Mr. Speaker, the hon. minister's fine speech articulated exactly what this government's intentions are and also the proactive approach this new government is taking to its plan for open federalism.
I join today's debate regarding, among other matters, bringing fiscal balance back to federal-provincial affairs. Before discussing what our Conservative government has achieved on this front in a relatively short time, it is important to place this debate in context.
It may be helpful to my hon. colleagues to think back to the state of affairs of just a few years ago under the previous Liberal government. The former Liberal government believed the concept of fiscal imbalance was mere allegation. It consistently and repeatedly refused to even acknowledge its existence.
Indeed, the former Liberal minister of finance, my friend from Wascana, was unequivocal on this matter. He stated that on “the allegation of a fiscal imbalance in Canada...I do not agree”. He said that “to those who hold these views, I believe that they are, in my opinion, wrong...they are in error”.
Even after being relegated to opposition, Liberals have remained consistent in their position. That is not something one can say often about Liberals, but in this case they appear to be.
The current Liberal leader has repeatedly reiterated the Liberal Party's dismissal of the fiscal imbalance's existence, bluntly stating earlier this year: “Don't ask me to pretend there is a fiscal imbalance...and [hope] I will fix it. I don't want to create these kinds of expectations”.
While the Liberal government was dismissing the fiscal imbalance, the Bloc, the mover of today's motion, was largely ineffective in ensuring the fiscal imbalance was addressed. As a regional party, it has been by its very nature relegated to opposition. In contrast, our national Conservative government, with a strong Quebec contingent, had the ability to deliver by addressing the fiscal balance.
That is where the balance debate has been situated: a Liberal government that denied the existence of the fiscal imbalance and an ineffective Bloc opposition unable to deliver results. Liberals would not act and the Bloc could not act.
When our Conservative government came to power, we committed to an approach of open federalism, an approach that would restore fiscal balance to Canada. In budget 2006, we started the process by setting out a principles based plan. In budget 2007, we followed through on that plan, clearly outlining how we would restore the fiscal imbalance.
Before continuing, I note for the benefit of the House today that the Bloc effectively endorsed our plan to restore fiscal balance when it voted for the budget.
Indeed, by providing over $39 billion in long term equitable and predictable funding for shared priorities, budget 2007 effectively restored fiscal balance with provinces and territories.
What is more, transfers were put on a long term predictable path. Through the Canada health transfer, we are providing provinces and territories with long term support, support that will continue to grow at 6% annually, reaching $30.3 billion by 2013-14. The Canada social transfer, growing at 3% annually, will reach $12.2 billion by 2013-14.
Also, by that time we will have provided $3 billion in total support for labour market training.
Additionally, in that year alone, we will be providing $5.7 billion for provincial, territorial and municipal infrastructure.
Altogether, funding under these transfers will have grown to $48.7 billion by the year 2013-14, a massive 60% increase compared to the 2005-06 numbers.
We also made governments more accountable to Canadians by clarifying roles and responsibilities while simultaneously strengthening the economic union based on our Advantage Canada blueprint.
Restoring fiscal balance ensures provinces and territories have both the means and the clarity of purpose to develop and provide programs and services that serve Canadians well.
For Quebec, this means that in 2007-08 the province will receive over $15 billion in federal funding for equalization, health, post-secondary education, labour market training and infrastructure.
This plan ensures our federation will work for the good of all provinces and all Canadians, including Quebeckers. Indeed, an array of prominent Quebeckers praised our plan. Quebec premier, Jean Charest, noted that it gave his government “satisfaction in the sense that we have fought for this for a number of years, and now the Conservative government has moved substantially on this issue”.
The then finance minister of Quebec, Michel Audet, called it “a real breakthrough as far as the fiscal imbalance is concerned”.
Another former Quebec finance minister, Yves Seguin, labelled the plan “a big step forward” that significantly redressed the fiscal imbalance.
The well respected La Presse economic commentator, Claude Picher, remarked that the plan tackled the fiscal imbalance issue “credibly and coherently”.
A key element of that plan for restoring fiscal balance legislated in budget 2007 was a renewed and strengthened equalization program. The new equalization program, fair to Canadians living in all provinces, is formula driven and principled.
Based on the findings of an independent expert panel chaired by Al O'Brien, the plan simplified equalization to enhance transparency and accountability.
It cleaned up, in the words of the Toronto Star, “the equalization mess the [former Liberal government] left behind” by returning stability and predictability to the program.
The O'Brien report proposed comprehensive, principle based reform to the equalization program that formed a solid foundation for the program's renewal. This new system provides a higher relative equalization standard. In 2007-08, it will provide nearly $13 billion, a $1.6 billion increase over 2006-07.
Further, the renewed and strengthened equalization program ensures payments are put back to a formula driven measure of provincial fiscal disparity. Provinces with relatively low fiscal capacity will receive the most on a per capita basis, while provinces with higher fiscal capacities will receive less. As a province's relative fiscal capacity declines, the new program will ensure that payments grow accordingly and vice versa.
Consequently, some provinces may no longer quality for equalization payments, while others may begin to qualify. This is the proper functioning of a formula driven, principle based program as envisioned by the independent expert panel.
To quote Al O'Brien himself, budget 2007 “adopted our recommendations as the core framework.... I'm really quite encouraged”.
By restoring fiscal balance, this government, under the Prime Minister and finance minister, has laid the foundation for a stronger federation to help Canadians realize their potential.
In the words of the prominent Globe and Mail columnist, John Ibbitson, this Conservative government has removed:
...the fiscal imbalance as a primary irritant in federal-provincial relations for some time. That's a good day's work, and deserves greater recognition than this Finance Minister has thus far received.
With fiscal balance restored, governments can focus on things that matter to Canadians and work toward our shared goals of a strengthened health care system, an improved post-secondary education system, the best skilled workforce in the world and a modern infrastructure system and a stronger economic union.
Our Conservative government promised to restore the fiscal balance, where the Liberals would not. In budget 2007, we delivered where the Bloc could not.