moved:
That the House regrets the attitude of the Prime Minister of Canada at the First Ministers' Conference on October 26, 2004, and that it call on the federal government to recognize the existence of a fiscal imbalance in Canada and that, to this end, the House ask the Standing Committee on Finance to strike a special subcommittee to propose tangible solutions for addressing the fiscal imbalance, and that its report be tabled no later than June 2, 2005.
Madam Speaker, I am pleased to present this motion of the Bloc Québécois concerning the attitude of the Prime Minister at the latest first ministers' conference. The conference was meant to address not only equalization payments but also the other financial pressures, to use the Prime Minister's terminology.
This motion also faults the government on its inertia, given its campaign promises, in coming up with any tangible measures to address the fiscal imbalance between the federal government and the governments of Quebec and the Canadian provinces.
It would be worthwhile reading the motion again, so that it will be sufficiently clear for the members on the other side of the House, because we have noticed that they need to hear a credible and well-documented message repeated for several years before finally getting it.
It reads:
That the House regrets the attitude of the Prime Minister of Canada at the First Ministers' Conference on October 26, 2004, and that it call on the federal government to recognize the existence of a fiscal imbalance in Canada and that, to this end, the House ask the Standing Committee on Finance to strike a special subcommittee to propose tangible solutions for addressing the fiscal imbalance, and that its report be tabled no later than June 2, 2005.
In addition to finding the Prime Minister's attitude regrettable at that conference, the motion also expresses the desire of my colleagues in the Bloc Québécois, and likely in other parties as well, for the government to come up with tangible solutions.
We want the government to pay more than just lip service to the existence of the fiscal imbalance, even if the Bloc Québécois has managed to introduce this concept into the throne speech, with some nuances. We want things to be made clear now. We want the government to recognize the existence of a fiscal imbalance and the House to reach a decision on this question, if the government is incapable of doing so alone, and we want them to get at it. A deadline of June 2005 has been set.
That may seem soon, but in fact we have been working on it for years. We were working on it even before Mr. Séguin began chairing the commission, the Séguin commission, three years ago.
Even before that began, as early as 1997, the Bloc Québécois saw that the system was dysfunctional, such that resources in Ottawa were overabundant in proportion to the federal government's constitutional mandate. The provinces and Quebec in particular, however, did not have enough resources to carry out their fundamental missions, especially in health care and education. We have been talking about it since 1997.
In 1997, the year of the first surplus, we proposed a solution. We proposed that the federal government remove itself from the tax fields it occupied with respect to the Canada social transfer—as it was then called—and return GST revenues to Quebec and the provinces so that they could, alone and independently, carry out mandates such as those of health, education and income support. That was already in the air in 1997.
We are aware, and all these years we have tried to make our colleagues aware of this, too, with varying degrees of success. Still, I think that today we can be confident that some other colleagues have finally understood that we cannot go on this way.
Now the debate is being heard, not only in Quebec and in this House, but all over Canada. The two recent conferences, on health and equalization, which were also supposed to consider financial pressures, have proved beyond a doubt that there is a problem, a disparity in the fiscal resources available to the federal and provincial governments.
During the campaign, when the Prime Minister found himself off balance with the rug slipping out from under his feet, he made a promise to solve the problem of what he calls financial pressures and what some people call the fiscal imbalance. I would remind him that the “some people” are all of Quebec, all the Bloc Québécois members of Parliament, and now all of Canada.
In the Bloc amendment to the amendment to the Speech from the Throne, instead of “financial pressures” we should have said, “what some people call financial pressures and what the vast majority call the fiscal imbalance.” In this case, “some people” would mean the Liberals, the only ones who speak of fiscal pressures on the provinces. Everyone is convinced that there is a fiscal imbalance and that change is needed.
It would not be the first time we have seen this. In 1964 already, at the time of Mr. Pearson, and Mr. Lesage in Quebec, a problem of fiscal disparity existed.
There was already a problem, given the mandates that the Government of Quebec had in education in particular. In 1964, education was the focus of the Quebec City Conference. The existence of a disparity was recognized. It was so evident that, exactly 40 years ago, Mr. Pearson, who was also at the head of a minority government, transferred tax points which, to this day, are used for health, education and income support.
Forty years later, we are facing a similar situation. The current Prime Minister lacks Mr. Pearson's finesse, of course. I think everyone recognizes that. In time, the Prime Minister himself will recognize it as well. The facts have to be recognized.
While promises were made concerning the financial pressures, the Prime Minister said he would be ushering in a new era of cooperation with the provinces. He keeps saying that over and over. What new era is this? The same old one, the one of confrontation. At the first ministers conference in September, he had no choice, he was cornered. One the one hand, his government is a minority government and, on the other hand, the provinces presented a united front to demand more funding for health.
Now, he has gone back to the Liberals' bad habits. We were told that we had to be careful because, for a few years, Ottawa would no longer have a huge surplus, that fiscal prudence was required. That has been going on for seven years. For seven years, the Liberal government has been fooling the public about its financial capacity to meet such basic necessities as education and health. For seven years, it has been telling us that it does not have any financial leeway. Yet, every year, as if by magic, the rabbit is pulled out of the hat, or the cat is out of the bag, depending on how we want to look at it, and there is always a big surplus, which keeps growing year after year.
While he was finance minister, the current Prime Minister made the worst forecasting errors, in the neighbourhood of 500%. A 3% or 4% margin of error might be acceptable, and maybe as much as 10% for a very lousy forecaster but, really, 500% is too much. The Prime Minister and the current finance minister are giving a bad name to the budget forecasters in the Department of Finance. These experts are highly trained professionals. How likely is it that they feel comfortable with the charade of the last seven years? They know perfectly well that the politicians across from us in the House are simply lying to Canadians. In so doing, they are making a mockery of democracy.
I just came out of a meeting of the Standing Committee on Finance that was attended by the Minister of Finance himself. He talked about prebudget consultations and mentioned the importance of coming up with new ideas and new means of managing public finances and forecasting federal government spending next year. However, on what basis would the public be consulted? That is what we need to ask him. It is imperative to know what we are consulting people about. We need a clearer idea of the amounts involved. We need to be told what the surpluses will be for the next few years. The last thing we need is distorted forecasts that have no basis in reality.
This, however, is what they have been telling us for the last seven years. This is a disservice to democracy. How can we evaluate, for example, the federal government's ability to meet the needs of the people if, to start with, the true picture of public finances is completely distorted? They are talking through their hats when they tell the people that Canada is not as rich as they think it is and that it will not generate great surpluses. They were predicting a surplus of $1.9 billion for the fiscal year ending on March 31. And we now have learned that the surplus is $9.1 billion instead. This year, the government is predicting a surplus of $2 billion or $3 billion. That is the figure we are hearing, since the economic growth anticipated by the governor of the Bank of Canada could be a bit too high. The government is saying that he is being more prudent and it believes the numbers will be different. We are heading straight toward a surplus of between $11 billion and $12 billion.
They should stop having us on. They should stop misleading the people and lying to their face about the true state of public finances. This makes no sense at all.
I noticed today something that is symptomatic. The finance minister appears so rarely before the finance committee that journalists and cameramen usually come to interview him there.
This morning there were none. Not a single journalist. Not a single camera. Do you know why? Because the government, and the Minister of Finance in particular, have lost all credibility. What he says cannot be trusted. Journalists are no longer interested in covering his presentations to the Standing Committee on Finance on economic forecasts. They are no longer credible. He has become a laughing stock.
What exactly do we know about the surplus? It is estimated at between $11 and $12 billion next year. That is what I believe. That is what the Bloc Québécois is forecasting, between $11 and $12 billion for the fiscal year ending March 31. A few weeks ago, the Minister of Finance asked the Conference Board to review the forecasts it issued a few months ago for the Séguin commission, regarding the federal surplus over the next 11 years and the deficit of the provincial governments over the next few years.
The Conference Board was given an extremely conservative framework. One must be prudent. However prudence becomes a lie when it is overdone. If you cry wolf too often, nobody will believe you eventually. Even with extremely conservative parameters, the Conference Board concluded that over the next 11 years, the federal government will post a $164 billion surplus. We are not talking peanuts. We are talking about a $164 billion surplus. On the other hand, the provinces will post a deficit topping $60 billion and this is a conservative estimate.
I bet the federal surplus will be around $200 billion over the next ten years. The Conference Board used as a starting point the federal government's own forecast for last year, which was around $2 billion. Using as a starting point such an abnormally low forecast, which proved to be off by 500%—the real number being more than four times that—to assess what might happen over the next 11 years, the Conference Board's forecasts will obviously be well below the actual surplus.
That is the picture. That is what makes us say that for the past seven years the public has been duped. The federal government is swimming in surplus, will continue to do so and has far too much money in proportion to its responsibilities, while the government of Quebec and the governments of the other Canadian provinces do not have enough stable and predictable funding to provide for the basic needs of the public, which is what we are asking for.
When a government comes into power, in Quebec as in the Canadian provinces, the public expects the government to serve it in those areas under its jurisdiction. Those jurisdictions include health, education, income support, and public services such as road maintenance, and so on. Governments have a mandate. However, if they do not have adequate resources to carry out their mandates, because the federal government denies them the means they should have, is that not dysfunction? Is it normal to have a $9 billion surplus here when most of the provinces, except Alberta, which is swimming in oil, of course—here they are swimming in surpluses, there they are swimming in oil—are suffering from the fiscal imbalance? Is this situation normal? No, it is not.
There are three other consequences to the surplus apart from the fiscal imbalance we have been dealing with for many years and will continue to deal with in the coming years.
First, the needs of the public are not being met.
Second, the federal government is using these surpluses to interfere in provincial jurisdictions. In the past four years alone, intrusions have totalled $16 billion. In other words, the federal government has taken money from the taxpayers, accumulated surpluses and used the surpluses to invade jurisdictions that, under the Constitution, belong to the provinces. I am talking about $16 billion just to confuse matters. A ship has one captain, not two. The Prime Minister should know that since he has been in the shipping industry for a long time. He should know that we cannot have two captains running the same ship. That is what the federal government is doing. It is interfering in health and education and is using surpluses to do so.
I can give you examples of intrusion. Federal intrusions amount to $16 billion in the last few years. Incidentally, the Bloc Québécois leader set up a committee on which I had the privilege to sit, along with my colleague from Joliette and Mr. Léonard, a former president of the Quebec treasury board. The committee found out that since 1994-95, and more particularly in the last five years, the federal government has spent more in areas under the jurisdiction of the Government of Quebec and the provinces generally than it did in areas under its own jurisdiction.
In the last five years, this spending totalled a hefty $16 billion.
There are many examples of this: the youth employment strategy, the health transition fund, the community action program for children, the Canada prenatal nutrition program, the Canadian health information system, the Canadian millennium scholarship foundation, strengthening communities in the voluntary sector, and the Canadian institutes of health research.
Let us talk about foundations, and especially the Canada foundation for innovation. Each and every time money is put into foundations, the Parliament loses all control. In the areas under Quebec jurisdiction, again, we have the nurses using the research and service evaluations fund. What does the federal government know about that? It manages two hospitals, one for aboriginals and one for veterans, and they are a complete and utter disaster. They have no business telling us how health services should be managed. We also have the supporting community partnerships initiative for the homeless. All these areas are under the jurisdiction of Quebec and the provinces.
This is what happens when you have too much money. You invest in provincial jurisdictions. Conditions are imposed for cost shared programs. This is how you end up in a situation like the one we are in right now. While the provincial governments do not have enough money to meet their essential, basic and fundamental needs, the federal government has too much money.
What else besides these intrusions does a surplus situation produce? It produces waste and corruption. Talking about waste, there has been an unprecedented increase in the federal government's operating expenditures since 1998. This was ongoing while this Prime Minister was Minister of Finance. He was the good manager who pretended to be managing public funds in a prudent and responsible manner. Between 1998 and 2003, there was a 39% increase in the operating expenditures while the inflation rate was about 10% for the same period. Is increasing the operating expenditures three or even four times the inflation rate really a responsible way of managing? Hardly.
Is he a good manager? This is easy. How do you think he could accumulate a surplus? The employment insurance fund surplus and the cuts in the Canada social transfer had no effect on the federal government operating expenditures. They were measures dealing with the services offered to the public and concerned their welfare.
I do not think there is doubt in anyone's mind that there has been corruption. The sponsorship scandal is probably just the tip of the iceberg. This is what happens when there is too much money. When people have access to so much money that they do not know how to spend it, it increases the risk of corruption and even promotes it.
This motion seeks to set the government back on the right track and to get the Standing Committee on Finance working on a solution to the fiscal imbalance problem.
They talk about the two conferences. They say it is wonderful; they solved a good part of the problem. Let me say that after the conference on health and the other that concluded the day before yesterday, Quebec will receive $800 million more this year. Do you know how much the transfer of tax points, such as transfer of the GST to the Government of Quebec, could represent? An extra $2.4 billion. In order to solve the fiscal imbalance problem we were talking about $3.3 billion this year alone for the Government of Quebec. With this $800 million, there is a shortfall of $2.4 billion. They are giving us $800 million and forgetting to mention that they have already taken $2 billion in taxes out of the pockets of Quebeckers, as part of the surplus. Our share of the surplus is $2 billion of the $9 billion. Quebeckers have paid $2 billion too much in taxes to the federal government. Now they are giving back $800 million and we are supposed to applaud.
It is time that this trickery, this clowning around, this foolishness stops. Right now, it is the taxpayers, sick people, students, and people on low incomes who are paying for the government's negligence and lies.
