Mr. Speaker, the issue I will be talking about today is an issue that I believe has not been mentioned in this debate before. It is an issue that I consider to be extremely significant and will have profound and significant repercussions, especially to the smaller provinces and their ability to fund their health care systems, post-secondary education and social services.
I am talking about the fundamental restructuring and the changes to the funding formula for the Canada social transfer and the Canadian health transfer. These changes, which I consider to be profound and fundamental, have really gone on without too much comment from the media, the analysts or anyone else for that matter.
To put my comments in perspective I will go back to 1977 when the federal government, in an effort to allow the provinces the ability to fund the growing health care system and the growing social safety net, agreed at that time that it would transfer certain tax points to the provinces. The actual numbers were 13.5 tax points on personal income tax and one tax point on corporate income taxes.
The value of those tax transfers at the time was $2.7 billion. Subsequently, the value for that major tax transfer that took place is now $20.5 billion.
I should also point out that all calculations done by the Department of Finance subsequent to that basically refer to this major tax transfer that took place 30 years ago. This is fundamental to our understanding of how the federal government finances health care, post-secondary education and other social services in this country.
A tax point is worth different amounts in different regions of the country. An example would be that a tax point on the personal income tax side was worth $310 per capita in Alberta and in neighbouring Saskatchewan it was worth $150. That was the case then.
So, there was a major discrepancy and the federal government could not just take the tax points and transfer them to the provinces without coming forward with a correcting formula, which it did, and which had to be fair to all Canadians.
The government did make the tax transfers. A formula was developed and the cash revenue that was subsequently advanced to the provinces was based on the value of these tax transfers which would fluctuate up and down depending on the wealth or the income, I should say, of the individuals and companies residing in the applicable jurisdiction.
To give an example, currently in the last fiscal year, under the Canada social transfer, Alberta would have received $187 per capita. Ontario would receive $249 per capita and the province of British Columbia would receive $282. That factors in the value of the tax point based upon the original transfer that took place 30 years ago, and that was all in accordance with the original principles.
I should say that the health transfer and the social services transfer has changed over the years. It has gone from different formulas, but that basic formula acknowledged in the tax transfer that took place in 1977 has always remained intact. That would be taken into consideration when the basic per capita payments were made to the individual provinces.
What is going on now on the Canada social transfer is that we are doing away with that formula in its entirety and going to a basic per capita formula. When the health accord expires in 10 years time we are doing away with that as well. At that point in time we are going to a basic per capita formula.
Someone might ask, what is the problem with a per capita formula? The equalization formula is there so the provinces can offer compatible services at compatible levels of taxation. I have no problem with it at all, assuming that the original tax points had been kept. If the $30 billion were available to the federal government, we would distribute that on a per capita basis to all provinces for health care funding and social service transfers. That is not what happened.
So members can follow what I am saying, there has been a basic fundamental change in the way the federal government finances health care and social services for the provinces. There is going to be a small increase of $7 to $289 per capita in the social transfer, but to bring the provinces in line, Alberta will receive $333 million, Ontario will receive $445 million and the other eight provinces will share $14 million. Members can see the profound problems with this as we go forward. More important, in 2013-14 according to the budget documents, the very same formula will be applied to health care funding. This will have two or three times the repercussions that the formula change is having this year.
This all has occurred under the radar screen. I would urge all members of Parliament and provincial treasurers to pay close attention to this. Some members may think that they may not be in politics in 2013-14 so they really do not care, but members were sent here to represent the people who elected them. It is something we should be giving very serious consideration to as we move forward in this budget debate.
Some people may argue that it is only one thing and it may not be a big issue, but it is a continuum of a whole host of other programs, priorities and initiatives which basically dismantles the role of the federal government. When we look back at the history of this country, and the initiatives and the programs that were established by the federal government, it is significant.
The federal government was here when medicare was established. No one was saying that that was a provincial jurisdiction. The federal government was here when the baby bonus was established, which subsequently evolved into the child tax benefit and the child tax credit. The federal government was here when old age security, the old age pension, came into effect. The federal government was here when that was expanded and enhanced through the guaranteed income supplement. The federal government in this House developed the Canada pension plan. The federal government in this House also developed the employment insurance program which is now available to all Canadians.
I am not going to be as partisan or as foolish as to say that they were all Liberal programs; some of them were and some of them were not, but whatever happened, they were improved, they were enhanced and they were continued by successive governments. However, that is not the case here. These are all being transferred gradually, if we read what is going on in this budget and when we hear what is going on in this House, to the provinces, lock, stock and barrel. What I am saying is that those are not the values that built this nation.
There is a momentum going on in this House and in this country toward decentralization, individualism and privatization, which I consider to be very unhealthy. Canada is becoming a loose association of autonomous regions. These autonomous regions claim to define the national interest. My point is that Canada is larger than its diverse parts. We are in a race to the bottom and we may reach it sooner rather than later.
In conclusion, we are dismantling Canada as we know it and it is being done without a whimper. We are going to end up with a lesser country. I urge everyone to consider this issue very carefully, because it is important and significant. I urge everyone to vote against this budget unless this particular issue can be resolved to the satisfaction of all Canadians.