Yvan Loubier

[The Economy, November 6th, 2001]

Mr. Speaker, the Minister of Finance tells us that he does not want to return to the era of deficits. We agree with him and we even proposed an antideficit bill, which he opposed, incidentally.

Will he admit that the plan to use the surplus that we proposed to him could stimulate employment and economic growth without causing any deficit?

[Prebudget Consultation, November 1st, 2001]

Mr. Speaker, I wish to congratulate the member for London West with whom it is my privilege to work on the Standing Committee on Finance. She does her work very seriously and most competently.

I agree with what she said about indirect spending on research and development. The fact that research grants do not apply to indirect spending on equipment or infrastructures remains a major concern of academics, not just in the health sector but in all other sectors as well. It is beginning to get in the way of scientific research and technological development.

When there is an economic slowdown, such as the one we are now experiencing, which may well go on for the next few months, the first spending to be sacrificed is spending on research and development by business in particular.

When universities are asked to tighten their budgets, the first thing to go is research. So on that score I agree completely with her analysis.

However I would really appreciate it if, during the next meeting of her caucus, the member could ask the Minister of Finance to stop saying whatever comes into his head about the surplus, to stop misleading the public and to give the real picture.

My greatest fear in connection with the next budget is that, in a situation where people need to be encouraged and given support, the Minister of Finance will play exactly the same game he has been playing for the past five years, which is to misrepresent the real surplus so as not to have to do what he should.

I urge her, because I can see the member's great ability and determination, to convince the Minister of Finance to stop saying any old thing and to come up with real measures in the next budget to stimulate the economy and help those who have lost or who are at risk of losing their job.

Can we count on the member for London West to take this up with the Minister of Finance?

[Prebudget Consultation, November 1st, 2001]

Mr. Speaker, yes, our $5 billion emergency plan to support the economy and employment contains some of the measures from the unanimous report of the Standing Committee on Human Resources Development. These measures were aimed at reforming employment insurance.

Among our proposals, a billion dollars would be set aside for the most urgent reforms, including changes for older workers. Since the POWA program disappeared there has been nothing to come to the assistance of workers aged 55 and older, a bracket that has been hit with massive layoffs by big business.

During an economic downturn, casual workers are the first to feel the crunch, workers who have less experience. This obviously affects young people and women more. Our plan to boost the economy contains extra measures to help youth and women survive the economic crisis.

There is also an increase in benefits for low income workers. Currently,employment insurance coverage stands at 55% but if one is a low income worker and has the misfortune of living in a resource based region that has suffered from the global downturn, one is doubly penalized. We are asking that the coverage for low income workers be increased.

In addition to these special measures that take into account the urgent nature of assistance for those who will be affected by the economic slowdown there is, of course, the whole issue of employment insurance reforms. Today we have a rare opportunity in this parliament. We have a unanimous report from a committee made up of members from all political parties. Why does the government not acknowledge the needs and carry out these much needed reforms?

[Prebudget Consultation, November 1st, 2001]

Mr. Speaker, my answer is that the concern is generalized. For some two years now, every time the first ministers and provincial finance ministers meet, this has been a concern.

At their last meeting in Montreal, the provincial finance ministers welcomed Quebec's proposal. It was to analyze the wisdom of having the tax point transfer accompanied by, for example, changes in transfer payments. To some provinces, tax points are not worth $260 million as they might be for Quebec or $450 million for Ontario, for example. They are worth less.

A maritime province, for example, would suffer with a tax point transfer because with tax points it would not get nearly what it does under the Canada social transfer. The reason is a matter of the relative wealth and population of these provinces. Generally speaking, the principle of transferring tax points was well received in Canada following the suggestion of the Quebec minister of finance.

However, one thing was agreed to by all. At the moment, there is too much money in federal coffers and this will be the case every year, despite the recent events. Quebec and the Canadian provinces have responsibilities in areas where there are desperate and unavoidable needs, in the areas of health and education, for example.

The federal government cannot set these needs to one side and look good by waving about billions of dollars in surpluses, which, we must not forget, come out of taxpayers' pockets. There is too much money here because there are taxpayers who pay too much tax and because the provinces do not have enough of the pie to meet their obligations as set out in the Canadian constitution, which these people claim to want to defend.

[Prebudget Consultation, November 1st, 2001]

Mr. Speaker, at the same time as we are proposing an emergency plan for the next six months, which is an ad hoc initiative by the federal government and not a recurring yearly measure, we have been noticing, particularly in the past two years, a tendency by the federal government to accumulate significant surpluses every year.

This is due to the federal tax structure. For example, in Quebec, 60% of the total personal income tax paid by Quebecers goes to the federal government, compared to 40% to the Quebec government.

The federal government is enjoying incredible fiscal capacity. And personal income tax is the type of taxation that increases the most rapidly over time. This means that there is truly a constant increase in tax revenues collected from individuals.

Because of this distortion in the tax system, the federal government finds itself year after year with a large structural surplus in its coffers, while responsibility for health, income security and particularly education needs falls to the Government of Quebec and the provinces of Canada.

We are therefore stuck with this skewed system, which must be corrected. There is a way to do that. We saw it used in the 1960s and particularly in the 1970s. The tax fields of the federal government and of the provinces were redefined.

In other words, the federal government gave out tax points. It gave the provinces additional tax capacity and it partially withdrew from the tax field in order to allow the provinces to collect additional money so they could meet their primary obligations, which are health and education.

Today we are back in the same situation we faced in the 1960s and 1970s. The federal government has excess tax capacity but the provinces are facing growing and inescapable demands in the fields of health, education and income security.

The Séguin commission is looking at ways of addressing this tax imbalance. We have specific proposals for a phasedin solution: gradually transfer tax points to the government of Quebec, starting with the portion the federal government is now paying in cash to the government of Quebec and the provinces for the Canada social transfer, the transfer for funding health, education and social assistance.

A portion of these transfers was already handed over to the provinces in the 1960s but there remains a cash portion of almost $2 billion for the government of Quebec.

This would be a good place to start.

[Prebudget Consultation, November 1st, 2001]

Mr. Speaker, I would like to inform you that I will be sharing my time with my colleague, the hon. member for Drummond, and that all of the other members of the Bloc Quebecois will also be sharing their time.

It is my pleasure to speak in this take note debate today regarding the budget that the Minister of Finance will be bringing down.

We would have liked to have had this debate earlier, since there have been clear signs of an economic downturn since September 11, and even earlier. This downturn has been exacerbated by the events of September 11 but it was already apparent several months beforehand.

We have been calling on the finance minister to intervene in support of the economy since October 3. He has the means, as I will explain later in my speech.

First, I would like to begin with a comment. If it can be said that anger does not help us think rationally, then the same can be said for excessive fear. When I hear the Minister of Finance say that nothing will ever be the same since September 11, obviously, security is the first priority, but there is more to it than that. By focusing on this aspect, the government is putting off other decisions that a responsible government must take.

Let me say from the outset that I accuse the Minister of Finance of contributing to the economic slowdown through his statements, his pessimism and his inaction. When he says that we did not have surpluses during the current fiscal year and that he cannot afford to make massive investments, he is deceiving consumers and making them much more cautious in their spending.

One of the reasons for this economic slowdown, if not this recession, is the consumers' unwillingness to spend. When the Minister of Finance keeps saying that things are bad everywhere, thus contributing to the economic slowdown, it can only make consumers put their spending on hold.

The Minister of Finance is also responsible for the economic slowdown because of his inaction. He should have taken action long before his upcoming budget. He could and still can act to support the economy and employment but he is not doing it.

What are these means? We are too used to seeing the minister fibbing every year when he says “Listen, we must be careful, there will not be any surpluses”. In the last fiscal year the government ended up with surpluses totalling $17 billion.

By not telling the truth on the actual surpluses, the minister avoids debates in the House and among the public on the use of these surpluses. Then, a few months before March 31, which is the end of the fiscal year, he no longer has any choice and must use all the surpluses that he deliberately overlooked, even though he knew full well that they existed, to reduce the debt.

We have nothing against paying off the debt but this government must deal with other priorities, and while security is important, so is people's economic well-being.

We did calculations regarding the evolution of public finances, as we have been doing for the past seven years, particularly for the past five years where there have been surpluses. This year, while a recession, which is a negative growth of the GDP in real terms, is likely over the next six months, there will still be a $13.6 billion surplus. This is the most conservative scenario. With a negative growth of less than 2% of the GDP over the next six months, we arrive at $13 billion.

The Minister of Finance can do something. He has the means. We are not asking him to return to a deficit situation, we hate deficits more than any other party in parliament. We even presented a bill on balanced budgets three years ago and the Minister of Finance rejected it. He rejected a bill opposing deficits. We detest deficits much more than they do.

We want a realistic plan that would use $5 billion of the $13 billion surplus expected in the present fiscal year to support the economy and jobs in order to guarantee the economic security of Quebecers and Canadians. This would also ensure that the slowdown, however deep it may be, would not turn into a deep and protracted recession. It would seem that the minister has forgotten the multiplier effect of a dollar invested in the economy and its effect on employment and tax revenues. We can support the economy.

This $5 billion plan we are proposing to the Minister of Finance includes the following. First, we want, and it is not costly, SMBs, which are currently suffering from the economic slowdown and need a breath of air, to enjoy a little relief from provisional instalments, that is the taxes they will have to pay in the coming months. We are asking that the instalments be put off for six months. This would cost almost nothing, $50 million, but it would be so effective right now that even the Chamber of Commerce and the Canadian Federation of Independent Business support this sort of measure.

We are also calling for some relief in contributions to the employment insurance plan. We can afford this too. There is a surplus of $6 billion or $7 billion in this fund. These two measures would inject nearly $2 billion into the economy.

We are also calling for—and this can be readily done to support workers facing the economic slowdown—the Employment Insurance Act to be amended. There is consensus in the Standing Committee on Human Resources Development on increasing benefit coverage for young people, women and regions hit with high unemployment.

One does not have to be a genius to realize that, in addition to the economic slowdown, there is restructuring in certain resource regions. These are calling for more extensive government intervention, at the cost of $1 billion.

We are also calling for another billion to help the tourism and aiarcraft industries, the most heavily hit by the economic downturn, which has been exacerbated since September 11. One billion dollars is being requested.

Last, we are calling for an acceleration—if this government can possibly grasp the concept—of investments that would have been made anyway during this fiscal year, for instance funding for social housing, within the infrastructures program.

Taking $5 billion of the forecasted $13 billion surplus for this year still leaves $8 billion. Part of that amount the Minister of Finance can reserve for security because we do not know what is around the corner. He can also show some open-mindedness in the next budget.

There are provinces suffering at this time because they have obligations toward their population as far as health and education are concerned. They are short of money.

Every year there will be a structural surplus in the coffers of the federal government. Would there be any way of having a meeting, a real federal-provincial meeting, on sharing taxation resources? There were such meetings in the sixties, seventies and eighties. Why is there such a closed mind about tax base redistribution? The needs are in the provinces and in Quebec as far as health and education are concerned, while the taxation resources are here. Surplus funds are accumulating year after year and this will not change, even after the recent events we are having to cope with.

What we are calling for is something very simple: for the government to realize that there are two kinds of security, one Security with a capital S and the other economic security. It is rather awful to experience feelings of insecurity because of the terrorist threat and at the same time to have to deal with economic insecurity because we cannot predict what the outcome of the economic slowdown will be on our lives and on our jobs.

We are asking the government to intervene. It has the means. We are asking it to use $5 billion of the $13 billion surplus expected for this year. We are asking it to permanently avoid deficits, forgetting of course that it was the Liberals who created the first deficits and who have a way with spending that is not always efficient or effective.

We do not want a deficit but we would like the Minister of Finance to get moving, to stop being so pessimistic about a balanced budget and to stop talking about the deficit. Such comments are not relevant this year. There will not be any deficit. The most skeptical outlook forecasts a surplus of $12 or $13 billion. So he should hold the rhetoric.

In the past, we heard about extreme caution. The Minister of Finance has lost so much credibility when it comes to his forecasts that he can no longer show his face. Today, the focus is on security. I am all for security. The terrorist threat is real but we also need to think about and look after people's economic security.

For this next budget, we expect the Minister of Finance to have understood this message and to have come up with a plan to stabilize the economy and employment. Since October 3, we have been offering him concrete suggestions to help him do this. He must consider security, but he must also consider peoples' economic security which is also important.

[Finance, October 30th, 2001]

Mr. Speaker, naturally we are taking these slowdowns into account. The figure for the next seven months is $2.5 billion, whereas it was over $11 billion in the first five months. We are not crazy.

We must have a clear plan in this House. Will the Minister of Finance admit that we in the Bloc have already presented a clear, targeted and deficit free plan that responds to the situation and supports the economy and employment?

He should use it, and for once have the wisdom to listen to us.

[Finance, October 30th, 2001]

Mr. Speaker, the Minister of Finance has the unfortunate habit of underestimating government surpluses in order to make his life easier and avoid having to justify his budget choices to parliament and his own caucus.

Will the Minister of Finance confirm that, for the first five months of the current fiscal year, his department's figures establish the accumulated surplus at $11.1 billion, whereas, for the next seven months, the most pessimistic scenarios predict an additional $2.5 billion, for a total of $13.6 billion in manoeuvring room?

[The Economy, October 25th, 2001]

Mr. Speaker, if the minister wants to live up to his claims, will he pledge in his next budget, so as to be effective, to transfer more money to the provinces for health and education, now that would be effective, to have targeted measures to stimulate the economy, as proposed by the Bloc Quebecois in its plan of October 3, that would also be welcomed, and to pay off the debt?

The minister can do all that and still avoid a deficit. We think that if there are no structuring measures in the next budget the minister will have failed in his duty.

[The Economy, October 25th, 2001]

Mr. Speaker, the Minister of Finance announced a budget for the beginning of December but, at the same time, he said that we should not expect direct support measures for the economy.

We agree that we must avoid any deficit but will the Minister of Finance recognize that he has the means to act and that this is not the time to use all the surpluses for the debt, but to allocate the majority of them to economic recovery?