Yvan Loubier

[Supply, June 6th, 2002]

Mr. Speaker, I have listened carefully to my Liberal colleague.

It takes a lot of gall to make statements like that, saying for instance that the provincial tax revenues were not in danger because they had the fiscal capacity to seek out tax revenue, on alcohol and gaming, for instance.

Is he trying to tell us that, to make up for the loss of the $875 million in equalization overpayments Quebec, for example, would have to pay back because of the federal government's error, it would have to encourage Quebecers to drink and gamble more? This is patently ridiculous.

What he neglected to say was that there is a fiscal imbalance at the present time, and the former finance minister kept making ridiculous statements in the House, year after year, about the amount of surplus. As for federal tax revenues, they have been inflated by the fact that the tax base is heavily dominated by federal personal income tax, which has gone up 7.3% annually since 1993.

Then there is all the money that has been cleverly pocketed by the folks over there from the unemployed, putting another $6 billion or $7 billion into the EI fund. As well, there are the cuts inflicted on the provinces, which represent $24 billion net shortfall for health and education.

Now, with the billions of dollars in government surplus funds, $17 billion last year, $10 billion this year and $14 billion the next, they are incapable of treating the provinces properly. They cannot do without demanding reimbursement from provinces who received those funds because of a miscalculation by the federal government. The mistake was the federal government's. They must be allowed to keep this money, but the others who did not have the benefit of this mistake, must be compensated.

It seems to me that this would be the right thing to do, for once, to deal properly with the provinces, which are being forced to cope with delivering necessary services to their populations, essential services such as health and education.

Let them finally get that through their heads instead of making such ridiculous statements.

[Supply, June 6th, 2002]

Mr. Speaker, I thank the member for Peace River for his comments and his question.

Of course, there is a problem. When it is not a problem of cronyism or outright thanking with money friends who have made contributions to the Liberal Party of Canada, it is clearly a problem of management abilities.

The member mentioned it: the fact that a $4 billion error such as this was made in overpayments to four provinces raises serious questions about this government's competency and that of the main administrators at Revenue Canada, or the Department of Finance.

The former Minister of Finance's estimates are a farce. From 1997 to today, the former minister was out by $66 billion in cumulative surpluses. This means that every year, he diverted billions and billions of dollars away from public debate. This was repeated until after five years, a total of $66 billion had been accumulated.

This means that citizens of this country did not get the real picture of public finances, they did not see what this government could have done because the truth was being kept from them. They were being told all kinds of things about the surplus. They were told “there will not be that much of a surplus. We must be careful, we must be prudent”.

There is a difference between being prudent, even being extremely prudent, and saying all kinds of things to the public and taking them for idiots. The former Minister of Finance took the public for idiots. He was $66 billion off in his forecasts; it makes no sense.

During all those years, I think he was trying to set the stage for his exit, the way he did reaping incredible praise on his abilities as a manager. That is what he did. He put his leadership campaign before the welfare of the population. That is what he did.

[Supply, June 6th, 2002]

Madam Speaker, I would first thank my colleague from the Canadian Alliance for agreeing to this amendment and for being open to discussion this morning. I will remain objective in my response to my colleague of the Liberal Party, as I have since the start of this debate.

First, I would correct his figure of 40% for health. It is very inflated. Second, even taking into account the tax points given up in the 1960s, the figure is around 20%. However, if these tax points are taken away, the figure drops to 13%.

It would be a good idea to take them away. If they gave up a taxation area in the 1960s, they gave it up. After 30 years, a person cannot claim right of ownership of a house that has been given up.

This area of taxation was given to the provinces and to the government of Quebec in the 1960s and to other provinces in 1977. It does not even appear any longer in the columns of Liberal government figures. This then is proof that the funds are not allocated. There is no spending, but it was transferred, sold, given away in the 1960s. This is just a little point I wanted to make.

As regards the holding of a referendum, we are still pondering the issue, both in Quebec City and within our party. However, a referendum has two virtues, even when there is consensus on the question.

First, it makes the federal government realize that this consensus is real consensus. The hon. member knows—because he witnessed it when he was in the opposition, before joining the Liberals—that even when we have had very strong consensuses in Quebec, they were ignored. This government would not accept them, it would just ignore them.

That was the case with the Young Offenders Act, on which there was consensus, and even unanimity in Quebec. Still, this government just would not listen. Having the public express itself clearly on an issue such as tax points is an additional argument. Therefore, we must consider this option.

The second virtue of a referendum is that it informs the public. We may talk about tax points, but the fact is that there is a fiscal imbalance. It is even reflected in the last fiscal year, with this $10 billion surplus, even though the government said there would be no surplus. These surpluses will grow, they will not shrink.

There has been a certain slowdown in the economy in recent months and, despite this slowdown and the new security measures, such as those announced in the last budget in December, there is a surplus. In the years to come, the surplus will increase almost exponentially.

This situation must be explained. The misinformation dished out by the Minister of Intergovernmental Affairs, who says just about anything that comes into his head on this issue, who tries to publish a document so ridiculous that it does not stand up to even an hour of superficial analysis, must be countered. He comes out with complete nonsense, such as that we heard yesterday, when he said that a referendum on a federal issue was illegal in any event, or some such drivel. I no longer really listen to him.

Nonetheless, the public must be given accurate information. This is a serious situation. On behalf of the public, I only hope that the new Minister of Finance is more receptive than the previous one, that the new Minister of Finance analyses the situation properly, unlike the previous incumbent.

I hope for this receptiveness on behalf of Quebecers and Canadians, who hope to have the best services possible, particularly in the health and education sectors.

[Supply, June 6th, 2002]

Madam Speaker, on a point of order. I obtained the consent of the sponsor of the motion, of my colleague, with whom I discussed the matter this morning . He can confirm that.

[Supply, June 6th, 2002]

Madam Speaker, I am pleased that my colleagues of the Canadian Alliance have raised this major problem, which was discovered last January. It has been analyzed since then by the auditor general.

I will start by asking the government a question. Is there someone piloting the plane, is there anything working properly in this government? For the past two months or so, problems have cropped up every week. When it is not a matter of funding or lost reports, it is problems related to the near-corruption of this government.

Today, we are informed, with a little more precision, based on the analysis of the auditor general, that there have been shortcomings in the administration of our taxes. From 1993 to 1999 in particular, the federal government overpaid four of the Canadian provinces to the tune of $3.3 billion. If we include the year 2000, since we can make an estimate from the data available, we could add on another billion, for the grand total of $4.3 billion.

It is an aberration that there is not more control over the taxes we pay to Ottawa. The other side is constantly telling us about competency, about good governance, about transparency. Over the past two months, there has been one example after another proving that it is just the opposite. This government lacks transparency in the allocation and distribution of government funds. This government is not managing our taxes properly. This government spends its time pondering the issues that we, the opposition, have raised.

These issues often relate to the very integrity of this government, with regard to the allocation of subsidies. In recent weeks, we witnessed it in the area of sponsorship. All that this government was able to say is that it is checking things out, it is investigating, it is examining the problem. The government leader is about to fall asleep over this issue, because whenever we raise a management or corruption problem, he tells us “I will check, I will review, I will examine”. Since he began giving us this line, the files have been accumulating on my desk and we never get answers to our questions on the proper or improper use of public funds, which are made up of personal and corporate taxes.

The issue that confronts us today is a serious one. As we know, the federal government collects all the taxes paid by individuals and businesses, in all the Canadian provinces. It does so on behalf of the provinces, except for Quebec, which set up its own revenue department several decades ago. It is the federal government, based on certain parameters, that redistributes to the provinces the taxes to which they would normally be entitled if they themselves had collected these taxes from their taxpayers.

In redistributing these funds, the federal government made a mistake during the years 1993 to 1999 in one area of personal income tax, namely trust funds. It gave too much money to four provinces: Ontario, Manitoba, British Columbia and Alberta. It gave them $3.3 billion more than these provinces would have been entitled to if they themselves has collected the taxes from their taxpayers.

As I mentioned earlier, in the year 2000, another mistake was made in the redistribution of the taxes, with the result that these four provinces received an additional $1 billion, which they should not normally have received.

All of these miscalculations in estimates from 1993 to 1999 and all of these miscalculations in the redistribution of taxes have had a ripple effect, a domino effect on other aspects of the federal government's fiscal policy, including equalization. From 1993 to 1999, by overestimating the fiscal capacity of the provinces targeted by the equalization calculations, Ontario and other provinces reveived most of the overpayments made by the federal government, the result being that equalization payments to receiving provinces were overestimated.

If we take Quebec as an example, due to miscalculations from 1993 to 1999, it is said to have received an equalization overpayment of $825 million. If the provinces that received part of the $4 billion in overpayments made by the federal government pay it back, it could have a domino effect when it comes to equalization.

We are talking about a lot of money for Quebec: $825 million. This represents 80% of the budget for all of Quebec's CEGEPs. This represents half of the budget for universities and 65% of health care spending in the Montérégie, where the beautiful riding of Saint-Hyacinthe—Bagot is located. An amount equivalent to 65% of health care spending is a great deal of money and not enough right now, incidentally. However, by taking away $825 million, if all of the provinces were asked to pay it back, including indirect reimbursements as a result of equalization, that is the kind of impact this would have.

If we look at the overpayment figures received by the four provinces I mentioned earlier, Ontario, Manitoba, British Columbia and Alberta, when we look at the per capita figure, we come up with fairly sizeable amounts. For example, Ontario received an overpayment of $321 per person.

If we compare this with the equalization payments resulting from this error and received by the provinces, if we look at the $825 million overpayment received by Quebec because of this miscalculation by Revenue Canada on a per capita basis, it works out to an overpayment of $321 per person for Ontarians, compared to $111 per person for Quebecers, for the overpayment resulting from this overestimate of Ontario's revenues, or rather of its fiscal capacity.

There is therefore a difference between the net benefit received by Ontario as a result of this error, which led to $3 billion tax overpayment it should not have received from the federal government. There is a difference of approximately $220 per inhabitant between the benefits that went to Ontario and those that went to Quebec.

If we look more closely at the situation, we agree with part of the motion put forward by our colleagues in the Canadian Alliance, that there should not be a clawback for an error of this magnitude. There would be too many consequences and domino effects on equalization and on other tax considerations. But, if four provinces benefited from an error made by the federal government between 1993 and 1999, and even 2000, if they received more in taxes than they would normally have received from their taxpayers, somewhere it must be taken into consideration that these four provinces benefited from an error, while six provinces did not. The relative wealth of these provinces and others was therefore attributable to an error by Revenue Canada.

Since it is impossible to change history, and since we accept and support the first part of the motion of the Canadian Alliance to the effect that the government cannot demand repayment from these four provinces. The six other provinces that did not benefit must instead be compensated. I noted that, even by comparing Quebec's equalization payment—the other benefiting provinces could have also been used—even comparing the amounts of equalization per Quebec resident with the amounts an Ontarian, for example, received as a result of the federal government's overpayment in tax terms, the difference represents about $220 per capita.

We contend that this is the compensation that should be given, on a per capita basis, to the six other provinces that did not benefit from Revenue Canada's error.

This is the error that is known about, that is, the one made between 1993 and 1999. Then there is also the error we estimate to amount to over $1 billion, for 2000.

However, Revenue Canada has acknowledged that these errors may have occurred since 1972. The auditor general has not closed the door on the possibility that the amount overpaid to the provinces between 1972 and 1992 can be calculated.

She has even cast doubt on Revenue Canada, which is now the Canada Customs and Revenue Agency, in connection with the response given by a senior official, who said that there was not enough information to evaluate the amount of the overpayment between 1972 and 1992. According to the auditor general, the figures could be calculated.

However, if we limit ourselves to the 1993 to 2000 period, it would be appropriate—based on discussions with my Canadian Alliance colleague, who is the sponsor of the motion—if the fruit of the federal government's error is left with the four provinces, to compensate the other six, which did not benefit from the error, on a per capita basis.

I gave an example a little while ago, concerning excess equalization payments and the difference between them and the amounts involved in the federal refund for Ontario and the three other provinces—with Ontario benefiting the most—the refund of excess taxes.

This is the solution we see. The federal government does not have to ask the four provinces to pay for past mistakes. Particularly since the four provinces in question are grappling with financial problems which grow worse with each passing year, as the population ages and pressure is put on the health sector.

Canadian provinces and the government of Quebec are already facing enormous pressures on their public finances. These pressures have grown worse since 1995, when the former minister of finance, who recently stepped down, made the worse cuts in the history of Canadian federalism in health and education transfer payments to the provinces and to the government of Quebec. The provinces were bled dry.

I did not take part in the chorus of praise for the former minister of finance, because praise is not what he deserves. When we look at who did the job, he is not the one we should be describing as a good manager. We have seen the glowing terms used by analysts who have lost their powers of judgment and analysis in recent days and have been saying that he was the best Minister of Finance since Confederation. Let us be serious.

The reason the Minister of Finance was able to eliminate the $43 billion deficit was because he got others to do the work. He did not do anything. He sat back and pressed a button to destroy social programs, and got the provincial ministers of finance to do the actual dirty work of downsizing.

This is what has happened since 1995. Which means that any chorus of praise with respect to Quebec should be directed at Mr. Campeau, who was finance minister when the former minister of finance made his first deep cuts, at Ms. Marois, and at Bernard Landry. They were the ones responsible for putting the federal fiscal house in order. They were the ones who were the good managers and who did more with less, given these deep cuts by the federal government and the former minister of finance, pretender to the throne.

Oh, he did work on this. Since 1995 he has been working at preparing for his exit. The former minister of finance was preparing for his exit, because he kept on announcing really insignificant surpluses and then, at the end of the fiscal year, making spectacular announcements of a surplus. This is a farce. It is the way a trumped up reputation is built. It is also how a person can prepare his exit in order to prepare for a leadership race. That is what the finance minister had been doing ever since 1995.

The unemployed merit congratulations, a handshake and a shower of praise. Every year, the former minister of finance has literally helped himself to the EI fund surplus. And yet he is being praised to the skies as a great humanitarian and a great person. The reputation as a humanitarian and a good administrator both need rethinking.

It is easy to be a good administrator when the EI fund is now being used just like any other source of funds and becomes part of the government's consolidated fund. It is no longer insurance. It is easy to pad the surplus when 60% of the unemployed are shunted aside as no longer eligible, thus making it possible to inflate the surplus and one's popularity as a good administrator. I think the unemployed are the ones deserving the shower of praise, not the former minister of finance and pretender to the throne.

Getting back to the issue before us, after depriving the provinces from a net $24 billion since 1995—this is taking into account the amounts given gradually, the $800 million here and the $800 million there—in transfers for health, education and income security, would it not be a good idea for the federal government to give back some of the money that it literally stole from the provinces, and to begin by not retroactively claw back the $4 billion paid by mistake between 1993 and now, and instead compensate the other six provinces that did not benefit from this mistake, this incompetence in the management of public funds?

It seems to me that this would give back a small portion of what this government stole from the provinces. Normally, that money should have been used to strengthen the health system, which is in great need of additional funding, particularly with our aging population.

Would it not be a good idea to leave them this $4 billion and compensate the other six provinces, so as to partly make up for the money stolen by this government and the former minister of finance and help fund education?

Members opposite talk about youth with their hands on their hearts; they talk about the future; they say that our young people represent our future and that they are proud of them. How many times did we hear the Minister of Finance talk about the future of young people and say that he really cared about it? Such hypocrisy.

At the same time that they were saying this, they would tell us that cuts were necessary, that cuts had to be made in social transfers to the provinces. It might be a good idea to let the provinces benefit from this mistake this time around. It would also be a good idea to compensate the other provinces that did not benefit from this mistake. It would just help them a bit.

They are swimming in money; it should be made clear today that they will not ask these four provinces to reimburse them and that they will compensate the other six provinces. Enough with the jokes from the other side.

I hope that the new Minister of Finance will go over the former minister's figures. There is only so much we can take when it comes to being laughed at like this, to being told that there is no more money left, that things look bad, that the surplus will not be very much, that the economy is in a downturn.

Hon. members will recall, six months ago, our competent former finance minister—who is being heaped with praise today, even the analysts have lost their objectivity—was forecasting a surplus of $1.5 billion for the financial year ending March 31. We ended up with a surplus of almost $10 billion, $9.8 billion to be precise.

Six months ago, our calculations predicted a surplus of between $9 billion and $10 billion. How is it that he, with all of his expertise, he who has received nothing but praise for the past week, could not anticipate this?

Enough with the jokes from the other side; enough with them telling us that they are good managers, that things are being checked, that they are improving, and will be even better in the future. Let them start being normal for once. Let them start by managing public money normally. Let them also see that while Ottawa is sinking under the weight of the surplus, Quebec and all of the provinces of Canada are having trouble making ends meet at the end of every month.

The population, particularly the aging population, has needs with it comes to health care. The future population also has needs, those who will take over for us. These young people need investment in education from the provincial governments, that are responsible for this education.

The four provinces should be allowed to benefit from this mistake, but those that did not benefit from the federal government's mistake should also be compensated.

I would like to propose an amendment to the motion moved by my colleagues from the Alliance.

I move:

That the motion be amended by adding the following to the end of the motion:

“and to give compensation to others which have not benefited from these errors”.

[Taxation, June 4th, 2002]

Mr. Speaker, the former Minister of Finance recognized the fiscal imbalance in the municipal sector, but denied its existence between the provinces and the federal government.

My question for the new Minister of Finance is this: Is he prepared to meet the demands of Pauline Marois and all the opposition parties in the National Assembly, by first admitting that a dangerous fiscal imbalance exists between Ottawa and the provinces?

[École de médecine vétérinaire du Québec, May 31st, 2002]

Mr. Speaker, a few months from now, the École de médecine vétérinaire de Saint-Hyacinthe could lose its North American accreditation. This means that the expertise of veterinarians in herd health and food safety would no longer be recognized. Quebec's livestock and meat exports to the United States, now worth approximately $800 million, could also be at risk.

Given the urgency of the situation, will the minister of agriculture tell us whether or not the federal government will do its part, as the Government of Quebec has already done, and come up with the $59 million needed by the school quickly?

[Le Courrier de Saint-Hyacinthe, May 30th, 2002]

Mr. Speaker, this year we are celebrating the 150th anniversary of the weekly newspaper, Le Courrier de Saint-Hyacinthe , a veritable monument to the Quebec press, as the first French language newspaper to be published in America.

Of its many contributors, without a doubt one of the most illustrious was Honoré Mercier, a former member for Saint-Hyacinthe and one of the great premiers of Quebec.

In the past, all newspapers supported a given political party. This was the case for Le Courrier de Saint-Hyacinthe until 1969, with the arrival of editor Pierre Bornais. From the moment he took over, he made it clear that the columns of the newspaper would be open to all ideas, regardless of the political party, as long as the truth and the readership were respected.

My congratulations to the Chartier family of Saint-Hyacinthe, third-generation owners of the newspaper, as well as those who make it what it is today, including editor Jean Vigneault. Thanks to them, this regional weekly continues to be one of the most lively members of the Quebec press.

[Securities Commissions, May 24th, 2002]

Mr. Speaker, the Minister of Finance ought to admit that securities are none of his business. This is a provincial sector.

If improvements are required, this is the responsibility of the 13 provincial commissions, including that of Quebec. These have, moreover, worked together on improving their system in recent years and continue to do so.

Will he then admit, once and for all, that this is nothing to do with him, that he needs to mind his own business and let the 13 securities commissions improve the system among themselves? That is the way of the future.

[Securities Commissions, May 24th, 2002]

Mr. Speaker, this week, speaking to businessmen in Toronto, the Minister of Finance criticized the provincial securities commissions, conveniently forgetting that this sector is exclusively a provincial one.

Is the Minister of Finance's attitude here a prelude to the creation of a Canadian securities commission, as he has made several attempts to do in recent years against Quebec's wishes?