Mr. Speaker, I am pleased to speak to Bill C-30, which implements the last Liberal government budget. This budget was passed on Tuesday, March 23.
This week saw the tabling of a budget in Quebec and several provinces, and budgets will be brought down in other Canadian provinces in the coming weeks. Obviously, it is not always easy for the public to make the distinction between the provincial budget and the federal budget. However, there is one thing the public must understand and that is that Canada generates a surplus and the provinces are having a great deal of difficulty achieving balanced budgets.
When a government presents a budget like the federal Liberal government did, with a surplus of nearly $7 billion, one would expect to see some sort of attempt to help each other out in this budget, in this fiscal federation, or what is left of it. The problem with the federation has become a fiscal problem.
Of the 57% of taxes that go to the federal government, 43% come back to the provinces for jurisdictions that are divided in the Constitution, yet shared fiscally. It is not uncommon to see the federal government getting directly involved in provincial jurisdictions. We saw this in the budget.
What is worse, this budget is strangling Quebec and the provinces, the sick, students, the unemployed and seniors.
I will conclude by talking about what might happen to the riding that I represent, to the constituents who have put their trust in me in Argenteuil—Papineau—Mirabel.
Why are we talking about strangulation? Because the federal government has a monumental surplus. Let us not forget that it has raked in $7 billion. What has it decided to do with this money? It has decided to keep it and pay down its debt. It does not care if the provinces go into debt. It does care if citizens, seniors, young people or families go into debt, as long as it can pay down its debt. That is called fiscal imbalance.
That is why I am saying that the budget tabled on March 23 is strangling Quebec. I will give a few examples, because it is not easy to talk about so many numbers in a concrete way. The one image that people remember is the infamous equalization condemned by Quebec's finance minister and premier. All the parties, including the Parti Quebecois and the Liberal Party, have spoken out for many years now about the distribution of wealth.
Equalization payments from the federal government to the provinces are a way to redistribute the wealth among the have and have-not provinces. It pains me to say this, but Quebec is considered a have-not, in this redistribution, although this seems hard to believe. The economic reality is that, in real life, Quebec's primary resources, such as aluminum and magnesium, are processed in other provinces, especially Ontario.
This was a harsh reality in the Laurentians and Lower Laurentians region, with the closing of the GM plant in Boisbriand. Quebec is one of the largest producers of aluminum and magnesium in the world, and these primary resources are processed in another province, Ontario, which provides better-paying jobs. Obviously, this generates wealth in Ontario and poverty in Quebec.
When it comes time to give us a share of this wealth, Quebec is told it is getting a gift. Equalization payments are made, and Quebec is supposed to quit complaining. These payments are made according to a formula which, once again, was condemned by both the Quebec Liberal Party and the Parti Quebecois, when it was in power in Quebec. The distribution of wealth is not equitable.
The government decided this in a unilateral fashion. It decided to unilaterally amend the most recent equalization formula, which expired yesterday, March 31. Clearly, the government did not fully listen to Quebec.
With the new formula, even though decisions were made on the basis of provisions previously put forward over a year ago by representatives of the Government of Quebec—regardless of political party—the federal government decided to take a chunk. I am using a metaphor.
Moreover, compared to the amount Quebec was expecting for next year, there will once again be a shortfall of close to $400 million for the equalization formula alone. The problem is that this formula was adopted unilaterally for five years.
Why did the government not want to sit down and negotiate the formula? Because this would have cost it more money. It is as simple as that. So, this is a unilateral decision that hurts Quebec and that will strangle our province for the next fiscal year. We saw the immediate impact of this with the difficulties encountered by the Quebec government in making its own budget which—as those who have been following this issue know—will end up with a deficit, which means that the debt will increase over the coming year.
The March 23 budget is also about strangling, metaphorically of course. But the sick will suffer because, once again, despite its anticipated surplus of $7 billion, the federal government did not invest in health the required amount, which the provinces were counting on.
The federal government promised $2 billion. That commitment was made under Jean Chrétien. It was repeated twice by the current Prime Minister. But it is the same $2 billion that the federal government is giving to the provinces, the $2 billion that was announced in February and was included in the budget in March, but that is not a recurrent amount.
For the benefit of those who are listening to us, this means that this amount will not be paid from year to year. What can a health minister do with funding that is not recurrent? He cannot invest in personnel. He cannot hire more public servants. He cannot give salary increases to doctors and nurses. He buys equipment. This is what the government will do in Quebec. It will buy equipment.
Even if $2 billion have gone to the provinces, the provincial advertisement points out that the federal level is paying only 16% of the costs. That was the figure calculated for fiscal year 2003-04. With the $2 billion anticipated because of the Prime Minister's promise in February, when we get to the 2004-05 budget for each province, and the approximate 7% increase in health budgets in each province, that percentage will be only 14.5%.
That is why we are saying that the sick are being strangled once again. There was more funding, but for a single year, and in comparison with the total costs of health care in all provinces of Canada, and in Quebec, there will be a drop in the percentage the provinces receive from the federal, from 16% to 14.5% .
Before next year's federal budget, we will be seeing new provincial ads saying that only 14.5% of health care costs are paid by the federal level whereas, when the system was created in the 1960s, the provincial-federal split was 50-50.
Students are also being strangled. It is true that bursaries are being increased, as are loans, or at least their weekly amount. Caution is needed, however. Rather than injecting money directly into the educational system so that fees will not be raised, the money is going to the students. As a result, student fees will go up in every province. That is where we are headed: a hike in tuition fees.
Rather than transfer money directly to the provinces in order to pay its fair share of the educational system, the federal government has decided to send the money directly to the students. I have no problem with that.
Where I do have a problem is that the students will be faced with fee hikes as a result. So this is no way to strike a balance in an area under direct provincial jurisdiction, that is education, where once again the federal government, whose only contribution is financial, is as we speak paying only 12% of the cost of education in Quebec. That is the reality, as it is in all the provinces.
As for the unemployed—