Mr. Speaker, I will be sharing my time with my distinguished and respected colleague from La Pointe-de-l'Île. I would also like to congratulate you on your appointment as Deputy Speaker and thank the electors in my riding of Saint-Hyacinthe—Bagot for their vote of confidence for a fifth consecutive time. I will continue to work with my usual passion and conviction to improve the welfare of my fellow citizens.
Expectations for the new government are high. They parallel the commitments made by the Prime Minister during the election campaign. He has the arduous task of repairing the breakage from 13 years of waste by the Liberal regime, a cynical, arrogant and corrupt regime that slashed transfers to the provinces to fund the obligations set for them under the Constitution.
I was happy, but not surprised. Throughout the election campaign, the Prime Minister made firm commitments regarding the fiscal imbalance. He convinced some voters in Quebec that he would settle the matter and rectify the fiscal imbalance. I was not surprised to hear that. I was happy, because it was beneath the previous government to even acknowledge the existence of a fiscal imbalance in Canada.
The government must now rectify two aspects of the fiscal imbalance. First, there is the vertical fiscal imbalance, the government's ability to tax our fellow citizens beyond its financial requirements for carrying out its mandate. The governments of Quebec and the provinces, on the other hand, are unable to obtain the financial resources they need to meet the obligations set out for them in the Constitution. In other words, there is too much money in Ottawa for the federal government's requirements and not enough in Quebec and the provinces to enable them to carry out their mandates as effectively as possible. These are fundamental mandates to provide direct services to the public such as education and health care and other provincial obligations.
We are not asking the government to resolve this issue tomorrow. However, we are asking that it start making corrective changes as early as the next budget, which will be brought down in a few weeks. In particular, we are asking it to promise to sit down with Quebec and the provinces to negotiate, much the same as in 1964 at the Quebec conference between Mr. Pearson, the Prime Minister of Canada, and Jean Lesage, the Premier of Quebec. In 1964, it was agreed that the federal government had a fiscal overcapacity and that major reforms were needed in the provinces, in matters of education and student assistance in particular. At the time, Mr. Pearson agreed to hand over some of the federal government's tax fields to the provinces that wanted to benefit from this. In 1964, only Quebec benefited. Today, when we talk about tax points and their value of several billion dollars, it comes mainly from that conference.
Our expectations when it comes to the vertical fiscal imbalance are that the government will initiate discussions with the provinces and with Quebec and end up transferring these tax fields or taxes like the GST, transferring revenue, and taking jurisdictions that are exclusive to Quebec and the provinces away from the federal government. With this new revenue, Quebec and the provinces could fulfil their basic missions.
The second type of fiscal imbalance the federal government must correct is the horizontal fiscal imbalance. The government has a fundamental instrument at its disposal, an instrument that has even been in the constitution since 1982 and that is equalization. The horizontal fiscal imbalance is the inequality between the provinces in their ability to obtain tax resources to provide comparable services from east to west in Canada. This equalization system can offset the horizontal fiscal imbalance, in other words, the disparity in provincial wealth obtained from taxes and used to fund basic programs.
The current situation makes the imbalance much more apparent than ever. Alberta, for example, is swimming is unbelievable wealth. Soon the Maritimes will have their turn thanks to offshore oil. Meanwhile, the other provinces are getting poorer in relative and absolute terms.
We must not forget that the oil boom and Alberta's massive oil exports are artificially raising the value of the Canadian dollar. In Quebec and Ontario in particular, but in the Maritimes as well, businesses are becoming less competitive, especially against emerging countries. When the Canadian dollar is pumped up by oil exports, the whole manufacturing sector suffers, in Quebec and the rest of Canada.
Today, with the rise of economic powers such as China and India, a number of regions are faced with massive job losses. I will come back to this later. Business owners do not know where to turn, with increased competition and the rise in value of the Canadian dollar, which makes businesses less competitive.
Equalization is the perfect way to try to alleviate the disparity between provinces, but there needs to be a way to accurately measure each province's revenue-raising ability before the have-not provinces can be adequately compensated with equalization payments. Equalization reform is needed.
First of all, the equalization formula has to be based on the 10-province standard. Each province's fiscal capacity must be calculated against a Canada-wide average, not just a five-province average, as is the case now. All 10 provinces have to be taken into account. As well, some tax bases, such as property tax, need to be reviewed. For some provinces, estimates of the government's ability to raise property tax revenue are used. These provinces' property tax capacity can be overestimated, with the result that they receive lower equalization transfers than they actually need.
Second, when we say that each province's total fiscal capacity has to be considered, this means that we must not remove a tax base from the equalization formula, as the Conservatives are proposing to do. They want to take out non-renewable natural resources. This would skew the system and add to the horizontal fiscal imbalance between the provinces. One province's relative wealth would increase, while the other provinces' relative wealth would decrease. We have to be consistent.
Equalization is the only program with constitutional status. In the past it was felt that there would be growing inequalities among the provinces in terms of their capacity to collect wealth in the form of taxes, and this program served to correct that. Equalization has to be reformed, but not in the way the Conservatives have proposed to us.
We are on the government’s side if it intends to rectify the fiscal imbalance in the medium term. The situation at the moment is urgent. Post-secondary education—i.e. colleges and universities—has been underfunded for many years. That began when the former finance minister, who later became Prime Minister, made savage cuts to transfers to the provinces for the funding of post-secondary education.
The situation in which we now find ourselves is dangerous. I have met with the president of the Association des collèges du Québec and the principal of François-Xavier-Garneau college, in the Quebec City region. They informed me that, since the mid-1990s, education programs have been reformed and modernized to take account of labour market realities and technological development. However they do not have the funds to set up these new programs. It is becoming a disaster. We know that education is fundamental, that it is the future of our economy and our societies. We do not even have the money to modernize our programs, much less set them up.
When the Conservatives were in opposition, I chaired a sub-committee on the fiscal imbalance. I told them that we needed to increase the federal contribution to 25%. They agreed. This represents an increase in transfers for post-secondary education of $4.9 billion per year for all of Canada. This has to be done. The government must take action on this.
I would also like to mention three other issues of close concern to me. One is POWA, the program for older worker adjustment. With the fierce competition from emerging countries, it is important to help workers aged 55 and over to get through this period until the time comes to retire. This program used to exist in 1997. In my riding, the people from Peerless in Acton were the last to benefit from it, in 1997.
Since then we have been fighting to bring it back. This is urgently necessary. The program is not expensive, and it helps the families of workers aged 55 and over to pull through.
Of course, the government must act on agriculture and the RCMP posts. The Conservatives have agreed to reopen the eight RCMP posts that had been closed.
In Saint-Hyacinthe, we expect to be waging total war against crime, thanks to the Info-Crime committee established by the warden of the RCM, Ms. Beaulac, and myself. We also believe we can do this with appropriate policing tools. That requires the reopening of the RCMP post in Saint-Hyacinthe and assignment of a significant number of investigators to it, i.e. eight. That is the functional mass that is necessary.