Yvan Loubier

[Registered Retirement Savings Plans, October 27th, 1994]

Mr. Speaker, the Prime Minister does not realize that his Minister of Finance is himself responsible for that uncertainty and that unacceptable situation. Yesterday morning, RRSPs were not going to be taxed; in the afternoon, the minister did not know for sure, while in the evening there was a possibility that RRSPs might be taxed. This is irresponsible on the part of the government.

If the government really wants to show taxpayers that it is serious about reducing spending and not increasing taxes, why does the Prime Minister refuse to formally pledge that he will not raise taxes and that he will not tax RRSPs? The Prime Minister must fulfill his promise!

[Registered Retirement Savings Plans, October 27th, 1994]

Mr. Speaker, my question is for the Prime Minister. In spite of the election promise made by the Prime Minister not to increase taxes, the Minister of Finance, through irresponsible statements, and particularly since yesterday, lets the uncertainty persist regarding the possibility that RRSPs will be taxed. Yet, all agree that such a measure would be irresponsible, despicable as well as a step backward.

Will the Prime Minister eliminate the uncertainty that prevails by pledging not to tax RRSPs?

[Taxation, October 25th, 1994]

Mr. Speaker, the government talks about eliminating tax loopholes, but not the right ones, only those that benefit people on middle

incomes, not those that benefit the very wealthy Canadian taxpayers that the minister is protecting in his Budget and his pre-budget consultations.

Why will the Minister of Finance not admit that you do not change the rules halfway through the game and that he will have to stop these damaging speculations by telling the House quite clearly that he will not tax RRSPs?

[Taxation, October 25th, 1994]

Mr. Speaker, my question is directed to the Minister of Finance.

During the last days of the federal election campaign, the Prime Minister promised to reduce the deficit without raising the taxes of Canadians during the first two years of his mandate.

Last week, however, in another about-face by this government, the Prime Minister referred in no uncertain terms to the possibility of raising taxes, contrary to his campaign promise.

How can the Minister of Finance account for the fact that exactly one year after it came to power, his government has already reneged on its commitment not to raise taxes and that the minister himself is feeding speculation about the possibility that his government will tax RRSPs?

[Supply, October 25th, 1994]

Mr. Speaker, we would have a normal tax system for a normal modern industrialized country. We would surely have a more equitable system that would not favour only the very, very, very high incomes. I am not talking about high incomes in the definition we have. I just gave you the example of family trusts, with an average of $47 million in assets and as much as half a billion. It is not right that these people pay no capital gains tax year after year for 80 years.

As we have shown from the beginning, sovereignists care about tax fairness, and I suppose that in a sovereign Quebec such treatment would be called into question. The same goes for the 3,400 Canadians who did not pay a cent of income tax to the federal treasury last year, even though they had a very high income. I think that we would also try to correct that effectively.

I would remind you-I know that I have only a minute left-and you will tell me that it is not related to the question, but it is related to the question, quite a bit in fact; I would remind you that sovereignists care about the collective well-being. We have also shown that we want to reduce the contribution of big corporations and big lobby groups to the financing of political parties as much as possible. That is why the Parti Quebecois, just as the Bloc Quebecois, is financed by the people.

That is why a sovereignist government in Quebec, unlike the Liberal government in Ottawa, is not subject to undue pressure and influenced by gifts, in some cases, from lobbyists for very rich Canadian families with assets of $47 million to half a billion that are not taxed for 80 years.

This already gives us a good idea that the prime concern of a sovereign Quebec will be the majority of the people, not an elite who provides the funding, as it does for the Liberal Party of Canada, so that this government has its hands tied and the

Minister of Finance does not put the real tax loopholes in his paper but goes after the tax breaks affecting middle- and low-income people.

So this gives you some idea of what sovereignty would mean for us.

[Supply, October 25th, 1994]

Mr. Speaker, about the $3.3 billion budget for subsidies to business, during the year we have been here, we have asked the Minister of Finance to put everything on the table and allow a parliamentary committee to look at federal government spending in a very thorough and specific way. We have always included the $3.3 billion in subsidies to business, in order to scrutinize what type of subsidies were involved and who the beneficiaries were. Did they really have a structural impact on the economy enabling us to face the challenges of internationalization and international competition?

We never received a reply from the minister in this regard. But, as you said, logic dictates that a normally competitive business should not need subsidies. However, we are now faced with radical economic changes.

The mere fact that the latest GATT agreement signed last December will bring about tariff reductions of about 75 per cent over the next six years is already a lot to deal with.

Although tariffs between the most industrialized countries already averaged five or six per cent, it still makes a difference, especially when, according to most experts, the value of the Canadian dollar remains very high despite some drops in recent months.

We are again in a situation where the slightest tariff protection can compensate for the fact that Canadian businesses are not as competitive, probably in part because of the Canadian dollar.

I submit to you that a normal, competitive business should not be subsidized. Often, all these subsidies to business do is generate competition between Quebec or Canadian firms because one received a subsidy while the other did not. I think that this system must be totally revised. I would say to you that most of this $3.3 billion should go.

[Supply, October 25th, 1994]

Mr. Speaker, the hon. member's question reflects the tendency of these people to evade the issues. Today, the issue is not Quebec's sovereignty. We are talking about their government's budget process. We are talking about their government's inertia. We are talking about the flabby approach of the Minister of Finance, who has spent the past year-I want to say this because it is true-colouring the Conservatives' blue book purple because they are even more conservative than the Conservatives and telling us we are in the red.

So the issue is the consultation process that is going on now. The issue is the measures this government is taking at the expense of the most vulnerable in our society. Sovereignty is not the issue.

However, I would like to answer a small part of his question. Look at how the sovereignist movement has operated in Quebec for the past 30 years. It has not operated on the basis of a rightist philosophy, like our Reform Party friends have done since they were elected a year ago. It has not operated on the basis of a philosophy that is very close to the right, which is the approach being taken today by the Liberals. It has operated, from the outset, in accordance with the views of Mr. Lévesque. It has operated on the basis of a profoundly democratic society that is intent on the well-being of its most vulnerable members and that wants to provide for a fair distribution of our collective wealth, and I think that once Quebec is sovereign, we will have some really exciting projects.

As soon as we get out of this system, we can go ahead with some very exciting projects to create full employment, increase our collective wealth and regional development and give people new hope and dignity. We will provide real projects to help people recover part of that dignity, without pretty speeches like the Prime Minister gave us when he referred to people who had lost that dignity as beer drinkers.

[Supply, October 25th, 1994]

I apologize, Mr. Speaker. It was said in the heat of the debate. Everyone refers to this reform by the minister's name, so I forgot we were on the floor of the House and that ministers should not be referred to by name.

Last week, we suggested to the Minister of Finance that the federal government withdraw from all areas of provincial jurisdiction and not, as is the case in the social security reform proposals presented by the Minister of Human Resources Development, maintain and reinforce the federal government's involvement in areas that are the exclusive jurisdiction of the provinces, such as health care and education.

Since in its discussions on relations between Quebec and the federal government, the Bélanger-Campeau Commission concluded that at least $2 billion could be saved by getting rid of all this duplication and overlap, I do not think it would be an exaggeration to say that at least $3 billion could be saved in the process. For a start, the government could do, as suggested by the Bloc Quebecois last June, and abolish the GST, give this tax space to the provinces and let them be responsible for introducing a consumer tax. As a result, hundreds of millions of dollars in GST administration costs could be recovered. Our second constructive suggestion for the minister was to cut many of the subsidies now being given to businesses. As you know, these subsidies represent a total of $3.3 billion. I am not saying they are all useless, but many are given as a form of patronage to businesses that are not efficient and not competitive, at a time when the stakes have changed as a result of globalization of world markets and international competition. There is a potential savings of $3.3 billion here for the Minister of Finance.

The same goes for the defence budget. In its election platform, the Bloc Quebecois proposed a 25 per cent reduction in the National Defence budget. So far, we have seen a 10 per cent cut in the last budget, or $1.1 billion. We have other positive and constructive suggestions to allow the Minister of Finance to cut another $1.6 billion from the defence budget.

According to all Quebec and Canadian experts we consulted, it is possible to get this extra 15 per cent without reducing or watering down the Canadian Forces mandate. Fourth, we asked the Minister of Finance to immediately stop government financing of Hibernia.

A total of $3.3 billion has already been sunk into this project without any prospect of profits and without knowing when the first barrel of oil will be extracted. If I remember correctly, the price of a barrel of oil must reach $26US for the Hibernia project to merely get to the point where it is no longer losing money on every barrel of oil is extracted from this drilling rig, without considering past losses. This year alone, another $250 million will be sunk into this project. Next year, another $250 million or even $300 million could be spent on this project, according to the finance minister's projections, without any hope of profitability.

How many more billions of dollars will the federal government sink into this project, when it is asking all Quebecers and Canadians, especially the poorest, to tighten their belts? Fifth suggestion, we asked the Minister of Finance to read again the last three reports from the auditor general, which reveal blatant carelessness, again, in government program management as well as a bureaucracy which-in some respects-is still overspending and wasteful in 1994, when we are told that public

finances must be brought under control and be more balanced over the next three years than they have ever been. This is our fifth suggestion to the Minister of Finance.

Sixth, we suggested that the Minister of Finance improve tax collection and tackle the recovery of bad debts. The auditor General says that there is $6 billion to pick up here. This amount of $6 billion does not even include contested debts. This is $6 billion that the federal government could get, but because of its laxity, we have a deliberate shortfall of over $6 billion this year.

The same goes for our seventh suggestion to the Minister of Finance and, strangely enough, these suggestions do not appear in his documents. We asked him to reform the Canadian tax system, but not by cutting the age credit, not by taxing RRSPs, not by attacking the middle class and the poor; we asked him to eliminate undue advantages for family trusts which benefit wealthy Canadians. I would recall a rather significant statistic. Ernst and Young surveyed 121 trusts-we only have surveys to go on because the Department of Finance and the Department of Revenue do not want to do a comprehensive analysis of family trusts-and I will give you some figures about them.

The average value of the assets in 121 trusts was $47 million. These are not family trusts for middle-income or high-income people, according to our own definition; these are $47 million in assets belonging to very rich Canadians. These family trusts held up to half a billion dollars. Indeed, that was the amount held in Trust No. 121 in the sample, which was the highest one. Five hundred million dollars. Five hundred million dollars in a trust which, year after year, and possibly until the death of the last beneficiary, benefits from a tax exemption on capital gains. If this beneficiary is lucky and lives to the age of 84, he may benefit from this tax exemption until he is 80 years old, on capital and assets which may be in the millions of dollars.

The same goes for tax conventions. We told the Minister of Finance but he is refuses to listen because he does not like the idea of targeting his friends, the friends of this government. We said that, even after the changes made to the taxation system last February, Canada still had tax conventions with 16 countries and these are considered to be tax havens.

The government loses hundreds of millions because Canadian corporations and very high income earners use these countries to avoid paying taxes. It is time to eliminate such loopholes and it is time this government realizes that it was not elected by major corporations or by those very rich Canadians who have family trusts with, on average, assets of $47 million and sometimes as much as half a billion dollars. It was elected by those people whom the government has been targeting since it took office.

[Supply, October 25th, 1994]

-bleak reality.

Mr. Speaker, Liberal members are cynical to the point of putting words in my mouth to describe their own harmful actions to Quebec and Canadian families. It is terrible to see them behave like that!

The Minister of Finance tabled an elaborate strategy to solve the problem of the deficit and the debt, a problem which everyone recognizes, but that strategy targeted the poorest in our society. Consequently, the Bloc Quebecois made detailed suggestions which respect the dignity of people, of the poor, of those who are looking for jobs but cannot find any, and of those who are depressed and who get even more depressed when they see the Liberal Party of Canada continue to make them pay a price which they should not have to pay. I did present these suggestions to the Minister of Finance and to those cynical members opposite.

In fact, we presented an eight-point proposal to the government. The minister should stop saying that we only complain. We do make constructive suggestions which could allow us to recover over $12 billion in the first year alone, without making the plight of our poorest ones worse.

For example, we suggested to the Minister of Finance and to the Liberals that the government should completely withdraw from fields which fall under provincial jurisdiction, instead of continuing to invest in those, as proposed in the Axworthy reform regarding education and health, but-

[Supply, October 25th, 1994]

Mr. Speaker, I thank my colleagues from the Reform Party for providing an opportunity to return again to the topic of public finances and to discuss a motion they introduced today concerning a detailed plan, or should I say the lack of a detailed plan, to be tabled by the federal government outlining its approach to the budget.

In contrast to my Reform colleagues, I would say that there is most definitely a plan and that it has been in place since last February 22 when the Liberal government tabled its first budget. If we are to believe the initial measures introduced by the federal government at that time, and if we are also to believe the various measures it has introduced and the numerous proposals it has made since then, this plan consists in slashing benefits to the very people in Quebec and in Canada who can least afford to do without them-the unemployed, recipients of social assistance, those with health problems and senior citizens as well.

There is clearly a plan, a very detailed and specific plan, to transfer the financial problems of the Canadian government onto the backs of those who least deserve them, who certainly do not deserve the insult of being abandoned by a government that won the election on a campaign that emphasized the dignity of having a job, the dignity that we owed the least fortunate in our society. This is the very group of Canadians that the government is insulting today.

What most struck me in the speech by the Minister of Finance was not the size of the deficit and of the debt; this is not news to us or to anyone else. We know that the federal government has been in the red, not just for one year but for ten. For ten years now, this government's approach to public finances has been building up to this impasse. I would remind the hon. members across the way that it was under a Liberal government that things first began to go badly. The deficit began to grow between 1970 and 1985. And it was when the present Liberal Prime Minister was Minister of Finance that the financial problems started.

Between 1970 and 1985 the deficit grew from 0.3 per cent of the Gross Domestic Product to 8.7 per cent. Fifteen years of Liberal rule led us to disaster. It is this legacy we are dealing with today. This Liberal legacy has led to drastic cuts-again, Liberal cuts-to solve the very serious public finance problem.

I noticed that in his speech the Minister of Finance mentioned a serious matter, namely that the current problem is essentially a structural one. It means that even with ideal conditions for economic growth and employment development, the system is so tainted and its financial and economic impact so serious that Canada's unemployment rate can never go under 8.5 per cent and that the structural deficit-again, even in ideal economic growth conditions-will stay at a minimum of around $30 billion year after year.

The minister's response to these structural problems was to propose more cuts, which will not do anything to solve these structural problems because what is needed-as Quebec sovereignists, and the Bloc Quebecois in particular, understood-is a comprehensive reform of the system. Sovereignists have decided to get out of the vicious circle by reforming the system. This system is impossible to sustain. It is also impossible to reform because if that had been the case, the Liberals across the floor would have spent their first year in office trimming off the fat, reducing the bureaucratic structure, eliminating inefficiency, and decentralizing as much as possible by transferring to the provinces all levers of economic and social development.

Instead, they take drastic measures that hurt, that show their lack of compassion for and attack the unemployed without solving Canada's fundamental public finance problems.

How much credibility can this government have, when all the commitments made by the Liberal Party of Canada during the election campaign are not being honoured? I will give you a few examples.

In the last week of the election campaign, the current Prime Minister said that a Liberal government would never increase taxes in its first two years in office. What did the Minister of Finance present us with last week? The possibility of tax increases.

The Prime Minister also said in this House that he did not rule out the possibility of tax increases this year. What credibility can this government have, when in less than ten months those people go back on the commitments about taxes that they made to the taxpayers of Quebec and Canada?

What credibility can they have when the Prime Minister and all his ministers led Quebecers and Canadians to believe during the election campaign that they would abolish the GST? What have they done since then? Not only have they started to soft-pedal on the promise of abolishing it but they have tried to find an alternative to the GST in a sneaky, even dishonest way. Not abolishing the tax but an alternative that is as bad as the original tax and even worse in some respects. Month after month, they have tried to make the provinces, Quebecers and Canadians take it.

What credibility can those people have? What credibility can the Minister of Finance have when he talks about the largest process of consultation ever undertaken by a federal government since Confederation? We had a consultation process before his budget was tabled: forums here and there and everywhere. I participated in those forums. Of course, a few representatives of organized labour and community organizations were invited to each of these forums, for the sake of appearances. Ultimately, what happened is that $5.5 billion was cut from unemployment insurance and $2 billion from funds allocated to the provinces.

Who said to do that? Who presented such a recommendation in the pre-budget forums that year? No one. But those forums made the Minister of Finance look good. Again he will make himself look good by saying that he consulted Canadians and that they said to cut another $7.5 billion from post-secondary education, health and, once again, unemployment insurance. That is how the Minister of Finance consults.

Who will believe in that? Who will believe in this desire for democracy expressed by the Minister of Finance and his government?

I think that after a year of this government, Quebecers and Canadians are starting to realize that those people have lied to them and not told them the whole truth, that they are going back on their commitments and throwing them in the garbage. They are not inclined to keep the commitments which got them elected.

Several months ago, I heard the Prime Minister refer to the unemployed and welfare recipients as lazy beer guzzlers who should go back to work. I understand why: the Liberals' detailed plan is to cut at the expense of the unemployed and the poorest people in society. That is the plan. Since the last budget came down, I have gone to my riding and met people who suffer as a result of the savage cuts this government has made to unemployment insurance, which force whole families onto welfare. Whole families are discouraged and depressed and have lost the dignity which the Prime Minister says they should have regained with his government.

I suggest to Liberal and Reform members that they go back to their ridings and talk to people affected by these cuts. I would advise them to go easy on slick rhetoric and go out, maybe once every couple of months, and meet some of these people in your ridings. It is important that these members go and talk those who suffer, and who will continue to suffer, because of them. I have met some of these people, as have my colleagues from the Bloc. I can tell you that I was deeply moved to see mothers rush to get social assistance when they had never contemplated such a-