Yvan Loubier

[Supply, May 31st, 2001]

Every year.

[Supply, May 31st, 2001]

Mr. Speaker, I would also like to welcome the member and wish him a speedy recovery.

However, I have to say that I am very disappointed with his diatribe. Each time we put sensible projects forward, we are told we want to destroy Canada. They do not need us to do that. They are destroying the country themselves by being as narrow-minded as they are, and by not even accepting the idea of a federal-provincial meeting. Really! A federalist is opposed to a meeting between his prime minister and the provincial premiers to talk about the efficient operation of the federation. This is really unbelievable.

They talk about the elimination of the deficit as if it were a miracle. Well if all miracles came about that way, we would never have seen one on the face of this earth. It is easy to have somebody else do the dirty work and then say it is a miracle. He did not see how the budget was balanced, that is for sure because it was done somewhere else, not here. It is the unemployed who did it, as well as the provinces. But I do agree, it is a miracle.

Could we strike some sort of a balance somewhere? It is not only the public finances that need to be balanced. Could he show a little more balance and admit that it would be a good idea, given anticipated surpluses of between $70 billion and $90 billion in the next four years, to talk about reapportioning the tax base?

[Supply, May 31st, 2001]

Mr. Speaker, there is no doubt in my mind that the bad policies of the federal government have hurt two main groups, women and young people.

Employment insurance policies have affected and continue to affect women and young people, who make up 60% of all those ineligible for EI benefits.

It is also true that the Minister of Finance has recently cut taxes, but mainly for the rich. Single parent families, often headed by women, will go empty-handed this year, next year and the year after.

It is obvious. These two examples show that women are paying the price and will continue to pay the price. I want to thank my colleague for her question.

[Supply, May 31st, 2001]

Mr. Speaker, my colleague from Rivière-des-Mille-Îles has put his finger on a thorny issue.

I believe the federal government owes over $3.2 billion to the Quebec government and, despite repeated requests, it steadfastly refuses to pay up. These outstanding bills are documented. Every one of them is well documented and together they total $3.2 billion, which the federal government refuses to acknowledge it owes.

At issue is, for example, $1.9 billion in compensation for the GST. A few years ago Quebec harmonized its provincial sales tax, the TVQ, with the GST. It has been losing money ever since. The federal government never told us it would one day compensate the maritime provinces for doing exactly the same. Three maritime provinces got $900 million for harmonizing their taxes.

We are asking the federal government for $1.9 billion because harmonization has cost us dearly. We were the first ones to do it, on our own initiative, because we wanted the tax system to work well.

Is there any way that someday Quebec's demands will be met?

The same is true of the Canada assistance plan. The Quebec government is suing the federal government for $310 million owed to it by the federal government.

The Quebec government is asking the federal government for $96 million to administer the Young Offenders Act. I am not talking about the new harsh, barbaric act beneath the dignity of this parliament, but rather about the old act under its jurisdiction.

These needs are not being met. It is incredible; the Minister of Finance has billions of dollars, he even boasts about the surplus, and he lets the needy remain exactly that, needy. He lets sick people wait in hospitals. He invests elsewhere. For example, as far as health is concerned, he invests through the real transfer to the Quebec government, but he does nothing for the fundamental needs of the sick people.

He makes students wait. A student is not a student forever. At one point in his life he has needs that must be met quickly. This is incredible. The funding of education, through the CHST for post-secondary education, has never been this low in 30 years. The minister continues to brag about the surpluses. He is being astute by not making forecasts that reflect the real surpluses. He is avoiding debate and paying down the debt.

Could he not give a bit more to the people, dish out the dough as they say? Let him spend on the people in order to meet the real needs, and let him pay his bills and his debts. The federal debt is not the only one the minister has to deal with. He has a debt toward the Quebec government because we have taken measures that were warranted from a practical point of view. For example, there is the harmonization of the GST and the QST and the issue of young offenders. I think there is a lack of will on the part of the government. This government is ignoring Quebec completely, it just does not care about Quebec.

[Supply, May 31st, 2001]

Mr. Speaker, it is no great feat to have forecast reality, because we have come pretty close to the right figure by using known and public figures, even those of the Minister of Finance.

If he has not done the same, then, it is because he has done a poor job, either out of incompetence or lack of transparency, or because he was trying to be astute, as I said earlier. He likes not forecasting a surplus; then he can decide on his own what to do with the money.

The expression fiscal strangulation is no exaggeration. We find ourselves in a situation—no joke here—in which the federal government's financial situation is going to be really flourishing. We are talking of $70 billion minimum over four years.

Those who find this an exaggeration have always said the same thing when we presented our estimates “It's an exaggeration, it makes no sense”. Yet we have always been dead on. There is, therefore, no exaggeration here and we have consulted many experts. We did not consult certain economists, not the friends of the Minister of Finance; we consulted all forecasting organizations. We were objective.

We are talking about fiscal strangulation in connection with needs. For instance, health needs are increasing in the provinces. In Quebec alone there will be a 5% rise. We are talking billions of dollars. The billions of dollars of surplus will pile up in the federal coffers while the health needs in Quebec and in the provinces will be very great.

These needs must be met; they are the needs of the population. Yes, there is fiscal strangulation going on. The present situation is a dramatic one. There has been an increase in initiatives in areas of jurisdiction that belong to Quebec, such as health and education, which do not take into account the needs of the public and the government of Quebec's policy in these two sectors in particular, where it spends more than the federal government. We are talking about $1 for every 14 cents in the health sector, and $1 for every 8 cents in the education sector.

The federal government is meddling in other areas, which have not been identified as fundamental needs by the government of Quebec. What does this mean? It means that the federal government is not making good use of our money. There are no two ways about it. So how are we to reconcile these two visions, Canada's and Quebec's? We are making an attempt. We are introducing a motion which says “Sit down with the premiers of Quebec and the provinces. Talk about rebalancing fiscal resources, but on the basis of the real numbers. Let us have no more of the Minister of Finance's nonsense, with estimates that are off by 140% to 400%. We want the real numbers”.

Everyone has the real numbers now anyway, because everyone is capable of taking a calculator, as I did with some of my colleagues, and doing the math. Even with the worst scenarios, the surplus will grow to $70 billion over the next four years.

This money does not belong to the Minister of Finance, nor does it belong to the member for Saint-Maurice. It belongs to taxpayers, whose needs are in areas such as health, education, income security and so forth, areas which should reflect the public's interest, not the leadership aspirations of the Minister of Finance.

[Supply, May 31st, 2001]

Mr. Speaker, first, I want to say that I will be using my 20 minutes to give a demonstration based on the motion we introduced this morning.

I would first like to reread the motion because, since the beginning of this debate, we keep hearing things that have nothing to do with the purpose of the motion. I thank my colleague from Kings-Hants, who clarified the motion by the Bloc Quebecois, to prevent the debate from going the way it seemed to be going this morning. The motion reads as follows:

That, in the opinion of this House, the government should call a federal-provincial first ministers' conference for the purpose of reapportioning the tax base among the federal and provincial governments through the transfer of tax points.

We are not saying that everything has to be turned upside down and that the value of equalization has to be challenged. We are not saying that the federal government's actions in its own areas of jurisdiction should be questioned either. The only thing we are saying, after four years of observation, is that it is essential that a balance be struck somewhere.

We have now reached a point where, and this has been the case for the last three years, there is too much money in Ottawa, given this government's constitutional responsibilities, and not enough in the provinces, including Quebec, given their responsibilities, particularly for health, education and income support. There is too much money. We are not talking about peanuts. We are not talking about a few billions, but rather several billion dollars.

Since 1995 the Bloc Quebecois has gotten into the habit of making its own forecasts regarding revenues and expenses, therefore surpluses, especially the surpluses that have been building up since 1997. We make forecasts because we do not trust this government. Ever since he has been holding the finance portfolio, the minister has been making forecasts that are way off, sometimes by an incredible 130% to 400%. How can we trust a government that does not even give us a true picture of public finances, which would allow us to make the right choices?

We came up with a rough forecast of surpluses over the next four years—one must be very cautious regarding the last year because four years is a long way away, even the third year is iffy. If we use the same economic growth parameters as the major banking institutions such as the SGF, the Caisse de dépôt et placement du Québec, the Mouvement Desjardins, the CIBC, the Bank of Montréal and the National Bank, and take into account not only the growth parameters but also the analysis of the growth, we see that over the next four years the Minister of Finance will have, thanks to the taxpayers of Quebec and Canada, a budget surplus of between $70 billion and $90 billion, plenty of room to manoeuvre.

We have hardly ever been wrong, maybe only by 5%. For his part, the finance minister has been way off; since 1994, his forecasts have been off by $60 billion. These are no small miscalculations. Over the next four years the government will accumulate surpluses of between $70 billion and $90 billion. Why such huge surpluses?

First, people pay too much taxes; second, the federal governments responsibilities are such that it cannot spend the money entrusted to it by Quebec's and Canada's taxpayers; third, if the surpluses are so huge it is because they have been accumulated on the back of the provinces by drastically cutting, gutting transfers since 1994. The provinces' needs keep on increasing whereas here in Ottawa money has been pouring in, especially over the past four years.

Since 1993 federal revenues have increased by 53%. Revenues from taxes and income tax have increased by 53% since 1993, while federal spending dropped 3%.

Let us have a look at the situation in Quebec. Program spending in Quebec has increased by 16% during the same period, that is since 1993. This means that the government of Quebec spends 13% more for programs under its jurisdiction.

In health care alone, the increase was twice as high: the government of Quebec's spending in health care has increased by 32%. Spending is increasing year after year, especially because of the natural aging of the population. Needs increase by 5% per year.

The federal government's spending has decreased by 3% since 1993. This is due to the fact that there were cuts to transfers to provinces. The federal government has reduced the level of its contribution to cost sharing programs, which had been set during the 1960s and 1970s, especially in the areas of health and education.

So much so that, for every dollar invested by the government of Quebec, the federal government contributes only 14 cents. However, these cost sharing programs were established on a 50:50 basis, the federal government contributing 50% of the costs and the provinces the other 50%.

In the area of education, it is even worse. The Liberals should stop misleading people by saying that there the federal government is not backing out. For every dollar invested by the government of Quebec in education, the federal government spends 8 cents. In the past it has even been 50 cents for 50 cents.

Over the next four years, there will be huge surpluses, so unbelievably huge as to be nearly surrealistic: between $70 billion and $90 billion in surplus for the next four years, and that is the conservative scenario. I would again point out that the Bloc Quebecois has never been wrong. The Minister of Finance has, and far wrong at that.

What is the Minister of Finance doing with these surpluses? First of all, the federal government is using these surpluses, under section 91 of the constitution and subsequent interpretation thereof, i.e. the power to spend, to intervene, or not to intervene, in areas under its jurisdiction.

Let us take the example of employment insurance. Instead of taking action, it makes cuts, while on the other hand, as the surplus accumulated over the past four years, its intrusions in areas of provincial jurisdiction, in particularly areas of Quebec government jurisdiction, increased proportionally.

Let us take for example the 1997 budget, where the first significant federal surplus appeared: $4.1 billion. The federal government invested in new initiatives, in areas of provincial jurisdiction, sums in excess of $2.3 billion. Out of a total of $4 billion, $2.3 billion were invested in areas coming under provincial jurisdiction. These include: the family, the child tax credit, research, education and health, particularly via the Canadian health information system.

Over half of the first year's surpluses were invested in exclusively provincial jurisdictions. However, in that same year, the Canada social transfer had not been restored to fund health and education through the existing networks that were well managed by Quebec and the other provinces.

In 1998, it was the same: a $10.8 billion surplus and $4 billion in new initiatives in areas in which the federal government has no business. In other words, it cuts on one side. It accumulates surpluses year after year, at the expense of the provinces, the unemployed and the poor.

The government then reinvests these surpluses through the back door, in provincial jurisdictions that it has obviously neglected if we look at the general transfers to fund health and education, among others. This is the tactic used by the federal government.

It was the same thing with the budget for the year 2000. The government will have between $15 billion and $19 billion in surpluses. The minister's forecasts called for less than half of that. The minister has lost all credibility in that respect. In any case, no one still believes him.

In the year 2000, close to $8 billion was spent on new initiatives and renewed initiatives from 1997, in particular, in jurisdictions that come exclusively under Quebec and the other provinces.

Is it normal that, on the one hand, the federal government goes after the provinces and has them bearing the brunt of all the cuts made since 1994 in health care and education when the needs of the provinces in both these areas are increasing? I want to remind the House that federal transfers for education have never been lower in the last 30 years. The government is cutting and not meeting the needs of the public.

On the other hand, it keeps infringing upon areas of exclusive provincial jurisdiction recognized in the Constitution of Canada and in many court rulings.

It is not normal to have the federal government juggling with a surplus while the provinces and Quebec are overburdened by heavy responsibilities.

We need to rebalance the tax base. This is such a matter of urgency that the government of Quebec and the premier of Quebec, Mr. Landry, have decided to set up, the Séguin commission, chaired by a Liberal who is a former Quebec minister of finance, to examine how great the imbalance is and how to correct it.

We are constantly in crisis. We cannot have a situation where the needs of the people are constantly growing while the federal government has huge surpluses and avoids debating the issue, because we know that the Minister of Finance, as astute as he is and with the lack of transparency he has shown, is predicting surpluses that have no basis in reality.

All the money that is not included in the budget and that magically appears at the end of the fiscal year, as we have seen since 1997, goes directly to debt reduction pursuant to the decision made in that regard. There is no debate. The government also avoids debating with the provincial governments, including the Quebec government, the fact that the needs are with the people but the surpluses are here, in this House.

This is not normal. For decades, successive governments and successive premiers in Quebec have fought every time an imbalance became apparent. It happened under Maurice Duplessis, as well as under Lesage, Bertrand and Johnson.

Mr. Bourassa said that the worst threat facing the government of Quebec was fiscal imbalance and a situation where the federal government continually, through its spending power, interfered in areas under the jurisdiction of Quebec and the other provinces, thereby preventing a consistent approach to public affairs management in areas which, under the Canadian constitution, are recognized as being the responsibility of the provinces, including Quebec.

Undoubtedly, the federal government has a problem. However, the provincial governments have more serious problems, because they have to meet the needs of the population.

We must limit the federal spending power. What is happening now was foreseeable. Since 1997, when the possibility of huge surpluses appeared for the first time, we have been saying that this would happen. Those who do not believe me can refer to Hansard ; our speeches were mostly on this issue.

The federal government will accumulate surpluses on the back of everybody: the unemployed, the sick people and the provinces. As soon as it has done so, as soon as the first surpluses appear, it will revert to its old bad habits, intrude into provincial jurisdictions and multiply federal initiatives in these areas just to stick the Canadian flag everywhere and to say that it is a good government, working in the best interests of the population.

How hypocritical to have cut programs of such basic necessity as education, health and income support, to have made the government of Quebec and Canadian provinces bear the brunt of it and then to have come in as a saviour by taking several initiatives in these areas through the back door.

This is why we have brought forward this motion, asking the government to reapportion the tax base by calling a federal-provincial conference.

In the last 50 years, there have been two important conferences. One of them took place in 1964, in Quebec City. Mr. Pearson was the Prime Minister of Canada, and Mr. Lesage was the premier of Quebec. Mr. Pearson was an intelligent man.

He was able to understand that the requirements of the provinces and of Quebec had to be met, if we were to have a better balance in this country. He did realize that, for the war effort, the federal government had borrowed the personnal income tax base of the provinces, but that after the war it was necessary to reapportion the tax base because of the constitutional responsibilities of the provinces. They had to regain the tax base they needed to finance these responsibilities. He realized that.

In 1977, during the second important conference, once again, the federal government realized what the situation was and transferred tax points.

Why is this federal government so dense? Why is it so obtuse that it cannot see the obvious? Things cannot go on like this for years. We cannot have the money in one place and the needs elsewhere. A reapportionment is in order.

The easy way is to use tax points, since this tax base can be easily reapportioned, by taking into account the needs of the provinces without denying the role of the federal government. Some members talked about equalization earlier. Certainly, when tax points are given to provinces such as the maritime provinces, there will be a problem at some point. These provinces have by definition some difficulty in getting from their taxpayers the taxes that would allow them to maintain services of the same quality as those provided elsewhere in Canada.

But there is equalization. We are not asking the federal government to transfer everything. We are asking that a new balance be struck. Might it not be open-minded at some point, instead of constantly saying no? We are used to no.

When it comes to Quebec, the federal government has always behaved as if it were a unitary state. It said no to Quebecers' democratic rights with Bill C-20. Everyone remembers that there was a reference to the supreme court. With Bill C-20, the government said no to Quebecers' democratic rights.

It said no to parental leave, for instance. It said we would have a program coast to coast. It is not nearly as good as the Quebec government's program, but that does not matter because it is the parents in Quebec who will pay at the end of the day. It said no to Quebec's program.

It is also saying no to young offenders, as we saw recently. The Minister of Intergovernmental Affairs, carrying indecency to a new high, beyond anything he had done up till now, went as far as to tell us that the consensus that we presented here, that my hon. colleague for Berthier—Montcalm presented, was a fabricated consensus because we had infiltrated all the organizations that supported us in our approach. We would then follow that we have infiltrated the Quebec Liberal Party. Such nonsense is quite incredible.

It is saying no again, because the transfer of tax points is another idea from Quebec. Sometimes we wonder if this government is not in the process of changing Canada into some unitary state, where differences are not tolerated. Forget about Quebec's specificity. We have almost become an internal colony. Before we were a colony ruled by metropolitan Britain. Now we have become a colony within Canada. We are told “No, Ottawa knows best. Ottawa knows everything. Ottawa knows what is good for Quebec”.

I hope we will find more open-mindedness on the part of the Liberals toward our proposal for a federal-provincial first ministers' conference for the purpose of redefining the tax base, of reapportioning that tax base. The current situation is unbearable.

Quebec is not alone. The government can say no to Quebec, in its colonial spirit, and seek to have a wall-to-wall policy across Canada, even while recognizing that sometimes Quebec's policy is better than the federal policy. We demonstrated it with respect to the Young Offenders Act. It can treat us that way if it wants, but a consensus is in the making across Canada.

It is not only Quebec. Members were speaking earlier of a national policy. We have a national government in Quebec City which is forming a consensus with the provinces to readjust the tax base.

In the case of the poorest provinces, it is very simple. There are equalization payments. We are not calling for them to be scrapped. We simply want, when we speak of the federal government's withdrawal and of redefining the tax base, the federal government to withdraw first from everything that concerns Quebec's and the provinces' jurisdiction—that would be the minimum—and to transfer the equivalent taxing power to the provinces. That could be discussed at a first ministers' conference.

I hear the Minister for International Trade bleating. If he stood up instead of being a wishy-washy member from Quebec, he would join the consensus. For once, if he stood up like a real Quebecer, he would defend Quebec's point of view.

I hope my colleagues in the House of Commons will vote in support of this motion.

[Supply, May 31st, 2001]

Mr. Speaker, before asking my question, let me clarify.

In 1994, the Bloc Quebecois talked about tax points as protection against the terrible cuts the Minister of Finance wanted to make to the Canada health and social transfer.

In 1995, Mrs. Marois, then Quebec's finance minister, asked:

That the federal government withdraw from social program funding and that it transfer to Quebec the tax points used to pay for that funding.

In 1997, Quebec's minister of intergovernmental affairs said exactly the same thing:

Quebec will demand that its constitutional authority be respected, will seek to fully exercise that authority, will continue to denounce the federal government's interference, and will call for full financial compensation in the form of tax points.

Recently, even before Mr. Charest's tour through the rest of Canada, Mr. Landry said that he would fight this battle, because it made no sense that the health and education needs were in Quebec but the money was in Ottawa.

With all due respect for the member for Richmond—Arthabaska, we have been talking about tax points for a long time. Since Mr. Charest agrees with this proposal, and because he certainly still has very close ties with Mr. Charest, could the hon. member not convince him to throw his support behind the premier of Quebec, who is also calling for such a federal-provincial conference, and who will continue to call for the transfer of tax points in order to help right the fiscal imbalance that has existed, particularly in the last three years, between Quebec, the Canadian provinces and the federal government?

[Supply, May 31st, 2001]

Madam Speaker, I have difficulty following the hon. member.

Is the hon. member telling us that the present situation with the federal government contributing, for health for instance, 14 cents for a provincial investment of $1, is an acceptable one?

Second, does he agree with the threats by the Liberals on their share of the funding for health and education? Because that is what cash transfers come down to. With them, the Liberals can decide at any point when to cut off their funding, or when to cut it, to slash it like they have since 1994. Is that what the hon. member is telling us?

Does he not realize—however, it does take some intelligence to do so—that most provinces, Quebec included, have said that they would respect the Canada Health Act, with its five conditions, and if ever tax points were transferred and a recalcitrant province did not meet one of the five, there would be legal proceedings by the federal government? There is no connection with cash transfers, as opposed to tax point transfers. It is simply a matter of proper administration of the Canada Health Act.

Does he understand this, instead of using all his convoluted analyses?

[Supply, May 31st, 2001]

Madam Speaker, I listened carefully to the member for Stoney Creek. It is not out of ignorance that he made such ill-chosen remarks. He is familiar with the issue since he was, for a few years, the Parliamentary Secretary to the Minister of Finance. I find it hard to understand how he is approaching the issue and how he can make such ill-advised comments.

First, he said that the Bloc Quebecois never cared about tax points. The fact is that we have cared about them since we first got here. As early as 1994, we suggested that the transfer of tax points to the provinces, particularly Quebec, would provide some protection against the deep cuts made by the Minister of Finance—who was putting his fiscal house in order at the expense of others—to the Canada social transfer, for health, education and income support.

We were the first ones in 1994 to raise the possibility of transferring tax points in order to free up some area of taxation for the provincial governments, so that they could protect themselves against the federal government's slash and burn approach. Second, we were also concerned about the interpretation made by these professional demagogues of the use of tax points.

In the 1960s, the federal government transferred tax points, specifically at the Quebec City conference in 1964. Mr. Pearson was much more open-minded than this bunch of demagogues. In 1977, he transferred other tax points, freeing up the tax field and telling the provinces “From now on, I will look after my responsibilities in certain areas of jurisdiction, and I leave the tax field to you. You can collect taxes in my stead”.

Once you sell your house, you no longer have a say in what goes on there. That is the business of the new owner.

It is the same thing with the tax points. The Bloc Quebecois is denouncing the demagogic use the Liberals are making of these tax points transferred in the 1960s and 1970s. Do members realize what this allows them to say as a result? It allows them to say “On the contrary, we increased the Canada social transfer”.

The government has managed to almost double the value of federal transfers by factoring in old tax points over which it no longer has any say; the house has been sold. There is a new owner. The government's figures are misleading.

So, I ask the member for Stoney Creek how he can grandstand on an issue as important as this. He will recall, if he knows his Canadian history—although he does not seem to; it is a bit odd that a sovereignist is instructing a federalist on Canadian history—that in the 1960s and 1970s, we were looking at a fiscal imbalance. In those days, there were intelligent people on both sides, in Quebec and in the rest of Canada, who could sit down together and negotiate new tax sharing agreements. Could we see a little more intelligence and a little less grandstanding and cynicism on the other side of the House?

[Budget Surpluses, May 18th, 2001]

Mr. Speaker, in these circumstances, why is the minister refusing to grant me two requests I made yesterday?

The first was to submit all his forecasts of revenue, spending and surpluses to a committee which is independent of the Minister of Finance and his little banking friends. The second was to allow a real parliamentary debate on the use of his surpluses, not just on their size but on their use, before he brought down his budget.

We certainly think that it is important to pay down the debt, but the public has other priorities, such as health and education.