Mr. Speaker, I am very glad to take part in the debate today, dealing with equalization. As we know, equalization has been a long term program of our federal, provincial and territorial governments. It is enshrined in our Constitution. Last year it was up for debate. With the arrangements that were made between the Prime Minister, the Minister of Finance, federal officials and their provincial and territorial counterparts, today Bill C-24 arrives in the House at report stand and third reading stage.
We have had a number of meetings with provincial and territorial ministers. With those, our federal government is doing its best to work out programs in the interest of all Canadians. We have concluded a health care accord, and soon we will receive a bill in the House that will deal with health care arrangements.
The equalization arrangements are being debating today, after coming back from the Standing Committee on Finance. All parties involved in the meetings of the finance committee have given great support to the program and to Bill C-24.
We also have been negotiating with the provinces, dealing with child care and communities programs. I can assure the House that our federal officials, our ministers and Prime Minister work diligently and faithfully to try to conclude arrangements for the betterment of all Canadians.
I am a bit concerned, though, when I hear some people refer in the House and across the country to have and have not provinces. Really, there are no have not provinces. However, certain provinces within our federation have more capital, better assets and better programs and have the fiscal capacity to deal with their issues better than others. In terms of this arrangement and as of this date two provinces do not receive equalization payments while eight provinces and territories receive some response from these arrangements.
The fiscal imbalance to which some people refer is not due to the people living in those provinces, but more to the economy of this great nation of ours. Many areas of Canada buy products that are manufactured in certain provinces. They look to other provinces for their oil reserves. They look to the natural resources of all provinces and within that context, they attempt to make amicable arrangements by which the wealth of a nation can be shared.
It is important that our provinces and territories have room to negotiate and, above all, room to plan their activities over the next period of time. The bill gives an opportunity for provinces to plan their future activities and programs.
There is a guaranteed growth track within the bill and within its arrangements. The approach includes five key elements: a new minimum funding floor of $10 billion for equalization and a $1.9 billion for TFF for the year 2004-05; complete protection for provinces and territories against overall and individual declines in payments in that year; a level of $10.9 billion for equalization and $2 billion in TFF in 2005-06; a growth rate guaranteed at 3.5% until 2009; and an independent panel to advise on the allocation among provinces and territories.
Over the next 10 years and subject to review in 2009-10, the new framework will provide $33 billion more in equalization and TFF payments to provinces and territories. This is compared with the annual entitlements for both equalization and TFF, according to the estimates in the February 2004 budget and according to the official October report, of $12.5 billion in 2009-10, an increase of 42% over the next five years.
Again, starting in 2005 the Government of Canada will establish a legislated financial framework for equalization and TFF with fixed overall payment levels that provide predictable and growing funding. In 2005-06 funding levels will be set at $10.9 billion for equalization and $2 billion for TFF, the highest levels ever reached by these programs. Both amounts will grow at a rate of 3.5%.
In addition the Government of Canada will also launch a review by an independent panel of experts on how the legislated equalization and TFF levels should be allocated among provinces and territories in the next year. Provinces and territories have been invited to appoint two members to the panel.
This review, among other things, will evaluate current practices for measuring fiscal disparities among provinces and territories. It will examine alternative approaches, such as those based on aggregate macroeconomic indicators, for example, the GDP, disposable income, or expenditure needs. It will review the evolution of fiscal disparities among provinces and the cost of providing services in the territories, to help governments and citizens evaluate the overall level of support for equalization and TFF. It will advise whether the Government of Canada should establish a permanent independent body to advise it on the allocation of equalization and TFF within the framework of legislated levels.
The Government of Canada, meanwhile, will remain fully concerned about accountability and responsibility for all decisions and will continue to consult extensively with provinces and territories.
The mandate of the panel is an advisory one and the federal government will make decisions based on advice received from the panel and the provincial and territorial governments. This expert panel will report back by the end of 2005 in time to provide advice on equalization and TFF for 2006-07.
Above all there is a guarantee of a complete floor protection. The framework will provide a floor protection to every province and territory to ensure that entitlements for 2004-05 are no lower than the levels forecast in the 2004 budget.
The effect of these various programs that we are arranging, in fact the programs in terms of health care and equalization, will provide a cumulative increase of $74 billion over 10 years compared to the annual levels estimated in the February 2004 budget.
Finally, I would like to allude to my own province of New Brunswick, which is very happy with the arrangements. The premier has expressed his approval and the fact that he is able to continue to provide new programs for people in New Brunswick.
According to the data that we have before us, the province of New Brunswick will receive $1.181 million on a total of $9 billion in equalization in this fiscal year. It is about $1,572 per person. For New Brunswick it will mean about $152 million in additional payments and with it, New Brunswick over the next 10 years will receive more than $800 million in additional health transfers.
I am very happy with the bill. I hope it will proceed at high speed through the House and that we as Canadians, and especially as New Brunswickers, will receive the benefits of the new equalization program as we approach the next taxation year.