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.


Budget Implementation Act, 2005
Government Orders

12:10 p.m.


Judy Wasylycia-Leis 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, 2005
Government Orders

12:15 p.m.


Paul Szabo 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, 2005
Government Orders

12:35 p.m.


Paul Crête 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, 2005
Government Orders

12:40 p.m.


Paul Szabo 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, 2005
Government Orders

12:45 p.m.


Tom Lukiwski 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.

Budget Implementation Act, 2005
Government Orders

12:45 p.m.


Paul Szabo Mississauga South, ON

Mr. Speaker, it is not my style to engage in partisan rhetoric. I heard the member and I understand. I think each party has a fiscal and economic plan that it would like to put forward and say that it can do it.

However the member must concede that even though it is a balanced budget, if the contingency and the prudence factors are not necessary, if everything came in as planned, there would have been a $5 billion surplus in the year. It came out at $9 billion. We also know that the fourth quarter economic performance was way beyond anybody's realistic assumptions and contributed probably another $2.5 million to $3 billion, bringing that up to about $8 billion. He is saying that it turned out to be $9 billion. I do not think that the gap is that wide.

The important thing is that every commitment that was made to Canadians with regard to keeping the important programs and priorities for Canadians were met and the consequence was a healthier economy than anybody could have unless there was a larger surplus. I think that is a reflection of the hard work of all Canadians and Canadians will benefit from today forward from the success that they have achieved. I do not see that there is a problem.

Budget Implementation Act, 2005
Government Orders

12:45 p.m.


Loyola Hearn St. John's South, NL

Mr. Speaker, I want to limit my remarks to mainly one section of the budget bill. I will refer to at least one other section to which I will refer briefly as part 19.

We are talking about, in case people are wondering, 24 different and separate pieces of legislation, all of which have been lumped together in what we refer to as the budget implementation act, 2005.

Part 19 is very relevant, particularly today. Everyone in Canada is aware of the department of public works and some of the contracts the department would have let in the past. However, part 19 of this bill gives the department of public works even more leeway, complete control of all procurements, the issuing of contracts, more or less carte blanche. It is an invitation to more of the same. We are very concerned to have that section there.

Mr. Speaker, I would also like to inform you that I will be splitting my time with the member for South Shore—St. Margaret's.

Having said that about part 19, I want to return to part 12. This is the section that deals with the revenues that should be flowing right now as we speak to the provinces of Newfoundland and Labrador and Nova Scotia.

I will give a little bit of history. During this time last year actually, we were gearing up for a campaign. Leading up to the election, two parties in this House, the Conservatives and the New Democratic Party, committed to the provinces of Newfoundland and Labrador and Nova Scotia that if elected, they would give these provinces 100% of their share of the royalties flowing from the offshore developments.

The Liberal Party made no such commitment. In fact, it was during the campaign, after written commitments had been made by the other parties, that the Government of Newfoundland and Labrador first, because of the intense pressures put on the Prime Minister by his own members down there and members of the Liberal Party and various associations, put the squeeze on. On one of his visits, perhaps they told him he would not be allowed out of the province, after an all night session under tremendous pressure, he called the premier of our province at seven o'clock in the morning to say, “I will accept your proposal”.

The Prime Minister did not put it in writing and, unfortunately, he was not asked for it. When a Prime Minister makes an open commitment that is carried by the press, one would think that we can keep a Prime Minister to his word.

The universe unfolded, the Liberals won the election, and then the question came from Nova Scotia, which by the way had also received that promise the day before the election in a last minute attempt to secure some seats. The provinces waited and waited. Our party kept asking the question, “When will the Liberals deliver their promise?”

We had a number of things happen. I know on this side of the House we raised the issue 35 times in question period alone, mostly as lead questions. This never happened before in history that a province had so much attention paid to it because of the importance of the issue to the province involved. We also had statements. We had a major debate in this House on that very issue. All of this was putting pressure on the government which was not moving at all on the issue.

Premier Williams, at an equalization meeting in Winnipeg, walked out to protest the lack of attention by the government on the issue.

I am glad to see we are joined by the Parliament Secretary to the Minister of Finance because he has been supportive of us on this issue. I am glad he is here to listen to my speech and verify what I am going to say.

We eventually went through the fall and there was still no movement. Just before Christmas, the Premier of Newfoundland and Labrador ordered that Canadian flags be removed from all provincial buildings. That drew a tremendous amount of attention across the country, but not all positive. However, people began to ask what was going on? When they realized what was going on and the shafting the provinces had been getting, then they also started to put pressure on the Prime Minister.

Finally, on Valentine's Day, a day for love, we received the agreement. The agreement was signed giving Newfoundland and Labrador and Nova Scotia control of their own share of the revenues from the offshore developments.

We would think, if we watched what went on that day, that this was it. It was all over because people were kissing the hem of the Prime Minister's garment and even on Valentine's Day almost kissing each other. If the players had not been the specific players they were, they might have kissed each other. It was a rough thing to think about kissing the Minister of Natural Resources, I am sure.

In any event, the agreement was signed and both provinces said they had it. As time went by more questions were asked about the legislation. We were told that it was complicated and we agreed with that. Then suddenly we found out that the provinces had reached an agreement with the federal government on the legislation. They were okay. There was nothing wrong with the specific piece of legislation. Bring it in, get it passed.

We knew that the government would support it. Even though people like the parliamentary secretary did not want to, it is government legislation so he would have to support it. We also know that the Bloc members would probably not support it, even though they should because it is giving provinces some control over their own resources which they always ask for. We knew our party, the NDP, and most of the people in the governing party would support it and the legislation would be passed quickly and money would flow to the provinces.

As this time goes by the Province of Newfoundland and Labrador is losing around $3 million a week. If we factor in all the spin-offs that this could create, it is getting closer to $1 million a day. That is a tremendous amount of money.

What did the government do? Did it bring in clean-cut legislation that could be passed quickly? No. It lumped that legislation in with 23 other pieces of legislation. Some of them are very complicated and controversial. Some are attractive pieces of legislation that can go through very quickly.

I go back to part 19 giving public works, of all departments, free rein in procurement, the issuing of contracts, and doing favours for its friends or whatever it wants to do. We also have legislation talking about child care funding and moneys for cities. There are no plans. Of course there are the infamous Kyoto clauses. I understand these will come out.

If they can be taken out of the bill, maybe in committee, the government will see that it is much more beneficial to it or particularly to the provinces of Newfoundland and Labrador and Nova Scotia if it would also take out the part dealing with revenues and there could be a vote.

I know my 10 minutes are up, but I am sure my colleague will continue in the same vein.

Budget Implementation Act, 2005
Government Orders

12:55 p.m.


Tom Lukiwski Regina—Lumsden—Lake Centre, SK

Mr. Speaker, I have one question for my colleague that deals with equalization but from a different perspective only inasmuch as Saskatchewan also had been looking for the same or similar deal as the Atlantic accord. We in Saskatchewan recognized the untold benefits we could receive were we able to retain 100% of our non-renewable natural resource revenue. By today's oil and gas prices alone I think it could easily total $1.5 billion a year, which could certainly make a huge difference and a huge positive financial impact on the province of Saskatchewan, something we have not seen in Saskatchewan's history.

I would like my hon. colleague to comment on that and whether he thinks, on the issue of fairness and equity across the board, that all provinces should be in the position to receive the same deal as Newfoundland and Labrador and Nova Scotia with respect to retention of 100% of the non-renewable natural resources.

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1 p.m.


Loyola Hearn St. John's South, NL

Mr. Speaker, I would like to thank the members from Saskatchewan, the western provinces and most of the country for solidly supporting my province when it had to fight so hard to get the control of and benefits from these resources.

In relation to his general question, I am sure he is not asking if Saskatchewan should benefit from its offshore resources. He is asking about the fundamental issue addressed by our party generally when we committed to give Newfoundland and Labrador and Nova Scotia 100% of their share of revenues from offshore development. The fundamental commitment was to take non-renewable resources out of the equalization formula, which would ensure that Saskatchewan and other provinces that had non-renewable resources would benefit from the development of these resources.

I agree totally with what the member has been fighting for. I say to him that our support for his province will be just as strong as the Saskatchewan support for us throughout this process. Hopefully, in the very near future there will be a government in power that will be able to deliver on that commitment. It is not a wild promise. It is not throwing away money. What it is doing is leaving money from non-renewable resources. There is a finite time. Sooner or later they are gone.

Alberta benefited from the original development. For 8 or 10 years Alberta received all the revenues from the development of its resources. That is why we should get it also because it gives poorer provinces the chance to get the infrastructure and start moving so that we in turn can be a contributing partner in Confederation.

We do not want to be taking from the rest of the country, such as Alberta and Ontario. We can be givers. We have the resources. All we need is to get our share of the development, so we can also be a contributing partner.

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1 p.m.



John McKay Parliamentary Secretary to the Minister of Finance

Mr. Speaker, the essential part of the hon. member's statement has to do with the issue of taking non-renewable resources out of the equalization equation in order for it to get 100% of that benefit. That is the position that the government has acceded to, but it raises in turn a whole bunch of other very complicated questions.

The first question, where a province does not have non-renewable resources, is why should a manufacturing sector, for instance, in Ontario be penalized effectively for including in its fiscal capacity things such as manufacturing and a variety of other ways in which people generate fiscal capacity? It begs the essential question of what the basic intellectual argument is to remove renewables or non-renewables or property tax revenues or any one of the 33 elements in the fiscal measuring capacity out of the formula so that one particular jurisdiction is preferred over another jurisdiction. Either it is all in or it is all out.

I would ask the hon. member his basis for why people in Ontario should be penalized for having manufacturing included in the measurement of fiscal capacity?

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1 p.m.


Loyola Hearn St. John's South, NL

Mr. Speaker, the member has an argument, but he has to remember that what we are talking about here is Confederation. We are talking about developing strong provinces by using their resources, whatever those resources might be, so that they can be contributing partners.

How can Ontario justify the fact that all the fall-out from the establishment of the federal government here in this province, the amount of money that flows into Ontario, is because the federal government is based here? All the federal departments are based here, and all the people who work here pay taxes. This benefit is not spread to the other provinces. We all have our strengths. If those strengths are developed, the funding from those developments, regardless of whether they are used properly, could make the provinces strong. Strong provinces make a strong country, and therein lies our argument.

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April 12th, 2005 / 1:05 p.m.


Gerald Keddy South Shore—St. Margaret's, NS

Mr. Speaker, it is certainly an honour to speak to the budget implementation bill.

My colleague from St. John's South--Mount Pearl has already given a very good background history and chronology of the Atlantic accord. I am certainly going to speak to the Atlantic accord, but I also want to speak to some of the comments that have been made in the House. I hope to set the record straight on a number of issues.

I could not help but listen with amazement to the Liberal member for Mississauga South. He quite often has his own version of reality in this House, but to go back to 1993 and somehow blame the state of the country's affairs on a previous government which was in power 12 years ago is a stretch of the imagination even for the member for Mississauga South. He talked about a $42 billion deficit that the government inherited in 1993. I am not trying to deny that; that is a fact.

What the Liberals never seem to bring up is that the Conservative government of the day governed for 10 years and it had inherited $38 billion of that deficit from the Trudeau era government. The Conservatives operated for 10 years at 19% interest rates and only increased the deficit by $4 billion. They did not cut services to the provinces. They did not cut the transfer dollars. They did not cut health care.

The Conservatives signed, which is still the largest and most important environmental accord ever signed in North America, that being the acid rain treaty signed with the United States. They brought in free trade. They brought in the GST. They governed and they did that in difficult times.

The Conservatives laid the framework for the Liberal government to come into power and reap the benefits without a plan, without any course of action, without any road map for the country. The Liberals simply govern, reap the benefits of somebody else's planting, harvest the benefits of somebody else's crop and drive this country into the worst of times during the best of times. It is absolutely incredible that any member of the government would try to blame the situation it is in on a Conservative government that was in power 12 years ago.

When we listen to this fabrication of events that somehow, as my colleague from Newfoundland has said, we cannot cut the Atlantic accord out of this budget, that is absolutely ridiculous. We passed the health accord in this House in 11 days. We did not talk about it for four, five or six months. We were able to separate that out of the budget. We were able to put that through the House as stand-alone legislation. We passed it in 11 days.

My hon. colleague from St. John's South--Mount Pearl mentioned that this issue was brought to the House 35 times, including by our leader. Thirty-five times we questioned the government on the Atlantic accord before the Liberals finally succumbed and said that they were going to have to do something. On the eve of the last election and not before, when they saw that they were losing seats in Atlantic Canada, then they became supporters of the Atlantic accord.

The Liberals have an absolutely abysmal record and to somehow rewrite history and reconfigure the facts of what actually happened is not acceptable in any way, shape or form. We brought the issue up in question period 35 times, but what my colleague missed was that there were another 13 times we spoke about the issue in statements pursuant to Standing Order 31 prior to question period. The members from Atlantic Canada raised the issue 45 times, not counting the times our leader raised it.

We are at an interesting time in Canadian politics. There is a lot of discussion going on about the budget. There is a lot of discussion of how we cannot separate out the Atlantic accord, that it has to stay in. The Liberals managed to separate out Kyoto because it was wrong-headed and had no business being included in the budgetary items.

There are 24 items in the budget, one of them being the Atlantic accord. The challenge to the government is to separate out the Atlantic accord, pass it forthwith, send it to the Senate and make sure that the province of Newfoundland and Labrador and the province of Nova Scotia get their funds from the Atlantic accord that they very rightly deserve.

The other thing we never hear the government bring up is the fact that last year's budget is still in the Senate. It is not as if it has been passed and has been implemented. Budget implementation takes time, but those guys are dragging their feet. It is still in the Senate.

Let us consider a couple of points on the budget implementation process. Last year's budget is still in the Senate. The previous budget implementation bill, Bill C-30, was introduced on March 31, 2004 and passed in the House of Commons on May 5, 2004. It took 35 days. These bills do not have to take time. The government is dragging its feet because it is caught up in the middle of the biggest scandal ever to hit Canadian politics since the railroad scandal during John A. Macdonald's time in 1872.

This is not about the Atlantic accord. This is about a Liberal government grasping with its fingernails trying to hold on to power. It is all about power. It is not about doing what is right for Canadians and doing what is right for Atlantic Canada.

Let us go back a little further in history. The last budget took 67 days to pass the House. The one previous to that one took 35 days. The one previous to that one took four months because the government was expecting to go into an election and it wanted to tell Canadians what a great job it was going to do for them. If the health accord went through the House in 11 days, in contrast the Atlantic accord could go through the House in 11 days. The average time that it took the last four budget implementation bills is 51 days.

Are we supposed to wait 51 days before Newfoundland and Labrador gets its just and fair share of its offshore resources, before the province of Nova Scotia gets its just and fair share of its offshore resources, or are we going to separate this out from the budget? We have challenged the government to do that. Our leader has challenged the government on many occasions to separate it out, send it to a committee of the whole, and pass it in the House in one day. The opposition parties are in agreement.

The government needs to show some leadership, but we have not seen leadership. The country is absolutely dying for leadership.

We have a budget here that is supposed to address the difficulties that Canadians are facing, difficulties that seniors are facing, difficulties that low income Canadians are facing, difficulties with delivery of health care services, difficulties of equalizing the transfer payment system. Unfortunately, the government would rather try to cling to power than deal with the issues of Atlantic Canada, of Newfoundland and Labrador and of Nova Scotia.

We have a unique history in this place. What we say in the House is on the record. I challenge Canadians and I challenge those watching this debate today to look at the Liberals' record. Listen to what they have been saying. I challenge them to take a look at the Atlantic accord and ask themselves why it cannot be a stand-alone piece of legislation. There is no reason it cannot be.

Canadians should take a look at the record, the deliberate shading of the facts, the obfuscation of the facts, that the Liberals have embarked upon. They should ask themselves why they would not simply set out the Atlantic accord in a separate, stand-alone piece of legislation and pass it forthwith. I think they will all come up with the same answer.

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1:15 p.m.


Peter Julian Burnaby—New Westminster, BC

Mr. Speaker, I listened with great interest to the speech from the member opposite, particularly when he referred to the ad scam scandal as being the biggest one since the railway scandal. I imagine he was talking about the previous century.

However, as I am sure he is aware, the biggest scandal that we have had until ad scam, which I agree is a deplorable abuse of taxpayer money, was in the 1980s with the Mulroney government. I would ask the hon. member to re-read On the Take by Stevie Cameron about the continual misuse of public funds in the way to further private fundraising for party coffers. In the same way the Liberals did with ad scam, we saw that with the PC Canada fund, which became very notorious in the 1980s. In a sense, what we have seen is both parties, same old same old, acting the same way, the Liberals taking their example from the Mulroney Conservatives. We see today the result.

The other comment I would like to make is in regard the record deficits that we saw in the 1980s. We have seen, under the Prime Minister, the fiscal projections being the worst among countries studied. In other words, the government misses the mark by the greatest amount of western countries studied. In the 1980s, under the Mulroney Conservatives again, we saw record deficits that were unprecedented, before or since.

Given the track record of his own party, the Mulroney Conservatives and their deplorable scandals, which were just as bad as the Liberal scandals, and the deplorable lack of financial management, the same as the Liberals missing the mark on fiscal projections, how can he say that his party is any better?

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1:15 p.m.


Gerald Keddy South Shore—St. Margaret's, NS

Mr. Speaker, that was quite a tirade for a new member of Parliament who has not yet got his feet wet in this place.

I would have very quickly said that the biggest scandal prior to this scandal was the NDP provincial government in British Columbia, on several occasions. Then I would have gone to the absolutely total incompetence of the NDP government in Ontario, which was booted out. If the member wants to compare apples to apples instead of apples to oranges, I am happy to do that on any given day.

I think what the hon. member really wanted to talk about was the government's budgetary projections, which I agree have been abysmal. This year the Liberals projected they would have a budgetary surplus of $1.8 billion. Last week we learned from our parliamentary advisers on the budget that it would be $6.8 billion or $6.1 billion, a total of $5 billion more in the coffers than we thought there would be at the beginning of the budgetary process.

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1:15 p.m.

Richmond Hill


Bryon Wilfert Parliamentary Secretary to the Minister of the Environment

Mr. Speaker, we heard from the member across the way the word “scandal”. Talking about the budget, is it a scandal that we have had eight balanced budgets or better? Is it a scandal that we are the only G-7 state paying off the national debt? Is it a scandal that the government reached a significant health care agreement of $41.5 billion, with every premier signing on for 10 years, the accountability factors? Is it a scandal that we reached an agreement with Nova Scotia and Newfoundland and Labrador on the Atlantic accord? Is it a scandal that we have invested in cities, unprecedented in the history of the country?

We are talking about budget. We are talking about something that many Canadians country want to see. They want to see the budget go through because it is important to families and to communities across Canada.

I am disappointed in the hon. member because I have a high degree of respect for him. I would like him to respond to that. I would like him to tell me why his party is toying with the idea of an election when these commitments are needed by Canadians?