Mr. Speaker, it is an honour for me to have an opportunity to join in the debate on the budget on behalf of the people in my riding of Winnipeg Centre.
Where I come from, people watch the budget very earnestly, mostly because they have a real vested interest in how the government chooses to spend our hard-earned tax dollars, even more so in my riding than some others. I am not proud to say that my riding is the third poorest riding in all Canada. Not many people are aware that right in the heart of downtown Winnipeg, by whatever poverty or income measurement we use, whether it is average family income or incidents of poverty, unfortunately ranks as the third poorest riding in the country.
The people who I represent rely heavily on the social programs that the federal government operates and pays for in our welfare state. They look to the government for relief in many ways, and they are particularly vulnerable to policy changes. When people are already low income, marginalized people living at the edge, it does not take much for them to be pushed over the edge. It does not take much to go from working poor to poverty, and that unfortunately is the case.
Members may be shocked to hear that 47% of the families in my riding live below the poverty line, as calculated by Statistics Canada as the low income cut-off; 52% of all the children in my riding live below the poverty line. Given statistics like that, members can forgive perhaps the zeal with which I sometimes undertake some of these issues. I witness, day to day, people trying to get by on marginal incomes and trying to make do when they do not even have the basic needs.
I do not say that for any romantic effect. I am simply informing the House that pockets of Canada are not doing well. They are being left behind. If we do not revitalize our commitment to equal opportunity, we run the risk of creating a permanent underclass and we run the risk of another generation being left behind, and none of us can afford that.
As we speak about the dollars and cents associated with our federal budget, let us also contemplate the costs of a social deficit which is growing and escalating in reverse of what I believe the goals and intentions are of a country like Canada.
If we are committed to equality as an objective, then why do we see policies like those which we have seen since the Liberal government took over? If we are committed to giving a hand up rather than a handout, then why are the very programs that enable people to come out, better themselves and to join the burgeoning middle class at risk?
By way of prefacing my remarks, I want to remind people of the true personal impact of some of the policy choices that this government has made. The Liberals bragged that they balanced the budget for seven years in a row. I approve of balanced budgets. Let us dispel the myth right here and now that the NDP is somehow opposed to balancing budgets.
I come from the province of Manitoba where under the Gary Doer government we have had five balanced budgets. In the province of Saskatchewan next door, the Blakeney government had nine balanced budgets in a row. Tommy Douglas himself said that one could not run a government when it was beholden to foreign bond holders. These are the points, these are the very foundations of our political party. The I approve balanced budgets. I am very critical of how they balance the budgets.
The previous speaker with the Bloc Quebecois mentioned that one way the Liberals balanced the budget was with the EI fund. Let us inform Canadians, let us be upfront with Canadians about the EI fund. The federal government does not put one penny into the EI fund. It is made up solely of contributions by employers and employees. Ergo, any surplus stemming from that fund should go to employers and employees, and I would argue favouring the employees. It was designed to provide benefits for people who were unfortunate enough to find themselves in between jobs. One of the designated uses of the EI fund is not to pay down the debt, or to build roads, or to give tax cuts or any of the other general revenue functions and purposes for which the government uses that money.
Let me simply summarize my criticism of the EI fund with this one message. To deduct something from a person's pay cheque for a specific purpose and then to use it for something else entirely different is, in the best of scenarios, a breach of trust and, in the worst scenario, out and out fraud. People are told the money that taken off their paycheques will be held in case they become unemployed at which time they will receive income maintenance until they can find another job. However, if they are deceived and if that money is used for something else entirely and those people are denied the very benefits they thought they were buying, I call it fraud.
I am glad to see you have assumed the chair, Mr. Speaker. It is an honour to have you with us in that lofty position. What would you think, Mr. Speaker, if you were forced to pay fire insurance on your home because you had no choice and the money came off of your cheque every week? Then your home burned down and you tried to collect on the insurance but you were told you did not qualify because your premiums had been spent on x, y or z? I think you would feel cheated. That is how working Canadians feel about the EI fund.
When we asked the current Prime Minister, when he was finance minister, about this huge growing surplus in the EI fund, he said, “Let me make it clear. There is no EI fund”. He said that plain as the nose on my face. He said that the members should understand that there was no EI fund, that it all went into general revenue. We may as well call it another tax on Canadians then. If that money is to be taken off the paycheques of people and used for whatever the government wants, that is a tax. That is not an insurance fund any more. Let us dispel that myth altogether.
There was another way that the Liberals balanced the budget, and people forget this. When Marcel Masse's was the president of the Treasury Board, he passed a bill without very much fanfare in the House. It took $30 billion out of the surplus of the public service employees' pension plan. Their pension plan was in surplus because their wages were frozen for seven years in a row and, as a result, people were not eligible for the same kind of benefits they thought they would be when they retired. For a number of reasons, their pension plan went into surplus by $30 billion .
I used to be a trustee on a union pension plan. In the real world, in the private sector, the employer and the employees would sit down and probably negotiate some kind of a settlement on that surplus. Part of it would go back to the employer and part of it would go to improving the benefits for the beneficiaries of the plan. However, not in this case. Even Bell Canada, which from a trade union point of view was a difficult employer, cut 60:40 with its pension service employees. The Government of Canada took 100%, every nickel, of that $30 billion. It said that the money belonged to it. This is a quote, “The employees have no proprietary right to the surplus in their pension plan”.
Surpluses in pension plans are wages being kept for employees until they need the money when they retire. That is money they have earned as part of their wage package. The pension surplus is deferred wages. The government had no right to do that, but it passed a specific bill that gave it that right. It passed unnoticed, and it should be exposed. That was not the government's money, just like the EI fund is not the government's money. It is Canadian working people's money being held in trust by the government. It has no right to put its hand in the jar and take the money out.
The third way the government has balanced the budget is by cutbacks to the very social services that are so necessary and needed in a low income riding like mine. The parliamentary secretary argued with our Bloc colleague and said that health care had risen 8% per year over the past four years. In actual fact we are only just getting back now to where we were in 1995 when the government drastically cut the Canada health and social transfer. It went from $19 billion to $11 billion, and it is gradually incrementally inching its way back up as the economy increases.
Therefore, it is completely disingenuous for the hon. member to say that in all this period of time of budgetary cutbacks and restraint the government has been raising contributions to the Canada health plan. We are only now to the point where we were in 1995.
Those three steps, the EI surplus pushing $50 billion, the public service pension plan of $30 billion, a gift the government just helped itself to, and the cutbacks to the Canada health and social transfer over the last nine years have made it possible for the Liberals to not only balance the books but it cut too far, resulting in surpluses.
On the treatment of those surpluses, we argue that we should be reinvesting them in our social deficit so we do not leave another generation of kids behind and our crumbling infrastructure. There is a huge deficit. Ask our municipalities. Sidewalks are falling apart under our feet out of negligence.
I come from the building trades in the construction industry. It does not matter how magnificent a building we build. If we do not maintain it, it will collapse around our ears. That is the situation with our crumbling infrastructure around the country.
I argue the government cut too far and too deep. The manifestation of that is the surplus it has. The government has not told us the truth about the surplus. From year to year, it has deliberately lowballed it. It has consciously misled Canadians, if I can say that. Maybe I can get away with pushing the limits with a new pinch hitter in the Chair. However, I believe there has been a deliberate misinformation associated with its budgetary estimates from year to year to the point where provinces cannot plan from year to year. Every year ministers of finance, especially our current Prime Minister, have been very adept at misleading the provinces.
We have in our presence today a former provincial minister of finance who probably found himself in that situation with the federal government playing its cards very close to its chest saying that there could not be any transfer payment increases to the province for that year, and it looked pretty grim. It is like asking a prairie farmer what kind of crop he will have this year. It is always pretty grim.
I believe the government knew full it would have a windfall at the end of the year. It denies and denies and then happy coincidence it finds $6 billion or $8 billion. How can we be out by $6 billion or $8 billion? I do not believe that in today's advanced accounting practices that we can make a mistake like that, not seven years in a row.
It has the effect of tying the hands of the provinces. They cannot plan. We cannot grow a province on one time funding. After begging, pleading and negotiating the government says that it will throw a few crumbs, a one time billion dollars here or there. That is not how we grow a country. We need a long range plan. We need stable core funding to plan and project our needs down the road.
Perhaps the biggest scandal associated with the Liberal government in my view is its deliberate and conscious under representing the budget surpluses that it has had from year to year. Never mind, the treatment of those surpluses. I would argue that is a scandal too. It all goes to debt reduction and none of it goes to reinvesting in the country, to redevelop the country.
About three or four years ago there was a time when the Liberal government said that if there were a surplus, and again the big if because it would not say there would be, it would divide that surplus three ways. One-third would go to tax cuts, one-third would go to debt reduction and one-third would go to program spending.
That promise went out the window. I do not know why we cannot hold the Liberals to task on that because that was a clear commitment they made, and that simply has not happened. One year $11 billion went straight to debt reduction and not a penny to increased program development even in a needy area like mine, Winnipeg Centre.
I gave the statistic that 52% of the children in my riding live below the poverty line. There is an urgent need for early childhood development and a national child care program in this country.
I have seen the website and I read the paper that the Liberal Party's social policy committee developed on an early childhood national child care program, in which all children between the ages of three and five would have access to full time, all day long day care. Again another budget has gone by without any commitment to that lofty principle.
Instead of a long awaited national child care program, this budget adds no new money. It only accelerates the already promised funds for child care from the last budget. Again it is the shell game of announcing and re-announcing the same dollars.
The one thing in the budget that I can actually speak positively about is that the federal government has finally listened to five years of pleas on our part, five years of admonitions on our part about the fact that this country is the only country in the western world in which businesses can deduct their fines as tax deductions. Fines and penalties were tax deductible until March 23 of this year.
I do not know why it took five years. Since a 1999 Supreme Court ruling, businesses in this country could deduct their fines. We asked the ministers of finance about it. We said that surely it undermines the deterrent value of a fine if businesses can write it off as a tax deduction. It seems ludicrous. Then it became clear why Liberals were reluctant to plug this outrageous tax loophole. The current Prime Minister, the former minister of finance, received the largest fine in Canadian history for ship source pollution when one of his ships owned by the company Canada Steamship Lines dumped its bilges in the Halifax harbour and polluted the harbour.
That was the single largest environmental fine for ship source pollution in Canadian history. Presumably Canada Steamship Lines wrote off that fine as a tax deduction and had it automatically reduced. We do not know that it did because we do not have privileged access to the company's taxation, but it would have been within its rights to do so and its accountant should be fired if he did not do it for them, so we can assume that this is what happened.
Why did that take five years? It is absolutely irritating, of course, to the sensibilities of any ordinary Canadian. It was an absurd situation.
The budget again is preoccupied with debt reduction. I again am the first to admit that we have to get out from under the crippling debt, a crippling debt that developed largely under the Trudeau years and the Mulroney years. Frankly, it grew and expanded and exploded, and it was not just over-spending that led to the accumulation of this $500 billion plus debt. Part of it was the fact that we do not hold or carry our own debt internally and domestically like we once did.
In fact, our debt was farmed out to foreign banks and foreign bond holders, so we were paying interest at a much higher rate than we used to. Essentially we were paying interest on the open market. As we all know, we went through a period when there were interest rates of 12%, 14% and 18%. That debt was just compounding and spiralling out of control, partly because of our own bad policy choice, I would argue.
It is part of our campaign platform this time around to repatriate some of that debt at least, to refinance so that we do not have to make these choices of paying down the debt or providing basic needs to Canadians. We believe we can do both. We can have a sensible debt reduction program and we can still reinvest in Canadians to deal with the social deficit, reinvest in our infrastructure to deal with the infrastructure deficit in municipalities, and do any other number of other good things.
