Mr. Speaker, when we left off, before statements by members and oral question period, I had started to list the reasons we oppose the budget recently tabled by the Minister of Finance.
The first reason is the bogus consultation by the Minister of Finance of the opposition parties' critics. He claimed he was open to including the various priorities of the opposition parties in the budget. During our over 60-minute meeting with him, he seemed quite sensitive to each of our proposals. However, here we are, several weeks later, with a budget that makes absolutely no mention of the priorities we had identified to him. Among those priorities is the whole issue of resolving the fiscal imbalance.
I had the opportunity, in my seven-minute presentation, to explain the negative impact of this imbalance and what we expected to see in the budget to at least begin to fix the fiscal imbalance.
I want to repeat that the government has ample means to resolve this issue. Even given the health accord of last September, the equalization agreement and even the special agreements with Newfoundland and Labrador and with Nova Scotia, we know that, over the next six years and under the current federal tax system, the government will have over $100 billion in surplus funds. And that is a conservative estimate.
While the federal government pockets the excess taxes paid by Canadian and Quebec taxpayers, the governments of the provinces and Quebec are having a hard time and are barely achieving their objectives and fulfilling their responsibilities, such as providing front-line services to people.
There was the health agreement. It is obvious that the governments of the provinces and Quebec cheered the amounts that were freed up last year. They have been bled dry, in any case, since 1997 by the former finance minister, who is now the Prime Minister, and they lack funds. So any additional $100 million to meet the needs of an aging population is very welcome. But it is clearly not enough.
I will use the example of Quebec because it is the one I know best. The agreement last September which provided more than $500 million for health will only produce enough funding to run the Quebec health system for nine days. This amount seems enormous, but the needs are very great as well. As I was saying, when the Prime Minister was finance minister, he cut the Canada social transfer, the transfers for health, education and assistance for the most disadvantaged families. So we find ourselves in a situation in which there is a lack of funds for the governments of the provinces and Quebec.
First, there is not even a hint of recognition of the fiscal imbalance, and second, there is no sign of any attempt to resolve it.
We also thought that the federal government would be better disposed toward the equalization issue. As we know, the bogus agreement reached last October between the provinces and the federal government only takes the amounts that the federal government paid in 2001-02 for equalization, caps them at $10 billion, which was the amount of the transfer for the recipient provinces at the time, and indexes this amount at 3.5% a year.
Such an agreement makes a travesty of the basic, prime objective of equalization. As for the two other agreements with Newfoundland and Labrador and Nova Scotia, we will return to them in a moment.
Equalization is there to even out the fiscal capacity of all the provinces so that they can provide a variety of services of equal or nearly equal quality from east to west across Canada.
In order to achieve this, the true fiscal capacity, in other words, the capacity of the governments or a province to collect taxes from their taxpayers, needs to be determined. This is no longer done. The federal government simply takes the amount paid in 2001-02 and adjusts it for inflation without taking into account any change in the provinces' wealth.
In a given year, a province might receive an equalization payment because of a major setback. For example, if the price of oil dropped considerably, some provinces would perhaps experience some difficulties and might be entitled to equalization. Others could see an increase in cash flow another year, in which case they would not be entitled to equalization.
Taking the $10 billion amount from three years ago and simply indexing it without taking into account the change in the situation, is nonsense. This is a travesty of the equalization formula devised in 1947 by the Rowell-Sirois Commission.
The agreement reached with Newfoundland and Labrador and Nova Scotia is an example of this, but worse. We have nothing against Newfoundland and Labrador and Nova Scotia. On the contrary, we have friends throughout Canada, in the Maritimes and in the west, in particular. I realized this during the work of the Subcommittee on Fiscal Imbalance. We have friends from east to west in Canada, from coast to coast.
However, to properly measure a province's fiscal potential, none of its sources of revenue can be eliminated. Nova Scotia's and Newfoundland and Labrador's offshore oil revenues, for example, cannot be excluded from the calculation of these provinces' ability to earn revenues from natural resources, property taxes, personal taxes, goods and services taxes.There cannot be a different treatment in another province that cannot have a special agreement like that. Nothing gets measured if a source of revenue is excluded. But this is what is happening with Newfoundland and Labrador and Nova Scotia, which benefited from a $2.8 billion agreement over 10 years, with the first $2 billion paid already from the surplus of the last fiscal year.
Let us consider the amount allocated to Newfoundland and Labrador and Nova Scotia per capita under the agreement with Ottawa. If the agreement were applied to the residents of Quebec, the province would get a lump sum payment of $38 billion tomorrow morning. That is a lot of money. Mr. McGuinty and Mr. Sorbara of the Ontario government, whom I had the honour to meet three weeks ago in subcommittee proceedings, were disconcerted by this agreement. It means that the per capita fiscal potential of Newfoundland and Labrador and Nova Scotia exceeds not only that of Quebec, but also that of Ontario. This is how they skewed the system.
Equalization is the only program in the Constitution, the aim of which, as I was saying, is to try to standardize provincial tax capacities so that Canadians are served well across the country. However, this objective has been totally ignored. Equalization would no longer exist but would simply be called a $10 billion subsidy indexed to inflation and it would change absolutely nothing.
There is one other problem, employment insurance. When I met with the minister, he was all ears and all heart when he spoke of the 60% of unemployed people who are excluded from the EI program. He said this was unfortunate, and was full of compassion at our meeting. Yet there is nothing in the budget to ensure better access and better coverage. There are just a bunch of very limited pilot projects for areas of high unemployment.
What kind of government do we have? Not only is its morality open to question now, it has already been questioned because of past actions. It has slashed EI, treated the unemployed as fraud artists, and excluded people who had paid 100% of the contributions to the EI fund when they were working. Yet now 60% of them, or 6 out of 10 workers, cannot benefit from EI. Is that moral? Is this not immorality?
Since this government has been in power, that is since 1993, it has done a number of immoral things. When I use that word, I am not referring to the sponsorship scandal, which is just one more thing to add to the dubious immorality of the present Liberal government. There is nothing for the unemployed.
I have met with agricultural producers and I am sure my western and Quebec colleagues do as well, every day in their respective ridings. These people are the victims of a disaster caused by one sick cow in Alberta and a ban imposed by the Americans. As a result, there is a total disaster as far as our farmers are concerned.
In addition, farmers in Quebec and across the rest of Canada have had negative net incomes for three straight years. Do members know what that means? It means that these producers work 365 days a year or close to it—they do not take vacations because the animals cannot wait—and have nothing to show for it. They do not have one red cent to put in their pockets, even if they have dozens of animals and tonnes of grain to sell. They have been going through this for three straight years.
How does the federal government respond to the mad cow crisis, for example, or the grain crisis caused by an increase in American subsidies for wheat in particular? It responds by providing $1 billion, which it was very pleased to announce last week. Farmers have been going through an unprecedented catastrophe for 25 or 30 years now. What does this figure mean for a beef producer? It amounts to $20 a head. For two years, these people have been losing $800, $900 or $1,000 a head, and now they are offered $20, while the government claims that it has done all it can, that it tried to persuade the Americans and develop a coherent policy. Well, these people are all starving.
So this is the federal government's response, despite its ability to collect a $100 billion surplus out of our pockets over the next six years. It could have done more to help farmers escape the catastrophe that they are currently going through.
In my riding of Saint-Hyacinthe—Bagot and in the rural ridings of most of my colleagues in Quebec and elsewhere in Canada, farmers are expressing their dismay, even after the fabulous announcement last week.
Nothing is provided for social housing, even though people have been waiting for a long time. All that the government has done since 1991 is invest in maintaining the existing social housing, while nothing is provided for new construction. Many families currently spend more than 50% of their incomes on rent. It is said that when people spend more than 25%, they are living in poverty. When they spend twice that, they are living doubly in poverty. But there is no answer to this in the budget.
I will leave it to my colleagues who will follow, including the member for Rosemont—La Petite-Patrie, to speak about the environmental question.
In conclusion, those are the reasons why we oppose this budget.