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.