That is not too bad for a government that claimed it was on a tight budget and could not meet the basic needs of its citizens in the areas of health, education and support to the disadvantaged. Not too bad for a government that claimed it had to tighten its belt because the public purse was in a bad state.
This year again—as my colleague from Medicine Hat has said—we in the opposition parties have retained the services of a group of independent experts so that there will not be the usual criticism that the Bloc Québécois, which has been within 3% in its estimates of the surplus at the beginning of the fiscal year ever since 1998, is exaggerating. In fact, the Standing Committee on Finance has hired independent experts who come and report to us every three months on the changes in public finances and provide us with their estimate of the surplus.
This year again, the Conference Board predicts a surplus of $10.2 billion, and Global Insight $12.4 billion. We ourselves estimate it to be between $10 billion and $11 billion, yet the government says it is in the $3 billion to $4 billion range.
That is utter nonsense. Since 1998, they have been hiding a margin of nearly $235 billion that could have been used for something other than enhancing the government's visibility. We will come back to that.
Not only has the government been hiding its considerable margin from us since 1998 and continues to do so, but it also continues to deny the fiscal imbalance and future structural surpluses, even though it acknowledges their existence through Bill C-67.
Despite this large margin, there have been some unbelievable inefficiencies in the machinery of government since it has been posting surpluses. When you are swimming in someone else's money and you have the authority to spend it, it is only human nature to waste it. I am referring to the numerous scandals. In fact, the sponsorship scandal is one of many. For example, we are still looking for the billion dollars that Human Resources Development Canada lost a few years ago, when the current Minister of Foreign Affairs was in charge. We are still looking for an explanation for the shameless waste of $1.5 billion in the gun registry, a program that was supposed to cost between $10 million and $20 million.
As you can see, the Bloc Québécois cares about sound fiscal management. Since the beginning, since 1993, we have been concerned about the sound management of the taxes paid by Quebeckers and Canadians, especially the $40 billion Quebeckers send to Ottawa. Nonetheless, we have noticed that since there have been surpluses, the federal government spending machine has been set in motion. In other words, it has taken the bit in its teeth.
Two years ago, the Bloc Québécois set up a committee that we christened the Léonard committee, after the former president of the treasury board of Quebec, Jacques Léonard. He wanted to get involved, as did my colleague, the hon. member for Joliette, my colleague from Drummond and myself. My colleague from Portneuf—Jacques-Cartier also joined the committee.
We conducted an in-depth examination of all bureaucratic spending by the federal government, and the results are disgraceful. From 1998 to 2003, when cumulative annual inflation was approximately 9.6%, federal government spending increased by 39%. We have verified these figures for the past two years. We discovered that during that period, while cumulative inflation hovered between 4.5% and 5%, federal spending increased by 20.4%. This is an outrage.
Yet, everyone was asked to tighten their belts before 1998, in order to eliminate the annual deficit. People have made sacrifices. However, the government has been hiding surpluses since 1998 and is therefore preventing the governments of the provinces and Quebec from fulfilling their fundamental mandates in health and education, and helping the most vulnerable members of our society.
Other people's money is being frittered away on operating budgets and bureaucratic spending in Ottawa. This is money that would normally go to the unemployed whose EI fund surplus is being stolen year after year. These surpluses correspond to employer and employee contributions; the federal government does not contribute one red cent. These are contributions from sick people who are waiting for treatment. There is not enough money for health care. The accord reached over a year and a half ago, thanks to which victory was declared and the federal government could appear to be a great saviour, was only enough to run the health care system in Quebec and the provinces for nine days. In the meantime, bureaucratic spending went unchecked.
The Léonard committee provided another important statistic. From 1998 to 2005, in other words from the time they started to generate surpluses using other people's money, on the backs of the unemployed, the sick and students drowning under student debt, payroll expenditures increased by 55.6%, an annual increase of 6.5%. This is more than double the inflation rate. This makes no sense whatsoever.
The government made major cuts to social programs, particular from 1995 on. They changed the criterion for social transfers for welfare, post-secondary education and health from needs-based to population-based. “They” means the present Prime Minister, and former finance minister, that man of great compassion. He is the one responsible for the drastic cuts since 1995. During that same time, the government's increasing revenues were being added to the savings achieved at the expense of our society's most vulnerable members.
Since 1995, federal revenues alone—not the savings in expenditures—have gone up by $76.6 billion. Over that same period, transfer payments to Quebec rose by $794 million, 1% of that figure. One per cent of the additional $74 billion has gone to increase transfer payments to Quebec since 1995. Disgraceful.
The Prime Minister, and former finance minister, achieved those budget cuts at the expense of the least advantaged members of society, including the unemployed excluded from EI because of tighter eligibility criteria. Otherwise, if the surplus had been reinvested in broadened accessibility, none of them would need to be on welfare now. The government is responsible for people having to move from EI to welfare, the latter being the responsibility of the Government of Quebec and the provinces.
At the same time as the provinces and the unemployed were being deprived of funds, the provinces' expenses were being increased, since they had to support people who had been literally thrown out on the street. This is the work of the Prime Minister, he who is so full of compassion for Canadians, whom he says he wants to help out of poverty. Come on, now, he is the one who has been putting them in it up to their necks since 1995.
If the transfer rate had been maintained for funding health and post-secondary education—that is to say colleges and universities—and to help the most disadvantaged, an additional $16.1 billion would have been transferred since 1995 to the governments of Quebec and the provinces for them to carry out their basic responsibilities.
This morning I heard the Minister of Finance talking about incredible tax cuts. In reality, Bill C-67 provides for the allocation of the “surprise” surpluses that the government might realize over the next few years. We call it a “surprise” even though we know about it a year in advance because we can figure it out with a little pocket calculator bought for $ 2.49 at the corner store. But for him, these are surprises. I do not know what they like about surprises; it is more fiddling with the figures.
Under this bill, if surpluses are anticipated at the end of each fiscal year, one third will be allocated to paying down the debt, one third will be allocated to tax cuts for taxpayers, and one third will be allocated to programs, but according to the government's priorities. These priorities could change along the way though, still according to Bill C-67, if the government so desires.
In reality, the government will continue doing over the next few years exactly what it has been since 1998. It will use its discretionary power to choose its own priorities, not those of Quebeckers and Canadians. That is what it has been doing since 1998. So what has changed?
In regard to these fantastic tax cuts, I would like to provide a small example of what they could be. Suppose that the surplus is $9 billion this year. Three billion would have to be set aside in a contingency fund. This has been automatically allocated to the debt since 1998. So we can forget this first $3 billion. There would be around $2 billion for new expenditures. These would not be the next expenditures but expenditures already included in Bill C-48 passed last June before the House adjourned for the summer. That is what would become the priority.
Therefore, $4 billion in surplus will remain after the reserve fund and the commitments under Bill C-48 have been satisfied. Let us suppose that if the surplus were just over $4 billion, $2 billion could be used for personal tax cuts. Do you know what that would mean for the 15.5 million taxpayers in Canada? That would represent $129 for one year. That is wonderful! We must applaud the government. A tax cut of $2 billion for 15.5 million taxpayers in Quebec and Canada would give them each $129. It is a joke to talk about whopping tax cuts; it is sheer visibility.
In reality, the federal government has sacrificed the economic and social development vision a government should have for visibility alone.
We have become accustomed to this government's finery: Canadian flags everywhere, cheques for fuel, etc. They are looking for visibility. You cannot run a society and make progress with visibility, you need a vision for development to do so.
We have just toured through several regions in Quebec. We have seen this government's lack of vision. Despite the billions of dollars in surplus it is been amassing since 1998, this lack of vision is killing entire communities, especially in the outlying regions. The remote regions have been totally abandoned.
All this visibility for a measly $129 cheque or a personal exemption for the same amount at the end of the day. This is a lot of talk for so little money.
We are talking about $2 billion for 15.5 million taxpayers. If the government was thinking about a vision instead of visibility, it would see that this money represents half the new investment the underfunded colleges, CEGEPs and universities have needed over the years. Last week's demonstration by students calling for $4 billion more did not come out of nowhere. It came from the fact that for the past 10 years, the Liberal government's savage cuts have not made it possible to give the colleges and universities the funding they should have received.
This too is the result of another of the Prime Minister’s promises which he has not kept and which has bit the dust. In the election campaign, when he was on the ropes, he was offering things to everybody. He promised students in the colleges and universities of Quebec and Canada to invest $4 billion in the education system, which is now suffering from underfunding. Fine words in an election campaign, aimed at saving his skin. They talk about the future of our children. They say the future of the Canadian economy depends on the education of our young people, on their knowledge, since ours is a knowledge-based economy. But when the time comes to act, there is no follow-up. They say that enough money has been invested in education. What lack of vision. So that every taxpayer can be offered an annual cheque for $129, we are in the process of sacrificing the education system of Quebec and Canada.
A sum of $2 billion, that is also what Quebec is lacking in equalization. If they corrected the formula and used real figures, a real method of calculating the pan-Canadian standard—that is, taking the ten provinces into account—and property tax, Quebec could obtain $2 billion with the equalization adjustment. That is the very amount we are scattering on needs of visibility and electioneering, that is, needs of very little importance which testify to this government’s lack of vision.
I listened to the Minister of Finance when he presented his bill. He said it was in line with what the opposition had asked for. What demagoguery. We made our request last spring, before the budget was tabled and before the revelation of the surplus figures for the last fiscal year. What we were asking for in the short term was to start correcting the fiscal imbalance by increasing transfers to the provinces for education, health and disadvantaged families, as priorities. We said that later, in the intermediate term, the government should sit down with Quebec and the provinces to work out a lasting solution for the fiscal imbalance.
We did not ask it to amass surpluses and plan a long-term distribution, but to correct the fiscal imbalance through a transfer of fields of taxation, such as the GST, and by correcting equalization. That would have ensured stability in Quebec and the provinces. But there is nothing in this bill that will correct the fiscal imbalance. They do not have the will, even though they recognize, by the very existence of Bill C-67, that there will be structural surpluses in the years ahead. This is testimony to the ongoing fiscal capacity of the federal government to generate surpluses, even though it does not need them to carry out its core mandates, and to the undercapacity of the governments of Quebec and the provinces to carry out their own mandates and provide direct services to the population, for lack of money, because that money is being siphoned off by Ottawa.
So we are going to oppose this bill. We will attempt to amend it so that there is a permanent and lasting solution to the fiscal imbalance. However, we cannot support the fact that, on account of the fiscal imbalance, it may be necessary to distribute in the coming years, at the rate of one third, one third, one third, the surpluses that the government will continue to outrageously accumulate.