Madam Speaker, I would like to thank the hon. member for Montmorency—Charlevoix—Haute-Côte-Nord for his questions and comments on tobacco farmers. The issue is not well enough known, unfortunately. Every time we have a chance to talk about it, we can put a little more pressure on the government to settle the matter finally.
He is right. In my opinion, Mr. Séguin did a great deal, first to get the concept of the fiscal imbalance recognized and then to explain the size of this imbalance and the solutions that could be applied.
In a way, we have made considerable progress in this debate. We all remember what the Quebec federalists said when we first talked about the fiscal imbalance. And yet, the concept was not invented by the sovereignists. The first person to mention it was Jean Charest, now Premier of Quebec, when he was opposition leader. Some people, including some editorial writers close to the Liberal Party of Canada, have said that it is a concept invented by sovereignists to promote sovereignty.
No one now denies the existence of the fiscal imbalance, except perhaps the federal Liberal MPs from Quebec. Last week, I read an article by Claude Piché, an economic reporter with whom I rarely agree. This time, however, on the eve of the budget, he was also calculating his expectations in terms of corrections to the fiscal imbalance.
Perhaps I will mention a few figures. Just now I pointed out that the negotiations in recent months concerning fresh transfers of money to the provinces, to Quebec in particular, only came to an additional $800 million, while the shortfall is estimated—according to Mr. Séguin of the Quebec government, of those federalists who often but not always have the interests of Quebec at heart—at $3.3 billion. Thus, if the gap is $3.3 billion, and $800 million of fresh money comes in, $2.4 billion is still needed in order to correct the fiscal imbalance.
I have a few figures for the current year, 2004-05. The amount transferred before the agreement, or the various agreements, was $14.150 billion. Now, with the new funding that has been announced—here I am not speaking only of Quebec, but of all the provinces—funding of $2.125 billion, the new total for funding is $16.275 billion.
Provincial spending on health is $83.133 billion. That means that the federal government's share in health care funding is only 19.6%. We are a long way from the 25% Romanow recommended. That is a shortfall, just in health, of $4.5 billion, which the provinces would be getting if the federal government were assuming 25% of health care costs, but are not.
Since the agreement is spread over 10 years, it could be said that things will be better in 10 years. Nonetheless, the calculations that were done—I did not do them, it was the Conference Board which published its report in August 2004—show that after all the agreements, this 23.8% share of health care funding will remain unchanged, if health care expenses increase at a limited pace.
We see that, if nothing is done to resolve the fiscal imbalance, despite the agreements on health and equalization—and the health accord is a relatively positive measure, as I said, but does not go far enough—the fiscal imbalance will continue to grow. The financial problems experienced by the provinces and Quebec will get worse.
While the federal government is paying down its debt—and I remind the House that in recent years, an additional $60 billion was misappropriated, from both the employment insurance fund and excessive taxation by the federal government, to pay down the debt—the provinces are having trouble balancing their budgets. A number of them are running a deficit. So, this ensures that the provinces and Quebec will continue to see their debt spiral.
I repeat again that there is no logic either financially or in terms of services, because the provinces and Quebec pay a much higher interest rate than the federal government. This means that money is being taken from those paying significant interest on their debt, and the federal debt, which has a lower interest rate, is being paid off. Financially and in terms of services, there is no logic to this.
We must remember that a fiscal imbalance means fewer health care and educational services. This will not fix itself over time.
For example, when a child is living in poverty because the federal government has cut employment insurance and does not want to transfer the money to which the provinces and Quebec are entitled, via the social programs, that child is the one to pay the price. If the federal government does not remedy this in five years, that child will have lived in poverty for five years, and the impact will be life long. This is something the bureaucrats in Ottawa just do not get. When a jobless person does not get benefits, the situation will never be remedied, because the economic and social insecurity of today will have an impact for the rest of his life. Child poverty has the same effect.
Every time the federal government puts off solving fiscal imbalance, social and democratic and service levels are affected. The harm done will never be remedied, even if we do manage to force the government to remedy the situation.
I will point out, before closing my remarks, that it is also a problem of democracy, if legislative assemblies, the Quebec National Assembly for instance, do not have the necessary resources to translate their decisions into concrete action. Parental leave is an excellent example of this. Since 1997, the Government of Quebec, whether Parti Québecois or Liberal, has had this more generous and more accessible parental leave on its books, but the National Assembly is incapable of implementing a democratic decision that reflects the will of the people of Quebec. We are dealing here with a real democratic deficit caused by fiscal imbalance and by the federal Liberals' lack of desire to correct it.