Yvan Loubier

[Taxation, November 15th, 2005]

Mr. Speaker, I remind him that they are at 20% in the polls in Quebec.

[Taxation, November 15th, 2005]

Mr. Speaker, once there is notice of a ways and means motion, this year's tax cuts are implemented. There is no need to vote on them.

The Minister of Finance's figures change magically according to the proximity of an election. Nine months ago, the minister announced a surplus of $4 billion for 2005-06, and now, miracle of miracles, it is over $11 billion.

How can the Minister of Finance justify, other than by the proximity of an election, an error of nearly 300% in his forecasted surplus, with no change in forecasts for economic growth or macroeconomic parameters?

[Unanticipated Surpluses Act, October 27th, 2005]

Well, there is one. But where is the Minister of Finance who wanted to hear our suggestions for improving his bill? That is shameful.

[Unanticipated Surpluses Act, October 27th, 2005]

This is absurd, Mr. Speaker. there is not one Liberal in this House to hear our grievances.

[Unanticipated Surpluses Act, October 27th, 2005]

Where are the Liberals?

[Unanticipated Surpluses Act, October 27th, 2005]

Mr. Speaker, this is not a balanced approach that we are being presented with today. It is so little balanced it is Kafkaesque. People are paying too much income tax and other taxes to the federal government. We are creating surpluses year after year. Where is the balance in this?

With this bill, public servants receive the money, immediately convert it into a cheque, and send that cheque back to the taxpayers. Balanced? This is totally unbalanced. If they admit that there are structural surpluses, that is because people pay too much income tax to the federal government. So we need to have a redefinition of the fields of taxation. That is what we have been asking for from the start.

This is not the first time this has happened in the history of this country. In 1964, Mr. Pearson and Mr. Lesage sat down together at the Quebec conference. Both were very intelligent. They agreed at that time that, in order to finance new initiatives—notably in education—the Government of Quebec needed of fiscal resources. This was offered to the other provinces as well, but only the government of Quebec took advantage. So there was a transfer of tax points to finance post-secondary education, among other things.

Prior to 1995, the agreement permitted three separate transfers for the Canada Social Transfer. This was before the Prime Minister made his savage cuts. This did not just come out of the blue. It was a federal-provincial agreement, in fields of Quebec jurisdiction, of course, but it was an agreement to transfer money from the federal government to Quebec. There was no question of the federal government interfering in education, social assistance or support to the most disadvantaged families: it was an agreement to transfer financial resources.

We have fallen from 50% to less than 18% in a few years. This has destabilized everybody. The result has been that the governments of Quebec and the other provinces have not been able to meet their core mandates. It is the Liberals who have destabilized the public finances of Quebec, and even of Ontario, which is in difficulty at the moment. Virtually the only province in this country with no problems is Alberta.

So don’t tell us that this is balanced. Don’t tell us we are saying the opposite. We have never said the opposite. If there is one consistent party in this Parliament, it is surely us.

[Unanticipated Surpluses Act, October 27th, 2005]

Mr. Speaker, staying with the Halloween theme, the government appears to be trying to offer some goodies to the public, a rather seasonal approach. That is what I wanted to say just now when visibility was raised, rather than a vision of development and improvement of the general well-being of the population. The greater good must be kept in mind. This bill is aimed at the greater good of the Liberal Party.

There is a suggestion of major tax reductions, but if looked at more closely—the breakdown I gave a few minutes ago—if the surplus is $9 billion, or even $10.5 billion, there will be at most a $2 billion tax cut. That means $129 per taxpayer, based on 15.5 million taxpayers. The colleague is right in saying that even those $129 are at risk. If we have understood the bill correctly, with those $129, the government has every freedom to announce that, if other priorities arise, and if it sees fit, they will be dealt with before the others.

In reality, the government has tabled this bill just to look good. Even the Prime Minister was talking about the public receiving dividends as if the state were a private business. I know that his family business is of far more importance to him than the future of the state of Quebec. I am speaking of his international shipping business. Moreover, he has made that clear by his actions since 1994 in changing the tax rules for international shipping companies. In short there is far more concern with looking good. But as I have said, those $2 billion could have been put to better use.

The hon. member has referred to seniors and homeless people. Since 1995 there have been considerable cuts made to transfer payments to the provinces to finance income enhancement initiatives, so that the homeless can improve their lot and so that social programs can ensure that seniors do not end up the way they were in the 1970s. A large proportion of seniors were living in poverty at that time.

The government did not do that. My colleague from Saint-Maurice should be consulted on this matter. He has been fighting tenaciously to have the government pay the guaranteed income supplement to those seniors who were unable to get it. In fact, the existence of the program had practically been hidden from them. That is what is shameful, when we look at everything that has taken place. The government was rolling in surpluses, but hid the existence of the guaranteed income supplement. The forms required were not accessible to seniors with decreasing independence because they could not read the fine print, for example. That is the kind of form that was produced.

Thousands of individuals were ripped off that way. While surpluses were piling up, the most disadvantaged were being ripped off. Seniors were picked on. This has been going on since 1993, since this government has been in office.

The same thing happened to the unemployed; instead of them getting help to re-enter the labour force, they were put down and suspected of cheating the system. We have seen examples of that in our ridings, as the hon. member probably has in his riding. The moment there was a mistake or incorrect information on a form, the unemployed individual would receive a letter indicating that he or she had cheated. Once your name is on the black list, try to see the process through to get benefits.

That is what this government does. It picks on the most disadvantaged to make itself look good. Then, it wants to ride in like a white knight waving cheques to compensate for the hike in energy costs, and with minuscule bogus tax cuts which are likely to be even smaller once all is said and done. The government seeks visibility to distract from the sponsorship scandal.

The Gomery report will be released next week. The government wants to take the focus off the sponsorship scandal. See how good the wonderful Liberal government is to us: there will be tax cuts in the years to come. I have to tell my hon. friend that I find that sad.

[Unanticipated Surpluses Act, October 27th, 2005]

That is not too bad for a government that claimed it was on a tight budget and could not meet the basic needs of its citizens in the areas of health, education and support to the disadvantaged. Not too bad for a government that claimed it had to tighten its belt because the public purse was in a bad state.

This year again—as my colleague from Medicine Hat has said—we in the opposition parties have retained the services of a group of independent experts so that there will not be the usual criticism that the Bloc Québécois, which has been within 3% in its estimates of the surplus at the beginning of the fiscal year ever since 1998, is exaggerating. In fact, the Standing Committee on Finance has hired independent experts who come and report to us every three months on the changes in public finances and provide us with their estimate of the surplus.

This year again, the Conference Board predicts a surplus of $10.2 billion, and Global Insight $12.4 billion. We ourselves estimate it to be between $10 billion and $11 billion, yet the government says it is in the $3 billion to $4 billion range.

That is utter nonsense. Since 1998, they have been hiding a margin of nearly $235 billion that could have been used for something other than enhancing the government's visibility. We will come back to that.

Not only has the government been hiding its considerable margin from us since 1998 and continues to do so, but it also continues to deny the fiscal imbalance and future structural surpluses, even though it acknowledges their existence through Bill C-67.

Despite this large margin, there have been some unbelievable inefficiencies in the machinery of government since it has been posting surpluses. When you are swimming in someone else's money and you have the authority to spend it, it is only human nature to waste it. I am referring to the numerous scandals. In fact, the sponsorship scandal is one of many. For example, we are still looking for the billion dollars that Human Resources Development Canada lost a few years ago, when the current Minister of Foreign Affairs was in charge. We are still looking for an explanation for the shameless waste of $1.5 billion in the gun registry, a program that was supposed to cost between $10 million and $20 million.

As you can see, the Bloc Québécois cares about sound fiscal management. Since the beginning, since 1993, we have been concerned about the sound management of the taxes paid by Quebeckers and Canadians, especially the $40 billion Quebeckers send to Ottawa. Nonetheless, we have noticed that since there have been surpluses, the federal government spending machine has been set in motion. In other words, it has taken the bit in its teeth.

Two years ago, the Bloc Québécois set up a committee that we christened the Léonard committee, after the former president of the treasury board of Quebec, Jacques Léonard. He wanted to get involved, as did my colleague, the hon. member for Joliette, my colleague from Drummond and myself. My colleague from Portneuf—Jacques-Cartier also joined the committee.

We conducted an in-depth examination of all bureaucratic spending by the federal government, and the results are disgraceful. From 1998 to 2003, when cumulative annual inflation was approximately 9.6%, federal government spending increased by 39%. We have verified these figures for the past two years. We discovered that during that period, while cumulative inflation hovered between 4.5% and 5%, federal spending increased by 20.4%. This is an outrage.

Yet, everyone was asked to tighten their belts before 1998, in order to eliminate the annual deficit. People have made sacrifices. However, the government has been hiding surpluses since 1998 and is therefore preventing the governments of the provinces and Quebec from fulfilling their fundamental mandates in health and education, and helping the most vulnerable members of our society.

Other people's money is being frittered away on operating budgets and bureaucratic spending in Ottawa. This is money that would normally go to the unemployed whose EI fund surplus is being stolen year after year. These surpluses correspond to employer and employee contributions; the federal government does not contribute one red cent. These are contributions from sick people who are waiting for treatment. There is not enough money for health care. The accord reached over a year and a half ago, thanks to which victory was declared and the federal government could appear to be a great saviour, was only enough to run the health care system in Quebec and the provinces for nine days. In the meantime, bureaucratic spending went unchecked.

The Léonard committee provided another important statistic. From 1998 to 2005, in other words from the time they started to generate surpluses using other people's money, on the backs of the unemployed, the sick and students drowning under student debt, payroll expenditures increased by 55.6%, an annual increase of 6.5%. This is more than double the inflation rate. This makes no sense whatsoever.

The government made major cuts to social programs, particular from 1995 on. They changed the criterion for social transfers for welfare, post-secondary education and health from needs-based to population-based. “They” means the present Prime Minister, and former finance minister, that man of great compassion. He is the one responsible for the drastic cuts since 1995. During that same time, the government's increasing revenues were being added to the savings achieved at the expense of our society's most vulnerable members.

Since 1995, federal revenues alone—not the savings in expenditures—have gone up by $76.6 billion. Over that same period, transfer payments to Quebec rose by $794 million, 1% of that figure. One per cent of the additional $74 billion has gone to increase transfer payments to Quebec since 1995. Disgraceful.

The Prime Minister, and former finance minister, achieved those budget cuts at the expense of the least advantaged members of society, including the unemployed excluded from EI because of tighter eligibility criteria. Otherwise, if the surplus had been reinvested in broadened accessibility, none of them would need to be on welfare now. The government is responsible for people having to move from EI to welfare, the latter being the responsibility of the Government of Quebec and the provinces.

At the same time as the provinces and the unemployed were being deprived of funds, the provinces' expenses were being increased, since they had to support people who had been literally thrown out on the street. This is the work of the Prime Minister, he who is so full of compassion for Canadians, whom he says he wants to help out of poverty. Come on, now, he is the one who has been putting them in it up to their necks since 1995.

If the transfer rate had been maintained for funding health and post-secondary education—that is to say colleges and universities—and to help the most disadvantaged, an additional $16.1 billion would have been transferred since 1995 to the governments of Quebec and the provinces for them to carry out their basic responsibilities.

This morning I heard the Minister of Finance talking about incredible tax cuts. In reality, Bill C-67 provides for the allocation of the “surprise” surpluses that the government might realize over the next few years. We call it a “surprise” even though we know about it a year in advance because we can figure it out with a little pocket calculator bought for $ 2.49 at the corner store. But for him, these are surprises. I do not know what they like about surprises; it is more fiddling with the figures.

Under this bill, if surpluses are anticipated at the end of each fiscal year, one third will be allocated to paying down the debt, one third will be allocated to tax cuts for taxpayers, and one third will be allocated to programs, but according to the government's priorities. These priorities could change along the way though, still according to Bill C-67, if the government so desires.

In reality, the government will continue doing over the next few years exactly what it has been since 1998. It will use its discretionary power to choose its own priorities, not those of Quebeckers and Canadians. That is what it has been doing since 1998. So what has changed?

In regard to these fantastic tax cuts, I would like to provide a small example of what they could be. Suppose that the surplus is $9 billion this year. Three billion would have to be set aside in a contingency fund. This has been automatically allocated to the debt since 1998. So we can forget this first $3 billion. There would be around $2 billion for new expenditures. These would not be the next expenditures but expenditures already included in Bill C-48 passed last June before the House adjourned for the summer. That is what would become the priority.

Therefore, $4 billion in surplus will remain after the reserve fund and the commitments under Bill C-48 have been satisfied. Let us suppose that if the surplus were just over $4 billion, $2 billion could be used for personal tax cuts. Do you know what that would mean for the 15.5 million taxpayers in Canada? That would represent $129 for one year. That is wonderful! We must applaud the government. A tax cut of $2 billion for 15.5 million taxpayers in Quebec and Canada would give them each $129. It is a joke to talk about whopping tax cuts; it is sheer visibility.

In reality, the federal government has sacrificed the economic and social development vision a government should have for visibility alone.

We have become accustomed to this government's finery: Canadian flags everywhere, cheques for fuel, etc. They are looking for visibility. You cannot run a society and make progress with visibility, you need a vision for development to do so.

We have just toured through several regions in Quebec. We have seen this government's lack of vision. Despite the billions of dollars in surplus it is been amassing since 1998, this lack of vision is killing entire communities, especially in the outlying regions. The remote regions have been totally abandoned.

All this visibility for a measly $129 cheque or a personal exemption for the same amount at the end of the day. This is a lot of talk for so little money.

We are talking about $2 billion for 15.5 million taxpayers. If the government was thinking about a vision instead of visibility, it would see that this money represents half the new investment the underfunded colleges, CEGEPs and universities have needed over the years. Last week's demonstration by students calling for $4 billion more did not come out of nowhere. It came from the fact that for the past 10 years, the Liberal government's savage cuts have not made it possible to give the colleges and universities the funding they should have received.

This too is the result of another of the Prime Minister’s promises which he has not kept and which has bit the dust. In the election campaign, when he was on the ropes, he was offering things to everybody. He promised students in the colleges and universities of Quebec and Canada to invest $4 billion in the education system, which is now suffering from underfunding. Fine words in an election campaign, aimed at saving his skin. They talk about the future of our children. They say the future of the Canadian economy depends on the education of our young people, on their knowledge, since ours is a knowledge-based economy. But when the time comes to act, there is no follow-up. They say that enough money has been invested in education. What lack of vision. So that every taxpayer can be offered an annual cheque for $129, we are in the process of sacrificing the education system of Quebec and Canada.

A sum of $2 billion, that is also what Quebec is lacking in equalization. If they corrected the formula and used real figures, a real method of calculating the pan-Canadian standard—that is, taking the ten provinces into account—and property tax, Quebec could obtain $2 billion with the equalization adjustment. That is the very amount we are scattering on needs of visibility and electioneering, that is, needs of very little importance which testify to this government’s lack of vision.

I listened to the Minister of Finance when he presented his bill. He said it was in line with what the opposition had asked for. What demagoguery. We made our request last spring, before the budget was tabled and before the revelation of the surplus figures for the last fiscal year. What we were asking for in the short term was to start correcting the fiscal imbalance by increasing transfers to the provinces for education, health and disadvantaged families, as priorities. We said that later, in the intermediate term, the government should sit down with Quebec and the provinces to work out a lasting solution for the fiscal imbalance.

We did not ask it to amass surpluses and plan a long-term distribution, but to correct the fiscal imbalance through a transfer of fields of taxation, such as the GST, and by correcting equalization. That would have ensured stability in Quebec and the provinces. But there is nothing in this bill that will correct the fiscal imbalance. They do not have the will, even though they recognize, by the very existence of Bill C-67, that there will be structural surpluses in the years ahead. This is testimony to the ongoing fiscal capacity of the federal government to generate surpluses, even though it does not need them to carry out its core mandates, and to the undercapacity of the governments of Quebec and the provinces to carry out their own mandates and provide direct services to the population, for lack of money, because that money is being siphoned off by Ottawa.

So we are going to oppose this bill. We will attempt to amend it so that there is a permanent and lasting solution to the fiscal imbalance. However, we cannot support the fact that, on account of the fiscal imbalance, it may be necessary to distribute in the coming years, at the rate of one third, one third, one third, the surpluses that the government will continue to outrageously accumulate.

[Unanticipated Surpluses Act, October 27th, 2005]

Mr. Speaker, it is a pleasure for me to rise and speak about Bill C-67, which at least gives us an opportunity—because this is the only benefit of the bill—to debate the question of whether or not there are structural surpluses in the federal coffers.

We have been estimating the surpluses since 1998 and we know that there is an imbalance between the financial capabilities of the federal government and those of Quebec and the provinces. On the other side of the House they have always denied the existence of the fiscal imbalance. Today, though, they confirm it for us through Bill C-67. It is a bill spread over the next five years. They anticipate, therefore, that there will be surpluses over this time, just as there always have been since 1998.

I would like to be very clear. The Bloc Québécois is totally opposed to this bill and will not support it. It is unacceptable in regard to both its arrangements and its substance concerning the existence of the fiscal imbalance. Nothing is corrected, and although the federal government recognizes the existence of the fiscal imbalance, it shows no desire to fix it.

So now the government says, “This is a bill for distributing the surpluses, but there will not be all that much in the future. There will not be any windfalls”. I am quite willing to think that there will not be any windfalls, but when we look at the tax cuts—and we will return to this in a minute—we see that the surpluses will generally be quite large.

Over the last few years, or at least since 1998 when the federal government has been taking in surpluses, about $75 billion in surpluses have been accumulated at year's end. But every year the government says: “There will not be a surplus or it will be minimal if there is one. We need to tighten our belts. We must be careful. Even if the post-secondary education system is collapsing and health care waiting lists are very long, the surplus will not be large enough for us to meet the demand”. And then every year, especially since 1997-98, the federal government's annual surpluses are a big surprise, like a rabbit they pull from a hat. We could not see it coming. It was unanticipated. What good government that gives us these surpluses at the end of the year thanks to its perfect management.

Perfect management it was not; it was a sham. Every year since 1998, some $75 billion of the surplus has been kept out of public debate. We could have been able to discuss allocation of those surplus funds, to focus even more on the matter of fiscal imbalance, and to find remedial measures precisely to enable the provinces and the Government of Quebec to fulfil their mandates duly set out in the Constitution, such as health, education and support to disadvantaged families.

But instead, they have concealed the surplus from us year after year. Not only had some $75 billion accumulated since 1998, but as well $160 billion had been allocated to new federal government initiatives. Not bad, that; it means that the government's margin of manoeuvrability, taking into account all that money since 1998, was in the order of $230 billion or $235 billion.

[Taxation, October 18th, 2005]

Mr. Speaker, let us talk about national interest. Back when he was finance minister and trying to reduce the deficit, national interest had nothing to do with it. The finance minister eliminated the deficit, at the expense of Quebec and the provinces, by cutting their transfer payments without any regard for national interest. Now that the government is swimming in surpluses, the national interest has suddenly become important.

Does the Prime Minister realize that he is confusing national interest with Liberal interest?