House of Commons Hansard #80 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was billion.

Topics

Budget Implementation Act, 2005Government Orders

10:40 a.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

I wonder why.

Budget Implementation Act, 2005Government Orders

10:40 a.m.

Liberal

John McKay Liberal Scarborough—Guildwood, ON

Well, in part because of provinces that cannot seem to get their acts together. I have had people in my office complaining that the money is sitting there and it is not being drawn down. When the money is drawn down, we will again review the situation. I would point out that affordable housing has become a lot more affordable under this government.

Budget Implementation Act, 2005Government Orders

10:45 a.m.

Conservative

James Bezan Conservative Selkirk—Interlake, MB

Mr. Speaker, I want to return to some of the comments that the parliamentary secretary made when answering questions from the member for Blackstrap.

He was talking about eligible expenses and gave the example of hobby farming. I know the parliamentary secretary is aware of the difficulties facing the farm community. We have a situation where we are going to see a sustained loss in that industry. A lot of the farms are not going to be able to show they have the potential to profit under the current definitions.

We also know that these current definitions affect other industries like real estate investment and would take some time to start showing any profit and any opportunity to have a return on those investments. How is the parliamentary secretary going to ensure that the stringent rules and guidelines we have today are not going to affect our productivity in the future.

A recent article in the Ottawa Citizen said that one of the greatest hamstrings we have in this country are the rules and regulations that prohibit investment. This is one of the things that is going to make people think twice about investing and starting these small sideline businesses while they work, and what hopefully will become a successful business down the road.

Budget Implementation Act, 2005Government Orders

10:45 a.m.

Liberal

John McKay Liberal Scarborough—Guildwood, ON

Mr. Speaker, the hon. member actually asks a good question. I know it is kind of a novelty here. The question revolves around REOP, reasonable expectation of profit. There are a lot of businesses that start up and, frankly, some are more successful than others. In fact, probably the vast majority are less successful than more successful. I do not remember what the statistics are on it, but my recollection is something in the order of 1 or 2 out of 10 are actually successful.

The government takes the view that there has to be a reasonable expectation of profit before one can deduct that against other income. If people set up businesses that have no expectation of profit, but they want to deduct their expenses against other income, whether it is pension income, other earned income or capital gains, then they will have troubles. I think that is the actual position to take.

As to encouraging small business to actually take off and go that way, there are a number of programs in place. The trouble with being in government is that one has to be able to walk and chew gum at the same time. One still has to have a reasonable expectation of profit and meet that definition. If one does not, I do not think anyone should expect to have deductions.

Budget Implementation Act, 2005Government Orders

10:50 a.m.

Conservative

Charlie Penson Conservative Peace River, AB

Mr. Speaker, I am pleased to take part in the debate today on Bill C-43, an act to implement certain provisions of the budget which was tabled just a short six weeks ago on February 23.

Unfortunately, this budget implementation bill is reflective of the Liberal government's arrogance that has plagued this Parliament for over a decade, back in 1993 when it was first elected. However, in this minority Parliament, it is time for the Prime Minister to stop behaving as if he had a majority and start governing, and take into account the best interests of Canadians. Unfortunately, that does not appear to be happening.

We in the Conservative Party have made it very clear that we believe the legislation contained in Bill C-43 should be divided into three stand-alone parts: first, legislation enacting Kyoto provisions; second, measures that fulfill commitments made to the provinces including the implementation of the Atlantic accord; and third, clauses traditionally found in budget implementation legislation.

Let me deal with the Kyoto measures first. We have a last minute decision by the government to include changes to the Canadian Environmental Protection Act and enabling legislation for a Canada emissions regulations agency. All it is, in this minority climate, is a crude bait and switch tactic that is not fooling anybody. I notice that the environmental community is not very happy about the government's tactic either, although the environment minister may have thought that he was going to have support there.

The Liberals knew the majority in the House however would not approve the Kyoto measures if they presented them in stand-alone legislation. That is why they attached it in a last minute amendment to Bill C-43. This move, at the very least, has delayed legitimate budget measures from implementation and may have even, depending on what happens in the next couple of months, put their very implementation at risk.

The government's cynical effort to divide and conquer has had the opposite effect. It does not matter what side people are on regarding the Kyoto debate. No one is prepared to swallow hasty, superficial and highly questionable Kyoto measures that are being presented in bad faith.

I would like to take a moment to talk about Kyoto and the whole business that was first developed in Rio back in the late 1980s. This is the government that sleepwalked its way to a very bad Kyoto agreement to begin with. Although it had left it for almost 10 years, it had to develop a position to take to Kyoto, Japan for the international conference that was taking place.

The Liberals hastily put a government position together. They went out and consulted with the provinces in about a week. They came back with a position the provinces could finally agree to, went to Kyoto, and doubled the amount of concessions that Canada was prepared to make, double what the provinces had just agreed to a week earlier. That is the kind of rocky start that they got off to, and quite frankly people are shaking their heads at the way that the government has handled this whole file.

From our point of view, these are not the same set of budget measures which the Conservative Party was presented with in the budget, and so we refused to defeat the government on the budget. Now we find this late amendment that has been brought in as a way to change things. It is a very strange approach.

Let me deal with the Atlantic accord. It is another problem we have with this budget implementation bill. I would say equally contemptuous is the Liberal tactic of holding the people of Newfoundland and Labrador and Nova Scotia hostage by linking the Atlantic accord provisions, which most members of the House support, with the obviously problematic Kyoto measures.

Members will remember the Atlantic accord. This was the promise that the Prime Minister made when he was slipping very badly in the last election, less than a year ago in June. He went to Newfoundland and Labrador to shore up his support and agreed that we had to make changes to the measures, especially on the offshore resource revenue. Then when the Premiers of Newfoundland and Labrador and Nova Scotia asked him to hold up his part of the bargain just a few months later, he was not prepared to do that. We all saw the negotiations that went on, including Danny Williams and his disgust at the way the Prime Minister had backed away from that agreement. Finally, under great pressure, the Prime Minister gave in.

We think the provisions of the Atlantic accord in Bill C-43 could be passed in one day in the House if the Liberals would table stand-alone legislation, but so far they have not agreed to do that very simple matter.

However, on April 6, just a short time ago, the leader of the Conservative Party rose in the House to seek unanimous consent for the following motion: “That, notwithstanding the Standing Orders or usual practices of the House, a minister of the Crown be permitted to table a bill without notice that implements the Atlantic accord; when such a bill is called for debate it be deemed read the second time and referred to a committee of the whole, deemed considered in committee of the whole, deemed reported without amendment, deemed concurred in at report stage, deemed read a third time and passed”.

Therefore, it is clear that the intent was to move this through very quickly. The accord was finally reached between the Premiers of Newfoundland and Labrador and Nova Scotia and the Liberal government after a great deal of pressure. However, the Liberals have linked it to the Kyoto amendment and this is problematic.

The member for Toronto—Danforth, the leader of the NDP, seconded this motion. We may disagree on many issues, but the Conservatives and the NDP share a sense of fair play and apparently the Liberals do not as they would not give their consent. Nevertheless, we remain united on this point. The Atlantic accord should be passed with no further delay, finally giving the people of Newfoundland and Labrador and Nova Scotia what they were duly promised in the last election campaign, which is a fair deal they so justly deserve.

The bottom line is that the Conservative Party does not believe in playing games with the well-being of Canadians and Canadians of that particular region on this issue. It is high time that the Liberals stop trying to score points and follow the lead of the Conservative Party by acting in the best interests of the people of Newfoundland and Labrador and Nova Scotia. We request that this be split away from this bill and if the government refuses to do so, we will try to accomplish that in committee when it comes to us.

Traditional budget measures are normally contained in these budget implementation bills. In the last election the Liberals campaigned against many of the Conservative initiatives which they seem to very strangely now accept, such as tax reductions. Our last platform, which the Liberals criticized as being fiscally irresponsible just about 10 or 11 months ago, committed to $58 billion in new spending and tax reductions over five years.

In budget 2005, the Liberals made $55 billion in new commitments for the same time period. Eerily and remarkably, almost exactly the same numbers. We could not afford them in June during the election campaign. They were highly irresponsible. Then the budget came down February 23, and strangely, the are exactly the same numbers. So it was just a crass political ploy at election time to discredit the Conservative Party. Now we see that it was affordable all along.

Unfortunately, many of the tax cuts embraced by the Liberals in the budget do not go far enough or occur fast enough to have a substantial impact on the well-being of Canadians. In fact, some people are calling the last budget “budget 2008” because many of the measures do not take effect until late in the five year period.

The personal tax relief measures in the bill are insufficient and back-end loaded. They amount to a reduction of no more than $16 next year. It is called the pizza of tax relief. One family could maybe buy a pizza with the tax relief it is going to get next year. So the Liberals back-end loaded many of these provisions and they are only going to be $192 when fully implemented in 2009. Not nearly enough, but it is the right direction.

The productivity enhancing measures in budget 2005 however are insufficient. They serve only to illustrate that the government is not taking the warning signs that Canada's high priority programs could be in jeopardy if comprehensive steps are not taken to grow the economy before the demographic crunch happens. I have been on the finance committee for some time. We have heard this story about the looming demographic change. We have an aging population in Canada. We will have less people paying the bills down the road. We believe that we have to take measures now to get Canada's economy going. We know that we are trailing our major trading partner, the United States, very badly in terms of productivity.

People may ask what that is, it really means we have a lower standard of living. It is not good enough. We have fallen behind very badly in the last 25 years. It means in real terms that people can understand that the average family of four in Canada has a take home pay of about $24,000 less than the average family in the United States.

What could people do with that? They could put some $2,000 a month on their mortgage payments. That is really what it amounts to in real terms. They could pay down their mortgage considerably faster if we had the same kind of standard of living as they have in the United States.

Why would we think that we should not aspire to have as high a standard of living? We have had it in the past. It is only in the last 25 years that we have drifted very badly. Our productivity has fallen so we are only about 75% as productive as the United States.

I would suggest that it is not the fault of Canadians. It is the fault of policy makers who put us into a whole bunch of areas of government spending in which we do not need to be involved any more.

Let us take some steps now to correct that before the big demographic crunch happens. Canada's productivity slack not only curtails the Canadian standard of living now but it puts the future affordability of our social programs into serious jeopardy. The time to fix a leaky roof is when the sun is shining, not to wait for a downpour to flood the house.

Some of the measures in the bill do not reflect how they were presented in the budget document. While the budget noted that each of the territories would equally share $120 million in trust, part 6 of Bill C-43 leaves the allocation up to the terms of the trust indenture. Maybe that is fine but maybe it is not. It does not spell it out.

Budget 2005 said that $150 million for the green municipal fund would be applied to clean up brownfields. We heard about the need for that many times but no stipulations to that effect were made in part 8 of Bill C-43, which I think is also an oversight or an error.

With regard to the much talked about gas tax transfer to the municipalities that the parliamentary secretary talked about a little earlier, part 11 of Bill C-43 only authorizes payments to the provinces regarding the gas tax until 2005-06 even though the budget stated that the amount of the share of the gas tax would rise to $2 billion annually by 2009-10.

I think some provisions still need to be cleared up.

Provisions to help low income seniors do not come out as beneficial as the Minister of Finance's budget speech would lead us to believe. For example, part 23 of Bill C-43 says that unless the provincial governments raise the comfort allowance amount, the total amount increased to the GIS, the guaranteed income supplement, would not be paid to seniors living in subsidized nursing homes but rather to the nursing home operator or the province.

There may also be provincial programs, such as GAINS in Ontario, which would claw back half of the GIS increase so that it may not be quite as rosy as the finance minister has suggested.

The area on which I am the most critical is the area of surplus projections. We just had the budget six weeks ago. The finance minister told us that the budget surplus for the year that just ended March 31, and he was only a few weeks away from it at the time, would be $3 billion. That has been changed many times this last year but we have heard him say there would be $3 billion.

Unfortunately, I suggest it is somewhat like the fiasco of last year when the finance minister stated that the budget surplus would be $1.9 billion and it magically turned out, after the election I might point out, to be $9.1 billion. A lot of people thought that maybe the finance minister was dyslexic or something when he got the numbers opposite but it turned out to be a huge advantage for the Liberal Party during the campaign. The Liberals said that they could not afford all the promises that were made by the Conservative Party but, alas, they could have afforded it all along because instead of a $1.9 billion surplus it turned out to be a $9.1 billion.

I am suggesting that the finance minister pull up his forecasting socks and stop hiding taxpayer dollars by lowballing surpluses.

Some people might want to know what is wrong with lowballing. What is wrong is that in the last seven years we have had seven consecutive budgets where the finance ministers have lowballed the surpluses and we actually had $80 billion more than the government said we had over the last seven years.

Why is that important? It is important because Canadians are shut out of the debate of how that money should be spent and what their priorities are, or, conversely, maybe too much tax money has been collected from Canadians. Eighty billion dollars would have been a pretty nice hit in terms of having tax relief.

Old habits die hard and the Liberals are at it once again using false numbers and saying that there would be a $3 billion surplus for 2004-05, the year just ending. We find those numbers strange because the fiscal forecasting group that the finance committee hired came up with a surplus of $6.1 billion. In terms of 2005-06, the Minister of Finance was saying that his estimate of the surplus would be $4 billion while the fiscal forecasters are saying $8 billion and that it could be considerably higher.

We know it is not an exact science, a point the parliamentary secretary has made many times, but it seems to me that if the government is going to be out it would be high as often as it would be low. However that does not seem to be happening. It seems to be quite a different process it has and it seems very deliberate.

I want to talk about the minister's fiscal update last November and how inaccurate that also was, which ties into this. What I am saying is that Canadians already have a problem. I remember when the Prime Minister was the finance minister he was in Toronto lecturing the business community about corporate malfeasance, how important it was that Canadians could rely on the numbers of the corporations and that they should be accurate in their projections so that when people wanted to buy stocks and bonds they could feel confident that these companies were providing accurate information.

Would that not also apply here? In fact, should this not be the place that sets the high standard on how projections are done? To that end, the finance committee, on behalf of especially the opposition parties that made amendments to the government's throne speech, asked that we have more accurate fiscal forecasting and asked that we look at an independent budget office.

We are in the process of doing that at committee. We have independent economists looking at the last two quarters of 2004-05. They have been able to give us timely updates, which is very important to parliamentarians in order to tell Canadians that we are reflecting their priorities and giving them the most current information.

The Auditor General has criticized the government in the past. The Conservative Party is working on the finance committee to bring truth and transparency to fiscal forecasting by establishing the independent parliamentary budget forecasting office. We believe it is in the public interest to have a healthy debate on what to do with the surplus, if there is one, and not play a game of hide and seek as to how big the surplus really is.

The Conservative Party will continue to hold the Liberals to account for spending that is unfocused and wasteful. Over a decade of Liberal waste, mismanagement and scandal has shown that billions of dollars sent to Ottawa could have been more effectively managed by Canadians themselves if left in their pockets. Canadians were overly taxed by $80 billion.

The Conservative Party has also said that it will strive to make this minority Parliament work so long as it is in the best interest of Canadians. Currently, the bill is not reflective of that principle. That said, we will try to turn the bill into pieces of legislation that are in the best interest of Canadians.

We can only hope the Liberals will keep those interests in mind and allow themselves to be guided by those same principles.

Budget Implementation Act, 2005Government Orders

11:05 a.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, for some time the House has had an interesting debate going on about surpluses. I can remember one of the reporters saying that it was a real good problem to have.

One of the things the member may want to comment on is the issue of the debt. We have paid down some $60 billion worth of debt. The debt I believe is still as high as it was when the Conservatives left office. It is a little out but very close.

The amount of surpluses that have been accumulated since the Liberal government came into office in 1993 basically have kept us at the same level of national debt that we were in when we came. Therefore to suggest that it is an inappropriate or usurious amount would be perhaps premature to make that conclusion.

I would ask the member to make some comment on the level of the surplus and on the importance of paying down debt and saving some $3 billion a year permanently that can be reinvested on behalf of Canadians. The member has been on the finance committee and he knows that the contingency and prudence factors, assuming that all things come in as budgeted, should generate surpluses. Could he comment on whether or not that is a responsible policy?

Budget Implementation Act, 2005Government Orders

April 12th, 2005 / 11:10 a.m.

Conservative

Charlie Penson Conservative Peace River, AB

Mr. Speaker, the question from the member for Mississauga South is important and it is one that Canadians want us to debate in the House. In fact, I think they would make it a priority that we pay down debt. However I do not think they want a sort of accidental paydown; something that is left over when we cannot find enough programs on which to spend the money, which is essentially the way it has happened under the government.

I want to remind the member that when the Liberal government came to office in 1993, the debt was at some $495 billion, a debt that was accumulated by two governments, including the Liberals' own. When the Liberals took office in 1993, I think they ran the debt up another $88 billion before they started to make any changes to bring it down. The debt still stands today at over $500 billion, which is not an acceptable level.

Canadians want us to pay down debt but they want it on a planned basis. In terms of the prudence and contingency reserves that are put in place in the budget, yes, we agree with those, but we think that should be enough to handle that category. The budget surpluses have been coming in two to three times higher than the combination of the contingency and prudence reserves set into the budget. That is showing that something is out of control here. If people in the private sector had that kind of forecasting and ran their businesses that way, I think the forecasters would be fired.

Quite frankly, this is irresponsible forecasting. That is one reason that the House, in the throne speech amendment, decided to look at an independent budget office. They have those in other countries, such as the United States and Great Britain. The idea is to act as a check and balance against the administration's numbers. That has worked very effectively in the United States.

When the member talks about the surpluses going to debt, yes, that is fine in the end, but it should be something that is discussed as a priority and where that ranks in priority. Maybe tax relief is also a priority they want to achieve.

Budget Implementation Act, 2005Government Orders

11:10 a.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, one of the most interesting developments around this whole budget implementation act has been the support of the Conservatives for this Liberal budget, a budget that has been questioned by all sectors of our society for its failure to put forward an appropriate balance between paying down the debt and reinvesting in programs that will build this country. It is a budget that is seen as fundamentally flawed because of the amount of money that will be stashed away in trusts and hidden funds for which there will be no accountability to Parliament.

We have a sponsorship scandal in the making with the likes of the budget: millions of dollars stashed away in trust funds and no way for the public or for Parliament to maintain some sort of oversight.

How can the Conservatives justify supporting a budget that contains the seeds for a scandal as big, if not bigger, than the sponsorship scandal with us today?

Budget Implementation Act, 2005Government Orders

11:10 a.m.

Conservative

Charlie Penson Conservative Peace River, AB

Mr. Speaker, the member for Winnipeg North has a lot of bravado today about the budget vote that took place some time ago but my understanding was that if the Conservative Party had voted against the budget instead of abstaining, the NDP members would have been running for the hills so they would not have had to bring down the government.

There will be a time when the government will be brought down but we believe that Canadians are the ones who have to make that decision.

We were not happy with the budget either. It went some ways to satisfying Canadians about things like tax relief. That said, I have already pointed out in my speech today that they were not fast enough and they were not deep enough.

We are not in favour of Bill C-43, which would implement the budget itself, and I have just pointed out our reasons. We want three provisions separated out of the bill and then we will deal with those items separately.

Budget Implementation Act, 2005Government Orders

11:15 a.m.

Conservative

Lynne Yelich Conservative Blackstrap, SK

Mr. Speaker, I would appreciate a comment from the member about airport rents.

In Saskatoon, Saskatchewan the airport authority will be facing rent of up to $700,000 beginning in January. This is a huge amount of money for the small city of Saskatoon. The airport was taken over by the Saskatoon Airport Authority because Transport Canada was losing money running the airport.

Would the member comment on the contradiction?

Budget Implementation Act, 2005Government Orders

11:15 a.m.

Conservative

Charlie Penson Conservative Peace River, AB

Mr. Speaker, that is an important question and not just for large airports. Toronto and other major airports are facing difficulties on the issue of the rents, but small airports are really in trouble on this issue. I was surprised that the government did not take measures in the budget to correct this situation. We know that some airlines are now saying that they will have to review their policy on flying into Pearson in Toronto because the airport rent is too high.

When the Government of Canada decided to ask the airport authorities, in effect the communities involved, to take over the airports, it did so under a certain set of criteria. No one expected the government to get into the sleazy landlord type of situation where it kept raising rents when it could not be justified. I think there has been a massive overcharge in rents. It is similar to a slum landlord.

It seems to me that this is going to kill a lot of small airports in the process. The airport in Grande Prairie is facing difficulties on the rent issue. Also, the airport authority has gone back to the city of Grande Prairie saying that there has to be firefighting ability there. It was one of the things that the government said 10 years ago that the airport would not have to have. There were major cost savings by having the firefighting ability just a quarter of a mile away where the city ends. Now the rules have changed. That is really hurting a lot of airports and airport authorities.

I agree with the member for Blackstrap that the government has to revisit this issue. I know that when the Conservatives become the government, which may be in the very near future, we will review that whole area.

Budget Implementation Act, 2005Government Orders

11:15 a.m.

Bloc

Guy Côté Bloc Portneuf, QC

Mr. Speaker, on February 23, the Liberal government tabled a budget that was and still is unacceptable to Quebeckers because it fails to consider their priorities.

Naturally, we cannot oppose a budget and support the bill to implement it. So, it is clear that the Bloc Québécois has the duty, on behalf of Quebeckers, to oppose Bill C-43 to implement the February 23 budget.

However, the government could have and indeed should have used the opportunity presented by Bill C-43 to make major improvements consistent with Quebec's interests to the budget. However, the Liberal government, in addition to rejecting improvements to EI and the fiscal imbalance, even went so far as to add items that are totally unacceptable to Quebec, such as the special agreements on equalization with Newfoundland and Labrador and with Nova Scotia, and the polluter-paid principle under the Kyoto protocol.

Furthermore, the minority government should have made compromises. Instead, it has chosen arrogance and actions befitting a majority government. It has behaved like a government itching for a snap election. If this bill results in the dissolution of the House, the Prime Minister will have to tell Quebeckers why, and the government members will take the fall in a new election. For all these reasons, we cannot support this motion.

I said earlier that the Bloc Québécois, on behalf of Quebeckers, was opposed to the budget. We will oppose this bill too. Why? We have held a broad-based consultation in Quebec on the real needs and priorities of Quebeckers. We have reached a number of conclusions, namely that, in Quebec, the fiscal imbalance is a major issue that must be resolved.

What do Quebeckers want? In the long term, they are calling for the transfer of tax fields. In the short term, they are calling for increased transfer payments for education and social assistance. They want increased equalization payments along with changes consistent with the demands of the Quebec government, such as the use of the ten province standard instead of the five province standard.

What do we have in this budget as far as the fiscal imbalance is concerned? We have a Minister of Finance who announces no additional measures to loosen the financial stanglehold on Quebec, a problem the Liberal Party refuses to acknowledge. We have agreements on health and equalization payments that are clearly inadequate and in no way resolve the fiscal imbalance. God knows,with its enormous, virtually scandalously huge surplus, the federal government has the financial means, at this time, to resolve this issue.

All workers in Quebec, and naturally—I am tempted to say “unfortunately”—the unemployed, have one priority. That priority is employment insurance. The Bloc Québécois called for an independent EI fund and commission; improved coverage including reducing the eligibility criteria to 365 hours; more weeks of benefits; a new program to assist older workers.

Once again, there is precious little in the budget on this and almost nothing relating to employment insurance, despite the recommendations of the Standing Committee on Human Resources Development, Skills Development, Social Development and the Status of Persons with Disabilities, which called for a far more sweeping reform, and despite reports which had, I might point out, unanimous support in committee. Unanimity means that Liberal MPs voted in favour of those reports. Nevertheless, there are no improvements that could, for instance, apply immediately to seasonal workers.

As far as seasonal workers are concerned, there is of course one markedly inadequate measure involving some pilot projects. That may amount to $300 million spread across Canada. In addition, the 2005 budget prevents any actual improvements to the EI program because the main objective in changing the fund is to eliminate the annual surplus.

Earlier, I mentioned Kyoto, and I am sure my colleague from Rosemont—La Petite-Patrie will speak much longer on it than I will.

I will however mention quickly that Quebec has called for substantial expansion of the wind energy support program,; tax deductions for public transit passes, the abolition of tax incentives for non renewable and nuclear energies and even the creation of tax credits for the purchase of hybrid vehicles. And what do we find? We find a budget that confirms the choice already expressed by the federal government of a voluntary approach to the Kyoto protocol, which will not lead to the achievement of the objectives for the reduction of greenhouse gases and will place the financial burden on the taxpayers rather than the major polluters.

There are absolutely no tax measures in the transport sector. This oversight will not help Quebec to improve its greenhouse gas reduction record. These measures are not appropriate to Quebec.

In recent years, Quebec has had a serious crisis in agriculture. The expectation was that the federal government would help farm producers struggling with the mad cow crisis, for example, in terms of the compensation needed to reach the floor price. There is the situation with cull cows in Quebec. Here again, the government's record is pretty poor in the context of the budget and Bill C-43. It is simple. There is nothing for agriculture. There is only the small sum of $17 million for slaughter, which in fact is not new money. This government has completely ignored the situation of farmers across Canada and Quebec.

The government keeps telling us about all its funding for the military. As in health care, I think that prevention will always produce better results. We expected this government to take concrete action to achieve the UN goal of increasing international aid to 0.7% of GDP by 2015. What are we seeing? We are seeing an extremely timid commitment from the government, which will in no way allow us to reach that goal. As things stand, we will not achieve 0.7% of GDP in 2015 but rather in 30 years. We are far from the mark.

An extremely important issue for Quebec is respect for its areas of jurisdiction. With regard to the child care initiative, Quebec is asking for the right to withdraw from the federal program, unconditionally and with full compensation. With regard to parental leave, the transfer payments must be made as soon as possible to the Quebec government so that it can finish implementing the initiative it had presented. The negotiations with the municipalities must be terminated. The gas tax revenues should not go directly to the municipalities but rather directly to Quebec, so that the latter can determine the terms and conditions and its allocation among the municipalities.

These are Quebec's traditional demands, and it is difficult sometimes to understand why the Liberal government will not listen to reason since it has been told the same thing for years. So what do we see in the budget? We see a final agreement on parental leave between the Government of Quebec and the federal government. It should not be forgotten, though, that this is Quebeckers' money that the federal government is using to invest in one of Quebec's jurisdictions. So this agreement is only fitting. It does not prove that asymmetrical federalism works. Instead, it is the result of a struggle that the Bloc Québécois has waged in this House since 1997. It took eight years to finally reach an agreement on parental leave, despite all the historic announcements about this program every month, to the effect that this matter was about to be settled.

As far as child care is concerned, the Prime Minister agreed to give Quebec its share of the federal funding with no conditions attached. However, we should recall that the federal budget speaks about Canada-wide standards and reporting. The transfer of part of the gasoline tax to municipalities may well be carried out under conditions that are unacceptable for Quebec. There is talk of strategic objectives, Canadian results and bilateral agreements specifying how the municipalities will share the funds.

Well, these three areas are very clearly within the jurisdiction of the provinces and Quebec. Once again, Quebec's demands regarding Bill C-43 and the budget have been disregarded.

Social housing is another area where the government's management has been so sad that it makes you want to cry. The federal government was asked to ultimately devote the equivalent of 1% of its program spending to contribute to the development of new social and community housing. So what do we see? Nothing. There is nothing at all for social housing. If there is one sector that has just been forgotten in this budget, that is it.

As I say, it is enough to make you cry. Families are having difficulty finding adequate housing. Some families in Quebec spend about 60% of their income just on housing. Meanwhile, this government has the nerve to bring down a budget with nothing for social housing.

For the Bloc Québécois, it is also important that this budget not neglect our francophone friends in the rest of Canada. We felt that the federal government ought to follow up on the budget requests from francophone associations in the Canadian provinces and raise to $42 million the budget allocated to them under the Canada-communities agreements. That budget, incidentally, is currently $24.4 million. Once again, there are no provisions for the Canadian francophonie, which is most unfortunate.

Yet the government had the means to do far more. The federal Liberals had enough financial leeway to do far more. According to the Bloc Québécois forecast, that leeway will attain the $50 billion mark, more or less, within three years, not the meagre $15 billion figure the Minister of Finance has given for that same period.

The federal government therefore had all the leeway necessary, but not the political will. It is as simple as that. Once again, the Minister of Finance turned Prime Minister is up to the same old tricks, giving priority to paying off the debt—they are talking about $15 billion over five years—at the expense of the people of Quebec.

That is the general situation. Now I will touch upon some of the more specific aspects of this bill which are of particular significance to me.

I will start with part V, which concerns the Federal-Provincial Fiscal Arrangements Act. This allows the transfer of up to $700 million to a trust to help Quebec and the provinces develop their child care system in keeping with the following principles: quality, universal inclusiveness,accessibility and development.

The Bloc Québécois calls for an unconditional right to opt out, with full financial compensation, from implementation of the federal child care program. Adoption of part V of Bill C-43 just as it stands would mean that the money in trust available to Quebec and the provinces would suddenly be tied to the application of four national standards in an area over which Quebec and the provinces have exclusive jurisdiction. While all Liberal ministers involved promised that all this would respect everyone's areas of jurisdiction, in reality this budget includes an obligation to meet national standards.

Such legislation means Quebec would have to meet national standards set by the federal government in an area outside federal jurisdiction. This also means Quebec would have to be accountable to the federal government for the proper application of these national standards.

Quebec is being heavily penalized by this bill. Quebec parents are still waiting for additional funding, while the Government of Quebec is ready to receive this funding and use it for improving its own system.

I remind this House that the Bloc Québécois is in Ottawa to protect the interests of Quebeckers. The federal government's interference in Quebec's jurisdictions and its foot-dragging in signing a bilateral agreement with Quebec so as not to penalize it for having one of the best child care systems in the world, are not the best ways to achieve this.

I am talking about early childhood, but this government's handling of the Old Age Security Act is hardly any better. I am referring to Part 23 of Bill C-43. The government is quick to remind everyone that it injected money into old age security, but the governing party forgets—I am being polite—to dig a little deeper to look at what this money represents.

First, the increase in funding will not begin before January 2006. The situation for seniors will not improve immediately. This will not begin until January 2006, or almost a year after the budget was tabled.

Second, there is also an increase of $18 monthly for single pensioners. As if eighteen dollars a month really improves the life of seniors. I should rush out and dance in the street to show my delight. Eighteen dollars a month is a scandal. The federal government had the means to do a lot more for seniors.

In addition, this bill makes no reference to the money seniors have been deprived of over the past 11 years, because of the government's failure to provide the information they needed to receive the guaranteed income supplement. I believe seniors in Canada lost out on $3 billion and those in Quebec on $800 million for lack of information. This is really scandalous, in my opinion. The bill makes no provision for this aspect of an extremely serious situation.

I have spoken of young people and seniors. Let us talk about workers now, people in the labour force, who, often for distressing reasons or sometimes for economic reasons, need financial support from the government, in the form of employment insurance, for example.

Previous Liberal governments have turned the employment insurance fund into an employment tax, which has enabled them to pay down the debt and eliminate the deficit. This bill contains no provision on access to the plan. Imagine an insurance company where only 40% of those paying premiums manage to get benefits when they need them. This is what is happening with employment insurance. The few amendments in the bill have nothing to do with access to the plan. They have nothing to do either with extending EI benefits. Only slightly, through pilot projects, do they have anything to do with extending benefits for seasonal workers. This bill, overall, responds to none of Quebeckers' needs.

In conclusion, I point out that this budget, tabled on February 23, is totally unacceptable. It completely ignores the priorities of Quebeckers. The federal Liberals have behaved exactly like a government looking for a quick election. We voted against the budget. We have a duty on behalf of Quebeckers to vote against Bill C-43.

Budget Implementation Act, 2005Government Orders

11:35 a.m.

Scarborough—Guildwood Ontario

Liberal

John McKay LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, there is essentially nothing that the Government of Canada can do to make the Bloc Québécois happy, so I do not know why we would spend a lot of time trying to do that.

One of the notable omissions from the hon. member's speech had to do with the Nova Scotia and Newfoundland and Labrador accords. As we know, this was a very significant sum of money, $2 billion, to Newfoundland and Labrador, and another $830 million to Nova Scotia, moneys that were agreed to by the Prime Minister after a great deal of negotiation and which have led to some other difficulties.

Part of the rationale for the government doing this was the very difficult fiscal situation in which Newfoundland and Labrador and Nova Scotia find themselves, with debt to GDP up around 62% in the case of Newfoundland and Labrador and around 38% in the case of Nova Scotia, I think, as well as declining populations and economies that are simply not performing.

One of the reasons that Newfoundland and Labrador finds itself in such great difficulty is that the Churchill Falls accord is so disadvantageous that the province is in effect selling its hydroelectricity to Quebec at a scandalously low rate, which effectively creates a great deal of difficulty for Newfoundland and Labrador in raising revenues.

I would ask the hon. member two questions. First, would he would support a renegotiation of that agreement between Newfoundland and Labrador and Quebec so that the rates generated can actually reflect market rates? Second, would he support the passage of this accord which in effect in part makes up for the difficulties that disadvantageous agreement has created for Newfoundland and Labrador?

Budget Implementation Act, 2005Government Orders

11:40 a.m.

Bloc

Guy Côté Bloc Portneuf, QC

Mr. Speaker, I would like to thank the parliamentary secretary for his question. I have two or three quick answers for the parliamentary secretary.

In regard to the impossibility of ever making the members of the Bloc Québécois happy, I would simply point, as I said in my speech, to the unanimous report of the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities calling for in-depth reform of the employment insurance system. The report was unanimous. If the government had had the courage to implement these measures, the Bloc Québécois would have been happy and would have voted in favour of such a bill. That is the first thing.

Second, regarding the agreement between Quebec and Newfoundland and Labrador, we in the Bloc Québécois, in contrast to the Liberal Party, do not interfere in provincial affairs. We are on the federal level. This was a contract between two parties. If the parties want to renegotiate it, they should do so. However that may be, these are matters for Quebec and the provinces and we will not interfere in that.

Let us turn to the special agreements with Newfoundland and Labrador and Nova Scotia. As the parliamentary secretary knows very well, a subcommittee of the Standing Committee on Finance, namely the Subcommittee on Fiscal Imbalance, is currently on a cross-Canada tour that will end soon. Allow me to draw a somewhat hasty conclusion in light of the various witnesses who have appeared: the equalization system has been completely perverted by this government , among other ways through special agreements. Equalization is supposed to be a matter of equity to ensure that the provinces can provide comparable services. So as they get richer, their equalization goes down. That is only natural.

These equity principles are called into question, though, by the agreements with Newfoundland and Labrador and Nova Scotia. These are agreements that completely upset the equalization system, which was already in difficulty as a result of the policies of this government.

Furthermore, we are now witnessing attempts to reach more special agreements, in particular with Saskatchewan and Ontario. Rather than trying to solve the problem piecemeal by signing agreements that only accentuate the inequities, why does the federal government not undertake an in-depth reform of the equalization system and solve the problem of the fiscal imbalance? That is the question.

Budget Implementation Act, 2005Government Orders

11:40 a.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, I want to congratulate the hon. member for Portneuf—Jacques-Cartier for his very interesting speech. I want to ask him a question, along the same lines as the parliamentary secretary, regarding the fiscal imbalance and equalization.

Yesterday, the hon. member and I were in Quebec to hear witnesses talk about equalization. It was incredible. All the witnesses from all parties, whether the Liberal Party, the Parti Québécois or Action Démocratique, indicated that the equalization program was a disaster, that we were looking at a crisis in Canada and that we were in the process of losing a very important program for our country.

I have the following question for my colleague. What solutions did the witnesses offer yesterday in order to guarantee a future for the equalization program?

Budget Implementation Act, 2005Government Orders

11:40 a.m.

Bloc

Guy Côté Bloc Portneuf, QC

Mr. Speaker, indeed, the Subcommittee on Fiscal Imbalance met in Quebec City yesterday.

The situation is Quebec is extremely clear, and numerous witnesses presented the same political analysis. What we have seen, particularly since 1995-96, is the government's withdrawal in terms of transfer payments to the provinces. This has had a ripple effect.

The federal government has cut transfer payments to the provinces. The provinces have a social mission to provide services in areas, such as health and education, that often consume between 60% and 70% of provincial budgets. As a result, they have had no choice but to make cuts in other areas.

A few years later, the federal government has a surplus. What does it do? It makes conditional reinvestments in areas that have been somewhat neglected, after cuts imposed by that same government, and it passes itself off as the saviour. Naturally, it often concerns pan-Canadian programs that do not meet the specific needs of any one province or Quebec.

For Quebec, the situation is relatively simple. The solution to the fiscal imbalance requires, first, a comprehensive reform of equalization. It means moving from the five province standard to the ten province standard. All revenues in all provinces must be included. It means better assessing the fiscal capacity with respect to taxes. That is the first thing; we must restore the role of equalization, which is to ensure tax fairness across Canada.

Second, the transfer payments are often conditional and subject to the government's will. One word comes to mind and, if we heard it once yesterday, we heard it 50 times. It is this government's “unilateralism”. “Unilateral decisions” are constantly being made.

Quebec is proposing, in exchange for transfer payments in health and education, that it recover the taxation field occupied by the GST. At present, these amounts are approximately equal. Thus, we would no longer be subject to the unilateral actions of this government, and the provinces and Quebec, where my interest lies, would be in a better position to make better choices in these areas of jurisdiction.

Budget Implementation Act, 2005Government Orders

11:45 a.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, this is a very interesting debate on the budget. It is interesting how things can change in just a couple of weeks. Normally, the budget implementation bill is a rather perfunctory process. It is a rubber stamp after the budget debate has occurred, the vote has taken place, and it is simply a matter of housekeeping. It is interesting how much can change in just a short period of time.

It was just two weeks ago that the Liberal government decided to put the finishing touches on Bill C-43 and added interestingly a new aspect that had not been part of the budget debate at all. That was of course the amendment to the Canadian environment protection legislation. It was all done, as we understand now, to force some interesting divisions around the issue of Kyoto and the environment, and presumably to create a fight that might lead to an election. It was leaving the options open to consolidate its forces around Kyoto, and to divide and conquer in this place and possibly go to the polls on that issue.

That was on the assumption that we would not have heard too much from the Gomery commission at that point. It was pretty tame two weeks ago with not a lot of interesting stuff coming out. The Liberals were trying to act before that would happen to pre-empt the inevitable and get on the hustings before the truth came out.

Here we are with a whole new set of developments. The lay of the land has changed completely. A bill that is normally quite anti-climatic has become a focal point for just what is wrong with this government, what is wrong with its budgetary approach, and how it is linked to the scandal of the sponsorship program as it unfolds around us.

I want to speak today on the budget implementation bill, but I do so with the realization that this has become far more than the customary debate about budget items alone. It is interesting what has just happened. Liberal infamy has drawn the world's eyes upon us today like never before. In the world of 21st century technology, the stench of corruption spreads almost instantaneously to all corners of the globe. It has riveted attention particularly on the way Liberals handle all money transactions and economic matters, such as the budget.

The Liberal government's fiscal judgment is under the microscope and the world is watching. What does it see? I see the parliamentary secretary is anxious to know how the world perceives the Liberal government. Canada is seen as one of the wealthiest countries in the world and one of the most envied societies floundering on a rock of its own creation.

Canada is not an economic superpower like our neighbour to the south, but we are still looked to for leadership. We are still looked to for moral leadership, as a promoter of peace, development, greater social equality, and a builder in the best sense. The scandal swirling around the Liberal government has undermined that reputation. The Liberals' backroom agenda has become front page news, and that news is worrisome both to Canadians and to those beyond our borders.

People want to know if they can trust the Liberal Government of Canada. They are looking to this bill, the budget implementation act, for some answers. They are looking for answers on whether Liberals can be trusted to keep their promises to Canadians, answers about whether Liberals can be trusted to put Canadians' priorities before their corporate buddies, and answers on whether the Liberals can be trusted to keep their international promises and honour our Kyoto commitments.

Budget Implementation Act, 2005Government Orders

11:50 a.m.

Liberal

John McKay Liberal Scarborough—Guildwood, ON

Done.

Budget Implementation Act, 2005Government Orders

11:50 a.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

The parliamentary secretary says “done”. Well I guess he is living in a little bowl with his rose-coloured glasses on because in fact the rest of the people in this country do not have such optimism. They do not see such faith maintained by the Liberals in terms of the promises made.

They want answers on the government's commitment to women's equality. I hope the parliamentary secretary does not say “done” because we are a long way from achieving our objectives around a fully equal society. They want answers about the government's commitment to international development, and the list goes on and on. Suffice it to say there are many unanswered questions on the part of Canadians.

The Liberal Party may be doing fine financially and certainly Liberal friends are millions of dollars richer, but the vast majority of Canadians are not so lucky. They are stressed out. They are struggling to hold their ground. They are fighting to keep pace. Many are working at more than one job, either in the paid workforce or unpaid family-related jobs, trying to pick up the slack from public services that have not survived previous Liberal budget cutbacks and downloads. These are the Canadians who have heard the Liberal speeches. They have endured the Liberal smugness and they now expect the Liberal government, through this budget, to deliver.

How does this budget bill measure up and what does it say in real terms about how the Liberals measure up in meeting the basic needs of Canadians: housing, education, child care, infrastructure, reducing poverty, and of course our share of the planet and environment.

To start, let us just take $4.6 billion right off the top, money that the Liberals have given away, no strings attached, the way only Liberals can, to their corporate pals in new tax cuts despite, interestingly, having promised not to bring in any new cuts until social program needs had been met. Then, let us carve off another $4 billion with no discussion and no debate in Parliament for accelerated debt reduction.

Let us look at what is left. Who better to ask about the impact of Liberal budget priorities than the people who work day in and day out on these issues, the people who are knowledgeable about what was needed and can best judge just what was given. Here is what a few of them had to say.

On the Liberal broken promise on post-secondary education, which as I have said many times is the foundation of our future workforce and continuing prosperity, university graduates are dragging an average debt load of nearly $25,000 with them when they leave school. Tuition fees have more than doubled under Liberal rule, an area completely ignored by the Liberals in this budget.

What are folks saying?

The Canadian Association of University Teachers said, “There is nothing in the budget that provides any relief to students and their families struggling with record high tuition fees” and record high debt. Of the Prime Minister's election vow to restore core funding, the Canadian Federation of Students said simply, “He broke that promise”.

On the Liberal broken promise on affordable housing, another vital area for Canadians, all ignored in this budget, the child poverty advocates of Campaign 2000 said:

We are extremely disappointed that the Liberal Government did not follow through on their election promise to invest $1.5 billion in housing.

The National Aboriginal Housing Association said:

Once again, the federal government has ignored the housing crisis facing non-reserve Aboriginal communities.

The Canadian Real Estate Association, with us in the halls of the House of Commons today, expressed disappointment and said:

The government should have taken this budget opportunity to specify its commitment to a new affordable housing strategy.

On the Liberal broken promise to take into account the budget impact on women, last promised by the Liberals in February, the Coalition for Women's Equality said:

This budget has once again let women down.

La Fédération des femmes du Québec said:

For the 2.4 million women currently living in poverty have very little to celebrate today. The government has not followed through on its housing promises nor has it made substantive changes in the EI program. These programs matter a lot for women.

The YWCA said:

Promise after promise, budget after budget, the federal government is ignoring women's needs and rightful place in Canadian society.

On the Liberal broken promise to make aboriginal issues a priority despite the long overdue round table process, the Assembly of First Nations said:

This budget will condemn our people to last place for a lot longer.

The National Association of Friendship Centres said:

The lack of attention to urban aboriginal issues, despite the Prime Minister's commitment...is disheartening.

Even in the areas where the government is slowly inching forward on its long time commitments, the municipal gas tax funding, the 12 year overdue promise on a national child care program, the response has been cautious as the projects are so far from complete.

As the Canadian Labour Congress said:

What we have are short-term half-measures that still don't deliver the goods for the majority of Canadians...nothing on a range of issues important to working people.

Let us not forget the environment, where again the Liberals just could not control their natural impulse to arrogance and deception by trying to sneak in changes to disguise the real inadequacy of the environmental proposals in the budget bill. I do not think the Liberals take the environment seriously. Twelve years after taking over an urgent environment file and promising to attack pollution, they still have not got their act together to take on the Kyoto challenge.

Climate change is a worldwide issue already bringing catastrophic results in ecologically vulnerable regions. People's lives, indeed the life of the planet as we know it, are at stake and the government, these Liberals, continue to dither around with half measures that question their commitment.

Many nations are wrestling with the same Kyoto adjustment pains that we are. They are watching closely to see how Canada resolves the contentious environmental issues and moves forward. It would appear that they have been waiting in vain. Instead of commitments and strategies, the Liberals offer only game playing, machismo, and measures not supported by the environmental community.

The budget has paraded a string of Liberal broken promises before the world that seriously challenges the government's credibility.

The Liberal broken promise that has the world community most concerned is Canada's lagging commitment to the millennium development goals, the 35-year-old broken promise to contribute .7% of our GDP toward developmental assistance. Two years ago under the Liberals, Canada's contribution had sunk to only .24% of GDP. This is incredible. It is an embarrassment.

I have just returned from the 112th Assembly of the Inter-Parliamentary Union. The topic of the day was international commitments to the millennium goals. Once again, Canada was hard-pressed to explain how, given our wealth and our economic stability, the government was contributing so little and had not even set a target date for meeting its promised funding obligations.

Some countries are already delivering their .7%. Others, including France, Britain, Spain, Finland, Belgium and Ireland, are on track to raising funding to this level by 2015. That is a reasonable target. That is a target we in the New Democratic Party have been calling on the government to adopt.

However, the Liberals seem as enthusiastic to address the world poverty issues as they are to lower poverty right here at home in Canada. They have failed to set targets to lower poverty here just as they have failed to meet their targets internationally.

Interestingly, the results speak for themselves. The gap between the rich and the poor keeps growing. Even with repeated promises to relieve child poverty, 15% of Canadian children still live below the poverty line. Broken promises led UNICEF to openly criticize Canada's record last month.

Whether we are in Winnipeg or Halifax, Kampala or Geneva, the conclusion from the budget is clearly that we cannot trust the Liberals.

Just as the Liberals will not own up to their responsibility for the sponsorship scandal, neither will they admit to their failures and broken promises. Instead, they preach to the world about what others should do. The Prime Minister, while still in waiting, having devastated public services to Canadians, issued a report to the United Nations extolling developing nations to base their economic future on the private sector instead of the government intervention route that helped forge the Canadian economy over the years.

Perhaps the most insipid and, as it turns out, ironic example of Liberal arrogance was Jean Chrétien's farewell tour. His farewell tour stopped in Abuja, Nigeria in December 2003, where he had the nerve to lecture those attending from southern nations about the need to clean up corruption as the most important step to attracting investment and strengthening their economies. He chided their record and cited Canada as exemplary in this respect.

The hypocrisy. Words escape me. I just cannot understand the Liberal government, those who came before and those who are now in the seat of power. Denial and then more denial.

A number of us were on the public accounts committee last year before the last election. We were examining in great detail the sponsorship scandal. We suspected the treachery now being recounted daily at the Gomery commission. What happened when we tried to ask those questions and raise those concerns? We were dismissed by Liberals as not knowing anything. We were dismissed arrogantly by the Liberals at the time.

We wanted to hear from key witnesses before the last election. Who stopped us? Who denied us the opportunity? The Liberal majority on the public accounts committee.

Well, the jig is up. There will be no more Liberals stuffing their friends' pockets while Canadians are wanting. Canadians will no longer abide it. The NDP certainly will not vote for it.

The budget is another chapter in the Liberals' long budget legacy of opportunities squandered to improve the lives of Canadians, and huge corporate tax cuts given, serving Liberal friends first.

The world sees the gap growing between the rich and the poor. Child poverty is beginning to increase again. The number of food banks is rising. And the Liberals do not understand it. Neither do Canadians. Under Liberal majority and minority governments, the wealthy continue to recycle wealth among themselves. There is nothing in the budget to keep investment in Canada instead of offshore tax havens.

There is ongoing chopping of programs to Canadians but nothing to recover millions in lost corporate taxes and loans. There is however an increase in the amount people making more than $100,000 can put into RRSPs where it is not taxed.

Maybe the Liberals when cornered can just steam off to their home ports in Barbados or other tax havens, but the rest of us are stuck here to face the world with their mess and their reputation. Today as we examine the Liberal budget bill, the story that is exposed to the world is one of a Liberal government that, in the midst of great riches, has greatly impoverished Canadians.

Budget Implementation Act, 2005Government Orders

12:05 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I always enjoy listening to the member.

The member raised a very important issue tangentially to the budget implementation bill, that being the issue of poverty and what we have been doing. I would like to simply remind the member of a couple of points.

It is easy to say that the gap between the rich and the poor is widening, but what really matters is the condition of the least of our society. The member would know that human resources and other departments have been doing work on what is called the market basket measure. They determine what amounts are necessary for food, shelter and clothing, but also for those expenditures that are necessary so that someone can integrate and live in a community without being noticed. It is an interesting angle to look at.

The member probably would agree that if we are talking about poverty and about the poor, we are also talking about the homeless. Let me remind her of who the homeless in Toronto are. Based on the Anne Golden report, 35% suffered from mental illness; 28% were youth who were alienated from their families; 17% were aboriginals off reserve; 10% were transient women and abused women; and the balance was for a variety of other reasons.

It really is not an economic problem with the homeless. It is primarily a social problem which requires social solutions. We have to put a little more balance between talking about what we can do economically to drive a social condition. There has to be some balance in that regard.

In terms of child poverty which is family poverty, 15% of all families are lone parent families and they account for 55% of all children living in poverty. What would the member suggest with regard to addressing the most serious cause of poverty in Canada which is the breakdown of the Canadian family?

Budget Implementation Act, 2005Government Orders

12:10 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, first, the member has it all wrong. If he cannot understand the simple fact that the economics of one's situation determine the way in which one deals with family issues and problems that come along, then there is no hope for us in ever convincing the government to come to its senses and start to bring in balanced budgets that reflect the needs of Canadians.

If we want to talk about transient single parent women, aboriginals coming off reserves, people with mental health issues, families with children living in poverty, kids going to school hungry, the member should first look at what kind of economic circumstances are at play such as where are they living, how much money do they have, how are they surviving.

The facts are that under the government the number of people who have been driven into poverty, who are living on the edge, who are eking out an existence, who are struggling with health issues, who are stressed trying to juggle work and family responsibilities has increased dramatically because the government has pulled the rug out from under them.

The cuts that happened in 1995, in the infamous budget, have trickled down and affected every aspect of our lives. They cannot be dealt with by a Liberal approach of band-aid solutions and boutique projects. We cannot keep cutting the heck out of programs, off-loading the responsibility on to provinces, on to municipalities and then on to families, and then bring in some new little side projects that require the provinces and municipalities and/or families to cost share. That is ludicrous thinking and it is wrong-headed public policy.

I want to remind the member just how bad the situation has become under the government. I refer to a report that just came out a few weeks ago, on March 14, by Statistics Canada. It has shown the amount of money that has been moved offshore under the government. Between 1990 and 2003, almost completely under Liberal rule, the amount of Canadian money stashed overseas skyrocketed eightfold from $11 billion to $88 billion. That amounts to one-fifth of all Canadian direct foreign investment; twice as much as in 1990.

Let me also refer the member to another statistic which became apparent once an analysis of the present budget was done by economists and academics. The finding of these individuals has been most revealing in terms of the government's tendencies and directions over the last decade. Liberals have consistently put corporate interests ahead of the public interest. Billions of dollars in losses through corporate tax cuts, tax havens and uncollected corporate bills are waved through on the fast track while child poverty, job training, student debt and the environment are left waiting on the side. It has taken them over a decade to even begin delivering on their child care promise.

According to the Canadian Centre for Policy Alternatives, over the next five years revenue coming from corporate income taxes will drop as percentage of total revenue from 15% to 11% while the personal income tax portion will rise from 45% to 65%. Relative to GDP, corporate income tax drops from 2.3%, personal income tax goes up and the pressure builds on families, on working people, on low and middle income Canadians while the wealthy and the corporate interests in our society continue to accumulate and continue to benefit from tax breaks.

There is little from the government to deal with the day to day pressures facing Canadians, little to help them climb out of poverty and little to help single parent women struggling to make a difference, to make a living for their kids. There is little hope for aboriginal people, either living on reserve in third world conditions or off reserve, where not a penny in terms of housing and other needs has been allocated in the budget today.

How can anyone stand here and accept the notion that these are problems caused by families, that there is a breakdown of the family and that is at the root of these issues. How narrow-minded, how frivolous, how supercilious can we get?

If the member cannot understand that economic circumstances determine one's outlook and one's ability to shape the circumstances around us to enable us to break through the difficulties which many families feel and give hope, then I do not know what we can do or say to get through to the government.

Has the Liberals' time in office led to such arrogance and to being so out of touch with Canadians that they cannot even make the link between economic and social equality? Can they assume that social equality is like a train that runs on a track on its own without any connection to the economic circumstances, to the very essence of eking out a living and surviving in society today?

How can the member and the Liberals be so out of touch with the reality of Canadians that they can take a time when we have this huge surplus and blow it? At a moment in the life of our nation when we have this opportunity to make a difference in the lives of Canadians, how can they ignore it? How can they spend it so frivolously on corporate tax breaks and on debt reduction to the point where there is no balance left?

When will the government understand that in order to build a society, we have to invest in Canadians and in Canadian institutions that will help create families, communities and a country and, indeed, a civil society.

Budget Implementation Act, 2005Government Orders

12:15 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I am delighted to participate in the debate on the budget implementation bill.

I have spoken a number of times on budget-related matters. After some 11 years of being involved in the process on the finance committee and looking at estimates in government operations committee, et cetera, I have come to realize how complicated governing and the budgeting process are. It is an enormous challenge with tremendous competing interests.

I recall one of the very first finance committee meetings I attended. The then finance minister, currently the Prime Minister, made a statement which I thought was very telling about what I would learn as a member of Parliament. In his address to the finance committee on the state of the financial affairs of the country, he made the overarching statement that good social policy made good fiscal policy and good fiscal policy made good social policy. There is clearly an integration. When we are addressing the social needs of Canadians, it is important to note that we are creating an environment in which economic growth and prosperity can occur and that economic growth and prosperity leads to dividends for Canadians.

We had a terrific discussion in 1996 about how we would dispose of the surplus when we finally slew the deficit and had a surplus. Should it be put toward paying down the debt? Should it be used for tax cuts? Should it be used for program spending or enhancing existing spending?

Having a surplus is a good problem to have. It is better than the alternative. When the government came into office in 1993, there was a $42 billion deficit in Canada. As a country, we were spending $42 billion more than what was coming in as revenues. That was an enormous amount of money relative to all things.

No government would be able to simply cut $42 billion in one year in spending. It would take a concerted effort and rationalization of expenses across a broad range. In fact, everyone in Canada was asked to do their share.

I can recall how people were very concerned about the size of the cuts. I remember the finance minister saying to me at that time that we had to make those cuts to save 80% of what we had. If we did not make those cuts, we would lose it all. Tough decisions have to be made in government. It comes down to that.

One thing I learned about the budget process was that the budget could not be looked at in isolation. It is important to look at a series of budgets. We had to find out where we were and how to move things forward. With the diversity of priorities that Canada has, both social and fiscal, it is difficult to address each and every one of them in every budget and move them forward in a substantive way so they would have the necessary impact to take advantage of the opportunities or the circumstances in terms of global impact.

We have to be strategic when doing budgets. Budget 2005 and the implementation act that we are now debating is another step in the process of securing the fiscal health as well as the social health of Canada.

I want to make a few comments about the budget in particular. Key commitments were made in the following areas. The first was maintaining sound financial management, which we have done since 1997. We have had balanced budgets ever since. People have been complaining that the surpluses, not only balances, are a problem. I will address the importance of debt repayment a little later.

The next area is securing our social foundations. Health care comes to mind. In achieving a productive and growing economy, that mix, what are we doing to make sure that we have an environment that continues to promote a productive and growing economy? It is good fiscally. It is good socially.

The fourth area is moving toward a green economy and sustainable communities. Canadians should link up to the initiatives with regard to our Kyoto commitment to reduce greenhouse gases. They should also look to our commitment to communities in a number of ways to ensure that our communities can provide sustainable activities with regard to infrastructure and other areas of assistance to them so that they can also do their share in promoting a good fiscal environment in which the economy can grow and prosper.

Finally, there is the commitment with regard to our global responsibilities. Canada is respected around the world. The reason for that respect is that it is something Canadians have earned.

They have earned that respect because of the tolerance, generosity and peacefulness of Canada and because of the good governance that it has experienced and the wise counsel that Canadians have been able to give in the global community over so many generations. That is a very important asset for Canada, because we are a global player. We are a global trading partner with many countries. That earned respect has come by making wise decisions, both fiscally and socially, and has continued to grow the reputation of Canada all around the world.

With regard to the economic outlook, we are looking now at growth of 2.9% in 2005 and about 3.1% in 2006. These rates are at the upper end of the G-7 projected growth rates, so again the outlook is very good.

However, our economy does face some challenges because of the high American dollar. I know that a number of members have expressed concern about our competitiveness with the differential against the U.S. dollar, not the high American dollar but in fact the high Canadian dollar relative to the U.S. dollar. It has moderated somewhat, but it still remains a significant influence in terms of the economic trade between our two countries. Seventy per cent of our exports go to the United States.

We do not live in a vacuum. We are not an island. We also have some concerns about the growing deficit in the U.S. It is extremely large. It affects our largest trading partner in ways that will also provide potential difficulties for our Canadian economic activities.

Since balancing the budget in 1997, we have had seven consecutive surplus budgets. I must admit that I am surprised at the amount of discussion that has been going on about how terrible this is. Most of the discussion has been around looking at the forecasting or estimates of what the budget surplus is going to be.

When we talk about the magnitude of things that the government has to deal with and the factors which influence the economic activity in Canada and are beyond our control, I am not sure what level of accuracy anyone could produce in a budget for a forthcoming year, and indeed for the next two to five years in many of the budgets based on economic scenarios given the input of some of the largest economic forecasters in the country.

I am not sure whether it is a useful discussion to say that somehow we are not being forthright in terms of the surplus. One thing I know is that once there was a balanced budget, Canadians said categorically, “We do not want Canada to be operating in a deficit scenario ever again”. Deficits are a non-starter.

Thus, immediately, to respond to Canadians' wish to keep balanced budgets, the budgeting process started to incorporate what are called contingency and prudence factors, which were to be included where there were unseen factors which would negatively affect the economic performance of Canada. There were contingency funds put in for those serious unforeseen items which would have a major impact.

There were also what are called prudence provisions, so that if the economic forecasters were saying that the growth rate was going to be 2.5%, the budget would assume that it was going to be about .25% less. There also were prudent assumptions with regard to short term and long term interest rates.

If everything in the budget came in exactly as planned, there would be a surplus. Since 1997 the government has in fact planned a surplus in its budgets, not just a balance but a surplus.

Earlier I had a conversation with a member of the Conservative Party. I had been talking about debt reduction. As background, let me give members an idea of where we have been in the last decade. When this government took office back in 1993, the national debt, the cumulative deficits of previous years, was $562 billion a year. It was gobbling up an enormous percentage of every disposable dollar that we were taking in. Debt servicing was extremely high. Today the national debt is $498 billion. This means that cumulatively since 1993 $64 billion of debt has been paid down.

We are not much farther ahead right now than we were when we started in government in terms of the scenario on the debt. The surpluses simply have been used; it is automatic. Once the year is over and once the accounts are audited, there is a determination of the final surplus and that final surplus is totally applied against the debt. It is not a choice. That is the way it happens.

I raise this because the member of the Conservative Party said to me that maybe sometimes tax cuts are a greater priority than debt reduction. I had to think about that for a little while. If debt reduction is a consequence of a surplus, but the member wants to argue that tax cuts may be a greater priority than debt repayment, he , therefore must be saying that tax cuts are okay even if we are creating a deficit. We cannot have it both ways. If we are not going to have debt repayment as a priority, we must therefore contemplate that there should be deficits.

There is another aspect the member did not understand. It really concerns me that after all these years the member still does not understand that there is a fundamental difference between tax cuts and spending. Spending can be a one time item as opposed to a new program, whereas a tax cut is a recurring annual charge or a reduction in the revenue of the country.

It is not enough to say that since there was a $4 billion surplus we should have a tax cut. The surplus was a one year occurrence. A tax cut would be each and every year. If we were to give a tax cut that effectively eliminated that $4 billion surplus, we might have a balanced budget in that particular year, but every year thereafter we would have a $4 billion deficit simply because tax cuts are ongoing.

I am a little concerned and a little nervous about the lack of understanding of some of the members, who somehow seem to suggest that a surplus is something that one must spend right away. There has not been an extraordinary paydown on the national debt, but from what we have had we have brought it down. Now we are below the levels we were at a decade ago. It is saving Canada approximately $3 billion a year in interest costs. It has reduced our costs from some 43% of every Canadian tax dollar to about 22¢ on the dollar. That is very significant. Most important, that $3 billion saving is an annual saving. It is available year after year to be able to sustain items, whether it be tax cuts, new programs or enhancement of existing programs.

That is the true fiscal dividend to Canadians in terms of getting one's fiscal house in order. It is getting the debt servicing paid down and it is the savings on interest that are available to Canadians, either to return to Canadians in terms of tax cuts or indeed to enhance programs and important priorities of Canadians, such as health care.

Having said that, let me move on to another aspect. Certainly health care is one in securing our social foundations. In our recent commitment in the health accord, there is $75 billion in support of a 10 year plan to strengthen health care and the new framework for equalization and territorial formula financing.

This has been extremely important, particularly for Newfoundland and Labrador and Nova Scotia in these new arrangements. From time to time there are important needs of regions of our country that we have to address. I am glad that the Prime Minister and the premiers were able to address them, but we have a matter consequential to that, which is e a province like Ontario looking at its own situation in isolation and saying, “How about us too?”

That is a problem. I am going to try to address very briefly at the end of my speech some of the elements of the so-called gap between how much money a province contributes to the federal coffers and how much money goes back into that province. It is a very interesting argument.

In terms of health care, the budget provides $805 million over five years in direct federal health investments, including: $300 million over five years for healthy living and prevention of chronic diseases; $200 million in support of health human resources and improved wait times; and $170 million over five years to implement measures to enhance the safety and effectiveness of drugs and other therapeutic products, which is very important to Canadians.

As members will know, there is also the $5 billion for the early learning and child care initiative. I believe that is a start, but I also personally believe that in a subsequent budget we have to look at the needs of those families who choose to provide care in the home to their own children. It is an important job. It is unpaid work, but it is important work. It deserves to be recognized. I hope we will see some movement on that in a coming budget.

There is the increase in the guaranteed income supplement. There is also new funding of $735 million for aboriginal communities and $398 for immigration settlement services and client services.

These are very important elements of the budget. I know that we have had an excellent debate on it. I know that members would like to see some of our other priorities take a higher line in this budget, but I have to repeat that each and every budget cannot address each and every item, each and every year. It just cannot happen and have budgets still have a meaningful impact, respond to the opportunities or defend ourselves against the threats of the current day. Budgets have to be responsible for the realities of the day.

I would like to look at moving toward a green economy and sustainable communities. Having been the vice-chair of the environment committee, I spent a fair bit of time with my colleagues across the way working on a number of initiatives. I am pleased to see that moneys have been set aside in the budget to look at renewables such as wind power. There is money for that in there. I also am very encouraged that we are moving forward on our Kyoto commitment with $1 billion to make sure that Canada does its share in that regard.

It was a very difficult one, but a very significant arrangement deal has just been made with the auto sector, as members know, whereby it has voluntarily come up with a plan to reduce greenhouse gas emissions by 5.3 megatonnes by 2010, I believe. This is a very significant accord that has been reached with one of the sectors that is one of the largest areas in which we can reduce greenhouse gas emissions. There is no question that we have more work to do on that file. Some of the large emitters, particularly those involved in hydro generation or other heavy manufacturing, are areas that have work to be done. We are going to need some progress, but I know that the House is committed to doing that.

With regard to cities and dealing with sustainable communities, I am pleased that we have been able to respond in terms of the $5 billion in federal gas tax revenues, the $600 million they will receive in 2005-06, the $300 million for green municipal funds and the infrastructure money as well. These are not federal jurisdictions per se, these moneys going to municipalities, but it shows some leadership on behalf of the government when it says that strong communities right down to the municipal level are to the benefit of all Canadians.

I am pleased to have participated in this debate. I welcome the members' questions.

Budget Implementation Act, 2005Government Orders

12:35 p.m.

Bloc

Paul Crête Bloc Rivière-Du-Loup—Montmagny, QC

Mr. Speaker, I have listened to my colleague's speech with interest, and one particular point caught my attention. He was selling the notion that it was an extraordinary accomplishment to have been able to pay off such a large portion of the debt .

What he did not say, however, was that during that same period, that is between 1993 and the present, they must have amassed a surplus of some $48 billion in the employment insurance fund. This was money they took from the pockets of workers and employers, and even from the unemployed, who have had to endure two very severe reforms aimed at cutting back the number of weeks of benefits, as well as the amount received, in addition to increasing the number of weeks required to qualify for benefits, to such an extent that many people have ended up no longer eligible. For example, young workers had to accumulate 910 hours in order to quality for EI.

As a result of all these changes, over 10 years a surplus of $48 billion was built up. If we look closely at the way the debt was reduced, a significant portion came from this source. The money deducted in EI contributions from workers' earnings is not a kind of payroll tax, but is intended to provide employment insurance.

How would the hon. member describe what the federal government is doing, which is to take the money paid into the employment insurance fund and use it for its standard expenditures, including servicing the debt? Is this theft? Is it embezzlement? What label can we put on it? I do not know, but I would like to hear what the member has to say about it.

I, for my part, see people in my riding, in Quebec and across Canada making a real effort to fight the deficit. They have had no return on their investment. For 12 years, they contributed to a plan thinking that, in the end, they might help reduce the debt, balance Canada's budget, knowing that the money belonged to the most disadvantaged. People contribute to EI up to a salary level of $39,000. Those who earned more or were not covered by it did not contribute. They did not pay their share.

What does the government say to men and women who have made the effort and who, today, see no improvement in their situation? It might be expected that the budget and subsequently the bill to implement the budget would contain something in this regard. The government has continued to leave them out.

Is this not one of the reasons the Liberal Party of Canada no longer elects MPs in a number of regions in Quebec and Canada? It promises, election after election, that it will change the EI system, but the day after, it leaves things as they are. Should there not have been clear measures in the budget to improve the employment insurance plan so as to meet the needs of the people, given the surplus that exists? Would it not have been reasonable to pay these people back?

Budget Implementation Act, 2005Government Orders

12:40 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, this is an issue that has come up many times in the House. Maybe it is important that we look at where we came from.

During the Mulroney years back in the eighties, cash for the unemployment insurance fund, which is what it was called at the time, was put into a separate pot. The premiums went in there and the benefits were paid out to people under the unemployment insurance program.

At the time the government was running large deficits. The Auditor General made its problem even worse by saying that the government was operating at about a $15 billion deficit in the unemployment insurance fund at the time. It was off balance sheet financing, if the member knows what that is. The Auditor General said that the government had to cover the losses in the unemployment fund and that henceforth it had to put all of the unemployment insurance premiums into the general funds of the government and pay the benefits out of the general funds and then there would be no more off balance sheets.

Then we came up with a thing called a notional account. The member is quite right. If we kept a record on the side since that time on a net basis, there is about $48 billion of surplus. We have taken in over all years $48 billion more than we have paid out in benefits for programs, et cetera.

What has happened in the last 10 years? We have not had a recession. The economy of Canada has been so strong that we have built up a surplus. The Auditor General will tell us that if we hit a deep recession, in one year we could wipe out $15 billion. Under the laws governing the treatment of the employment insurance fund, it says that we should keep about two years worth of reserve in the event that there is a severe downturn, a severe depression, but there is still more than two years and probably about three years' worth at the worst.

The legislation also says that if there is a surplus beyond that, we must reduce premiums to lower the future year's surplus so that it will ease down, or introduce new programs. Both of those have actually happened. Every year since we took office the EI premiums have been going down.

Indeed, the member is well aware that extending parental year to a full year under the EI is another part of the element of the program which has also responded in terms of the legislation guiding the EI surplus.

Everything that should happen has been happening. Unfortunately, and maybe it is a good problem, there is still a surplus, probably about a year's worth of benefits that may have to be paid out in extraordinary circumstances.

The member has also made the argument about all the people who pay into the fund and who do not qualify for benefits. I did my daughter's tax return. She attends university but works during the summer. She had EI deducted just like everybody else but she did not make enough money to pay it and she got it back as a refund.

The member has not taken into account that people who do not make enough money, even though they have made some, once they get down below a certain level there is no EI premiums payable and they get them refunded on their tax return.

I think the member's numbers are somewhat inflated on this. However I will concede to him that we have a situation that has been caused by good things and the good things are that Canada has had a strong, resilient economy so that we have not had to pay out EI benefits at the historic levels that we did. We have not had a recession in some 10 years. This result cannot be a surprise to anybody but the member should be encouraged that at least premiums continue to be reduced and that programs continue to be enhanced.

Budget Implementation Act, 2005Government Orders

12:45 p.m.

Conservative

Tom Lukiwski Conservative Regina—Lumsden—Lake Centre, SK

Mr. Speaker, I would like to make a comment and ask a question of my colleague across the floor.

In his presentation he spoke about surpluses and seemed to suggest that perhaps opposition parties were paying a little too much attention to surpluses and how difficult it was to accurately forecast surpluses when there was a range of economic forecasts on the issues.

However I hearken back to the last election in 2004 when the Conservative Party came up with its platform. On the financial aspect of it, we had suggested that there would be a series of personal income tax cuts primarily to middle and lower income tax earners over a five year period. Plus we had a program spending platform totalling about $58 billion. We had calculated that to be realistic based on our projections in the previous year's budget, the 2004-05 budget. Using the government's own figures we conservatively projected a surplus of around $7 billion to $8 billion. As we all know, it turned to be about $9 billion.

My point is that at the time the Liberal Party accused the Conservatives in our platform of being fiscally irresponsible and yet in the 2005 budget, lo and behold, the Liberals have come up with a spending program totalling about $55 billion, plus tax cuts graduated over five years. In other words, this is very similar to what we had proposed a short year ago. At that time, we were branded by the Liberals as being fiscally irresponsible and now they are calling themselves fiscally prudent.

I would just like to know why the double standard.