Debates of June 20th, 2005

An Act to Authorize the Minister of Finance to Make Certain Payments

[Larry Bagnell, Liberal, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, I was delighted that the member spent his time talking about international trade. The Prime Minister actually has been talking about this for over a year and is leading initiatives in this. I am delighted that the member is coming on side to support us.

The Prime Minister has increased foreign presence in our consulates in the United States, especially one in Alaska that I have lobbied for. We have millions of dollars of softwood lumber marketing in the United States to deal with that trade dispute. In the Doha talks we are leading the way to reduce agricultural subsidies in Europe and the United States, while still championing our supply management mechanisms here. The Prime Minister long ago, and I am glad the opposition is coming on side, talked about the fact that Canada now has to look at the new emerging markets in international trade in Brazil, India and China. Of course he signed a new international trade agreement with Mexico.

The member suggested the removal of trade barriers. Does he support some of his party members who have constantly criticized the Export Development Corporation? All major countries in the world help their companies export by providing them some insurance should they not get paid. Canada is keeping up with the rest of the world because we depend on trade and yet some of his party's members were suggesting we handicap Canada by removing this service that helps us compete with other countries.

The member did get into the area of CIDA. What does he think about the dramatic change in the number of countries that we have decided to support through CIDA and our new strategy?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, perhaps I was not very clear in some of my comments if they were actually misconstrued as being supportive of this budget. Clearly nothing that I commented on could be classified as supportive, but I guess one grasps at the support one thinks one might get.

It is interesting that my hon. colleague mentioned the fact that the Prime Minister is finally addressing some of these trade issues, such as not enough consulates in different areas and certainly with our largest trading partner. The government has had 12 years to put those in place. It is not as if Canada's trade interests came out of nowhere and just started last year. The government has had 12 years to develop these trade initiatives and to increase our opportunities to trade.

There is one comment I might make about the consulates. Certainly they are a good thing, but I still do have to question to whom the consulates are reporting. My sense is that they are reporting to foreign affairs and not to trade. If indeed these are consulates that are set up to initiate trade deals and help Canadian companies, then they should be reporting to the trade department rather than to foreign affairs.

I would also have to question how much we are leading at the WTO. In fact the Minister of International Trade was not even present at the last two mini ministerials leading up to Hong Kong in December. How can we be a leader if we are not even at the table?

[Peter Goldring, Conservative, Edmonton East, AB]

Mr. Speaker, I would like to talk about what was mentioned earlier about the affordable housing sector and how this NDP budget has an allocation in it for $1.6 billion for affordable housing. The question really is, why was there no allowance for any additional funding in the budget itself?

I would like to remind the House in general that there was another promise in the red book 2000 during the election campaign. At that time it promised to build up to 120,000 units of affordable housing worth $680 million. Of course that came to fruition in budget 2001 with an allocation of $680 million. In 2003 there was another $320 million. The 2001 budget had $753 million for homeless, which could be construed for homes. There was another $400 million in budget 2003. This makes a sum total of $2.1 billion, when from the onset only $680 million was going to create 120,000 units of housing.

At the end of this program there have been less than 25,000 units of housing produced with that $2.1 billion. I would ask the hon. member to comment on this. Does he feel that without a plan, without proven results, without analyzing what the problem was, that this is just throwing good money after bad?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I would like to take a moment to commend the hon. member for the good work he has done on these specific issues, not only in affordable housing for Canadians but the passion he has shown in helping people in other countries. That brings the Conservative message out loud and clear that we on this side of the House do actually want to follow up on our promises. We do actually want to help Canadians.

There is probably one very simple way to answer my hon. colleague's question. Promises made, promises broken. We have seen it repeated many times in I have forgotten how many red books now. The numbers quoted are probably very accurate, but we probably should not be very proud of those numbers.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, I am glad to speak at report stage of Bill C-48 to address a lot of the concerns that the constituents of Selkirk--Interlake and I have with this bill. The big thing is we are talking about $4.6 billion that is contained in a document that is only six pages long. The last three pages make really good reading as they are all blank. Essentially this bill gives a blank cheque to the Liberal government to do with as it pleases.

We do not want to see any more boondoggles or scandals take place in the government. One of the reasons I entered politics was to make sure that we could put an end to wasteful spending, get the biggest bang for our buck as taxpayers and defend the interests of taxpayers here in the House.

The big concern is there are a lot of great ideas laid out in two pages of spending proposals, but there is no plan to support them. We voted on Bill C-43 just last week. When that bill was tabled, it was tabled with volumes of books as a backstop, as a plan, as a way to have the checks and balances in place for the spending that the government was promising. During the spring the committees sat down and went through the budgets for the respective departments and voted on the budgetary estimates line by line. Those are the types of checks and balances that are needed to ensure that government spending is kept in place so that the taxpayers are getting the benefits and the services they have requested.

I fear that the programs and policies that are being supported in this very thin bill will open the door for more mismanagement and more boondoggles. We only need to look at things like the gun registry, the HRDC boondoggle and many other programs that have been overrun because there has not been adequate planning put in place for the spending. We have to make sure that the plans are there and that the dollars are spent wisely.

I am the associate agriculture critic for our party. One thing that concerns me is that the NDP members often come in here and say that agriculture is very important to them, but unfortunately there is not a single line in the bill that even addresses any agricultural concerns. I have to wonder what the NDP priorities are if that party is not addressing agriculture. It makes up such a crucial part of our economy here in Canada, not just rurally but the entire GDP is largely based upon our agriculture and resource sectors.

All the spending that is planned in the bill is not really very beneficial to rural Canada. I represent a very rural riding. I do not see anything in the bill that is going to help with doctor shortages in our area. I do not see anything in it that is going to help with access to federal services in rural Canada. I do not see anything in it that is going to help our farmers improve their marketplace. For those reasons, I cannot support Bill C-48.

There is a paragraph in the bill that addresses foreign aid. I think it is admirable that we would increase our foreign aid to at least 0.7% of GDP, which is a number that has been bandied about since the 1960s as the ideal mark in funding foreign aid. However, we know that currently, as was already talked about with respect to CIDA, there is a shotgun approach to foreign aid. Money is thrown all over the place, sprinkling a little here and a little there. It is not really getting to the crucial parts, the areas of importance to help those in need.

Whether we are looking at poverty or children's issues around the world, essentially we should target a few countries. We should focus our resources on a few countries to get the biggest bang for our buck to help those people who need it the most with their education and their farming activities and help them provide for themselves. Those are things that we want to address.

We are talking about throwing more money at foreign aid, but we have a real crisis here in Canada right now and that is why we need more farm aid. We have a BSE crisis that needs to be addressed more adequately. Farmers are still not getting the dollars into their pockets and we need to ensure those things are taken care of first before we start throwing more dollars into foreign field.

We have to realize what this bill is all about and what brought it about. If this bill were so important to the Liberal government, it would have been in the original budget back in February. We know that it was all about getting 19 more votes to support the government. The NDP negotiated this deal in a backroom on a napkin and this is what it came up with.

This has been traded off with some really major tax cuts that we need to see take place to create more jobs and more opportunity in this country. The $4.6 billion could have been better used to ensure we create more opportunities and a better and more competitive environment for business. We would see more jobs and, by and large, a better economy because of these tax cuts. Unfortunately, we have traded that off for votes and that is shameful.

There are a lot of things in the original budget that we could support but there is nothing in Bill C-48 that we can really dream of being brought forward and put into play. There is no accountability, no checks and balances, and nothing for agriculture. We are always quite concerned in ensuring that we address the needs of taxpayers as much as possible, so that we can go forward and put in place the services they desire. I do not see that happening here in a legitimate way.

[Shawn Murphy, Liberal, Parliamentary Secretary to the Minister of Fisheries and Oceans]

Mr. Speaker, the hon. member outlined a whole litany of problems with this budget, but let us look at the macroeconomic indicators of this nation. I know there are always improvements to be made. We have to deal with the problems and never let our guard down.

Let us look at the situations that are generally good. We have strong employment growth which is the highest in the G-7. We have the fastest growth in standard of living in the G-7. We have good, steady, consistent GDP growth, low interest rates and extremely low inflation rates. There has been an extreme reduction in the debt to GDP ratio over the last eight or nine years.

We have had eight consecutive surplus budgets, the only country in the G-7 to be in a surplus position, and we have paid down about $65 billion on the debt over the last nine years. When we compare that to what happened during the Conservative government, it is almost the opposite.

If things are as bad as he says they are, why are all the macroeconomic indicators, which are the only indicators we have, pointing in the opposite direction?

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, the first time I voted in a federal election was in 1984 and I was more than happy to vote Conservative and replace the Liberal government of the day.

I took out my first loan in 1983 to buy some cows and the interest rate was over 22%. My father was feeling the same burden in his farming situation. Interest rates were so high in this country that no one could make a viable living. No one could start up a new business and it was choking the nation.

Then we had the chance to turn that around. It started with the Conservatives bringing in the trade agreements and the taxing regime, so that we could have a healthy economy and a healthy federal budget. As has been said--

[Paul Szabo, Liberal, Mississauga South, ON]

You never paid down a penny of debt.

[James Bezan, Conservative, Selkirk—Interlake, MB]

At 20% interest, it was almost impossible. If the interest rates were at the same level as they were during the last 12 years, there would have been a surplus posted the last three or four years of the Conservative government back in 1984-85 when it came into power.

The other thing to take into consideration is that spending has gone through the roof over the last few years. Since 1999-2000 spending has increased 44.3%. That is not responsible. Sure, the government has a flood of income but we just cannot keep on spending. Let us return some of that back to the taxpayer. Let us put more of that against the debt. No, we are going to invent some more programs that are not going to be fiscally responsible and will jeopardize our status now as a nation, as the Liberal government likes to do all too often.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member just deflected the question. It was an excellent question. We lead the G-7 in job growth as well as being the only G-7 country to have a surplus, low interest rates and low inflation. The fundamentals are good because we are fiscally prudent in managing the financial affairs of the country.

The same procedure has been followed in significant cross-Canada consultation with Canadians. Canadians did not say to forget about affordable housing, post-secondary education, the environment, foreign aid for Darfur, or labour market programs. Canadians did not say that. They wanted a balanced approach. It was not “give me more money and stay out of my life because we do not need anything else”.

Given that background, the member should know that there are about 14 million Canadians who pay income taxes each year. If we were to put $100 in each pocket of every Canadian who pays taxes, it would be $1.4 billion to provide $100 of taxes. If the member is suggesting we need meaningful tax cuts, what does he consider to be meaningful? How many hundreds of dollars times $1.4 billion does he feel would be necessary to achieve the things he wants and what is that total, and does it put us back into a deficit scenario which Canadians do not want?

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, the $4.6 billion that was promised in the original budget and taken out of Bill C-43 was going to be targeted toward corporate tax relief to make our industry more competitive, to create more opportunity for reinvestment and job creation. We like to throw out rhetoric as to what is meaningful, but any dollar that we can put back in the pocket of Canadians is meaningful. I will trust Canadians any day of being able to spend their money more wisely than the government. We need to give them that opportunity and put those dollars back in their hands.

We have been debating the bill for some time now along with Bill C-43 and I have not heard anything from the other side that would convince me that if Bill C-48 were so important, that the Liberals would have put it in the original budget. They have never come out and said that it is a good idea. Bill C-48 represents only one thing and that is to buy NDP votes to ensure that the Liberals stay in power. That is what it is all about.

[Peter Goldring, Conservative, Edmonton East, AB]

Mr. Speaker, I am pleased to speak to Bill C-48, the NDP budget, and to remind people that in the 2000 Liberal red book the government promised to build up to 120,000 units of affordable housing for $680 million by the year 2005. To date, there are less than 25,000 units of housing that have cost over three times that allotted funding that have been built, some $2.1 billion.

Bill C-48 commits $1.6 billion, with no plan and no number of housing units the government expects to build. It just simply does not know how many it would be able to build.

The current hodgepodge Liberal approach to affordable rental housing and homeless emergency shelters for single people is both financially wasteful and appallingly ineffective. Homeless emergency shelter usage and affordable housing availability for singles are interrelated concerns. A shortage of available low-cost, entry level rental units for singles leaves many no option but to seek very costly emergency social shelter space. Any discussion on housing needs must include a basic understanding of the most needy, the single people who dwell in Canada's emergency shelters.

It might be impossible to individually categorize all the sheltered homeless because some have varied levels of mental capabilities and addictions that generally inhibit independent, unsupervised living, let alone employment. Most of those living in homeless shelters are fully capable of paying their own way in modest, independent living and affordable homes, but none are available.

Canada's sheltered homeless population can be broken down by cause. Some 25% are what we call the de-institutionalized from the '70s. They are singles who are really in need of institutional care. Some 25% more are unemployable. They are hard-to-house singles with addictions. However, 50% are simply low-income singles in need of affordable rental housing.

Statistics Canada in 2001, the last year it took the statistics, said there were 14,150 homeless single persons in Canada's emergency shelter system. In Edmonton, there are 590.

Canada needs affordable rental housing for low-income families, but for those 14,000 singles in emergency shelters across the country who are able to live independently, the need is great for simple, entry level, single-room housing. Research has indicated that 50% of those residing in the shelters are actually low-income individuals with some income but with no independent living rental housing alternatives.

Federal funding flows into replacement emergency shelters, assisted living, transitional social shelters, but not into the building of independent living, private, singles homes.

Nationally, 75% of all private, single-person, entry level rental housing has been torn down or closed down over the last 30 years and has not been replaced. During the same period, singles homeless emergency shelters have been expanded and are now one of Canada's fastest growing industries.

Unavailable, private, $350-per-month, self-paid, and entry level singles homes have now been replaced out of necessity by $1,500-per-month emergency shelter and transitional social shelter, industry-taxpayer paid emergency beds.

One contributing problem is that affordable housing funding agents are very disconnected from the emergency shelter funding agents and, sadly, neither prioritize the true need for private, basic, entry level, singles, independent living rental homes.

New, multiple unit, family rental apartment housing numbers have also drastically declined over the last 30 years while new multiple unit condo ownership apartment housing numbers have grown. Over 30 years ago, 90% of all multiple unit housing being built were rental units. Today, 90% of all multiple unit buildings are condo ownership apartments and the very few rental apartments being built are not entry level, economical apartments but upscale, expensive, luxury units.

While Canada's population has grown greatly, society's most basic housing need has not changed. Virtually all of us first leaving home are low income earners and rent because we cannot afford the down payment to buy a house. The need for affordable, entry level rental housing is great, but assistance by government to help create more should not be made in isolation from private, professional rental owner market forces.

The decline in the new rental construction market and an increasing need for affordable rental units must be explored statistically to determine what went wrong with the marketplace. The private rental market knows that affordable rental housing begins by building economical basic entry level housing, with fees, levies and taxes no higher than those for home ownership, and allowing private developers to access funding meant to encourage construction of new affordable housing.

Private developers of economical, multi-unit rental projects are discouraged by the barriers against building new rental units, such as proportionally higher property taxes, higher construction fees and levies, as compared to ownership condo units. Excessive city planning aesthetic requirements unnecessarily add considerably to costs of economical basic housing.

Research would show that these barriers are more numerous and much higher than they were 30 years ago. In short, fees, levies, grand municipal architecture vision and taxes have together served to halt development of building basic rental apartment units, while artificial rent controls and rent subsidies made certain new development would not start.

The federal Liberal government position on affordable housing and homeless funding is little different from the NDP's 1% solution, other than that the Liberals put more money into it. The federal government has failed to provide provinces and municipalities with statistical guidance that would help them understand the barriers and offer solutions to affordable rental home development. Instead, the Liberals bring out the federal chequebook, which, with poor guidelines and no remedial long term measures, actually exacerbates the problem and loads more taxation burden on the fewer and fewer unsubsidized rental taxpayers.

Proper statistical analysis of the cause and effect of taxation, fee burdens and subsidies would point to long term solutions for governments to recognize the problems and then work toward correcting them.

Once again, in the 2000 election red book, the promise was to create 120,000 homes for 680 million before 2005. Less than 25,000 have been committed to construction to date.

Non-profit landlords have many times received up to 100% of the project funding from multi-sourcing of taxpayer funding grants, pay no property taxes and charge just slightly less than market average rents. Liberal funding mismanagement is quickly destroying what little is left of the private competition in rental housing. The problem is that the federal Liberal government has no more idea of how to effectively control these funds than does the NDP.

Most of these funds were disbursed over the last five years and very little housing has resulted. Properly planned and disbursed, the $2.1 billion, partnered with provinces, could have helped build over 150,000 new homes and could have half emptied Canada's emergency shelter spaces.

Over 50% of Canada's 15,000 emergency shelter units have some money and could pay themselves for moderate entry level single room homes, but none have been built, and sadly, the $2.1 billion has leveraged no more than 25,000 homes, most of them social non-profit housing. Meanwhile, private developers would build, pay taxes and rent apartments at less than market rents for a fraction of the grants now being made, but they are discouraged from applying.

We need to return to the competitive enthusiasm of the private rental building construction market of the 1970s, where literally thousands of very affordable modest apartment buildings were built for entry level renters. The cause of today's affordable rental housing crisis is that we no longer build significant quantities of very necessary affordable housing for entry level renters.

Statistically identifying and then working with the federal-provincial-municipal departments to remove the barriers that inhibit private rental development should be the first priority. Then we must work with the provinces on a plan to proceed with workable guidelines to encourage competitive private enterprise to return to the business of building, owning and renting affordable entry level housing.

Throwing more billions of dollars at the problem without a plan most certainly will not address the housing needs of low income and homeless Canadians. It will only continue a trend of policy incoherence and ineptitude.

The promise made in 2000 was a promise broken. The government did not create a fraction of the homes promised. The money grew to $2.1 billion and produced less than 25,000 units. Of the provincial-federal share, that is approximately $170,000 per unit produced, a colossal mismanagement on a monumental scale. Shamefully, this bill is not about building housing. This bill is all about buying votes.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I have to admit that it is kind of refreshing to finally hear someone talk about one of the aspects of the bills.

The member sounded quite knowledgeable but seemed to dwell on the homeless side of housing, then on social side and then on the affordable. There is a difference.

I must remind him, if the Toronto condition is any indicator, that: 35% of the homeless in Toronto suffer from mental illness; 28% are youth alienated from their families, 75% of which have experienced physical or mental abuse; 18% are aboriginals off reserve; 10% are transient women; and for the remainder, less than 10%, it has to do with some economic reasons. I would characterize those people as those in Canada whom no one loves.

That is the social housing side, but those people probably do not want the housing at any price. This is one problem that needs to be dealt with and this is not what this bill deals with.

With regard to the affordable side, members will probably know that many of the projects that have been built require a split between market rents and housing that is subsidized or rent geared to income. Usually it is 40% subsidized rent or rent geared to income, yet if we were to think about it, if the proportion were simply increased from 40% to 50%, that would be a 25% increase in the affordable housing stock. There are ways to deal with this. It is not just about money; it is about being smart. I know the member realizes that.

My question for the member, since he has spent a substantial portion of his time on housing, is this, excluding investment in aboriginal housing, which is a given: does he believe the non-aboriginal support would in fact be beneficial not necessarily as a final solution to all things but rather a help to ensure that more Canadians have the dignity of a roof over their heads?

[Peter Goldring, Conservative, Edmonton East, AB]

Mr. Speaker, first let us talk a bit about those in the shelters, those who have been used, frankly, as a kind of symbolism for affordable housing fundraising and for coming to the federal government for affordable housing money. It is the poor people who are in the shelters. Certainly we can argue statistically, one balance or another, because some of them have multiple challenges.

What I am saying is that 25% are probably the de-institutionalized with mental challenges and another 25% have certain other addictions, making it very difficult for them to exist. The fact remains that the 50% number is made up of people who are fully capable of living on their own. Quite frankly, they have some income and could very well live on their own if there were modest housing available for them. Yes, Toronto's number will be slightly different than Calgary's or Edmonton's, but overall the mix is the same whether we are talking about Toronto or about Edmonton, where I live.

When I see the SCPI funds going into funding $4 million, and this is just one example, to move 62 people out of a rented shelter into an architecturally designed shelter that has exactly 13 more beds and now has a budget that is 50% higher than it was before, I know it does not help those homeless people at all. What it is doing is building a shelter system.

What about those homeless people? When are they going to have the dignity of their own private single room home so they can close the door behind them in the evening, something modest? Then they can have the dignity of being able to afford to pay it for themselves. That is on the one hand. On the other hand, there is multiple family housing.

Why not have that offered by the irregular housing industry, assisted by some granting, probably to supplant all of the other barriers that have been in the way of creating rental housing, to bring back that industry again? Why does that industry have to be in the hands of non-profits? There certainly is a role for non-profits, but if we want the big bang for the buck, we want to work with the boardwalks that have tens of thousands of units. Those are the people we want to work with to get the bang for the taxpayer's buck, to build multiple units, not just one-off projects.

Certainly there are solutions required and it is a very complex issue all the way up and down, but we should not ignore the private sector and, for heaven's sake, we should not ignore the people who are still locked up in the shelters because we have not done a darn thing for them.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, I too will speak with respect to Bill C-48 and highlight some of the issues of concern.

Initially the NDP leader posed a question in the House to the finance minister as to whether or not there was any chance he might modify the first budget, Bill C-43. The Minister of Finance indicated that he might consider some technical changes, in the sense of being technical.

The leader of the NDP went fishing a little further and asked whether he might consider some substantive changes to the initial budget. The finance minister indicated he would not because, he said, one cannot start changing the budget. He had consulted with many people. He had consulted with all the Canadian interests. He had heard from the various interest groups. He had taken all that into consideration and, outside of technical changes, he could not do anything.

In fact, the Minister of Labour and Housing had proposed in advance of the budget that there would be $1.5 billion allocated over the next five years for housing and he was shut out. It was the minister who had proposed that to the finance minister. The finance minister said it would not be prudent given all the circumstances that he knew of. He said did not want anyone to “cherry-pick” the budget, to take any portions out of the budget. It was what it was, he said, he had come to a balanced approach and there was not any room to move.

Suddenly there was a $4.6 billion movement. That is not something that could be called a technical change to the budget. That, to my mind, is be very substantive.

However, when he was asked by the leader of the NDP whether he would be prepared to make any changes, he said he would not buy a pig in a poke. He said he would need to know exactly what was being talked about. When we look at Bill C-48, I am not so sure that the NDP did not sell itself for a pig in a poke.

When we look at the bill itself, it indicates that the minister “may, in respect to the fiscal year 2005-2006, make payments” with respect to the items indicated, provided there is a surplus of $2 billion, and similarly for the period of 2006-07. However, the budget agreement itself said the investments would be booked in the years 2005-06, again, only if there is a surplus and only if the minister decides that the money will be spent. We do not know exactly what it will be, but we know it will not be in excess of $4.5 billion.

When we read the initial budget agreement, which many have said was prepared hastily in a period of 24 hours, without essential consultation with the finance minister, we find that it actually was meant to be $4.6 billion. It is missing $100 million. Part of that $100 million was with respect to the investment that the NDP required for the protection of workers' earnings in the event of their employers' bankruptcy. That is not in the bill.

The Minister of Labour has been in charge of the area of workers' protection for some time; it has been in the House for a period of nine years. I ask, what has pricked the social conscience of the minister? The minister first of all agreed to the fact that it would be in the budget bill agreement of May 3, 2005, and then not in the act but in a separate piece of legislation.

That separate piece of legislation is a proposed amendment to the Bankruptcy and Insolvency Act. Let us see what the minister actually proposes in that bankruptcy act. He is suggesting that workers be given a superpriority, ahead of the banking industry and secured creditors, to the extent of $2,000. He then proposes that there be a wage protection fund totalling $3,000, with the understanding that in the case of the bankruptcy when the worker applies to that fund and gets paid, the worker assigns or subrogates all of the worker's rights to Her Majesty the Queen or the federal government, which then takes the place of the worker and collects back the $2,000 at the expense of the secured party.

If that bill should pass, anyone attempting to start up a business and to provide jobs for workers would find himself or herself being able to obtain a far smaller loan than before the legislation. If he or she had 50 employees at $2,000, the financial institution would deduct about $100,000 from a line of credit. That business may never start. In fact, existing businesses may have a hard time maintaining their lines of credit if the legislation were to pass.

I make that point to make this one. The Minister of Labour has indicated this legislation will cost somewhere between $30 million and $50 million. A good half or more of that would be recoverable by taking the funds from secured creditors by virtue of the preferred position. Therefore, in the net there was not $100 million, as agreed to in the budget bill agreement, but perhaps something like $16 million over the next year and another $16 million over the following year. That is an indication of the Liberals living up to their promises.

At the same time, we find there has been a piling up of dollars in various crown corporations such as CMHC. It is charging first time home buyers an insurance fee that results in profits being made by the organization to the tune of $800 million. In 2005 it is expected to rise again. In 2009 it is expected to rise to $1.175 billion, which should help first time buyers to buy a home. The government has made promises that require the funding of various programs, the use of multi-dollars, but primarily for the purpose of not helping those on the other side of it, but to help the Liberals stay in power, to help them cling to power.

As we heard my learned friend from Edmonton East, we have had a great amount of dollars spent in the housing area, but we have not seen any affordable units built. He indicated 25,000 or less housing were built after many years of Liberal spending. Where has that money gone? The minister has indicated that over $1 billion has been spend on what is called “protective care” or to look after those who are homeless or lack affordable housing. However, he has not provided the amount and type of units that are required.

The minister spoke recently in an interview. He realized that most of the moneys the Liberals had spent so far had been for emergency shelters. He also realized that the area of housing, first and foremost, it was a provincial jurisdiction. Yet when we look at Bill C-48, or the bill that was made on the napkin, it indicates that the money allocated for housing would be utilized without the agreement of the provinces. In other words, the federal government would decide where it will spend it.

In the interview to which I referred, the minister was asked how many permanent housing units the money would buy. The interviewer said, “I still do not have an answer to my question: $1.6 billion, how many units of affordable housing will you be building with that?”

Here is the Minister of Labour's answer, “A lot”. We know a few is seven or eight. What would a lot be? A lot would be more than seven or eight. When $50,000 or $80,000 is spent to subsidize a unit, or as my learned friend from Edmonton East said, to build a few number at great expense, it is not a wise use of money. She asked if he had a number and he never answered.

He said that once the budget passed, and he was in the process of working and meeting with his provincial counterparts, they would not have to put in a dollar. She asked him again if he was not going to delay. He replied that since July $700 million was still in the bank. It had been there for the past three or four years. The provinces had not taken the money already in place. What did he do? He met with them individually and collectively and asked them what it would take to start spending the government's money. He said that the government was starting to spend the money and, in his words, “building units like crazy”.

The point is it is not hard to spend money. Anyone can spend money, but spending it wisely and achieving the maximum return for that dollar is very important.

Behind all of this is the fact that while old money is not used up, new money is put in place to have a corrupt government cling to power and for no other purpose. When we divide the $4.6 billion by the number of members in the NDP, that is a pretty expensive buy.

[Shawn Murphy, Liberal, Parliamentary Secretary to the Minister of Fisheries and Oceans]

Mr. Speaker, I have a question for the member about his comments on the wage protection process. He has valid concerns and I share them. This, no doubt, will be an extremely complex issue when it comes before the House.

We are dealing with the interplay between federal jurisdiction and provincial jurisdiction and whether the company is under the Bankruptcy Act, or under the CCAA or insolvent. We do not want to develop or create an impediment to companies seeking financing in Canada.

My understanding is this is not in Bill C-48. It would require separate legislation or a major amendment to existing legislation. It would have to come back before the House. I assume it would be debated extensively, dealing with a separate appropriation.

Why would the member hold up this bill, which seems to have broad approval from across Canada, for that issue?

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, I am not holding up this bill because of that issue. I am pointing out that the government had years to bring in the wage earner protection act legislation.

The Liberals were pricked in their social conscience by the fact that they needed to buy some votes to stay in power. They were prepared to give the NDP what it wanted. NDP members said that they wanted $100 million for a wage earner protection plan and all of a sudden a separate act was introduced to meet that promise.

The fact is the government has indicated that it will utilize $30 million to $50 million to protect workers and it will receive a half of it on the back of secured creditors. However, what the government is giving is really $1,000 per worker. More important, that amount would be less than a quarter of quarter of 1% of the $46 billions it took from the employment insurance fund to put into general revenues. The government will give the workers a quarter of a quarter of 1% for their use to protect them.

It is appalling. The Liberals should first put the $46 billion back where they got it from so workers can protect themselves without the need of government and without the need of a $30 million Liberal handout. The Liberals have had their own money sitting in general revenues which they have frittered away in one fashion or another while a debt is in place. They are taking $4.6 billion of that money and giving it out to buy votes for themselves for the sole and exclusive purpose of staying in power.

Any fair judgment would have to say that the Liberals did more than buy votes. They played tricks in the House to get people to cross the floor. They defied the House constitutionally when they did not recognize the fact that the House had lost confidence in them. For a week, they used the levers of government, the power to government, to stay in government when they had no right and no legal basis to do so. We might expect that in third world countries, but we would not expect that in Canada. To legitimize government, they did it illegitimately and that is wrong.

[Charlie Penson, Conservative, Peace River, AB]

Mr. Speaker, I would like my colleague from Souris—Moose Mountain to address the issue. I know he is on to the Liberals in this business of Bill C-48 providing the funding that the NDP wants for bankruptcy protection.

It sounds like a noble goal. I was on the industry committee for a number of years. We heard a lot about small and medium sized businesses not being able to get the kind of credit they wanted from the banking industry. If somehow they are not to be ranked as secured creditors, if wage earners are to be ranked ahead of them, I think it will be more difficult.

Could the member for Souris—Moose Mountain comment on that?

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, it is simple math. Any business person who attends at an institution to raise funds to start up a business and to provide meaningful jobs to ordinary people needs a line of credit. Most times, those lines of credit are taken on accounts receivable, on inventory and on cash in the bank.

The first $2,000 of receivables per worker is a hit of a secured creditor, even if one has security on that. What will they do? The institutions will count up the number of employees, multiply that by 2,000 and reduce the amount of money available to operate a business: 50 workers, $100,000. These business people will have to go to their moms or their dads or some place else to find security to proceed, or not proceed at all if they cannot get the security.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Mr. Speaker, I am pleased to rise today on behalf of the constituents of Fleetwood—Port Kells to participate in the debate on Bill C-48, an act to authorize the Minister of Finance to make certain payments. The bill is better known as the Liberal-NDP budget.

Bill C-48 seeks to enact $4.5 billion of the $4.6 billion deal struck by the Liberal government with the NDP to make payments in 2005-06 and 2006-07 from surplus moneys exceeding $2 billion. The money would be used to fund environmental initiatives including: public transit; an energy efficiency retrofit program for low income housing; training programs; enhanced access to post-secondary education to benefit, among others, aboriginal Canadians; affordable housing, including housing for aboriginal Canadians; and foreign aid.

All of this is unplanned spending and the Liberal government has proven time and time again that when it spends without a plan the result is inevitably waste and mismanagement. We have seen it with health care, the gun registry, Kyoto and infrastructure spending.

Billions of dollars have gone from the treasury without noticeable improvements to our health care system, the environment or our nation's highways. It all boils down to a government that liberally throws money at an identifiable problem without ever having a clear idea of how to fix it. Now the government wants to spend another $4.6 billion of taxpayers' hard-earned money without a plan. Canadians have a right to feel nervous.

The Liberals only agreed to this bill to save their political skin. This is a $4.6 billion deal using taxpayer money to keep a corrupt party afloat in government. A government mired in scandal has teamed with the NDP to write a fiscal plan for the nation on the back of an envelope. This is a recipe for economic disaster. If all of the spending in Bill C-48 was such a wonderful idea, then why was it not included in the February budget?

The Prime Minister has abandoned his party's so-called balanced approach to governing, which was to offset spending increases with some debt repayment and modest tax relief. We must keep in mind though that the balance was always tilted heavily in favour of spending anyway as taxpayers can attest. Now, with his budget pact with the NDP, the Prime Minister has given up all pretense of a balance. The deal squanders the budget surplus and flouts responsible budgeting in favour of irresponsible spending.

Even before this deal, federal spending was running out of control. Last year the finance minister projected program spending of $148 billion for 2004-05 and it ended up being over $10 billion more than that. As a result, between 2003-04 and 2004-05, government spending increased by over $17 billion. At 12%, this is the largest single spending increase in over 20 years and the fourth largest in the last four decades. Since 2000, program spending has soared by 44% and, judging from this year's budget, Canadians should hang on to their seats because they have not seen anything yet.

In the first few months after he seized the Liberal leadership, the Prime Minister and his minions spoke of “financial responsibility and integrity”. He promised Canadians to “better control spending”. That is yet another broken promise by the government.

Including the new spending contained in Bill C-48, the Liberal government has announced over $28 billion in spending since the Prime Minister went on national television in April to plead for his job. This spending has everything to do with his struggle to remain in office and nothing to do with improving the lots of Canadians. In the world of the Liberal Party, the poor voter is a secondary consideration.

By choosing spending over tax cuts and debt repayment, the Prime Minister is putting Canada's long term financial future at risk.

The federal government must become more aggressive in reducing Canada's $500 billion debt. Interest payments soak up approximately $38 billion annually, almost 18% of each tax dollar. This is the government's single largest expenditure. By paying more on the national debt, the government would have lower servicing charges, leaving more money for other more fulfilling purposes. Our debt to GDP ratio is still very high relative to other countries and our own past.

Prior to the mid-1970s, when Liberal governments first started ramping up spending, the debt to GDP ratio had always been at or below 20%. Now we are at twice that level. A responsible government would realize that today's surpluses will not last long. There is a chance of a recession or a prolonged rise in interest rates.

As well, we know that the baby boom generation will be retiring, placing increased burdens on our pensions and health care. If we do not act quickly to tackle the debt and bring it down to manageable proportions it may quickly become unmanageable.

The Conservative Party believes that the federal government should move to pay down the mortgage, which the huge national debt places on the shoulders of our children and grandchildren. This should be accomplished by introducing a debt repayment plan, with the main part of budget surplus being allocated to debt repayment in order to have a debt to GDP ratio well under 20%.

Steps must now also be taken to address Canada's falling standard of living and an unemployment rate that remains stuck above 7%. Improvements will only come with changes to the tax regime.

Our tax burden is too high. It saps productivity, deters wealth creation and remains a visible competitive disadvantage. The miserly tax relief announced by the finance minister in this year's budget will save every taxpayer only $16 in personal income taxes in 2005. That is not good enough.

What Canadians need is immediate and long term broad based tax relief, starting with reducing personal income tax rates and substantially raising both the basic personal exemption and the spousal exemption under the Income Tax Act. Reducing personal income taxes will hike the take home pay and raise the living standard of all Canadians.

The Conservative Party of Canada believes that the goal of the federal government should be to give Canadians the highest standard of living in the world. Every Canadian who wants a job should be able to get a job. Every region of the country should enjoy economic growth and new opportunities for its people.

Canada should become the economic envy of the world. All of this will only happen if the government spends within its means and does not tax too much.

The Liberals have pledged tens of billions of dollars without providing much detail. This is the same approach that causes sponsorship scandals and gun registry boondoggles.

The government has lost control over the federal finances. It will spend, say or agree to anything to cling to power. The Liberal-NDP budget is proof of that.

The Conservative Party wants to ensure that Canadians have access to affordable, high quality education, to initiatives that create a clean environment, to affordable housing and to other high priority programs. That is why it would be irresponsible to support a government that throws public funds at these initiatives without a plan.

Canada faces numerous competitive challenges and yet the government remains committed to massive spending, rather than a balanced approach that secures our standard of living, which is why I cannot support Bill C-48.

[Larry Bagnell, Liberal, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, I am delighted the member mentioned the tax cuts that were in the budget but I do not think she covered enough of what is being done. I want to ensure that the public is aware that the Liberal government has put forward the largest tax cut in history of $100 billion.

She talked about how significant this is to families. This is a 27% deduction on average in the personal income taxes of families. There are also tax cuts for people with disabilities in that $100 billion. The tax cuts in that particular plan will take a million low income people off the tax rolls completely.

We can talk about what it does for businesses because we wanted to make sure that entrepreneurs and corporations also enjoyed those tax cuts. The small business deduction limit has gone from $225,000 in 2003 up to $250,000 in 2004 and rises to $300,000 in 2005. All in all, for corporations the corporate taxes, including capital taxes, are now 2.3 percentage points lower than in the United States.

The member mentioned that she would like people to have jobs in all regions of the country, which we agree is admirable. Why then does her party, particularly the finance critic, constantly say that they are against the regional development agencies and that they would close those agencies that are so instrumental in actually getting regional development in all areas of the country and in the areas that really need that help?

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Mr. Speaker, it is unbelievable what the government will do to cling to power. It has sold itself to the NDP. Where are its priorities? Its priorities are misplaced and wrong. The government changed its own budget to accommodate the NDP.

This is a weak government with weak priorities. Where are the tax cuts? It has no money to keep up with its old promises. This is a recipe for fiscal disaster. The government runs on making deals, not on principles.

[Shawn Murphy, Liberal, Parliamentary Secretary to the Minister of Fisheries and Oceans]

Mr. Speaker, the member across made two comments. First she said that she wanted to see further decreases in the debt to GDP ratio and, second, she said that in the mid-1970s our debt to GDP ratio was around 20%.

I believe our debt to GDP ratio is now around 37% or 38% and she wants that decreased. I want to remind the member across that when her party, the Conservative Party, was booted out by the Canadian people in 1993, the debt to GDP ratio was 73%. I will repeat that. It was 73%, and through a lot of hard work and effort, the government has been able to decrease that from 73% to 38%.

She also talked about the payment of the debt. I want to remind the member across that the year that her party, the Conservative Party, was voted out of office, the annual deficit of this country was $43 billion.

In 1993, when things were so out of control, could the member tell me how things got so far out of control?

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Mr. Speaker, the Liberals would rather grow the size of government than grow the income of families. We will continue to hold the Liberals to account where spending is unfocused and wasteful. We will continue to push them for more tax relief. Canadians deserve better. The Liberals cannot be trusted. The Liberals are corrupt.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Mr. Speaker, I listened to my hon. friend's comments and one of the things I found rather interesting were her remarks on how interest rates will be going up.

After the Toronto--Danforth finance minister had his budget accepted by the rest of the coalition, I was waiting to see which economist would be the first one out to warn about this. I read in the Ottawa Citizen that the higher spending would put pressure on the interest rates because of the extra demand side pressures due to the inefficient, non-productive spending that the government, with its new baby coalition partner, was promoting,

Could the member tell the House how higher interest rates will affect people in her riding who have mortgages on their houses? How will it affect them in their day to day lives? What will it do to the economy in the area of Surrey?