and make money so we can support something else? If those networks she talked about are doing so well, why have the private outfits not picked up the funding on these programs in order to keep them going?

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, my colleague has raised an important question. When I said things have changed since the inception of the fund in 1996, it is because the demand for Canadian programming by international markets has actually shrunk. More and more countries are insisting on buying only indigenous work. Canadian productions are now being left out in the cold.

While other countries are trying to reinforce and require their producers to make more indigenous programming, we, in a sense, with a reduction in the fund in the 2003 budget by $25 million, have actually done a tremendous disservice to our own industry. Where Canada has been a leader in so many things, we actually fell behind here because we let other countries increase their production while we have sort of ended up going backward.

The important thing to remember is that the CTF only provides 30% of the funding, when in fact it leverages this huge amount of money. For every dollar we get, another $2 is put in by the private sector which, as the members opposite know, encourages and creates investment and creates jobs in all communities across Canada, not just big cities, because there are films everywhere.

In Saskatchewan there is great production in Canadian productions. As we become more successful we will continue to export it. However we must compete with the United States, which has a huge industry that comes across via satellite. Our productions are just as good. We just need to continue to make them even better.

[Bev Desjarlais, NDP, Churchill, MB]

Mr. Speaker, I want to acknowledge my colleague's commitment to culture. Curiously, she is praising the budget for putting the money back into culture, even though at some point she said that we had to look deep into the budget to find it. When I was out in the lobby I was thinking we might have to put a finder's fee in there to find that great investment in culture.

The hon. member has spoken accurately in the sense that culture does create jobs; it does create economic activity that brings in tax dollars. How does she feel, knowing that for the last number of years the finance minister, now turned Prime Minister, made severe cuts to that program? Why should we be here cheering now that the Liberals have passed one of the cuts when there are still a whole lot more out there? Why should we be cheering this when we should be giving a good slap on the hand for having made the cuts in the first place?

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, I think the hon. member is mistaken. In 2002 the government on this side of the House was responsible for the largest reinvestment in the arts in the last 40 years: $550 million. It increased funding for the CBC, increasing acknowledgement of how important a role the CBC plays here.

If we talk about cuts that were made, let us not talk about cuts that were made 10 years ago. Those cuts were made in order to invest in the programs that we are investing in now because we dealt with the deficit. We started paying down the debt. All this talk about how we should take money that does not go into the debt and invest it in strategic infrastructure, we are doing all that.

However, by the very fact that we have been able to pay down a debt which, when I was first elected in 1997, cost us $42 billion in interest, I can only think of how many programs we could fund if we were to bring that into line. We must continue to pay down the debt so we can continue to invest in the programs that are important to my colleague across the way and to those on this side of the House.

[Larry Bagnell, Liberal, Parliamentary Secretary to the Minister of Indian Affairs and Northern Development]

Mr. Speaker, I first want to thank the Prime Minister and the finance minister for the tremendous job they have done for the north in this budget. It puts the north on the map, which is very exciting. My counterparts from the other territories and the people in the north were excited when they talked to me about the budget. It is a landmark budget for the north. I will explain a number of provisions that provide to the north, which have made us so excited about this budget.

First, of course, is the $90 million for northern economic development. My colleagues have talked a lot about regional funding. We know regional development funds were sometimes not available for the north but were available for other parts of the country, but now we have the funds for the north. We are tremendously excited.

We are in the process of transiting the north for ideas on the best federal investments in economic development. I can tell members that the people I talked to across the north so far have been very excited about the potential of this investment.

Furthermore, the northern territories are funded through transfer payments and very complicated formulas. They are in the process of renewing them now. In that process will be a $150 million increase in transfer payments over five years, bringing the projected territorial transfer payments over the next five years to more than $10 billion.

As we know, for a couple of years there was an increase of $20 million in health because of the unique circumstances the north finds itself in health care and its unique needs. Now that has been permanently put into the next five years of this formula financing cycle. We are very excited about this increase in health care money for the north.

I now want to talk about northern gas and oil development. The Mackenzie Valley pipeline is on the verge of occurring. The Alaska Highway pipeline will be the biggest industrial project in history, with wonderful wealth creation, not only for the people in the territories but for all of Canada. This budget puts $75 million in to help the process for the federal government to do its role in making these projects possible. This money is needed for the agencies, the environmental boards and the federal departments.

Last week, the minister and I were in the Mackenzie Valley as they are getting ready for this potentially great economic development project in the north. The environmental boards that have to go through this complex procedure need capacity. The local small communities will be impacted. Their infrastructure, their social programs, their health care system and their employees will all be impacted by such large projects. They need the capacity to deal with this. The federal departments in the region, which do not have the capacity to analyze and be involved in coordinating such large projects, need to be upgraded.

The $75 million is needed so that the federal government will do its part to help industry and to help the local people in the north to take advantage of and develop the capacity to have the jobs in the north that this project, which everyone has been working so hard on, can create.

I was also delighted to see once again for the north the $3.5 billion toward the cleaning up of federal contaminated sites. Sixty per cent of that will go to the north. This is a wonderful initiative by the federal government. This is the largest amount of money that has ever been provided by any government in Canada for an environmental program. The money will not only ameliorate the environment, clean up the environmental problems that have been left over the years in hundreds and hundreds of sites, but it will also be a great economic development generated in itself.

As northerners develop the skills to do this through mediation, to clean up these sites on our own territory, we can then sell those skills around the northern world which will have a lasting effect on economic development, as well as, of course, the usage of the sites that are cleaned up.

Another exciting item for the north is the $51 million investment over 10 years for seabed mapping of the Arctic continental shelf. People have heard me speak a number of times in the House about the importance of northern sovereignty and of ensuring our sovereignty in this developing part of Canada, especially with global warming as the seas are opened up.

The mapping of the continental shelf, which is possible for us after we recently signed a convention on the law of the sea, will allow us to expand our boundaries beyond the normal 200 mile limit. Other Arctic nations have already done this mapping. Everyone can see that it is very expensive. This will allow us to extend our boundaries, our sovereignty and make sure that it is Canadian laws and Canadian environmental control over precious parts of the waterways around our Arctic islands. I think this is very exciting for all Canadians.

Another item that will have a great effect on the north is the rural infrastructure program where municipalities apply for projects. Past versions of this have been a tremendous success in the north. Virtually every municipality in the Yukon has had projects through this. As we know, this was announced before. In our jurisdiction the $15 million will be a great influx into our economy as cabinet and the government took heed of the fact that it is a lot more than we would normally get per capita because of the very difficult conditions in the north. We appreciate the government's understanding of the difficulties of developing infrastructure in the north.

What this budget did was accelerate the distribution of that money from 10 years down to 5 years, which means our municipalities and communities can spend twice as much each year of that money in developing projects. Once again this provides for more economic development and environmental protection as green infrastructure projects are done in communities.

I also wanted to talk about some of the other things that will be helpful for the north, although I will not be able to get through all of them. I guess I will have to do it during the next budget debate.

Northerners are happy with a number of things in the budget which will help them in a lot of ways, but will also help all Canadians. One in particular is the assistance to the voluntary sector and moral support for the voluntary sector. This is a very important part of our society and I think some people underestimate the importance of it to the smooth running operation and cooperation in health and safety that millions of Canadians put in.

We will receive $12 million over the next two years to continue with the government's initiative in that area. There are some very innovative ideas, such as looking at a bank for the voluntary sector, looking at non-profit organization legislation that would remove some of the red tape, and of course the change in the capital percentage so that a trust fund or endowment fund can be built. They will not have to spend as much each year on operations and it will make it easier for voluntary giving.

Also in my portfolio I am delighted about the amounts of money to help the great needs of the aboriginal people. I will not go into all of them as there would not be time. There is $125 million for the aboriginal human resource development and this is just one of a number of things in the throne speech and the budget is reinforcing and providing the funding to do what is in the throne speech.

There is also $495 million, as we saw in the main estimates, to help aboriginal people, which is about a 9% increase, and that will go toward land claims, water, program funding, education and to capital rust and northern air mail food, once again another program for the north where food is mailed to the very remote northern communities at lower cost.

I will finish by saying that the $7 billion for communities and the new deal for municipalities has been very well received. In my riding it is a substantial amount of funds for the municipalities that they can use on environmentally sensitive infrastructure and other things that municipalities need to help their local communities. It is an exciting budget for the north and I thank the Prime Minister and the finance minister for so much commitment to the north.

[Darrel Stinson, Canadian Alliance, Okanagan—Shuswap, BC]

Mr. Speaker, I listened to the member's speech. With regard to the $7 billion that the municipalities are looking forward to, I would like to comment on that. It is much less than what the Prime Minister promised the cities and municipalities with regard to the gas tax rebate. I know the money for the north is long overdue in many areas there.

How much confidence does the member have that this will actually happen, in light of the history of broken promises in the budgets of the previous Liberal government? The member could be in for a long wait and many winters before he sees many of these programs implemented there.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, the history is that the GST rebate for municipalities started on February 1. The government has kept its promise already.

[The Acting Speaker (Mr. Bélair)]

Is there unanimous consent to call it 5:30 p.m.?

[Some hon. members]

Agreed.

The House resumed from March 10 consideration of the motion.

Fisheries

[The Acting Speaker (Mr. Bélair)]

It being 5:30 p.m., the House will now proceed to the taking of the deferred recorded division on Motion No. 136 under private members' business.

Call in the members.

( The House divided on the motion, which was agreed to on the following division:)

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Mr. Speaker, I was not paying attention when the vote was taken. I would like to be recorded as voting in favour of the motion.