Madam Speaker, it is with pleasure that I participate in the third reading debate on Bill C-73, concerning the federal government's borrowing authority.
From the outset, we must say that the official opposition is against this bill. We are opposed to it because it flows from the last budget presented by the Minister of Finance of Canada.
So, logically, we are against the borrowing authority because we were opposed to the finance minister's budget. It is with great pleasure that, during the next few minutes, I will remind you of why we are opposed to the bill and of why we were so opposed to the finance minister's budget.
First of all, I would like to make it clear that we have never been against putting the fiscal house in order, on the contrary.
If you have an opportunity of rereading the Hansard for the last year, you will see that every time we had a chance to do so we asked the finance minister to have an item by item review, in
the normal course of activities of a parliamentary committee made up of parliamentarians, not of experts nor officials working on the sly, of all the federal budgetary expenditures, including tax expenditures, that is the various provisions of the Canadian tax legislation that allow certain individuals or corporations to avoid paying income tax.
That is absolutely not what we are challenging in the last budget, nor therefore in Bill C-73. We are against two specific elements of the budget. First, we oppose the means to be used to stabilize public finances, because we cannot agree with them. Those means include a downright offloading of the federal government's deficit problems onto the provinces, and also a downright offloading of the federal public financing problems for the unemployment insurance account, because year after year billions of dollars are taken off the UI account in order to address the public finance problem, and also budget cuts made at the expense of the neediest members of society, that is cuts in the transfer payments for social assistance and post-secondary education.
The second element of the federal budget we cannot agree to, and the second reason why we therefore cannot agree with Bill C-73 providing borrowing authority, is related to the fact that the real problem of Canadian public finances is hidden from the people of Quebec and Canada, and that is the explosive problem of chronic and massive debt, a problem that is likely to stay with us for the next few years.
If I may, I will take the next few minutes to review our major objections to the budget, and therefore to Bill C-73. As I said earlier, the first of these budgets over the next three years will offload the federal government's deficit onto the backs of the provinces. For the government of Quebec alone, this represents over the next three years a shortfall of almost $3 billion. In addition, not content with cutting transfers, the federal government is still attempting, even though it can no longer afford to do so, to impose its view of things on the provincial governments and on the government of Quebec in particular by imposing standards in all the areas where it has made cuts and where it is going to continue to cut in the coming years. These areas would include health, post-secondary education and social assistance, as I mentioned.
Just as he did last year, the Minister of Finance again this year went after the unemployed. Over the next two years, he will cut $7.5 billion in the unemployment insurance fund. Out of this fund, to which the federal government no longer even contributes, he will take $7.5 billion. What is this if not an indirect tax, because only employers and employees contribute to this unemployment insurance fund. And for three years now, the federal government has been merrily dipping into this fund, although it should not be doing so.
I would remind you that $7.5 billion in cuts represents 120 times what is being asked of the banks over the coming years. They are being asked to cough up $100 million as an additional, temporary tax over the next two years. The government is laughing in our faces when they leave the banks intact in this cost-cutting exercise and ask the unemployed, who did not make a profit of $5 billion last year, to contribute $7.5 billion to social assistance programs. This is how this government defines social justice and fairness.
These cuts are part of a vision of economic and social development that does not correspond with Quebecers' view of society. I would remind the Secretary of State, who said earlier that everyone was happy with the budget, that that is not the case. In Quebec, 58 per cent of Quebecers have just said that they are against this budget, that they are not confident that this budget can even begin to bring about job creation. So he should check his polls and he should also verify elsewhere than in financial circles the reaction to this budget.
I would remind you that, in the last budget, this government had so few concerns regarding jobs and unemployment that, for the only program of any interest-the infrastructure program-, it found a way to cut $200 million from this fund which had been set aside for investment in infrastructures across Canada.
I would also remind you that, in terms of employment, more than 800,000 jobs still need to be created, with all the jobs we have lost since the big recession in the first quarter of 1990. For this government, unemployment is not a problem, as the Minister of Finance indicated in his budget speech, but jobs are not a priority either.
We oppose Bill C-73, since, as it stems from the budget, it does not directly attack the duplication that is costing taxpayers billions of dollars. Moreover, as we have said in recent weeks, this duplication and overlap will continue. Members opposite who say this is not the case should have a look at the budget and note that nothing has changed in terms of expenditures or tax revenues.
They should also look at all of the departments. Not one department has been cut. Not one. If duplication and overlap were being eliminated, departments would be cut, because expenditures are being cut, and 45,000 people are being laid off. Where is the big machine being restructured? It is not. It remains intact and will continue to generate billions of dollars in wastage paid for with the income and other taxes of Quebec and Canadian taxpayers. This is the fine way the Liberal government manages public finances.
We oppose Bill C-73, because the budget is silent on one serious problem in the Canadian tax system: the many tax inequities. The budget contains no tax reform that would allow for a reduction in government borrowing on the capital markets. It contains only taxation measures and measures that will perpetuate the wastage, as well.
The Minister of Finance is not going after the tens of thousands of companies that pay no income tax. We have been drawing this problem to his attention for months. We have been saying for months that some 70,000 profitable companies in Canada do not pay income tax. The minister has done nothing to correct this tax inequity, this preferential tax treatment given business.
Neither does the budget contain any provision concerning 16 tax conventions entered into between the federal government and countries considered as tax havens for hundreds of millions of unpaid corporate taxes. In the end, the budget offers only superficial changes aimed at hiding the $7 billion cut in transfers to the provinces.
For instance, while the government announces that it will make permanent cuts to the unemployment insurance program, it is increasing, on a temporary basis, for two years only, the capital tax imposed on banks, which will raise approximately $100 million. This represents a fortieth of the profits made by Canadian banks as a whole, in 1994-95. Imagine the fiscal effort required of banks. Imagine the fiscal effort required of the Royal Bank, for instance, which last year recorded profits of $1.2 billion.
As far as family trusts are concerned, we are told that the very rich who, in Canada, do not have to pay any capital gains tax, for a maximum period of 80 years, on assets worth hundreds of millions of dollars held in family trusts, will see their benefits diminish slightly.
In his budget speech, the finance minister told us: "Do not worry. We will eliminate the undue benefits available to the very rich in Canada". He gives them four years to dismantle their family trusts, put their wealth somewhere else, and ensure that for the next four years they will not pay their rightful share of federal tax. This is a reflection of the inability and lack of political will on the part of the federal government to close the tax loopholes which benefit very high income earners, and explains the financial predicament it is in.
We oppose Bill C-73, which is a spin-off from the budget, because Canada still operates its farming sector with a double standard. To compensate western farmers for abolishing the western grain transportation subsidy, which enriched Prairie farmers by $560 million, they offer a direct subsidy of $1.6 billion to offset the decline in land values.
When a ways and means motion was introduced last week concerning the Crow's Nest Pass agreement, it was a replay of the problem we had in 1982 when another Liberal government attempted to abolish the same agreement and to compensate western grain producers without compensating those in the east, in particular in Quebec. They want to base compensation to western producers on cultivated acreage, not on whether producers exported their grain in the past and even benefited from the Crow rate. They want to compensate all western producers based on cultivated acreage.
On top of the $1.6 billion, western farmers will receive another $1 billion in loan guarantees and $300 million specifically earmarked for diversification. They are subsidizing the diversification of western farm products outright. These products will directly compete with Quebec products and this is what makes no sense: that close to $3 billion, of which 25 per cent comes from Quebec, will be dedicated to the cause of diversifying the economy in the west, which will eventually impinge on Quebec's share of the market.
