Debates of March 20th, 2007

Financial Statement of Minister of Finance

[Gary Goodyear, Conservative, Cambridge, ON]

Mr. Speaker, I would like to ask the hon. member opposite a couple of questions. Obviously the member does not remember the over half a billion dollars that the government put toward homelessness initiatives earlier this year.

I would like to ask the member if he intends to vote against the $300 million for the cervical cancer vaccine to help women and girls. It might prevent their deaths.

I wonder if this gentleman knows that the firemen in Canada have been coming to the Hill for 11 years asking for money to train them in hazardous material handling. That member, every time, voted no: it is not important to Canadians and I do not care about firemen. Does he intend to vote against this budget, which has money to train our firemen to protect our areas much better than before?

I want to know if the member intends to vote against Medic Alert bracelets for children.

I want to know if the member cares at all, except for the rhetoric of getting nothing done and getting back to power versus doing the right thing for Canadians.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, it is that rhetoric and these lies that have poisoned the Canadian people, because the hon. member knows very well--

[The Speaker, Peter Milliken]

Order.

[Gary Goodyear, Conservative, Cambridge, ON]

On a point of order, Mr. Speaker, I rise to demand an apology from the member opposite.

[The Speaker, Peter Milliken]

The hon. member for Scarborough Centre will have to be careful. I do not know whether he was directly suggesting that the hon. member for Cambridge had said anything that was untrue. If he was, then I know he will want to apologize and withdraw the language. In any event, I would admonish him for using this kind of word in the House. It is unnecessary. He can rephrase his remarks, I suspect.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I think the question put to me was that I did not support the firefighters. I challenge the hon. member to prove that. If he proves that I did not, I will be prepared to withdraw, because that was a very inaccurate statement that he made and he knows it very well.

Why am I going to vote? I am not voting against this budget. I am not going to vote for this budget on one issue because we see it as a whole. It is for the same reason that when we provided tax relief and money for health services under the Romanow report that those members voted against it. It is by the same reasoning, much as I outlined one program that I am very pleased with, that I cannot support the budget.

[Maurizio Bevilacqua, Liberal, Vaughan, ON]

Mr. Speaker, I have paid attention to the speech delivered by my hon. colleague. We can understand the nervousness on the other side. It is obvious. They inherited surplus budgets. When we took office, we inherited a $42 billion deficit. We were able to balance the budget. We were able to give a $100 billion tax cut. We were able to create over three million jobs. I understand.

Unfortunately the budget has not been received as well as the Conservatives thought it would be received. I want to give my hon. colleague a chance to perhaps expand on the reasons why this Conservative budget has not been well received by Canadians.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, it has not been well received because it is totally misleading. I will provide one example.

The Minister of Finance said a couple of weeks ago that his government provided the largest tax relief program in the history of our country: $20 billion over two years. I will remind everybody that in 2000 we provided, as the hon. member clearly pointed out, $100 billion in tax relief over five years. If we do our math again, that works out to $20 billion a year. I do believe I was taught that $20 billion is much higher than $10 billion, which is what the government provided.

This is what frustrates most Canadians. It is like what Danny Williams said: the government has literally misled us, us being the veterans, for example, and everybody. There is too much camouflage in the budget to make it believable.

[Gary Merasty, Liberal, Desnethé—Missinippi—Churchill River, SK]

Mr. Speaker, I rise today to speak on the budget presented yesterday and I look forward to some discussion on this as we move forward.

On May 14, 2006, a Meadow Lake Progress editorial stated that with the 2006 budget, northern Saskatchewan communities “have been left behind”.

The editorial listed three major ways in which our communities have been left behind: first, no specific help for forestry workers and communities in Saskatchewan; second, nothing to help farmers with spring seeding; and third, abandoning the Kelowna accord.

It is unfortunate that a year and a budget later, little has changed. Once again, Saskatchewan forestry workers and industry have not been given any specific assistance, farmers will not receive any help for spring seeding, and of course the Kelowna accord has not been honoured.

Northern Saskatchewan is once again being left behind.

However, this budget is even more of a disappointment for northern Saskatchewan because of all the Conservative broken promises. Income tax rates have increased and income trusts have been taxed. There are no plans to reduce health care wait times. The promise of removing non-renewable resources from the equalization formula has been abandoned.

Let me first address agriculture. The agriculture announcement is all headline and no substance. After a year of the Prime Minister being distracted by fighting with farmers over the future of the Canadian Wheat Board, he forgot to deliver any assistance to them for spring seeding this year.

As the Western Producer reported on March 15, 2007, farmers and the provinces know they are being played as pawns by the Conservatives with the budget as well. This has given rise to frustration and cynicism.

Farmers know that the Conservatives are playing political games by claiming the budget must be passed in order for money to flow. Farmers need assistance with spring seeding now to pay for fertilizer, fuel and other costs of production.

The Prime Minister can and should deliver the money now but is leaving the producers waiting. There is no reason to wait. This aid needs to be delivered now. Farmers who need the aid now might not be in business by the fall or next year.

We must make no mistake: for the current government, farmers are on their own.

On top of that, the farmer savings accounts that require provinces to buy in were unilaterally introduced by the Prime Minister without consultation. Provinces were caught by surprise by the announcement. No timelines or details have come out yet, making the announcement an empty headline.

Moreover, during the Prime Minister's photo op in Saskatoon, he could not resist taking potshots at the Saskatchewan premier even while admitting he needed the premier's support to create these savings accounts. So much for creating goodwill and working together.

The situation for Saskatchewan forestry workers, the industry and the communities is also deeply disappointing. In the past year, the Conservatives did not announce any Saskatchewan-specific plans to help workers or businesses. In the softwood managed trade agreement, they left $1 billion of illegally collected duties in American hands and traded away half of Saskatchewan's traditional U.S. market share.

With tough market conditions, forestry workers and industry deserve a strategy about how to move forward. The Liberals had responded to this challenge by creating the five year and $1.5 billion forest industry competitiveness strategy. This strategy offered long term stability and a plan to build sustainability for forestry communities.

However, the Conservatives abandoned that strategy. This has meant incredible hardship for Big River mill workers, who have been out of work for the past year, and uncertainties for Meadow Lake mills. The pain and uncertainty for these workers are real and the Prime Minister needs to offer his support to them. These workers deserve a plan. It is time the Prime Minister delivered it.

Northern Saskatchewan has also been hurt by broken Conservative promises. The Conservatives breaking their health care wait time promise by not offering any timelines or plans and the health minister's lack of leadership on health issues have hurt rural and northern communities.

However, other challenges also need immediate attention. Accessibility to treatment and facilities remains a major concern. Recurring doctor shortages in Spiritwood led to its hospital closing, forcing residents to travel at least an hour to get emergency care. For remote communities, there is double the hardship.

As for taxes, the Conservatives broke their word to lower taxes, hiking the lowest income tax rate to 15.5% in the last budget and refusing to cut it in this budget. Also, the amount that people can earn tax free has been lowered and the Conservatives refuse to increase it to the levels the Liberals had it at. This move has meant that tax credit savings for Canadians have been cancelled out or that their taxes have actually increased.

The broken income trust promise has been a bitter disappointment as well, as many relied on the Prime Minister's promise not to tax income trusts. His sudden move to tax income trusts took away $25 billion from investors overnight.

But breaking the equalization promise is perhaps the most bitter of all for Saskatchewan. For over two years, Conservative members of Parliament had vocally advocated excluding non-renewable resources. The member for Battlefords—Lloydminster changed from saying that “people were getting angry about equalization” to saying it was priority 11 out of 10. The member for Regina—Lumsden—Lake Centre switched from introducing a motion in support of the promise to saying he would “be happy with whatever announcement was made” by the Prime Minister.

With this broken promise it is clear that not one of them is willing to speak up for Saskatchewan. Their voices do not even amount to a whisper in the government.

Considering the amount cut by the Conservatives by scrapping the child care agreements and the Kelowna accord, the income tax rate hikes and personal tax free amount decreases and social program cuts to literacy, museums and youth investments, Saskatchewan is not even at a break-even point because of this broken promise.

As for aboriginal issues, the scrapping of the Kelowna accord and the meagre funding for first nations, Métis and Inuit, despite the quickly growing aboriginal population, hurts Saskatchewan in particular. The last year had already been very disappointing for aboriginal Canadians. Only $150 million of new money was specifically dedicated to first nations, Métis and Inuit. With cuts to INAC and aboriginal health and languages totalling at least $220 million, this means that funding was cut by about $70 million, a net loss over the course of the last year.

What a loss scrapping the Kelowna accord has been. There has been more of a loss than simply the $5.1 billion that was budgeted for economic development, housing, water and health. It is more than the loss of the new consensus reached between premiers and the aboriginal leadership.

The investments in the Kelowna accord would have provided increased economic development for all of Saskatchewan; more jobs for aboriginal and non-aboriginal workers, as investments in housing and water would have created a need for construction workers, water treatment specialists and housing firms; more economic activity, particularly for all northern Saskatchewan communities, as business opportunities would be created to meet the needs of suppliers, workers and capacity. Most important, investments in our youth for education and child care would have enabled aboriginal youth to achieve their goals in post-secondary education because they would have the necessary supports from their communities for funding and services.

However, the narrow and short-sighted vision of the Conservatives never saw the Kelowna accord for the opportunity it held for Saskatchewan. They saw it as something to cut. With this cut they have cut down the aspirations of many first nations, Métis and Inuit youth, youth who deserve much better, youth who are the competitive advantage of a new Saskatchewan. Without investing resources, this will increase the social pressures upon which these young people have to survive and battle every day.

A few weeks ago I was in Sandy Bay, a community that suffered through several suicides by despondent youth. The small community was in shock, reeling from the loss of so many lives. Many spoke about how they needed hope, jobs and something to do, someone to talk to. Community members came together in the face of this tragedy. The many divisions of the town joined together: Métis, first nations and municipal; health, justice and leadership; youth, elders and parents. They all came together for a common cause, the young people who needed the attention in order to survive and prosper in the new Saskatchewan.

This is what the Kelowna accord was about for Canada, all Canadians united, working together, a meeting ground, an understanding, a commitment to get the work done that needed to get done.

At their meeting, Sandy Bay residents spoke of their considerable need. They need resources for health, basic infrastructure, community halls, youth centres and such. Will they be able to achieve that? Only if we, the Liberals, the NDP, the Bloc and Conservatives commit once and for all to respect that it is people in those communities that have the answers and we exist only to empower them. We cannot afford to waste any time.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Mr. Speaker, last Friday I had the pleasure of announcing on behalf of the minister continued funding for the new horizons program, which will bring 660 high quality jobs in the oil sands project for people in the member's riding. We are getting things done and we are putting money where we get results.

I listened with interest to the member's comments about equalization. There is some $870 million of new money in Saskatchewan as a result of this budget. In total there is $1.4 billion when we factor in the per capita increases in education and social transfers.

The member should be well qualified to answer my question. The O'Brien report said that there should be a cap on equalization programs, the point being that provinces that receive equalization should not be doing better than the provinces that do not receive equalization. I am going to ask the member who is from a northern Saskatchewan riding whether he agrees with the concept that provinces that receive equalization should not be able to do better than the provinces that do not receive equalization.

[Gary Merasty, Liberal, Desnethé—Missinippi—Churchill River, SK]

Mr. Speaker, one of the things that we have to realize in Saskatchewan is that we have dipped in and out of the ability to be a have and a have not province. One of the future successes of remaining a have province is to exclude the non-renewable resources that the province generates, which is exactly the promise that the Prime Minister made.

I think a more relevant question would be why the Prime Minister and the members from Saskatchewan would make that promise, make strong moves toward implementing that promise in various comments and correspondence, but actually not do it at the end of the day. This hurts Saskatchewan. This hurts the future prospects of many opportunities that could otherwise be realized in Saskatchewan over the next little while. To me the real question is why that promise was broken.

[Maurizio Bevilacqua, Liberal, Vaughan, ON]

Mr. Speaker, I want to congratulate the hon. member for an excellent speech and for giving an overview of the impact of the budget on Saskatchewan. I want him to expand on that particular issue.

We have seen time and time again how the government is cutting in areas such as literacy, the reneging on the Kelowna accord, the opportunities missed, the inability of many people in this country to fulfill their own promise as individuals, to achieve their full potential.

Could the hon. member comment on the reaction he has received from the people he represents, his constituents, on this budget?

[Gary Merasty, Liberal, Desnethé—Missinippi—Churchill River, SK]

Mr. Speaker, speaking to residents in Saskatchewan, residents from the aboriginal community, residents from the non-aboriginal community, Saskatchewan is the only province in the country to have the oldest and youngest population at the same time.

The youngest population is primarily aboriginal. There is a huge labour force gap right smack dab in the middle. There is anger in our province over the breaking of the promise, over the lack of investment in post-secondary education, employment skills and training and in literacy. People in Saskatchewan are completely dumbfounded that Saskatchewan was totally cut out of the Conservative budget that was presented yesterday. There is absolute anger in the streets. People cannot believe that they are, in their own words from what I have heard, being taken for granted. They do not appreciate being taken for granted and they will speak loudly with their feet the next time.

[Tina Keeper, Liberal, Churchill, MB]

Mr. Speaker, I would like to ask the member, after his carefully thought out speech, about the investment in child care spaces.

The Conservative government did not create one new child care space in the last year. The Conservatives talked about the $250 million that they are going to invest in child care spaces. Could the member speak to that in terms of first nations?

[Gary Merasty, Liberal, Desnethé—Missinippi—Churchill River, SK]

Mr. Speaker, as I have said, the fastest growing segment of the Canadian population is the aboriginal population. There has been virtually no investment and no consideration for the child care needs of first nations, Métis and Inuit communities in this country. That is a shame.

[Helena Guergis, Conservative, Secretary of State (Foreign Affairs and International Trade) (Sport)]

Mr. Speaker, I will be sharing my time with the Minister of Public Safety.

I am proud to stand here and speak to our government's 2007 budget, “Aspire”. The contents of this balanced budget will undoubtedly allow Canadians to aspire to great things as it will cut taxes for hard-working Canadian families. The budget will invest in priorities like health care, the environment and infrastructure, including roads, bridges and public transit. It will restore fiscal balance by giving the provinces the resources they need to deliver the front line services that matter to Canadians.

It is amazing that Canada has a $1.5 trillion economy. This means a responsible government must make choices that strike the right balance.

As we promised in “Advantage Canada”, our government's long term economic plan for Canada, we will take historic action by moving to restore fiscal balance through long term, predictable funding. We have done just that.

I know the citizens in my riding of Simcoe—Grey will appreciate the fact that we are reducing the tax burden and making life a little easier for hard-working Canadian families. With initiatives like the tax back guarantee and our working families tax plan, there will be a little more money in the pockets of every Canadian. I am very proud of our government and our Prime Minister.

After 13 years of the Liberal Party's look the other way policies, we are cracking down on corporate tax avoiders to restore some semblance of fairness to Canada's tax system. As the Prime Minister said last weekend, “We will let the Liberals defend the vested interest and the loopholes of those associated with the previous government”.

This budget is all about making our strong economy even stronger and providing the necessary tools so Canadians from all walks of life can reach their full potential.

Canada's new government knows that by creating a climate of hope and opportunity, Canada can be an example to the rest of the world of what a truly great, prosperous and compassionate nation can be. It is in this vein that I am particularly proud.

As the Secretary of State for Foreign Affairs, International Trade and Sport, I am proud to be part of a government and a ministry that are once again making Canada a respected name on the international stage.

Whether it is in sport or international affairs, as Canadians we take great pride in our historical reputation on the international stage whether it be as world medallists, diplomats, peacekeepers, or soldiers on the battlefield.

In sport, I am proud that we will accelerate our contributions to the own the podium program. This exciting initiative will ensure Canadian athletes can achieve success in international competition, especially at the Vancouver Olympics in 2010.

We are proud to make a significant investment in Canadian heritage sports, such as lacrosse and three down football. This money will ensure Canadian-specific sports will continue to thrive in Canadian society.

On the international stage, Canada is once again respected, whether it is our ardent defence of human rights in consular cases, such as the defence of Mr. Celil in China, or our commitment to the people of Afghanistan, our commitment to the many peacekeeping missions in which we are currently engaged, or our commitment to reducing global poverty and aiding international peace and security.

In last year's budget we committed to doubling our international assistance by 2010-11 from what it was in 2001-02. I am proud to say that budget 2007 will increase the resources devoted to poverty reduction and international peace and security by establishing a three point program to enhance the focus, efficiency and accountability of Canada's international assistance efforts. We will provide $200 million in extra support for reconstruction and development in Afghanistan, with a focus on new opportunities for women, governance, enhanced security and combating illegal drugs. We will also invest $115 million in the innovative advance market commitment led by Canada, Italy and the United Kingdom to create a vaccine for pneumonia, expected to save more than five million lives by 2030.

Our government is committed to helping Canadian companies succeed in global markets. The global commerce strategy offers real solutions to challenges arising from the global economy.

Budget 2007 provides $60 million over two years to advance three core objectives: negotiate bilateral agreements with our trade partners to improve market access for our exports; protect and promote investment; and facilitate science and technology cooperation.

It will also reinforce our presence in the U.S. market by directly engaging the private sector and networking with governments. We will enhance commercial services in new markets by opening offices in Asia.

Moreover, the government will introduce new measures to enhance Export Development Canada's ability to make strategic equity investments in order to encourage greater participation by small and medium sized Canadian businesses in emerging market opportunities.

With respect to mission security, our government takes the responsibility to ensure the safety and security of our diplomats seriously. The realities of today's world mean we need to strengthen the security of our missions to advance Canada's interests in a more complex world.

To this end, budget 2007 will invest an additional $11 million over the next two years to enhance the critical infrastructure of foreign missions. Enhancements will include improvements to closed-circuit televisions, exterior lighting, enhanced visitor screening, vehicle barriers and more rigorous surveillance.

Canada, to put it plain and simple, is making the world a better and safer place for all citizens of this planet. Canada's contributions in particular to Afghanistan are helping to rebuild a nation that has for decades been a country torn apart by war and the tyranny of the Taliban. But things are changing in Afghanistan.

Unlike the decade of darkness under the Liberals, Canada's Conservative government is once again ensuring we live up to our UN and international obligations. Budget 2007 will help Canada to aspire to great things and we will continue to work with our partners in the international community to help rebuild Afghanistan.

While the opposition plays politics with our troops, our aid workers and diplomats on the ground, this government is getting the job done by committing real support to our men and women on the ground whether they are soldiers, diplomats or aid workers. Unlike the Liberals who just talked the talk and did not back any of their words up with money or support, this government is walking the walk and we are putting our money where our mouth is and we are getting the job done.

Let me remind the opposition of Canada's successes in Afghanistan which can only remain successes if we remain committed to the mission. Five million children, one-third girls, now go to school. This is a 700% increase since 2001. We have 363,000 teachers and now they have teaching materials. Over seven million Afghan children have been immunized. We also have microfinance programs for over 300,000 Afghans. It is important to note that 72% of these microfinance programs are for women who have started their own businesses.

We have four large water reservoirs and 55 pipe schemes that have been built to provide 1.3 million Afghans with water. We have 100 kilometres of irrigation canals that have been rehabilitated, 150 kilometres of new roads and bridges, 50 kilometres of electricity lines, and 10 transformers and 42 generators.

Canada's new government is getting results in Afghanistan where the former Liberal government simply did not. This is real progress and it was the vision of the Afghanistan compact which was for a secure, self-sufficient and democratic Afghanistan to realize the aspirations of its people.

Budget 2007 also demonstrates our commitment to strengthen Canada's aid program. We will strengthen this program both in terms of financing and improvements to ensure that our aid dollars are actually reaching those who need it most. Last year we committed to doubling our aid budget by 2010 from the 2001 levels, but with our budgets 2006 and 2007 combined. We have gone beyond this doubling commitment by providing $635 million in additional aid resources.

While adding more aid money is indeed helpful, what is also important is ensuring that these aid dollars and aid resources work more effectively. Aspire 2007 lays out a clear and impressive agenda to do this by strengthening the focus and improving the efficiency and accountability of our foreign aid.

I am conscious of my time, but let me reiterate just how proud I am of this government as we aspire to do great things for and on behalf of Canadians. Once again the pride of Canadians is on the rise. No longer are they governed by a government embroiled in scandal that distracted the nation from doing everyday business.

Canada's new government is creating a climate of hope and opportunity. We can be an example to the rest of the world of what a truly great, prosperous and compassionate nation we can be.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, I have to question the commitment of the government, certainly the lack of commitment through this budget, to the sporting community in this country. The minister talked about the own the podium program. There was no new money for own the podium. The money was accelerated and that was it. Nothing for the road to excellence program. That turns our back on our summer athletes, those going to Beijing and those going to London in 2012. Zero support for those athletes.

However, the most obvious and prevalent loss through this budget is the campaign promise that was made by the Conservatives back in the last election. They have had two shots at it now and that is 1% of the health budget for sport. There is nothing in this budget on that. Why has this sport minister thrown in the towel on sport in this country?

[Helena Guergis, Conservative, Simcoe—Grey, ON]

Mr. Speaker, I will not thank the hon. member for his question because he is very wrong in some of the comments that he has made.

The government has made substantial commitments to sport in Canada. In particular, he referred to summer sports. In fact, every year we give $45 million to summer sports and over 1,200 athletes receive direct funding from Sport Canada to help them achieve their goals in order to win at the Olympics or compete internationally. The hon. member is quite wrong.

With respect to own the podium, we recommitted our support for it. Own the podium wanted us to advance to it the money it needs. We are very much in favour of supporting the Olympics, international athletes, and all athletes across the country for that matter.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I want to ask the Secretary of State for Sport a question also regarding sport. In particular, it is about the World Police & Fire Games that are going to be held in the lower mainland of British Columbia and the city of Burnaby in 2009.

Recently, the government turned down a request from the organizing committee to be a sponsor and help fund these important games that will see 12,000 police and fire personnel from around the world gather in the lower mainland of British Columbia. In fact, right now they are gathered in Adelaide, Australia. The mayor of Burnaby is there to bring home the ceremonial torch for the next games.

In the past the federal Government of Canada has supported these games and most recently when they were held in Quebec City in 2005. It is very important for our fire and police personnel to have this important opportunity to meet their colleagues from around the world. It is also very important to the communities that host these games because of the positive economic value that the games bring to those communities.

I would ask the Secretary of State why the government has turned down this request? Why is there no money in the latest budget and why the government will not support the men and women of our police forces and fire departments in hosting these important games?

[Helena Guergis, Conservative, Simcoe—Grey, ON]

Mr. Speaker, just a little over a week ago I had the opportunity to meet with the firefighters and police specific to this request. I explained to them that our sport hosting policy does not provide for the Canadian government to give them money to carry out their event, although I came away from that meeting having made a commitment to them that I would look to see exactly what we may be able to do.

It is important to point out that the entire B.C. caucus has approached me on this, that the government is working with this group, and we will find a solution for them that will be acceptable.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I would like to ask the Secretary of State for Foreign Affairs and International Trade a question.

We started team Canada, which was leading and trading around the world, and now it is retreating. The government is closing consulates. Why is it reducing Canada's role in the world? I would like to know specifically, is the government closing consulates in Japan, St. Petersburg and Milan, and are there any others that will be closed?

[Helena Guergis, Conservative, Simcoe—Grey, ON]

Mr. Speaker, as I said in my speech earlier, we take the responsibility to ensure the safety and security of our diplomats very seriously.

With respect to the global commerce strategy which we are launching in budget 2007, we will be helping Canadian companies succeed in global markets. That will include having some enhanced commercial services in new markets by opening offices in Asia, which the member was specifically asking about. This is the path that we are going down.

In answer to his specific question, the services that he is talking about have been eliminated. We continue to have services in Rome, Moscow and Tokyo, and Canadian embassies will serve those constituents.

[Stockwell Day, Conservative, Minister of Public Safety]

Mr. Speaker, predictable partisanship goes on in a budget debate. The government presenting the budget is quite rightly proud of it and of course the opposition parties have difficulty recognizing its positive nature.

I would like to focus on the sheer statistical reality of this budget. People can argue about whether they think a certain thing is a good idea or not, but there are some things this budget will accomplish which will be of truly historic proportion and that should be noted and acknowledged.

First and most important is the whole aspect of fiscal imbalance. For decades and possibly for more than a generation, there has been this question of fiscal imbalance. Most Canadians, myself included for many years, have had difficulty understanding it because it is a complex issue, but because it is complex does not mean there is no solution to it.

Fiscal imbalance is the situation where in the perception of the provinces and territories there is an abundance of taxpayer dollars lodged at the federal level. They feel it should be spread around on an equal basis in such a way that they will have the capacity to deliver essential services.

It is acknowledged that from time to time in the history of a country various provinces or territories may or may not have the capacity to deliver approximately comparable services. At times when they do not have that capacity, there is this sharing at the federal level of the dollars that sit there. It is a constitutional item. That is in essence what the program talks about.

For perhaps a generation or more federal governments have used this as a political tool and it has been built up by an ad hoc system of how much money should go to a given province at a given time. The Prime Minister and the finance minister made a commitment to once and for all come up with a formula-based, rules-based program where there would not be any argument anymore, or so they thought and hoped, and where there certainly would not be a sense of depending on which party was in power could affect how much money a province would receive.

They came up with a formula based on recommendations in the O'Brien report that at least took the argument out of whether a province received preferential treatment or not. That has happened. This is of historic proportions.

We now have a formula in place in the area of equalization that is rules-based and formula-based, and one which has taken out the ad hoc system which has been used by previous governments just to try and bend the will of people for political gain.

With that formula now in place some provinces are indicating that they are not happy with it. Some concerns have been raised in British Columbia. Even a good friend of mine who is a minister in the government there has raised some issues. The issue of British Columbia's share is an interesting one because British Columbia is called a have province.

When we are talking about provinces, countries, cities or individuals, prosperity and poverty do not happen by accident. An exception to that rule would be a windfall of some kind for a province, or a country, or an individual. Then there will be prosperity at least on a temporary basis. A disaster can strike an individual, a city, a province or a country and there can be poverty at least on a temporary basis. Other than these instances, both prosperity and poverty occur in most cases because of certain principles being applied or not applied.

The people of British Columbia finally rid themselves of the socialist government that had plunged that province into an economic morass for years. I was in Alberta at the time and business was coming from B.C. in streams because of the poorly thought out, socialistic approach to governance and to economic issues. B.C. was spinning down and becoming a have not province.

There has been a Liberal government there for a few years, and I use the word Liberal because that is what it calls itself so it is with some reticence obviously, and is it perfect? No it is not. No government is perfect. The trend has been reversed and there is economic prosperity. Things have turned around. Is there prosperity for everybody? No. It is not perfect, but it is a lot better than what it used to be.

With its new government, British Columbia, hopefully, will never need to draw on the equalization formula. However, should something happen, by accident or some other reason, that turns things around economically in British Columbia, the same formula that is being applied to Quebec, to Ontario and to Newfoundland and Labrador today, will be applied to British Columbia.

In spite of the adjustment, $4.7 billion will go to British Columbia this year because of this formula. A member just said that is a lot of money. We have $3.1 billion just in the health transfer alone and another $1.3 billion in the social transfer which is for post-secondary education and other issues related to that. B.C. is definitely benefiting from this particular budget.

It has also been raised that there is nothing in the budget for British Columbia this year for the pine beetle infestation problem. This is a problem that was ignored by the federal Liberals when it first was identified quite a number of years ago. Now it has devastated the forest industry in many of our communities and a commitment was made last year, which is being maintained, a $1 billion commitment over 10 years to deal with the beetle infestation problem and all of the negative effects of it. The money was announced last year and it is there again this year.

Those were some of the issues that people in British Columbia have raised. I am pleased to see the benefits that the people of British Columbia will be receiving from this particular budget.

Let us look at some of the approaches to prosperity and how the budget is based on those principles. The government recognizes the importance of families and the importance of children and the costs that go with that. Though we are told children are a blessing, and those of us with kids will generally acknowledge that, though from time to time we have our moments, but to acknowledge the raising of children there is a child tax credit in place of $2,000 per person for every child. That money is in addition to last year's child care benefit that is in place. That means $174 million for British Columbians.

Another thing of historic proportions that happened in this budget is that the so-called marriage penalty has finally been eliminated. The process by which a working spouse would be graded at one level of taxation, a spouse who is working in the home, which is also full time if not overtime, was not given the same benefit as two individuals living together under the same roof. We and families have been asking for years why we have that marriage penalty. We took that out and we raised the spousal benefit. It is the first time in history that has happened at the federal level. Thirty-five million dollars will go to B.C. just because of that adjustment alone.

On day care, $250 million was committed across the country, $87 million of which will land in B.C. for the creation of child care spaces, along with the program that will continue to allow parents to be compensated for the child care of their choice. It will no longer be the Liberal type approach of one way only. It will be a proper approach of allowing the parents to decide.

For farmers, $60 million will land in B.C. because of what we are doing on the farm programs in this budget.

For seniors, another thing of historic proportion, we have raised the level at which they can maintain their retirement savings, not just until 69 years old when they must transfer their money into a RRIF but up to 71. It was not too many years ago that the Liberals knocked it down from 71 years old to 69. We have raised it back up, along with income splitting.

There is $30 million for the Great Bear Rain Forest.

Cities will be able to have predictability because the formula now related to the GST. It is not just 57% of the GST rebate that goes to cities but now it will be 100%. The gas tax formula will now be maintained into the future for years.

People in Penticton, Summerland, Westbank, Merritt, Logan Lake, Naramata, Peachland--I hope I have not left anyone out--the hard-working, locally elected officials will have some predictability in terms of what they can see in terms of growth in infrastructure because our region is growing. It is the most beautiful region in all of Canada with the most wonderful people. People from the entire country are going there, not just to retire but to invest and to grow.

This budget will meet the needs and the environmental needs that we are so concerned about.

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, I know this House and myself personally hold the member in very high regard. His explanation with respect to the fiscal deficit is probably one of the most logical and circumspect ones that I have heard. However, there is one area that bothers me in terms of this budget and it has more to do with the spirit with respect to the relationship to cities and municipalities.

A partnership was developing with the federal government based on the recognition that the very objectives that the member outlined, in terms of cities and communities, could be best met by working in partnership with those levels of government. The treasurer had indicated that it was time for each level of government to look after their own knitting.

Does the member agree with that particular perspective and does that mean that those partnerships that evolved in a non-partisan way are being abandoned and that we will not be able to get on with governance within this federal system that will serve the interests of communities across the country, in particular with respect to the social and infrastructure objectives that the member has outlined?

[Stockwell Day, Conservative, Okanagan—Coquihalla, BC]

Mr. Speaker, that is a fair question. As we know, in our country, which has three levels of government, municipal, provincial and federal, there can be and there is a lot of overlap. I am sure the member will agree, just as do my constituents, hard-working people raising families, looking to their retirement, going to school or whatever they might be doing, are not that concerned with which level of government is administering. They just want to know that their needs will be met in the most efficient way.

Our new Government of Canada, under the leadership of the Prime Minister, has tried to bring things back into focus so that the most efficient ways of getting the dollars to people are achieved, which is why we will be working with the provinces in many areas and passing the transfer dollars on to them so they can meet the needs of the municipalities. One of those areas is the 2,500 police officers who have been promised to municipalities across the country.

I met with the mayor of Vancouver this morning and explained to him that he needs to take those concerns to the provincial level so we can translate that down into what will be the needs for the province and at the municipal level which they can channel that way. Some programs go direct to the cities, like the national crime prevention program for which we delivered dollars just last week into British Columbia. There is no abandonment here but there is a desire to have it nice and clean and efficient in terms of working.