Yvan Loubier

[Maintenance Of Railway Operations Act, 1995, March 25th, 1995]

This is only a huge charade on the part of the government, to score political points.

[Borrowing Authority Act, 1995-96, March 24th, 1995]

Mr. Speaker, I wish to congratulate my hon. colleague from Rimouski-Témiscouata, who, with his well-known verve and oratorical skills, demonstrated that this budget is even more conservative that the one the Tories dared to table when they were in power.

She put her finger on one of the government's shortcomings by saying that there was no one to defend culture on the government side. On hearing that there was no one to defend culture, I wondered who, in the last year and a half, has been defending the most disadvantaged as well as students, seniors,

middle-income earners and workers? They have shown how trigger-happy they are in their handling of the rail dispute.

The Liberals are knuckling under. They even knuckle under history when we ask them to correct it. Last night, I felt sick when the Liberals on the other side of the House refused to correct history regarding the high treason charges against Louis Riel. They even refused to refer the matter to a committee of the House. I was appalled.

So there is no one to defend the most disadvantaged, to defend culture, to defend students, middle-income earners and workers, to defend history. What has happened to the Liberals since the election campaign, when they presented us with a red book full of humanitarian and social democratic principles as well as promises to defend the most disadvantaged? What has happened since then? I am putting the question to my colleague.

[Borrowing Authority Act, 1995-96, March 24th, 1995]

It is a disgrace.

[Borrowing Authority Act, 1995-96, March 24th, 1995]

Mr. Speaker, I wish my hon. colleague from the Reform Party would take the good news to his party because, for the past 15 months, all we have heard the Reform Party suggest is that we continue to deal with the deficit and debt problem on the backs of the workers, the unemployed and the disadvantaged.

As for tax fairness, I would say this is another piece of good news he could pass on to his colleagues because every initiative put forth by the Bloc Quebecois at the finance committee to eliminate unfair advantages flowing from family trusts, to eliminate all those inequities in the tax system that have enabled very high income earners as well as large corporations with large profits not to pay a cent in taxes since 1991, every time we have come up with such an initiative, the Reformists have voted against our proposal.

So, before claiming that they want tax fairness, before claiming that they want to restore fairness in the tax system, I think that the hon. member should go back and check in his party what his party really wants.

[Transfer Payments, March 23rd, 1995]

Mr. Speaker, be that as it may, can the Minister of Finance deny that, to preserve his own image as a good manager and his own credit rating, he knowingly and deliberately jeopardized the credit ratings of Quebec and Ontario by transferring his budget problems to these provinces?

[Transfer Payments, March 23rd, 1995]

Mr. Speaker, yesterday, Dominion Bond Rating Service confirmed the misgivings the official opposition and the Quebec government had about Quebec and Ontario being hit hardest by most of the cuts in transfer payments announced by the federal government in its last budget.

My question is for the Minister of Finance. Will the minister confirm the Dominion Bond Rating estimate that Ontario and Quebec will have to absorb 71 per cent of the reductions in transfers announced in the last federal budget?

[Bank Of Canada, March 22nd, 1995]

Mr. Speaker, the question is so important and serious that I will direct my supplementary question to the Prime Minister.

Does the Prime Minister, who as he said yesterday is the only one to have access to the ethics counsellor, intend to submit the case of the senior deputy governor of the Bank of Canada for an opinion and then report to the House on this important, serious and grave issue?

[Bank Of Canada, March 22nd, 1995]

Mr. Speaker, yesterday, the senior deputy governor of the Bank of Canada, Bernard Bonin, set a dangerous precedent when he endorsed the analysis and conclusions of a prereferendum study carried out by the C.D. Howe Institute which concluded that Quebec's separation would provoke a serious economic upset and a capital drain which would force Quebec to mint its own currency.

Does the Minister of Finance feel that it is proper for the senior deputy governor of the Bank of Canada to become publicly involved in a political debate?

[Borrowing Authority Act, 1995-96, March 20th, 1995]

Madam Speaker, I fully intend to prove that what I am saying is relevant to the budget.

I will not deal with all fifteen points raised and agreed by Mr. Côté. One is entitled to query these, however. I did select five which deserve a somewhat different treatment based on facts, on the truth, on genuine scientific methods and not on political bias and the kind of methods for which Mr. Côté is unique or occasionally, on a tissue of lies.

I will address point six in Mr. Côté's document.

Madam Speaker, since you asked the hon. member to sit down and show respect for the official opposition, I think he should show some respect for your decision as well.

Point six. Mr. Côté wonders what was the net benefit to Quebecers from the federal budget. You know what he said? Three billion. In other words, Quebecers get three billion more from the federal government than they contribute to the federal treasury. I say that is not true and is not borne out by the facts.

In 1991, when the Bélanger-Campeau Commission conducted its hearings, even André Raynauld, who is not known for his sovereignist views, concluded on the basis of a genuine analysis of public finances in Quebec and Canada that at the time, we were receiving more or less what we were paying to the federal government. In other words, the taxes we as Quebecers paid into the federal treasury and the transfer payments made by the federal government amounted to about the same, until 1988. Subsequently, we started getting less. And now, after the last two budgets and especially the last one, we see that, according to the experts where there used to be a surplus, there is now a deficit.

Take the Unemployment Insurance Fund. There is no surplus over what employers and employees in Quebec pay in to the fund. There is now a potential loss of $118 million. In other words, what the federal government pays in the form of unemployment insurance benefits in Quebec will be $118 million less than was contributed by Quebec employers and employees. The same applies to transfer payments. Mr. Côté is definitely out to lunch.

Federal transfer payments to Quebec were cut by 32 per cent for the three year period from 1994 to 1997. Therefore, in my opinion, Quebecers are currently in a deficit position when we compare the amount of taxes and income taxes that they pay to federal coffers with what the federal government spends and invests in the province of Quebec.

So, why did Mr. Côté say what he did? Do you know why? Because he took federal spending as a whole and divided it by the population. This methodology is not only dubious, it is also dishonest. As an economist, Mr. Côté has no right to make such a calculation. He does not have the right and, what makes it worse, he knows it. He knows, for example, that Quebec never gets one quarter of research and development spending or agricultural spending, and that, from 1984 to 1993, the federal government only spent 16 per cent of its total investments in Canada in the province of Quebec, although Quebec accounts for one quarter of the population. He knows this but it did not stop him from saying such rubbish.

I am happy to see that I have a few minutes more. I will go on to point 7. What does Mr. Côté say a sovereign Quebec could hope to save by eliminating overlap? No more than $500 million.

How did Mr. Côté arrive at his figures? I am going to let you in on it. I would like to say, though, that I am almost ashamed to tell you because it puts economists in such a bad light. He took 10 per cent of the federal government's operating budget, so 10 per cent of $18 billion is $1.8 billion, and he multiplied it by 25 per cent, which is the population of Quebec, and he got $500 million. Just imagine, Madam Speaker! I have never seen such an analysis, except the utterly preposterous one which the Royal Bank delivered during the Charlottetown debate, according to which almost one half of Canada's population would flee to the United States. Mr. Côté's calculations are not any better.

In 1991, the Bélanger-Campeau Commission, which used exact and scientific sector analysis methods, calculated that, for three items of expenditure alone, Quebec would save $800 million: $289 million in tax and income tax administration; $233 million in the communication and transportation sectors; $275 million in the job training sector (this figure was issued by Gil Rémillard and Marcel Bourbeau).

Using a ludicrous methodology, Mr. Côté says that we will be lucky if we save $500 million overall.

When we speak of duplication and overlap, we are not just speaking of administrative expenses. We are speaking of inconsistent policies, manpower policies that have the federal government going in one direction and the government of Quebec going in another, with the result that at a certain point no one knows what anyone else is doing and there is no more sustainable job creation. These are more of the costs of duplication and overlap.

The endless negotiations on regional development are another example of costly duplication and overlap. They go on for years and years, while entire regions are left hanging. This is the cost of duplication and overlap, not just ordinary administrative costs, especially according to the arbitrary and completely ridiculous method used by Mr. Côté.

Mr. Côté's eighth question was what percentage of the debt would Quebec inherit? He starts out by saying that it will be according to population, therefore 25 per cent. Why would we pay more than our share of the debt today? Why, when Quebecers are covering 23 per cent of the cost of servicing the debt now through the taxes they pay, would they take on 25 per cent the day after sovereignty? Here, already, Mr. Côté seems intent on artificially inflating the figures he is presenting. We are paying 23 per cent of the cost of servicing the debt at the present time and it is too much.

Why is it too much? Because our assets in Quebec do not justify our paying 23 per cent annually to help service the debt. And the Bélanger-Campeau Commission made it very clear, with three international observers who confirmed the commission's calculations. The proportion of assets in Quebec is 18.5 per cent, and it is therefore 18.5 per cent of the debt that the government of Quebec would inherit, with sovereignty.

So, why did Marcel Côté ignore this fact? Why did Mr. Côté, who has a degree in economy, choose to ignore a basic fact, unless he has forgotten what he learned in his economics classes, in which case he can no longer claim to be an economics expert or write books on the costs of sovereignty with titles such as Le rêve de la Terre promise .

One last thing. I would like, at this stage, to say that this man really talked through his hat. He does not know the first thing about the subject and it shows. Third, Mr. Côté wonders if Quebec dairy producers could continue to sell their products to Canada at twice the world price and expect to receive what amounts to several millions in subsidy from Canadian consumers every year.

Three things are incorrect in this short statement. First, it is incorrect to say that the price of dairy products in Canada and Quebec is twice the price on the international market. It is not true. Second, dairy production, which is subject to interprovincial distribution through quotas, is centred on processing milk to make cheese, yogurt, ice cream, mozzarella and what not. This is the part to which an act of Parliament and a federal milk subsidy apply.

If our products in Quebec were not competitive, if they were not competitive in price and quality, they would not sell on the Quebec market, they would not sell on the Ontarian market or even in some specific segments of the American market. They would not anywhere. The fact is that Quebec's milk production is quite competitive and if 50 per cent of all the industrial milk produced in Canada is currently produced in Quebec, it is because we have great producers in Quebec. We have the best, and I dare you to compare the productivity of Quebec milk producers with that of American producers.

What we have been presented with is basically a tissue of fabrications, as a scare tactic, and let me tell you that while cut-throat competition may have characterized international trade before 1947, it is no longer the case. It is no longer a free for all. There are specific rules, the GATT rules or the rules of the World Trade Organization. According to these rules, no GATT member, whether it is Canada, Quebec or the United States, regardless of its size or importance, can block the export of dairy or other products to its territory, for reasons of politics or resentment following a democratic vote by Quebecers in favour of sovereignty. So, Mr. Côté can go back to the drawing board.

As regards the issue being debated here, the official opposition will oppose Bill C-73, which provides borrowing authority to the government, since it is the direct consequence of the Minister of Finance's budget, which is fundamentally unacceptable.

[Borrowing Authority Act, 1995-96, March 20th, 1995]

Yes, it is a shame, because they tell us we must tighten our belts, while cutting $560 million in Western Canada but compensating by injecting $3 billion in that region. This does not make any sense.

We are also opposed to the proposed measures related to international aid. They are cutting the international aid budget by $532 million, thus placing Canada, which already ranked pretty low in terms of the assistance provided to the millions of children who starve to death every year, at the bottom of the list of donor countries. When I see that, despite Canada's tradition of compassion, the federal government is maintaining until 1997 the $1.5 billion in direct subsidies to business while

cutting by $532 million the budget to help reduce child mortality around the world, I find this simply revolting.

We oppose Bill C-73 resulting from the last budget because this budget forgets a fundamental consideration: the federal government's chronic debt problem.

With the national debt currently standing at $548 billion, the federal government is responsible for over 70 per cent of the public debt burden in Canada. In terms of the size of the overall public debt, the debt of all levels of government put together, Canada ranks first among G-7 countries. Not a very enviable position.

Just at the federal level, the debt is so huge that debt charges alone presently account for more than one third of the taxes paid by Quebecers and Canadians. In the case of Quebec, for example, this means that of the total amount paid by the people of Quebec in taxes of all sort, which is about $30 billion, $10 billion goes to pay debt charges, that is to say the interest on this huge debt.

The last budget does not provide any relief, none at all. To the point that, next year, the portion of the taxes paid by all the taxpayers in Quebec and Canada that will be required to service the debt, just to pay the interests on the federal debt, will be more than 37 per cent, or a 4 per cent increase in just one year. Before you know it, in four or five years, nearly half of the taxes paid by the taxpayers in Quebec and Canada will go to servicing the debt. If you extrapolate these figures, five or six years from now, the federal debt, which will have increased steadily since the Minister of Finance tabled this budget, will be between $750 and $800 billion.

If the federal debt is already a huge problem at $548 billion, you can imagine what a problem it will be at $800 billion. It will be a nightmare in terms of public financial management. It will be such a nightmare that the Minister of Finance tried-we can talk about the response of the financial markets-to do some window-dressing. He does not talk about the debt any more. He does not talk about it. But based on the assumptions and growth rates contained in his budget, you get this $800 billion figure. This is not a figment of our imagination: it is reality.

Similarly, using the Minister of Finance's own calculations and the same growth rates, we arrived at the following conclusion: in five years, the percentage will be 50 per cent. In other words, the proportion of tax revenues allocated to federal programs, including transfers to provinces and individuals, and the proportion used to pay the interest on the debt will be the same. One year later, the tax revenues used to pay the interest on the debt will be greater than those allocated to federal transfers to provinces and individuals.

In the private sector, if we had a product to sell and if interest costs related to that product were greater than its value, we would have declared bankruptcy a long time ago, we would have gone belly up as they say. That will happen in five or six years, and this is what the Minister of Finance tried to hide from Canadians and Quebecers.

There are two major reasons for this enormous, chronic and inescapable federal debt. First, the federal system is obsolete. It can no longer meet the challenges of the nineties and of the year 2000; it does nothing to help the country adjust to the new international economy by being productive and competitive, by having the best possible products and skilled workers, and by striving to provide humane conditions in this new competitive environment. Such support is greatly lacking in Canada right now, but we hope to find in Quebec.

The second main reason why we have such an enormous debt is what is called the structural deficit. We are not making that up: it is mentioned in the Minister of Finance's documents and it has been for about seven years in the documents released by his department. What do these documents say?

The Canadian economy does not generate enough jobs. Since the unemployment level for the next three years is expected to reach 9.5 per cent in Canada and about 12 per cent in Quebec, it is obvious that we have a problem here. The annual deficit and the debt increase are caused by the fact that the people who do not work do not pay taxes, which means a loss in tax revenues. This loss of revenues is reflected in the deficit and then in the debt. This is the structural component of our deficit and our debt.

What does it do? It creates a spiral: we have foregone tax revenues, a higher deficit, a steadily increasing debt, higher interest rates following incursion into the capital markets and foreign borrowing, investors demanding incentives because our debt in not under control, which means we pay more interest and our debt service costs are on the rise.

Our debt service costs are rising, which entails another increase in interest rates, the expected investments are not forthcoming and all the jobs that we were promised and that we need-we are 800,000 jobs short-will not be created. This is the structural component of our deficit and our debt, and it never changes.

Why? Because there is no major change to this structural component in what was tabled by the finance minister. It remains with all the duplications, overlapping, federal interference and, now that the federal government can no longer live beyond its means, it is reducing its vision to its means. It goes after the provinces, imposing national standards and pretending

to have the right to do so for ever and ever. That is what flexible federalism is all about.

For all these reasons, the official opposition will reject Bill C-73 at third reading. This bill to provide borrowing authority stems directly from the budget. We, and Quebecers with us, have enough reasons to reject this bill. I remind you that 58 per cent of Quebecers are against this budget. They are convinced that it undermines job creation and economic recovery and that it does nothing to solve the basic debt problem, as I just explained. Therefore, we will reject it.

I would like to send a message to my fellow Quebecers. I would like to ask them what they want for the years to come. Do they want to continue to live in a system which will at best make decisions they will not necessarily agree with, because the Bloc represents only 25 per cent of the votes in this Parliament? Twenty-five per cent of a board of trustees, that is not much.

Do they want to go on within a system which has nothing to do any more with the image we have of a government of the 90s and beyond, with how we have been been percieving our society for the last 30 years? An image that we have tried to fashion through various constitutional conferences, through various negotiations, through various submissions in the history of Quebec?

Quebecers have been very patient. One could hardly be more patient than we have been over the past 30 years, trying to change the system a little so as to better reflect a reality that we have wanted to see reflected since 1867, that is the reality of two founding nations with some kind of recognition of Quebecers' legitimate aspirations.

Finally, we have two choices. We can stay in a system that is sinking-a big boat that is taking in water on all sides-a system that neither the federal government nor English Canada want to reform. This system may be satisfactory for English Canada, but it cannot be satisfactory for Quebecers with their particular aspirations.

Do we want to stay in this system or seize the opportunity that is offered to us this year to leave it voluntarily, maintaining the peace of mind that has motivated us over the last seven years since the failure of the Meech Lake Accord?

Would it not be preferable to get out of this system in a democratic way and to envision a less morose future than what we have had for several years with a system that is continually slowing down and that is becoming a burden, a ball and chain for Quebec and Canada's economic advancement?

I would say that if my fellow citizens get out of this system, they must do so by ignoring the fear-mongering campaigns and also ignoring the distorted analyses based on dubious methodologies and often containing a web of untruth.

Last week-end, I had the opportunity to take a look at one of these truncated analyses, one that distorts reality. I am talking here about the analysis made by Mr. Marcel Côté, from SECOR, and contained in a book entitled Le rêve de la Terre promise ou le coût de l'indépendance . That gives me an opportunity to digress somewhat, using the distorted elements of this analysis. Mr. Côté presents 15 questions on sovereignty.