Debates of May 4th, 2004

Budget Implementation Act, 2004

[Rahim Jaffer, Canadian Alliance, Edmonton Strathcona, AB]

Madam Speaker, it always gives me pleasure to rise in the House and speak to various legislation.

I listened to the hon. parliamentary secretary with some concern about some of the things he was saying. I know he tried to paint as positive a picture as he could about the government's financial record and its ability over the last decade, because the Liberals have to take responsibility for everything that we are seeing today.

One thing I took exception to and which I have seen over the years that I have been here is the way the Liberals forecast numbers. One of my hon. colleagues tried to address the case of the tax rate and the Prime Minister having his company registered overseas, but especially with regard to the surplus. The parliamentary secretary talked a lot about the surplus and how there have been repeated surpluses and how it has been good for the country.

I take exception to the fact that the surplus has never been reported to Canadians in an open and honest way. That is of a great deal of concern for me. When we look at the first 10 months of the fiscal year the surplus was pegged at about $5.5 billion. Then, all of a sudden, as the budget promises started to be put in place over the last few months leading up to the introduction of the budget, that surplus was whittled down to about $1.9 billion. This tells me that the type of government the Liberals try to portray themselves as, as a prudent, fiscal government, is far from that fact.

The fact that the Liberals have not been honest with the surplus numbers really begs the question that there are some huge missed opportunities in this particular budget, especially when it comes to tax relief and investing in certain areas that I think are priorities for Canadians. That is something the parliamentary secretary failed to address.

I have talked specifically about missed opportunities and about trying to trust the government's numbers. This is a huge problem in this place, but also for all Canadians. I can give examples of some of the numbers that we have seen.

I will start with when this Parliament began not too long ago and the Prime Minister was answering questions for the first time in the House. We had asked over and over again in the House how much money had been given to the Prime Minister's shipping companies over the course of his being in this place when it came to government grants from different departments.

The initial number from the government was $137,000 in answer to a question by my colleague from Edmonton Southwest. We had to do a further study on that. We had to put a question on the Order Paper. We had to look in other ways to try to access information because the numbers were not right when they came from the government. We learned later that the number in fact was $161 million.

How can the federal government put out numbers like that? How can we trust any of the numbers the government puts out when it comes to the budget or the surplus? That is an incredible gaping hole when it comes to accountability.

There is another example of mismanagement by the government when it comes to numbers. I think everyone now knows the frustration level is at an all-time high when it comes to the gun registry. We must remember what the government said that program would cost Canadians. The Liberals said it would cost $2 million.

The Auditor General has said that it is actually well over $1 billion in the management of that program. In fact, it is even going higher and by the end of this year it could be up to $1.5 billion and approaching close to $2 billion.

How can Canadians trust the government in any of its numbers when we continue to see this sort of abuse in the way that the Liberals report numbers and the way they manage Canadians' money? Those are two examples.

The final example that we know of is the one that has been in the news and which we are trying to get to the bottom of, if the government decides to allow us to get to the bottom of it because we are all expecting an election. We do not know whether we will find who in fact was responsible when it came to the sponsorship program and the money that was lost there.

The Auditor General again appeared in front of the public accounts committee yesterday saying that there is $250 million for which there is no accountability. Some of it was spent on things that really were very questionable in the way those contracts were awarded, and that $100 million of that money just disappeared when it came to ad companies, especially in Quebec. It is astounding.

On that particular problem we have heard so many different numbers from the government. It was not so long ago that the minister in charge of the public accounts said that in fact the Auditor General was wrong, and that the amount was only about $13 million. Where did he get that number from? He pulled that number right out of the air. He did not know what he was talking about.

That is another example of things we have seen where it makes it difficult for Canadians and especially for us on this side of the House to take the government seriously when it comes to its numbers. What sort of respect do the Liberals have for Canadians when they think they can abuse them in that way, especially with regard to their hard-earned tax dollars?

The hon. member talked so greatly about the budget implementation act and encouraged all members to support it, but how can he expect us to support it? I have news for him. Many of us on this side of the House have difficulty supporting the government in any way, including the implementation of the budget, given the fact that we have seen such abuse when it comes to the way the Liberals deal with taxpayers.

I want to talk specifically about a few areas that were huge missed opportunities in the budget specifically as they pertain to my riding of Edmonton--Strathcona, but also some bigger themes that have been of real concern to Canadians from coast to coast.

As the Conservative Party critic for revenue, I have been very active in trying to push for fairness and equality for taxpayers in this country. I have put forward some policy in my party and some legislation in the House to try to create the office of taxpayer protection.

I have seen countless abuses when it comes to the Canada revenue agency and its dealings with honest, hardworking taxpayers. Many times when it decides to audit people, it usually goes after hardworking Canadians who really pose no risk when it comes to paying their taxes. It is amazing. About 40% of Canadians are maybe trying to avoid paying their taxes and are left out of the mix and CRA does not go after them.

We have been trying to put forward some legislation that will increase accountability when it comes to how the tax department deals with Canadians and how the government spends their money.

I mentioned briefly a missed opportunity in the budget. There is another number that I failed to mention initially. The Liberals talked about the tax package that they introduced of about $100 million that was to be given to Canadians over five years. The parliamentary secretary said that we are in the last year of that package. Again those numbers are not accurate.

If we asked average Canadians if they had seen some of those tax reductions on their paycheques, if they had actually saved more money at the end of the day, most of them would say that they have been paying more. If the government did reduce some level of taxes, we would find increases in many other areas. In the end, Canadians unfortunately are worse off than they were before.

Over the time that the government has been in office, taxes have actually risen. We have seen about 38 variations of taxes. Some would call them user fees. These have been increased over the years that the government has been in power.

One of the ones that comes to mind is the air security tax. That tax has been a direct hit to our travel and transportation industry. The government could have reduced that tax completely. We and others have encouraged the government to reduce that tax, and it has been reduced slightly over the last couple of budgets. When that is factored in, it sure hits Canadians at the end of the day.

We have talked endlessly about fuel taxes. We had a motion in the House last year and the current Prime Minister voted for it. The current Prime Minister endorsed the plan to give a portion of the fuel taxes back to municipalities, back to Canadians. The government collects quite a significant amount of money when it comes to fuel taxes.

In the budget we see marginal investments for infrastructure, yet the Liberals are touting it as a huge plan for the cities. If we look at how much the current government collects in fuel taxes and the fact that the Prime Minister and his government endorsed a plan to give a portion of the fuel taxes back to the municipalities, it is a complete failure. This issue has not been addressed in the budget.

When it comes to infrastructure we know that the government has reduced the municipal GST rebate. The parliamentary secretary spoke about that. Of course the municipalities will say that is a good start and a move in the right direction because it will give a portion of the money that the cities need to invest in their infrastructure.

When I am in Edmonton I see some of the challenges in infrastructure and think of the many more investments that could have been made with the money collected from the fuel taxes. I know that Canadians are really not happy when it comes to the government on that particular front.

There was another area that unfortunately was completely absent in the budget. I hear about it from people in Edmonton—Strathcona, a large group of Canadians. The parliamentary secretary talked about labour participation and the challenges we are going to have when it comes to the aging population. That is a particular group that was completely left out of the budget.

I am distraught when I hear the seniors in my riding who call me on a regular basis to say it is so difficult for them to make ends meet. They are on fixed incomes but all their costs are going up when it comes to medication, transportation, health costs obviously, and rent in some their housing arrangements. Their pensions are not even indexed to inflation. They have huge challenges when it comes to trying to maintain their own standard of living. The government has continuously ignored seniors, and if not, we have seen at times the government attempting to claw back some of the benefits for seniors which is incredible. It is one of the most vulnerable groups in society. Seniors are the ones we owe the most to when it comes to thanking them for building the great country we have, yet it is that type of disrespect they receive from the government.

It is a huge concern for me in looking at the surplus numbers and what the government could have done to address some of the concerns for seniors. The fact that I am hearing from many seniors on a regular basis is something we should be concerned about. We should be doing something more for them. We on this side of the House have proposed policy to address some of the concerns for seniors. We just do not understand why the government has chosen to ignore them.

The parliamentary secretary also spoke about education. There were some efforts in the budget to increase the ability for students to access more money through the student loans program. There are still some fundamental problems with the loans program in the way that we approach education. I am very concerned about that.

The University of Alberta is in my riding. I hear from a lot of students as well as the administration in that university on some of the challenges they have. I get many calls from students who are being forced into default because of the lack of flexibility in the student loans program.

I also get calls from students, even in the case of the budget, where the government has increased potential limits under the student loans program but it still has not addressed the issue of the parental contribution amounts. Some students unfortunately do not get support from their parents when they go to school. They do it on their own and I admire and respect that.

Unfortunately, in trying to adjust the amounts of loans one can actually apply for, the government still has not addressed the issue of parental contribution. That leaves some students in the same place they were before and they cannot access the funds they need for their education. I would encourage the government to review that.

Our party has put forward a policy. We would like to see that particular element of the Canada student loans program eliminated so that students could be judged on what sort of program they want to take and not have it based on the portion of contribution their parents should make to their education. I hope that is something the government will address.

We have not dealt with the biggest problem that students are facing and that is being able to pay down and manage their debt. We are seeing tuition fees across the country rise at incredible rates, especially in professional designations.

Even though the government has addressed the issue of trying to access funds, it still has not addressed the issue of trying to reduce the overall debt for students when it comes to their education. They are graduating nowadays with some of the largest amounts of debt in the western world. That is something we need to address. We must work with the provinces to try to reduce that overall cost so that students can have a fair start once they get through their education.

There is nothing in the budget or any commitment from the government on that. If anything, we saw over the last number of years, especially when the current Prime Minister was finance minister, a $25 billion cut from the health and education transfers. This made it very difficult for the provinces to make up that difference in spending and unfortunately health care and education suffered. Now the Liberals are trying to say they are the great saviours of health care and education but when we look at the transfers, they are barely at the level they were at when the Liberals first took office.

Health care is a top priority for many Canadians. They would like to see effective commitments when it comes to funding but also the ability to work with the provinces to ensure that no one is left out of the public system, that no one is left out of the universal system. All Canadians must have good and equal access to a system that should work efficiently.

In the messages we have heard from the government over the last week, I would say that there is in fact a hidden agenda when it comes to health care. On the one hand, we heard that the minister is in favour of private services and that he is going to work with the provinces to allow that evolution of private services. Then, in the next couple of days after that, we heard another mixed message that in fact the government would never allow private services.

I would argue that under this Liberal government's watch we have seen the evolution of that two tier system becoming quite a bit more significant because of the government's lack of commitment in health care. We have seen more private services evolving all across the country. The government has not been able to stop this on its watch, if that is its goal, as in some of the messages we have heard.

I would say that we do not know clearly what the Liberals' position is. They have stated two distinct and separate messages over the last couple of weeks. It only begs the question: there must be some sort of hidden agenda. They are trying to pull the wool over the eyes of Canadians before an election and then right after the election put forward a whole new set of policies when it comes to health care. I would argue that this is completely unacceptable. Canadians want to have a public system that works, is well funded and universal and gives accessibility to all Canadians regardless of their ability to pay.

That is what we on this side of the House stand for. We are going to continue to fight for that and to hold the Liberal government accountable. As much as the government has increased some of the funding, which was not even new money but the $2 billion promised prior to the tabling of the budget in the House, there really is not a commitment when it comes to a long term vision.

Again, concerning the 10 year plan the Prime Minister has spoken about, it would be nice to see what some of the arrangements under that 10 year plan are so that Canadians can actually see that and know what is coming down the pike, but I think it is not in the interests of the government to show that.

Prior to the change in this budget on the security side, I had been in charge of the portfolio of Canada Customs and Revenue Agency. As the House knows, customs has been moved out of revenue and put under the new department in charge of public security. This is a change that we had encouraged the government to pursue. We applaud that change. It was really unfortunate that our front line customs agents, who worked so hard and did such a great job, were never given the tools they needed to protect Canadians when it came to border security. It was only after September 11, 2001, that we saw a real effort to try to address some of the security concerns due the lack of attention from the government over the last number of years. Prior to 9/11, in the government's philosophy, the primary role of customs was that of tax collector, not border security. We in our party had a huge problem with that.

The government has now moved that under the public security banner. Now we have to address how well some of the security measures are working. I know the government was moving very slowly when it came to making sure that the resources were given to our customs agents in getting computer access to names of potentially high risk people trying to get into the country. When it comes to resources to actually protect agents and to deal with high risk situations at the border, we still have not see those sorts of commitments from the government. The government talks about $500 million for beefing up border security, yet in many of the ports of entry there still is not the proper type of equipment to make sure that Canadians are protected and, as I said, that our customs agents have the tools to do the job.

There is still a lot that needs to be addressed. The House has heard this theme from our side of the House over and over since we have had the chance to debate the budget implementation: This budget was a budget of missed opportunities. There were some great opportunities given the size of the surplus, as I have said, to address areas of tax relief and areas of debt reduction, but also to make investments in areas that Canadians feel are very important.

I did not have the opportunity to address the area of the military. Some of my colleagues will mostly likely do that in the future. I know that this is an area for which Canadians have said that even with the investment under this budget we have seen only enough money put forward to cover our operations in Afghanistan and now in Haiti. We have not seen the real long term funding that is required for the personnel of the armed forces to do their peacekeeping jobs or the jobs they are called on to do in a way so as to be able to protect themselves and deal with the challenges they face in some of the tougher areas of the world.

I appreciate the opportunity to speak to this today, but I think it will be very difficult for the official opposition to support the budget implementation bill at this stage.

[Roy Cullen, Liberal, Etobicoke North, ON]

Madam Speaker, I listened to the remarks of the member for Edmonton--Strathcona about the budget. I have a couple of comments.

My first comment is with respect to the surpluses that this government was able to accomplish after three years in office and then continuously since. In fact, I think this budget is the seventh consecutive surplus. It seems to me that predicting a surplus and then meeting or beating it is a better policy than setting certain deficit reduction targets or surplus targets, as it was under the previous Conservative government, and never meeting them. That was the case, of course, under the Progressive Conservative Party before we took power in 1993. It set various targets but never met them, whereas our government set targets and met them or beat them. Psychologically that was an important item for Canadians, I think, because part of the challenge was to engage Canadians in the whole fight against the deficit. The Canadian public rallied around that mission and we accomplished it.

The member talked about the lack of investment in infrastructure. While I would agree with him that we need to do more in terms of investing in infrastructure, in the last five years, if I remember correctly, our government has put up something like $12 billion for infrastructure spending. That of course leverages money from the provinces and the municipalities, so I think his facts on that are somewhat erroneous.

With respect to health care and seniors, first of all, our government has been very clear that we are committed to the principles of the Canada Health Act that talk about universal access and accessibility for people at a reasonable cost. Those commitments are very much enshrined in the policy of this government.

I want to ask the member for Edmonton--Strathcona what his view is of the role of private health care in Canada in terms of the national health care system. Before I do that, I should also comment that there were some specific things in this budget for seniors, and especially the huge investments our government has made in health care, such as the Canada health and social transfer of $37 billion. Another $2 billion was announced recently and the $37 billion was from the 2003 health accord. Those investments in our health care system of course are going to be a benefit not only to seniors but to all Canadians.

I share a concern similar to the member's. There are a number of seniors in my riding who are on fixed incomes. Their property taxes are going up and they do struggle. Over time when we have the fiscal capacity I would like to see us do more in terms of the old age pension, but that is a very expensive item to tinker with and we do not have the resources now.

I will come back to my question. What is the member's view of the role of private health care in our health care system in Canada?

[Rahim Jaffer, Canadian Alliance, Edmonton Strathcona, AB]

Madam Speaker, I am happy to address the question, but I would like to make a couple of quick comments on some of the things the hon. member spoke about, especially when it comes to the numbers and being able to be above numbers so at least they are there on a positive level when it comes to surplus. Liberals have continuously lowered expectations for Canadians, saying that the surplus will be much lower than it is. By doing so, they are playing around with the numbers to their advantage.

That was my big point about how we need greater accountability. That money belongs to Canadians, and unless the government is going to make the investments to show that it is using the surplus in an open and honest way for Canadians, the government should be returning it. There have been ideas about it, such as some of that surplus being legislated into paying down the debt or into tax relief. That is something that I would like to see coming from the government. There has been no movement on that front.

The member also mentioned infrastructure and the $12 billion over the course of the Liberals being in office. Let us compare this to the amount collected on fuel taxes, especially if it were a dedicated tax where the money collected from fuel taxes was supposed to go back into our highways and roads and into infrastructure across the country. The numbers do not add up for the amount of revenue from fuel taxes and the amount that has actually been spent on infrastructure. That is why I had to criticize the Liberals, because they are still really far off the mark when it comes to acceptable levels.

On the question of private health care, all Canadians have had to accept the idea of private health care because under the watch of this government we have seen a proliferation of health care services going private across the country, whether we like it or not and whether Canadians support it or not. This is because of the fact that the government has not shown leadership, first, when it comes to investments in transfers into the provinces and when it comes to stable funding for health care and education, but also because there has been no leadership in coordinating stable policy with the provinces. If anything, the government has had a very antagonistic approach when it comes to the provinces.

I know that in my province of Alberta, where the premier and the government have tried to look at innovative ways to provide health care for citizens, the government has penalized them in the past and has held back transfers, and that was when it had the gall to cut the transfers to begin with. It is outrageous that the government would accuse anyone else of privatizing our health care system when, I would argue, it is the Liberals who have put us in the situation we are in, where a private system is inevitable unless we change this government.

Again, I want to reiterate that we have had mixed messages from the health minister. On one day he says he is in favour of working with the provinces to allow for privatized services. On the next day, because of the backlash from many of his caucus colleagues, he says they are only in favour of a public system. I would say that for once we are finally seeing before the election what we have seen in the past. They have a hidden agenda on health care, they are not going to be up front with Canadians until after the election, and then it will be too late.

[Dick Harris, Canadian Alliance, Prince George—Bulkley Valley, BC]

Madam Speaker, I listened to the member for Etobicoke North. He is like all other Liberal members. They make an attempt to trumpet their interest in the infrastructure problem we have in this country. He talks about the $12 billion that his government has put in since 1993. As my colleague from Edmonton mentioned earlier, that is simply a fraction of the billions of dollars in fuel taxes that the Liberals have scooped for other programs when in fact, as my colleague pointed out, fuel taxes were first implemented to be directed to new infrastructure programs and the maintenance of existing programs.

What the member for Etobicoke North failed to mention--and no Liberal will mention this--is that under the 10 year reign of the Liberal government, under the former finance minister who is now the Prime Minister, this government drove the national infrastructure deficit up to an astounding $53 billion. Liberals allowed it because they took money out of fuel taxes and directed it to politically friendly programs through their program increase in spending every year. That infrastructure deficit went up to $53 billion. They cannot deny that fact. To stand up and trumpet the $12 billion they put into it is really smoke and mirrors.

I am sure that my colleague from Edmonton has seen the infrastructure deficit in his neck of the woods. I would like him to comment on these smoke and mirrors comments the Liberals are so quick to put forward.

[Rahim Jaffer, Canadian Alliance, Edmonton Strathcona, AB]

Madam Speaker, I would like to thank my hon. colleague from Prince George for his question and his comments. I think he is absolutely right.

Earlier, one of my other colleagues from Prince George talked about the idea of Canadians being so frustrated when it comes to sending so much money to Ottawa. We are in the tax season where people are filing their taxes. People are sending so much money to Ottawa in so many different ways, whether it is personal income taxes, GST payments or fuel taxes, but seeing very little value come out of those investments.

I think that is the level of frustration we are seeing. I have looked at Edmonton and other cities while driving around and seen the needs when it comes to infrastructure. There are pot holes, bridge repairs and a number of other problems right across this country. Edmonton is not the only city that is suffering from that.

Then we look at the amounts of money that have been collected, when it comes to the fuel taxes levied in this country and the amount that is coming back to our cities and rural areas across the country. It is theft. That is all I can call it. This was supposed to be a dedicated tax to allow for these sorts of investments, but we are not even seeing a fraction of that come back.

When this particular government, over the time it has been in office, starts to gloat about the idea of putting as much money as it has into infrastructure, especially when the amounts that are collected are much higher, it is a real shame. We can imagine the types of things that the local municipalities and provinces could do with that sort of money if it was coming back into their communities because they are the ones paying the fuel tax.

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, 20 minutes to comment on Bill C-30 is quite a lot. On the other hand, 20 minutes to comment on the budget and this government's financial management is not much.

In Bill C-30 we find elements related to equalization, and I shall look at those in particular. We also find elements related to the Canada Pension Plan, with which we agree, and elements related to the GST rebate for municipalities, with which we also agree.

However, we are worried about the fact that the health and education sectors were not included in the Liberal government's new approach. And in fact, we know the reason well. It is simply an election strategy; they are seeking to create an alliance above the provinces, above Quebec, in order to be able to get around provincial jurisdictions.

The final element is one which relates to extended deadlines, permitting the Canada Customs and Revenue Agency to recover unpaid taxes over a 10-year period, and we agree with this as well, with the exception of the air security tax. We are opposed to this tax, whose need has not yet been demonstrated, unless it is to increase the already large, indeed amazing, surpluses of the federal government.

Looking at equalization in particular, it clearly illustrates the approach of this government. Whether headed by former Prime Minister Chrétien, or the new PM and former finance minister, when it comes down to it, their approach to real problems involves only cosmetic measures that do not solve the underlying problem. Instead, they increase it by giving the impression to Quebeckers, and to Canadians, that they are trying to respond to their concerns, yet this is totally false.

As far as the overall budget and the overall policy of this government is concerned, their approach is to increase Ottawa's power over the provinces, and particularly over the Government of Quebec.

Looking at the equalization formula proposed in Bill C-30, we see first of all that the new formula does not in any way respond to the concerns and needs that have been made clear on a number of occasions by the provinces, Quebec in particular.

Then, as far as the overall transfer of funds from the federal government to the provinces is concerned, we can see that it resolves nothing whatsoever. These continue to decrease year after year.

Finally, and this makes no useful contribution to the debate on fiscal imbalance, we see that there is too much money in Ottawa for the responsibilities the federal level has under the Constitution, and not enough in the provinces, and in Quebec in particular, particularly for health, but also for education and social housing.

Not only does this equalization formula resolve nothing, it also takes away, for the next five years, money from those who are institutionalized. Through the Minister of Finance and the Prime Minister, the federal government has made a unilateral decision to impose this equalization formula on the provinces.

There is something totally aberrant about our having had to vote on Bill C-18 only a few weeks ago, to extend the present equalization formula for one year, supposedly to maintain payments during the negotiations with the provinces. So we voted on that bill—Bill C-18 if I recall correctly—and then, on March 24, along they came with a budget including a unilaterally imposed formula.

This is another example of the government's incompetence, of the fact that the Prime Minister, the Minister of Finance and this House cannot make a decision. A few weeks ago, they probably really thought that they could reach an agreement with the provinces and Quebec before the election. They saw that the provinces were standing up and that Quebec had demands that it wanted the federal government to meet. Mr. Séguin, Quebec's Minister of Finance, repeated it when he tabled his budget, shortly after the federal government had done the same thing; if memory serves, this was on March 30. When the federal government realized that it could not easily impose its views on the provinces during negotiations and that an election was coming, it decided to unilaterally impose its formula for the next five years.

This decision alone is totally unacceptable. The Prime Minister talks about the democratic deficit. This is a perfect example. The federal government did not care at all about the provinces and it did not negotiate seriously. It did not take into consideration the provinces' needs and demands; instead, it unilaterally imposed its own vision. As I said, this alone makes Bill C-30 unacceptable to the Bloc Quebecois.

The federal government did not at all take into consideration the concerns of the provinces. Most of the changes made by the Minister of Finance, the Prime Minister and the Liberal government of Canada are cosmetic.

The government also did not take into consideration the unanimous proposal made by the provinces, whereby the equalization formula should be based on the performances of the ten provinces, as opposed to those of five provinces, as is currently the case, since this formula excludes one rich province, with the result that Quebec is losing several hundred millions, if not a few billion dollars.

This should have been taken into account, as was the case in the past. This is not something new. For several years, the federal government's equalization formula was based on all ten provinces. It is probably when this formula began to benefit the provinces and Quebec, as it should, that the federal government changed the rules of the game to ensure that it would not have to pay too much money in these areas of responsibility.

Property tax was not considered an element of the tax base as it should have been. In the budget, it was suggested that property value would be taken into account when determining the wealth of the various provinces. In British Columbia, property value is extremely high. So, that would have a huge impact on Quebec. It would mean somewhere around $400 million in equalization.

Therefore, it was suggested that property value would be taken into account. That would be the case, for instance, in British Columbia. However, public servants who appeared before the Standing Committee on Finance told us that it would not really be done that way since experts—probably friends of the government—had argued that the value market could not be factored in, as it would lead to bias, distortions, and things like that. So, a halfway compromise was reached, but, in reality, absolutely nothing was solved.

I hope B.C. residents are shocked to realize they were used in that way. In Quebec, we are shocked because our demands and requirements were not met. Whichever way you look at it, Quebec stands to loose over $1 billion. Not only have we lost $1 billion, but we will continue to lose money through transfers.

Let me give the House some figures to illustrate what is really going on. In 2001-02, Quebec's equalization payments totalled $4.690 billion. In 2002-03, they decreased to $3.985 billion, as seen in the budget plan, a $705 million drop. In 2003-04, we are down to $3.802 billion, after another drop of $183 million. In 2004-05, we will get $3.761 billion, and that includes the $150 million in fiscal rebalancing the government has announced in the budget, which is the only real increase. In fact, it is not an increase at all, but a reduction of the decrease Quebec feared. So, for these three years, we are expecting a reduction of close to but not quite $1 billion in equalization payments from the federal government to the Government of Quebec.

Compared to the October 2003 estimates, however, these figures tell the whole sorry tale. In October 2003, transfers to Quebec were estimated at $4.662 billion, as I said, but now they are estimated at $3.985 billion, a $677 million decrease in one year.

In 2003-04, in October 2003 to be more specific—less than five or six months ago—Quebec expected to get $4.525 billion in transfers. Now, according to the budget plan, we are down to $3.802 billion, a $723 million drop.

We should accept this? That is impossible. For people who defend Quebec's interests, it is impossible to accept this. This year, with the shenanigans that the government has announced—the cosmetic part—there is a slight increase of $70 million, but, once again, this is compared to a decrease of $41 million. Thus, the government simply alleviated the decrease, thinking it would distribute a goodie to the provinces, and to Quebec in particular. In total, from 2002 to 2005, the decrease will be $1.330 billion. This is totally unacceptable.

The parliamentary secretary tells us that equalization increases and decreases, depending on economic times. The problem is, this is the only existing formula that takes the needs of the provinces into account.

In the past, the federal transfer was mostly based on the needs and investments of the provinces. For example, the Canada assistance plan ensured that, for every dollar put in by Quebec, the federal government would put in a dollar. Since we had—and still have—poverty problems that were slightly higher than the Canadian average, Quebec would be imaginative and invest based to its people's need. The federal government had to follow; it was the rule.

The federal government changed the rules of the game with the Canada social transfer. Now, it is not based on the needs, but on the percentage of the population. Consequently, whatever amount is transferred to the provinces, Quebec is always receiving a little less than 25%.

Within the Canadian federation, equalization is the only way to take the needs of the provinces into account. However, we told you that the formula is inadequate. The provinces, particularly Quebec and the Minister of Finance of Quebec, said this several times. The federal government cannot deny it. Even recently, I believe that Minister Couillard said that the fiscal imbalance problem was a parasite in the relations between Quebec and Ottawa. This is the reality. Liberals can turn a blind eye and put their heads in the sand, but Quebeckers are not fooled by this situation.

If equalization does not meet the provinces' needs, the formula will have to be reviewed. At present, the transfers for health and social programs are not in keeping with the needs. They are calculated on a per capita basis, and that is that. That is the greatest injustice in the year we have just completed.

On one hand, the federal government makes a lot of fuss about announcements it has already made three times. It is like the case of highway 175—and they think we are fooled. The Prime Minister is holding off the election call so he can make announcements that have already been made. We have heard that they will be going to the Chicoutimi region, probably, I suppose, to help the hon. member for Chicoutimi—Le Fjord, who must be in serious difficulties. They will announce again, for the third time, the investment in highway 175. It has already been announced by Mr. Chrétien and by Mr. Landry. They think that people will not see it is all a flimsy fabrication. Probably they will do the same thing for highway 30. I am just waiting for that. The election call has been delayed so they can announce again the things that have already been announced three or four times.

That $2 billion in transfer payments to the provinces promised by Mr. Chrétien, which the former minister of finance pretended not to be able to give, just like the new Minister of Finance, in order to set the scene economically and financially to enable the new Prime Minister to announce it, has finally been announced. It has even been passed in the House, finally. Thus, $2 billion in transfer payments will go to the provinces, on a per capita basis. Quebec will receive a little under 25% of that, around $460 or $470 million.

At the same time, we are told that, for the same period, there will be $2 billion less in equalization. They would have us believe that they have taken $2 billion away but that the same amount will be given back in transfers. Now look: Quebec receives half of the equalization budget. We therefore have lost half of the $2 billion amount, while we get $470 million through the Canada health and social transfer.

No one is fooled. The Atlantic provinces and Quebec have been the big losers in this Liberal shell game. People know it.

Overall, transfers are decreasing in amount. To give one example, a figure that came out last week in the committee chaired by Jacques Léonard, who was president of Quebec's treasury board. He is very familiar with the public finances of Quebec but also has a very clear picture of federal public finances. It was found that, between 1994-95 and 2002-03, the revenues of this government—with the present PM as Minister of Finance—rose 45%. That is nothing to be sneezed at when there is so much talk of belt-tightening.

Obviously, they used part of this money to increase their bureaucracy. Operating expenditures increased by 39%. I would remind hon. members that, at the time, inflation was around 16% and the population of Canada increased by a little less than 4%. If memory serves, the figure was 3.9%. So the increase was not because of increased needs.

In fact, the needs did increase in the provinces, but not the needs for federal bureaucracy. It was merely a Liberal strategy, of Pierre Elliott Trudeau and all those who followed him, to keep on building up the power of the central state in order to create a unitary state, by strangling the provinces financially.

The proof of this is that, while revenues increased by 45%, while bureaucratic expenses increased by 39%, government transfer payments to Quebec decreased by 7.6%. That is the truth. That is the reality. The rest is just smoke and mirrors.

The machine was beefed up, they made themselves indispensable, and they strangled Quebec financially. They will pay for that at the next election, if only they get their act together and call one.

They are wondering, “Will one week be enough to try and convince Quebeckers and the rest of Canada that we are a good government?” Well, of course not! They have been there 10 years. Taking stock of those 10 years, we realize that in the absence of a strong opposition, they are simply all over the map.

Therefore, in terms of overall transfers to Quebec, we are looking at a net loss of 7.6%. And just to give you some idea, with regard to health, when our present Prime Minister became Minister of Finance, for every tax dollar taken from our pockets, in Quebec as in the rest of Canada, he would transfer 4.5¢ to the provinces. Today however, for every tax dollar he gets, he transfers a mere 2.7¢. Which means that he takes in more and more money, while giving out proportionately less and less to the provinces and to Quebec.

What this means is that, ever since the Liberals have come to power, ever since the former finance minister and now Prime Minister has held the reins in finance, Quebec has been cut by a total of $10 billion. This represents a drop of $1,300. Small wonder then that the provinces and Quebec have been hard pressed to make ends meet. The sheer fact of having been able to eliminate the deficit is a miracle in itself under such circumstances.

This cannot go on forever, though. It is already no longer the case in a number of provinces. Ontario is in a deficit position, B.C. as well. Most of the Atlantic provinces have deficits. As for Quebec, it is experiencing—to use the finance minister's expression—some difficulties with its budget. This year, with sales of some assets, it has managed to balance the budget, but assets cannot keep on being sold.

The responsibility for this lies with the federal government. In this case, neither Mr. Charest nor Mr. Séguin are responsible. They have been strangled financially by this government, as the previous Quebec government was, and as the provincial governments currently are. We have a strike in Newfoundland, and a strike in the B.C. health system. There is not a single politician who would be in favour of a strike in the health sector, knowing what public opinion is on this. Yet they have to make hard decisions.

Having been involved with unions, I can tell you that I have seen governments forced to make hard choices. Sometimes they have to stir up confrontations, as was the case in Newfoundland and British Columbia. They are, however, not the ones responsible for the situation; the federal government is. There is nothing whatsoever in this budget to suggest that any corrections will be forthcoming in the next few years. In my opinion, the people of Quebec are going to have a very clear understanding of just how much it will be in their interests to send as many Bloc Quebecois members to Ottawa as possible in the upcoming election.

So that is what there is in Bill C-30. What is not in the bill, and in the budget, is equally deplorable. As far as employment insurance is concerned, $45 billion has been diverted, while people on the North Shore and in other areas are starving. For months, forestry workers in the northern part of Lanaudière have not seen a cheque. The sawmills have suffered because of the softwood lumber crisis, which is not settled even though we won. The Americans have still not opened their borders to us, and we have not got back the $2 billion they collected illegally.

Employment insurance reform is necessary, and the money is there. Now, on the eve of the election, the Liberals say it is coming. Let them table the legislation, since they are taking their time to call the election. We will vote in favour of a substantial improvement in employment insurance. If the Liberals do not do this, people will remember that, in 2000, the President of the Privy Council went to the Saguenay and told the construction workers, “We are going to improve the employment insurance system”, and then nothing was done.

I could go on and on. I have examples concerning families, the guaranteed income supplement, the sponsorship scandal, and gun control. And as for the sales of Petro-Canada stock, we cannot foresee exactly what will happen with that. Commissions will be paid out. That is worth about $3 billion. What brokerage firm will be hired to sell this stock? Probably some friends of the government. And so it will be exactly the same thing that happened in the sponsorship scandal.

Not only are the federal Liberals—the Liberal Party of Canada—more interested in defending the interests of the Liberal Party than defending federalism, but worse yet, they defend the private interests of certain friends of the government. Regarding the sale of Petro-Canada stock, we want to know who is going to sell the stock and how the brokerage firms will be chosen.

I did not have time to address the issue of tax havens and CSL International. I do not know if members had an opportunity to watch the program, Enjeux . The headquarters in Barbados is just an empty shell, and that is close to the line of illegality, in my opinion. But we will dig into that at another time. With all of this, I simply want to say that the real democratic deficit is the fact that Quebec is being strangled. The only answer for that is the sovereignty of Quebec, and the coming election will be a step toward that sovereignty.

[Roy Cullen, Liberal, Etobicoke North, ON]

Madam Speaker, we have heard the speech of the member for Joliette many times before with some variation, but I find it strangely ironic that a member from a party, whose mission is to separate Quebec from Canada, would stand up to whine and moan about the transfers from the federal government.

What he forgets in his remarks are the huge increases that the government has made to the Canada health and social transfer. In fact, in the health accord 2003 it was $37 billion and that was topped up with another $2 billion. Our Prime Minister has talked about meeting with the premiers this summer to put more money in, but more money with more accountability in a sustainable health care system moving forward.

The member talks about the former system, which was the CAP program and established programs financing. Of course, everybody will acknowledge that the CAP program was an abused program because it was 50¢ dollars for the provinces, so the government moved to the Canada health and social transfer. This system is working quite well.

The member talked about how the officials came to the finance committee on the equalization program and they talked glibly about how they could use property values. In fairness, I think the officials spoke quite clearly about the need to look at not just property values but the mill rate because property values could be going up while the mill rate is going down. Therefore, looking at property values alone as a proxy for revenue generating ability is erroneous, and that is well acknowledged.

He talked about the fact that the CHST does not reflect needs, but reflects per capita transfers. Of course, he conveniently forgets about the fact that equalization is there to help the provinces so they can provide the same level of services. In fact, I find it amazing that this member would stand here when the Province of Quebec, because of the failed economic policies of the Parti Quebecois, is now a have not province. Until recently the Province of Quebec claimed about half of the equalization moneys from the federal government, some $5 billion. I think that has shrunk somewhat in the last couple of years because of certain economic events in the Province of Quebec.

I wonder if the Liberal government in Quebec has helped with the equalization and looked at the economy. I am hoping and I am quite confident that the voters in the upcoming will do the same to the members from the Bloc Quebecois here in the House.

I wonder if the member could perhaps clarify for the House the Bloc's position with respect to CHST and the linkage to equalization. Does he not understand that equalization is meant to compensate for the fact that the CHST is a per capita based transfer and equalization is meant to compensate for that? Could the member elaborate on that for the House?

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, I think we are talking about the exact same thing. First, let me clarify one point. I support sovereignty for Quebec and I think that, if we managed our own taxes, we would do a much better job.

Here is an example. As regards the GST, Mr. Séguin, who headed the commission on fiscal imbalance, proposed that the taxation field be transferred to Quebec. This would mean $5 billion annually, an amount that would very adequately make up for the fact that Quebec is no longer getting equalization payments from the federal government.

However, the rules of the game remain unchanged. We have to live with the existing rules. The Canada social transfer only takes into consideration the number of people that make up the population. It does not take into account the fact that there may be greater or fewer socio-economic problems. Quebec has greater problems than Ontario in this area. The equalization program does not meet this need to take into consideration the socio-economic reality of a province.

As evidence of this, and the chair of the Standing Committee on Finance was present, we saw that the line for public servants is going up. The more this trend continues, the closer the Canadian average and the average for the Canadian provinces are getting. This means that, in a few years, the equalization program will no longer provide any money to the Atlantic provinces and Quebec.

Some might argue that needs will then be taken into consideration. The formula is not adequate. It must be reviewed, based on a number of criteria. Quebec and the provinces have proposed changes. I alluded to those changes in my speech.

There is one thing that I want to emphasize: 60% of the taxes paid by Quebeckers is grabbed by Ottawa. We want our money back, our “booty” as Mr. Duplessis used to call it. I am convinced that, if this had not been the federal government's strategy, then as now, we would have been able to get along.

It is very clear that there are no federalists now who want to renew the Canadian federation. During the election campaign, we will explain to Quebeckers the choice that they have: either they agree to fit in a unitary state, with a single government that is responsible and has the means to implement its policies—and this is not even the federal government, but the government in Ottawa—or they opt for Quebec's sovereignty. I clearly believe that this is where we are headed, and the next election will be a step toward that destiny.

[Jay Hill, Canadian Alliance, Prince George—Peace River, BC]

Madam Speaker, I guess I will leave the debate for another day as to whether Quebec actually receives more in services and other transfers from the federal government than it contributes.

I think the one thing on which we can all agree, as we in the opposition, on behalf of our constituents, sit and listen to member after member on the government side talk about surpluses, is that it is very frustrating and maddening to hear them talk the way they do about surpluses. What I think we need to do is ask what a surplus is.

I hear all the time from my constituents, and I think it is the same in all the provinces, that a surplus to the federal government is overtaxation out in the real world, especially for the so-called middle class. The middle class people are overtaxed to the point where, in frustration, they try to look ahead and see how they will raise their young children, how they will make ends meet and how they will provide not only a decent standard of living for their children, but hopefully set aside a bit of money for their children's post-secondary education. They are looking down the road and what the Liberal government sees as surplus, they simply see as overtaxation.

The Liberal government has the unmitigated gall to say that it has offered billions of dollars in tax relief, but when the parents, who are struggling to make ends meet, look at their paycheques and see a declining disposable income, they do not believe the government. When young parents see someone on social assistance living down the street who has the same standard of living as they do even though they work outside the home and are struggling to make ends meet, they know something is drastically wrong with our tax system and with the cut the federal government takes and then blows on scandal after scandal.

I wonder if my hon. colleague from Joliette in the province of Quebec has heard similar growing frustration and anger from his constituents as he travels around his riding.

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, the hon. member is absolutely right. People are in no doubt that the federal government is overtaxing them, considering its responsibilities.

From 1994-95 to 2002-03, the federal government's revenues increased by 45%, while operating expenditures increased by 39%. Meanwhile, in Quebec and Ontario, operating expenditures increased by about 20%, even though it is the provinces that are responsible for health, education and other pressing needs and priorities.

Where did that money go? It was used to expand bureaucracy, buy capital assets, replace computers time and again, and so on.

It is not only about surpluses. A $50 billion surplus has been generated since 1997-98 and has been used to reduce the debt, without a debate when there should have been one. Based on our estimates, at least $13 billion too much was spent on bureaucracy. Then there are the foundations. Seven billion dollars is lying dormant in foundations and this Parliament no longer has any say about it. This is totally undemocratic.

The federal government has money. It has enough money to reduce taxes, particularly for families—and this should be a priority—and to transfer either the taxation fields or the money directly to the provinces, and to Quebec in particular, so that we can fulfill our responsibilities in health and education.

There is no financial or political obstacle other than the government's bad faith.

[Claude Duplain, Liberal, Portneuf, QC]

Madam Speaker, I would just like to make a few comments.

I find it a bit strange to hear all these speeches on the eve of an election: they claim that this government is undemocratic, that it is delaying the election, that they are asking for changes to the legislation.

When the hon. member talks about being undemocratic, I wonder if he thinks it was democratic for their head office—as you know, their head office was the PQ in Quebec—to have accumulated an additional $12 billion in debt, but claim to have a balanced budget. During the last referendum, Quebeckers were not told that some of their assets would have been frozen if the referendum question had passed. This was hidden from Quebeckers during the last referendum. No one ever talked about this; it recently came out in a book.

It is incredible. When they talk—

[The Acting Speaker (Mrs. Hinton)]

The hon. member for Joliette.

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, I cannot even respond to that. Everything he says is completely wrong.

It is true that Quebec's debt has increased, but that is because of the accounting methods used for the assets of Hydro-Québec and crown corporations, and because of real financial problems the federal government has created by maintaining the fiscal imbalance. It is not new; I am not just saying this on the eve of the election. Moreover, the Chair of the Standing Committee on Finance said so. What I am saying this morning I have said many times in recent years, since I have been finance critic anyway.

As to what he said about the referendum, the entire financial community agreed that Mr. Parizeau was right to have a plan to support the Canadian dollar in order to avoid a financial crisis had the yes side won, or if the no side had won in much more difficult circumstances. Nothing was frozen; there was an agreement among a number of decision-makers, including federalists, who, of course, have common sense.

[Claude Duplain, Liberal, Portneuf, QC]

That was not said beforehand. It was only said afterward.

[Pierre Paquette, Bloc, Joliette, QC]

You bought all the billboards. When did we find out about the $8 million?

[Claude Duplain, Liberal, Portneuf, QC]

And what about the $17 billion?

[Pierre Paquette, Bloc, Joliette, QC]

You broke the rules.

[The Acting Speaker (Mrs. Hinton)]

Order, please. We will have order in the House. Please take your disagreement outside the chamber.

Resuming debate, the hon. member for Palliser.

[Dick Proctor, NDP, Palliser, SK]

Madam Speaker, I will be sharing my time with the member for Halifax.

In this budget speech I will focus a good deal of my remarks on child poverty, a subject I campaigned on in 1997 and spoke about in my initial speech in the House in the fall of that year. It is something I know Canadians feel very strongly about, as I do.

Last week, in response to a question by the member for Winnipeg--Transcona, the Minister of National Defence talked about star wars being a 1980s concept just like Ed Broadbent. I want to say, through you, Madam Speaker, to the Minister of National Defence that child poverty was also a 1980s concept. In fact, Ed Broadbent moved a motion in 1989, which the House unanimously supported, that we would eliminate child poverty in Canada by the year 2000. We did not make that deadline and we are not even close to making that deadline. I think that is one of the reasons that Ed Broadbent is running again to come back to active politics. I think one of the reasons he will be elected in Ottawa Centre is that too many Canadians are appalled at what has not happened in the area of child poverty since that motion was passed unanimously by all parties in November 1989.

How is it, after all the hand wringing, the outpouring about child poverty that has been expressed and the lip service by probably all parties in the House, that we have seen so little in the past decade and a half? How is it that countries like Sweden, Norway and Finland have found ways to reduce poverty rates well below 5%, while English speaking countries, like Canada, the United Kingdom, Australia and the United States, have poverty rates in excess of 15% and as high as 22.3%?

The answer from the experts is two-fold. First, a lack of a government investment, depending on our perspective, high investment by a government to reduce child poverty. Second, minimum wage. Low minimum wages almost certainly guarantee child poverty and Canada has a terrible track record, second only to the United States when it comes to low minimum wages.

Those are the main differences in child poverty levels when we look at it across the world.

In this country, low income families with children remained far below the poverty line throughout the 1980s and the 1990s. There are different categories of low income families, and lone parent families headed by a female is one category. The average gap between the median income and the poverty line is $9,000 per year, and 46% of families headed by a lone female parent live in poverty.

Children with disabilities is another crucial area because of financial stresses, first, due to the disability, and second, probably having one of the parents needing to quit his or her job, more often her job, in order to look after the disabled child.

The third category is immigrant families. Members will be interested to know that in 1980, less than one-quarter of immigrant families were living in poverty. The number has risen to nearly 36% in the intervening 20 years. It used to take 10 years for a newly arrived immigrant family to have a median income with their Canadian counterparts. That has now grown by 50% to 15 years. Forty per cent of immigrant children, where both parents are recent immigrants, are living in poverty, and the pressures are most profound in our largest cities, such as Toronto and Vancouver.

The fourth category is our aboriginals. They have one of the highest rates of child poverty. Of aboriginals living off reserve in 2001, 41% of those children live in poverty.

In my home city of Regina, aboriginal people are more than three times as likely to be in low income in the general population, as in the census of the metropolitan area of Regina. The census data showed that almost 6 of every 10 aboriginal people in Regina were living in low income in 2000.

In metropolitan areas the low income rate included three groups: the lone parent headed by a female, immigrants and aboriginals. In the 1980s most metropolitan area residents, regardless of their income, shared in economic growth to a certain extent. It is true that higher income families increased greater, but everybody got a larger piece of the economic pie. Contrary to what the parliamentary secretary said in his speech this morning, in the 1990s the growth was concentrated among high income families.

This is not NDP group think. This is from the Statistic Canada report of April 7, 2004. The two areas that are singled out are Toronto and Vancouver. It directly counters the parliamentary secretary's feel happy argument that wealth and health have both been enhanced in the country since the miracle of October 1993 when his party came to power.

The solution to child and family poverty is a structural systemic reality, and it has to be dealt with in that way. The problems are caused by a low wage economy on the one hand and inadequate income security on the other. Neither provides assurances in our country or lifts families out of poverty, nor establishes a solid income floor to ensure that they stay out of poverty. Unless and until structural sources of child poverty are addressed, there will always be new vulnerable groups that will fall into that trap, such as the immigrant parents and families, which I referenced a moment ago.

Economic growth by itself is not enough. We need instead a comprehensive package that includes labour market income security, early learning and child care and a housing program that concentrates on social programs. We know that the Canadian Mortgage and Housing Corporation has not built a stick of social housing in the past decade.

The second area is the fact that Canada is, whether we like it or not and I do not, a low wage country, second only to the United States. Therefore, we need a significant increase in our minimum wage. People who have looked at child poverty say that we need a $10 an hour minimum wage. I realize that will result in cardiac arrest for the Canadian Federation of Independent Business and the Canadian Taxpayers Federation. However, if we are to do something about child poverty, we have to put our money where out mouth is. These experts are saying that we have to come up with not 10¢ an hour or 25¢ an hour, but a significant increase in our minimum wage laws.

I realize my time is winding down, but I want to make a brief comment or two about the phoney debate that continues to take place in the House by members of the official opposition and the government about who is scarier and who will do what to whom. The reality has been that tax rates have been flattened over several years because the official opposition proposed them. The government opposed them but then introduced those flattened tax rates and reduced taxes.

If we recall the debate prior to the 2000 election, the then Canadian Alliance was going to reduce taxes by $65 billion. The government trumped it and made it $100 billion. That is the reality. We just introduced on January 1, $4 billion in corporate tax reductions.

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

Madam Speaker, I listened carefully to the hon. member's speech concerning the issues around child poverty. Would he care to comment on some of the material that was contained in a graph in the finance committee report, which states effectively that there has been a general improvement since 1996 in the income of low income situations? The incidence of low income families with children went from 15.8% in 1996 down to 11.4% in year 2000. The absolute number of children on the low income threshold went from 1.1 million to 867,000.

The member and I would probably agree that one is too many, but would he not say that there is significant progress? Would he not agree that in 1996, 14% of everyone was below the low income cut-off line, where in the year 2001 it was 10.4%? In other words that is a 25% improvement. With children it is a 31% improvement over the same period of time, 1996 to 2001. In Ontario there was a 30.9% improvement, from 12.3% down to 8.5% of people below the cut-off line.

One of the more disturbing issues, however, is with respect to a single female parent. There was a significant improvement of 31% decline over that same period of time, but still a fairly significant and persistent problem with poverty and single parenthood.

I put it to the hon. member that over this period of time, coincidentally a period of time in which the government ran surpluses, there was a significant improvement in the lives of some of Canada's most vulnerable people.

[Dick Proctor, NDP, Palliser, SK]

Madam Speaker, I guess we can each look at our statistics and challenge one another. I am looking at child poverty rates in Canada between 1973 and 2001. The source is the Social Planning Council of Metropolitan Toronto and data taken from StatsCanada, Income Trends in Canada 2001.

Let me just reference 1989 because that was the year that Mr. Broadbent's resolution received unanimous support of the House. According to this graph, the child poverty rate was exactly 15%. Then it went up in the next four years to reach a high point of about 20.3% in 1993. Then there was some slight reduction, but not nearly as dramatic as the parliamentary secretary would suggest. There was a gradual reduction until 2001, where it sits miraculously as 15.2%.

In other words, over the 12 years, between 1989 and 2001, it went up 0.2%, which is hardly anything to get very excited about. Obviously it got worse, not better.

[Alexa McDonough, NDP, Halifax, NS]

Madam Speaker, I am very pleased to have the opportunity today to briefly speak on Bill C-30, an implementation bill with respect to the government's most recently introduced budget. Sometimes the debate can seem to be somewhat ritualistic.

However, I am very pleased and I want to congratulate the member for Palliser for zeroing in on the issue of child poverty. If the current Parliamentary Secretary to the Minister of Finance, a supposedly Liberal member, is satisfied with this government's record in terms of reducing child poverty, then it illustrates, better than almost any other public policy issue that one could use, how little difference there is today between the Liberal government opposite, the no longer Liberal government opposite and the no longer Progressive Conservative opposition party.

I listened carefully to the words that were uttered by the member for Scarborough East. In itself it is telling that we have now within this so-called Liberal government a parliamentary secretary specifically assigned to advance, and I would presume accelerate, the rate of privatization taking place under this so-called Liberal government.

I listened to his speech on Bill C-30. I then listened a few moments later to the speech by the member for Prince George—Peace River. If we went back 10 years ago, his party was significantly different in terms of its policies and priorities than the Liberal government was at the time. However, when we listened to those two speeches side by side in juxtaposition in the House this morning, I would defy anyone to see any fundamental difference between those two political parties.

Canadians need a serious progressive alternative. That progressive government in power would have brought in a very different set of priorities in the budget we are now debating, and the implementation bill that is now before us.

I just about fell off my chair when I heard the prescriptions that were offered up by the parliamentary secretary for privatization to genuinely improve the well-being of Canadians. No wonder we are making so little progress in tackling child poverty. We heard the member for Scarborough East say that we needed to grow the pie. When did we last hear that as a banner headline all over this country? It came from one of the contestants for the leadership of the no longer Progressive Conservative Party.

The contention that Canadians are better off today because this Liberal government has pursued vigorously and conscientiously the policies advanced by the Conservative Party is exactly what is wrong with what is happening.

We heard that there were two ways to increase productivity. One is to have people working harder and the other is to have people working smarter. I want to take those two prescriptions and relate them right down on the ground at the grassroots level in my riding of Halifax as to what is happening in the lives of a good many Canadians. They are supposed to be better off as a result of this government's pursuit of those ultra conservative prescriptions to supposedly to do something to ensure that we eliminate child poverty, as this Parliament unanimously resolved to do in 1989.

Let me take first the example of child care. Child care workers in Halifax are working their guts out for terrible pay, and they cannot work any harder, despite the fact that they have taken the training that has allowed them to work smarter.

Child care centres are closing because governments have not increased the per diem funding for those child care centres serving low income families that are also working their guts out, harder and harder, for poor pay. It has not been possible to increase their operating budgets because per diems have not increased. The result is that we have child care centres closing all over the place. How that works to support working people in being able to better support their families and work harder and work smarter, I do not know.

I want to speak about the medical residents, just one example of health care workers in my riding who are working their guts out. They are often working 36 hour and 40 hour shifts to try to meet the needs of patients because hospitals are under-resourced and short-staffed, because the government has taken tens of billions of dollars out of our health care system. Yet the parliamentary secretary talks about people needing to work smarter and harder. Those medical residents with whom I met in the QE II Hospital in my riding on Sunday during a medical residents awareness week initiative could not work any smarter or any harder.

And do we know what? Their families are paying a terrible penalty for how hard the residents are working and they themselves are paying a terrible penalty in massive debt loads. In one case, a husband and wife team of medical doctors has a debt load of $212,000 before they even begin to earn the kind of pay that people imagine medical doctors earning.

I want to speak about disabled persons in my riding. I met with a disabled man in my riding who has been absolutely breaking his back trying to get employment. He has been trying to generate employment with supposed support from programs that have been so shrunken down he cannot even get a foot in the door to get a job to work harder and work smarter.

I am going to finish with a reference to what is happening to our senior citizens. Last Friday I had the privilege of attending a tribute dinner to Dr. F. R. MacKinnon, Fred MacKinnon, who served the Province of Nova Scotia and the people of Canada as one of the most senior long-serving deputy ministers in this country. For 55 years he served the people of my province of Nova Scotia and the people of Canada, driving progressive social policy. He had a lot to say about what is happening to seniors today, particularly as they reach their pension years.

He says they have been robbed of adequate pensions because of the policies corporations have been allowed to pursue due to inadequate government regulations, because of privatization, and because of policies pursued by government itself. Because of privatization, because of contracting out, because of shipping out the risk and shrinking down the benefits, people do not have the kinds of pensions that allow them to deal with the everyday demands of life.

The fact that the parliamentary secretary, presumably speaking on behalf of the government, can be proud of the results of the government's implementation of these ultra-conservative policies is very instructive to the people of Canada as we go to the polls in the next few days or weeks, as we surely will.

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

Mr. Speaker, I find the speech given by the member for Halifax utterly bizarre. For goodness' sake, over the past five years, from 1996 to 2001, the low income rate for all Canadians has dropped by 25%. I would have thought that the hon. member would celebrate that. It will hardly be the end-all, but for goodness' sake, when rates are dropping 25% for all persons, 31% for children, and even 31% for single parents, then surely to goodness this is something to be celebrated rather than criticized.

Is there more to be done? Of course there is more to be done. There will always be more to be done, but for goodness' sake, when the rates are actually moving in the right direction then surely to goodness the hon. member will admit that things are moving in the right direction.

With respect to the so-called issue of privatization--and the NDP improperly characterizes triple-Ps as privatization--I put it to the hon. member that other jurisdictions such as Australia, Great Britain and other European countries do not have the juvenile dialogue the hon. member's party represents. They have actually gone to positions where they have put up a PFI and they evaluate a particular project as to whether it is more appropriately done through government-only financing or through P3s. In virtually all instances where it has been decided to do P3s, 88% of the time they come in on budget and on time, whereas the government-only initiatives come in on time and on budget only 30% of the time.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I would like to respond directly to a couple of matters the parliamentary secretary spoke about.

The child poverty rate in this country is higher today than it was in 1989 when this Parliament resolved to eliminate child poverty in Canada. The child poverty rate at the time was 15%. Today it is 16%.

Maybe we need to have a debate on that alone, because the reality is denied by members opposite, not just by the parliamentary secretary--I do not want to pick on him--but by other members as well. The reality is that they deny the fact that we have a deepening of child poverty, that we have a racialization of child poverty in this country and that we have a feminization of child poverty. But however it is described, child poverty is at a higher rate today in the country than it was in 1989 when the Broadbent resolution was adopted unanimously by Parliament.

The government in power for the last 11 years has been the Liberal government, and the more it has implemented the Conservative policies of the Alliance, the more we have seen a deepening of that child poverty.

I want to speak briefly about the privatization that the parliamentary secretary applauds and lauds. He spoke about privatization in Great Britain. I have just received a report on the disastrous effect of privatization of the British railways. It is a disastrous report; they are in such trouble with that railway that they are trying to figure out how to re-nationalize it.

Then we have the airlines. In New Zealand airlines were privatized and deregulated. The airlines turned into a total disaster, looking a lot like Air Canada looks today, and what did the new Labour government in New Zealand do? What was it forced to do when it got back in power? It was forced to re-nationalize the airline because no other way of turning around the situation could be found.

So that member may know of a lot of privatization successes in terms of the corporations making big money: it is public money for private gain. That is what privatization is. When it comes to health care privatization, this government keeps speaking out of both sides of its mouth on that issue. I have to say that if this government thinks it is going to run an election on the contention that it is the champion of public and not for profit health in this country, I say bring on that election.

[Dennis Mills, Liberal, Toronto—Danforth, ON]

Mr. Speaker, I appreciate the opportunity to speak on the budget implementation bill. In my remarks today, I want to deal with accountability of budget dollars and the whole issue of value for taxpayers' money. I think that when Canadians hear about our budget process and the large numbers that go through for various government programs and services, as important as all those program dollars are, it is really important for Canadians to understand that we have a system of accountability for those budget dollars, a system of verifying value for taxpayers' money.

I want to refer to something I said in the House about a year ago:

Mr. Speaker, I want to begin by acknowledging the work done by the member for St. Albert as the chair of the Standing Committee on Public Accounts. I have watched his work over the last few years and it is an extraordinary piece of government accountability that he organizes through his committee experience.

Over the last 10 weeks I have had the great privilege of sitting on the public accounts committee, where we are in the process of responding to the Auditor General's report on the whole issue of government-wide audit of sponsorship, advertising and public opinion research.

I believe that most Canadians, and in fact 90% of Canadians, have an understanding, because of misinformed or improperly written journalistic stories, that $100 million of taxpayer money was stolen. In fact, a few weeks ago in our committee, one of the members said repeatedly that Canadians want to know who stole the $100 million. When Canadians hear that on a repeated basis through radio talk shows, through television, and when they see it in print articles, it immediately fractures the trust in the House of Commons. It immediately fractures and breaks the trust in all of us who have been dedicated to public service.

Part of my remarks this morning will be an attempt to try to put on the record during the budget implementation speech some facts that are extremely relevant for Canadians to know in terms of value for money. It is so important, because if we do not have a system of trust with Canadians, then in future times when we decide we need to use government advertising and government communication systems to educate Canadians on the very things we are passing in the House of Commons, we are going to end up creating such a gap between what is going on in the House and where the public is.

I want to first of all clear up something, because it is in fairness to the Auditor General. Again, a few years ago in the House I stood and asked that the Auditor General's budget be quadrupled, because I did not think that $1 million a year per department for audit fees was really sufficient. If we do not have sufficient resources to really do a job thoroughly, in the end we all suffer.

I do not want anyone to take my remarks in any way, shape or form as being critical of the Auditor General because I have always supported Ms. Fraser. However, I want to illustrate where misperception can cause great frustration for all of us as parliamentarians.

I want to begin by reading into the record that Ms. Fraser said yesterday that she had never, ever said that $100 million was stolen. I think most Canadians saw that on television last night and it was reported in some press this morning. The point I want to illustrate in my remarks today is that the system of doing the audit on the whole sponsorship file is something that I personally believe needs review.

We all know that over the last five years, for the period that the Auditor General did her analysis, there were 1,986 special events or projects all across Canada. I stress across Canada because initially the press reports were that $100 million went to Quebec Liberal-friendly ad agencies. That is a dangerous thing when it is factually not correct. The reality is that about $65 million went into projects in Quebec over the five years but the balance, approximately $30 million, went to agencies outside of Quebec, to agencies in Atlantic Canada, British Columbia and Ontario.

This is a key point for all Canadians to realize. I have been very concerned about the fact that this was becoming a Quebec-centred mistake. The reality is that the program was to serve all of Canada. It was to serve every region of our country.

The second point is very important for Canadians to understand. This goes back to the work in public accounts on accountability and value for taxpayers' money. I refer to a letter that was delivered to the committee on April 26, signed by Sheila Fraser, Auditor General, wherein she identified the 53 special events that formed the basis of her formulation or judgment on the entire 1,986 events.

Paragraph 3.60 of her report states:

Most of the 53 files in our audit sample contained no assessment of the project's merits or even any criteria for assessing merit. No file contained the rationale supporting the decision to sponsor the event. Furthermore, in 64% of the files we reviewed, there was no information about the event organizers, no description of the project, and no discussion of the visibility the Government of Canada would achieve by sponsoring the event.

The Auditor General, using that criteria, has judged certain events, and I am going to name a few of them, where there was no assessment of the projects' merits or no discussion of visibility. These are some samples: the Pan Am games; the Bluenose , which went to 38 cities in Atlantic Canada and even through the Great Lakes; the Molson Indy in Vancouver; the Montreal Canadiens hockey club; the Rimouski minor hockey tournament; the Nagano winter Olympics.

Just think, there was no assessment of the projects' merits or visibility of the Government of Canada. I say humbly that all of Canada saw all of those events. We all know those events happened. I personally question why in the audit process we would not double check and make sure that the Pan Am games happened, that the Olympic games happened. If one would check, it would be pretty obvious that these things happened.

I want to give a very specific example about Rimouski because I was the one responsible on that particular project. I was the chair of the House of Commons committee on sport at the time. The member from Rimouski approached me about a small minor league tournament in the member's riding. I appealed on behalf of the member for a $10,000 sponsorship in the Bloc Quebecois member's riding. The event happened and it was widely reported.

Under paragraph 3.60 it says there was no assessment of the project's merits or no discussion of the visibility. With respect and humility, I have to ask myself, is this a fair analysis? I am not saying that there were not other projects where maybe we did not get that, but to extrapolate from 53 projects when all 1,986 were in the same category I think is something that needs to be reviewed.

Paragraph 3.69 of the Auditor General's report states:

There was little evidence that any communications agency had analyzed the results of sponsored events in our sample.... There was no post mortem report and therefore no evidence that the government had obtained the visibility that it paid for.

I have difficulty with this because one of the projects that was identified in the Auditor General's list of 53 was the team Canada China project.

Canadians should know that Vickers & Benson, an award winning agency from English Canada, received a little over $9 million, almost 10% of the total fees and production costs, to produce 30 28-minute specials that went on television all over China. Those 30 28-minute shows talked about doing business with Canada, the cultural assets of Canada, tourism in Canada, and on and on. A third party did a post mortem. It was reported in committee two weeks ago by the chairman of the board of the agency, Mr. Hayter, again from Toronto, that the value added on that investment of $9 million was $51.5 million. However, it is one of the clouded programs; it is one of the stained programs.

Under paragraph 3.60 it was no in terms of assessment of the project's merits, but the auditor said yes in paragraph 3.69 that the post mortem was there. I would go one step further and say this is an example where the value plus, the net gain to Canadian taxpayers, was in excess of $40 million on that one project.

I want to give an example of another project. I have the reports in my hand. They were listed as well. It is 17th on the Auditor General's list of the 53 out of 1,986 projects she reviewed. It is the post mortem and economic impact analysis and has to do with the Government of Canada and the Molson's Indy in Vancouver.

The report analyzes every bit of GST and PST. It is the most sophisticated breakdown of taxes: initial, direct, indirect, business, property, personal. Again, the value in excess of the investment is 10 to 1. When we are dealing with Canadian taxpayers' money and we are talking about budget implementation, I believe that when projects are being evaluated, if there is a value plus or a value added, especially if it is an incredible amount, it should not be put into a file where there is a cloud over it.

For the Molson Indy in Vancouver, which is a car race, under paragraph 3.60, it says that no, there was no assessment of the project's merits. It says that there was no rationale supporting the decision to sponsor the event, no discussion of the visibility the Government of Canada achieved by sponsoring the event. On the Molson Indy in Montreal, Toronto and Vancouver, the Government of Canada's presence is not only national, it is international. It goes to literally hundreds of countries.

It was no on the assessment of the merits but it was yes, the auditors did in fact see the post mortem. Even though the auditors saw the post mortem and the value added was there, Canadians feel that the project was stained.

We have a very difficult challenge here on a good day of building trust with Canadians. It is really important that when things take off in the media that are not factually correct, even if it is unpopular, even if it means we have to go against the wind in terms of public opinion, it is our responsibility to get to the facts and the truth and not just piggyback on a whole tirade of factually incorrect statements.

In the books and records on some of these files, 53 files in fact, the Auditor General said that in 49% of our files, there was no post mortem. I am not suggesting for a second that we cannot keep better books and records on this file, but it is the idea that we leave with Canadians. And thank God for the Auditor General who came in yesterday and corrected statements that were being made and articles that were being written that $100 million was stolen. It is the duty of all members when they are working on value for taxpayers' money that they do not just go with the lemmings, but that they stand up and get to the facts, that they get to the truth.

Therefore, I move:

That the question be now put.

I want to end my remarks by saying that in no way, shape or form am I questioning that those files were not up to speed, but we also have a duty to get to the bottom of this file, as we have been doing so well in the public accounts committee. Where there is value for money, we should also acknowledge that. Those files that are stained, that is the work for the RCMP.