Yvan Loubier

[Publishing Industry, May 27th, 1999]

Mr. Speaker, does the government realize that the agreement it signed with the Americans puts half the advertising revenues of magazines at risk? At stake is 50% of the market, or $300 million, which the Canadian publishers will no longer have.

Does the government intend to compensate all of this considerable loss or will it abandon Canadian publishers?

[Publishing Industry, May 27th, 1999]

Mr. Speaker, in addition to creating a dramatic rift in the area of cultural exemptions, the agreement signed this week between Canada and the United States testifies to the federal government's total lack of planning and threatens the Canadian publishing industry.

Does the government realize that, far from saving Canadian publishers, it has betrayed them thereby potentially costing them $300 million in losses annually? How does the government intend to compensate the publishers for these losses, which it has caused?

[Bank Act, May 26th, 1999]

Madam Speaker, I am pleased to speak at third reading of Bill C-67. I only have a few minutes, but it will be enough to present the Bloc Quebecois' views on this bill.

We are concerned about this bill, especially section 7.1 which grants extraordinary powers to the Office of the Superintendent of Financial Institutions. The superintendent has the power, among others, to negotiate with appropriate provincial authorities—which are not defined in the bill—any measure which could result in the superintendent applying federal acts to provincial jurisdiction such as, for example, insurance and securities companies.

However, there is no reciprocity. The bill does not provide that negotiations may take place with the appropriate provincial authorities so that these authorities can apply provincial laws to federally chartered institutions. By contrast, the superintendent of financial institutions will enjoy enhanced powers in Quebec.

The bill could have included reciprocity provisions regarding the enhanced powers of the superintendent of financial institutions, even for federally chartered institutions such as banks or insurance companies, with regard to the implementation of acts in Quebec.

However, there is no mention of such reciprocity. The bill enhances the powers of the superintendent of financial institutions and allows him to get involved in provincial jurisdictions, but the reverse is not true.

Two and a half years ago there was the case of a Quebec insurance company, L'Entraide assurance-vie du Québec, which was and still is governed by a provincial charter. Because of its provincial charter that company was not able to conclude a major transaction to acquire blocks of insurance from a federally chartered insurance company.

Bill C-67 implements some of the recommendations of the MacKay task force, as well as some of the recommendations of the Standing Committee on Finance. We discussed this possibility of allowing provincially regulated companies to buy blocks of insurance from federally regulated companies. We would have thought the Minister of Finance would have taken advantage of this bill to include reciprocity and thus ensure fair treatment for Quebec insurance companies in particular.

Furthermore, we are opposed to this bill because it puts the cart before the horse. For instance, it makes it easier for foreign banks or financial institutions to enter the Canadian market. That is putting the cart before the horse. At the finance committee hearings on the follow-up to be given to the MacKay report, we proposed a three-stage strategy. First, everything possible must be done to strengthen the Canadian financial and banking industry.

No matter what people say, the Canadian financial industry is not the world's most competitive. The day we fully open our borders to international competition, we will see that even the largest Canadian banks are not big enough to stand up to some of the banks now evolving internationally, which have assets 10, 20 and even 30 times greater than those of the largest Canadian bank.

The financial sector has to be strengthened. The ownership rules also have to be changed so that large financial holdings can be created and banks allowed to join forces with a trust company or an insurance company in order to form solid and sizeable financial holdings.

We do not see this in the bill, and that is why we will be voting against it.

[Division No. 425, May 13th, 1999]

Mr. Speaker, you have said that the purpose of this House is to debate. How then can it be that you prevent my colleague from taking a minute of silence, because you claim it prevents debate, yet when the government introduces a gag motion, which deprives us of our right—

[Division No. 425, May 13th, 1999]

Mr. Speaker, I rise on a point of order.

I wonder. Did my colleague use language that was in contempt of parliament? No. Did my colleague use props to illustrate what he was saying? No. Is my colleague inappropriately attired, and thus deserving of expulsion from the House? No. Did my colleague use unparliamentary language which could offend the institution? No. Does my colleague have a right to express himself? Is there a translation problem if my colleague decides to remain silent for a minute?

[Income Tax Amendments Act, 1998, May 10th, 1999]

Mr. Speaker, there was nothing petty in what I said. It is rather tiresome to be speaking and hear the whispers of a Liberal MP over there. Out of mere courtesy, perhaps out of respect for this House, if there is a need for private conversations, they should be held in the lobby. Moreover, the Chair has often stopped conversations of that nature in order to ensure that the institution operates as it should. That was all I was asking for. I see that my colleague has finished his discussion, so I can now continue my speech.

I was saying that, in 1998-99, the Minister of Finance could have done great things. He had choices to make. The same thing goes for 1999-2000, but since Bill C-72 is connected with the 1998 budget, I will limit myself to that budget.

He knew he had a surplus of $15 billion. He could count just as we could. If we in the Bloc Quebecois were able to determine that the surplus for fiscal year 1998-99 would range between $12 billion and $15 billion, he could have done the same with the whole gang of public servants, specialists, and the amazing prediction machine at his disposal. But instead he concealed the real figures.

We have been calling for tax reform for years now. The Reform Party did exactly the same recently. The Minister of Finance prefers to focus on economic conditions rather than taking a serious look at the tax system.

This is certainly a major undertaking, because the last tax reform was in 1968, with the Carter report. That report led to the implementation of certain measures which resulted in some marked improvements to the tax system, ones which were of considerable significance.

But it is work. It is true that the time he spent on reforming the tax system he would not spend promoting his candidacy for the leadership of the Liberal Party of Canada.

The Minister of Finance must have the interest of the public more at heart than his own interests, and, until he convinces me otherwise, I think he has worked more for his own interests, and he has displayed a certain laziness not found among his predecessors.

He could have done extraordinary things. When he felt the lid on the pot was beginning to lift, he decided to establish an empty working group that produced an empty report. Some considerations were correct, but most did not relate to the needs for significant change, particularly in the area of personal income tax.

The Mintz working group, which he set up in order to reform taxes, focussed on corporate taxes only. What did the Minister of Finance do with the report Mr. Mintz submitted? He took it and he put it on a shelf. He applied none of its recommendations.

He did not deign to work on reforming personal income taxes, which would be easy to do. As I mentioned earlier, the reports the Bloc Quebecois produced were applauded and welcomed by the Minister of Finance. But there has been no follow up. There really is a lack of interest.

What could the Minister of Finance have done without racking his brains and compromising his race for the leadership of the Liberal Party of Canada? He could have fully indexed the tax tables and all the parameters of federal taxation. He could have done it very simply. I will illustrate my remarks in this respect in a few minutes.

Here is what happens without indexation. Since 1986, the government has not taken inflation lower than 3% into account. When the rate of inflation is such as the one we have been experiencing for several years, the federal government gets tax revenues that increase every year, without having to impose any direct tax increase or specific tax measure. So, by not fully indexing tax tables, the Minister of Finance is quietly getting more money, every year, in the federal treasury.

When inflation is high, taxpayers must pay more for goods and services. They must pay more for food, housing and even in taxes. They pay more indirectly because no adjustment, or only partial adjustment, is made by the federal government to the tax tables and the various federal tax components, to take into account the cost of living increase.

If the government fully took inflation into account, it would lower federal tax rates for certain income categories, or it would allow a tax rate that is currently low and that applies to a specific income category to apply to a higher income category.

Instead of doing that, the government decided it was just too easy to get more money. It was just too easy to fully index tax tables and components. Instead of helping middle income families, the Minister of Finance decided to maintain the unfair system that has been in place since 1986.

What is the result of all this? I tried to illustrate how it affects taxpayers, particularly middle income earners, who account for 70% of all taxpayers. On the first $29,590, the federal tax rate in 17%. If the government had fully taken inflation into account since 1986, and had also fully indexed federal tax brackets, taxpayers would now be paying 17% not on the first $29,590 that they earn, but on the first $36,918.

This makes a difference. Because taxes are not fully indexed, taxpayers are paying 17% on the first $29,590 of earnings instead of on the first $36,918. This has a negative impact on families' disposable income.

We are told that families' disposable income has continued to fall since the late 1970s. This is a measure that reduces disposable income. Disposable income is what is left over after taxpayers have paid all their taxes. It is what they have left to buy goods and services and to make investments.

When tax brackets are not indexed, it starts to add up: 17% on the first $36,000 rather than 17% on the first $29,590 starts to add up to thousands of dollars a year.

The $29,591 to $59,180 federal tax bracket is taxed at 26%. After that, it goes up. Normally, with full indexing, the 26% tax rate would have kicked in between $36,000 and $73,800 instead of between $29,000 and $59,000. This becomes important, because the first $36,000 earned would be taxed at only 26% instead of 29% or 30%, which is quite a difference.

The Minister of Finance preferred instead to continue with this unfair system, to allow the economic situation and inflation to continue unchecked so as to provide him with additional revenue, rather than impose any unpopular measures like raising income and other taxes.

I would remind hon. members that some 72% or 73% of taxpayers fall within the category of the two taxation levels I referred to, of 17% and 26%, for incomes of between $29,000 and $59,000. So not having fully indexed tax tables, tax levels and other tax parameters since 1986 has cost the majority of taxpayers very dearly.

I will give an illustration of what not having full indexation can represent for a resident of Quebec and a resident of Ontario. For example, for a family with one wage-earner and two children, with a 1986 income of $25,800 and a 1996 income of $35,400, the lack of indexation of the tax tables and other tax parameters has meant a loss of between $7,000 and $10,000 since 1986. That is a considerable amount of money.

We are not talking about a family with millions in income, but a family with one wage earner and two children, whose income was $25,800 in 1986 and had risen to $35,400 by 1996, as a result of inflation and promotions. The lack of indexation of the tax tables and other tax parameters has meant a loss of $7,000 since 1986. That is a considerable amount of money.

These people do not have any money to throw away. They are not taking vacations in Acapulco every year. Since 1986 they have seen between $7,000 and $10,000 in net revenue taken out of their pockets. They could have invested it in their children's education. They could have used it to improve their general situation. They also could have perhaps put it toward buying a house.

Maintaining such unjust situations is a serious matter. We have a family with one wage earner, a family of two adults and two children, losing between $7,000 and $10,000, if their present income is $35,000 or $36,000.

That is what lies behind the inaction of the Liberal government and the laziness of the Minister of Finance .

It is not for the fun of it that we have been asking him to reform taxes since 1993 and keep asking him to do so. They could have done something else to improve people's situation. They should have reformed taxes years ago. It needs to be done soon. It needed to be done in 1993, when there were one million poor children in Canada. Today, in 1999, there are 1.6 million poor children.

This man, rising every week with his hand on his heart and speaking of his compassion for poor children, is helping make the parents of these children poorer. This category of middle income earner, representing 70% of taxpayers, makes the greatest contribution to the employment insurance fund. The Minister of Finance is literally stealing the surplus from it, to the tune of $6 billion or $7 billion a year, rather than take this money and give it back to workers in the middle class and employers in SMBs or give a significant part of it back to the unemployed who are excluded from the application of the employment insurance plan.

The Minister of Human Resources Development, who says that he too has great compassion for those worst off, cut the plan and tightened eligibility criteria with the complicity of the Minister of Finance. The Minister of Human Resources Development is a kind of sherpa for the Minister of Finance.

Middle income earners paying because the tax tables and brackets are not fully indexed are also paying in terms of the money they take—and I am being polite—the money they rob from the employment insurance fund. These people pay double, and this is the fault of the Minister of Finance. If we look at the category of the public servants, these are the same middle income earners whose pension plan surplus will be taken by the President of the Treasury Board.

He has just introduced a bill that will establish the pension investment board for the main pension plans. He also announced that he expects he will use the $30 billion surplus accumulated in the plan as he sees fit, without consulting anyone.

This is a curious style of management, in which money is taken from middle income earners, because there is no tax reform. More money is taken from them when the government helps itself to the surplus in the EI fund. And moreover the same thing is happening to federal public servants, as the government is grabbing the surpluses in their pension funds.

I was going to say something unparliamentary, but I will refrain. I am casting about for a word that is parliamentary but conveys my meaning. It begins to look like the federal government is systematically misrepresenting the numbers, using money that does not belong to it, wasting this money on measures designed more for the visibility, such as the millennium scholarships, the Minister of Canadian Heritage's Canadian flag operation, or the Council on Canadian Unity. This is no way to manage taxpayers' money and the public knows it. The public should not be underestimated.

When we travel throughout Quebec, as I often do, people, not necessarily hard-liners, tell us that the federal government's management of taxpayers' money and the type of hypocrisy we see here make absolutely no sense.

Since 1996, the Minister of Finance has been promising legislation to eliminate tax loopholes that mostly benefit Canada's millionaires and billionaires. We have not seen it yet.

People will remember the auditor general's criticism in 1996, following our denunciations that went all the way back to the 1993 election campaign of the family trust system for millionaires—not for middle income earners, but for millionaires—that lets them use tax loopholes for tax planning purposes instead of the purposes for which they were originally intended, such as providing a life annuity for a permanently disabled child.

Here we have a situation that was denounced by the auditor general, a situation where officials from the Department of National Revenue, the Department of Finance and the Department of Justice got together of an evening one December 24 a few years ago and came up with an advance ruling allowing a family of billionaires to transfer two family trusts totalling $2 billion completely tax free to the United States.

This was unprecedented. At least, we were not aware of any other similar situation.

There was a public outcry and the Bloc Quebecois strongly condemned what had taken place. I must say that the public servants who were present when that advance ruling was made and who appeared before the Standing Committee on Finance and the Standing Committee on Public Accounts found it to be most uncomfortable to say the least.

Following that incident, the Minister of Finance announced that he would table a bill to make taxpayers accountable in the case of such transfers by providing a certain amount to pay taxes to Revenue Canada when assets are transferred abroad.

Three years ago, when the minister announced his intention to eliminate that loophole, what did these millionaires and billionaires do? They came up with all sorts of schemes to immediately transfer their trusts to tax havens abroad, by taking advantage of the precedent created by that advance ruling. They took advantage of the situation. In 1999, three years after alerting robbers, the Minister of Finance has yet to table his bill to eliminate the tax loopholes available to these millionaires.

It is hardly surprising. In the last budget, the most significant tax reductions are for those with incomes of $250,000 and up. Based on the proposed tax reductions, these people, who do not have a hard time making ends meet—unlike a family of two adults and two children with an income of $36,000—will benefit from tax savings of $3,800 as early as this year. On the other hand, those earning between $25,000 and $50,000 are not going to benefit from a tax saving of any more than $80 to $350.

The reason is obvious. We see where the friends of the Liberal Party and the friends of the Minister of Finance fit in. They are not families with one wage earner, with two adults and two children, and an income of $36,000. They are millionaires and billionaires. Moreover, what came out yesterday or the day before about the key contributors to the Liberal Party of Canada's campaign fund is most revealing. There are many banks, trust companies and family trusts. No change there. Join the dots between a $35,000 or $45,000 contribution, even $100,000, from major companies to the Liberal Party coffers, and then ask yourself whether the Liberals will end up with their hands tied afterward when it comes to tax reform, to blocking the loopholes for millionaires, for preventing the banks from doing certain things.

It is so ridiculous that I recently cut out an article on this subject, which I found most instructive. In 1993, when I first came to this House, I said we would be fighting to block the gaps in the taxation system, the so-called loopholes. These loopholes enable people who are far from being in need to do tax planning, to do all sorts of tricky tax moves, with the blessing of the Minister of Finance, in order to find themselves tax-exempt in foreign tax havens.

In the newspapers in 1993, there were classified ads that read “Come and plan the retirement of your dreams with us”. They were talking about tax havens. At that point, the Income Tax Act permitted millions and millions of dollars in taxes to be saved through various means.

I was looking at a paper last week again, and it made no sense. There was another classified ad, which read in English and French, “Come and see us, we have ways for you to save hundreds of thousands if not millions in taxes, depending on your income”. No family earning $36,000 a year will be able to take advantage of the advice on how to save money in tax havens. One has to have money to do that.

Six years later, nothing has changed, with tax havens. With permissive federal taxes and the federal Income Tax Act, the situation is similar to that of 1993, in which millionaires and billionaires paid no taxes and 70% of Quebeckers and Canadians pay most of the taxes, that is, the average income earners. Yet the Minister of Finance still has not introduced a bill to put an end to this scandal.

Bill C-72 contains some positive measures. They are the ones we praised in the 1998 budget. The Minister of Finance could have done so much better that it is ironic he is getting off so lightly.

With the options available to him then and now, he could have helped improve the situation of people in this country, of middle income families that have been struggling for years. Some of them have sunk into poverty because of the measures of the Minister of Finance and of the Minister of Human Resources Development in the area of employment insurance. He could have done a lot.

Still, this bill is a small step in the right direction, and we would not want to tell taxpayers “These incomplete measures would save you a few dollars, and we could not oppose the bill simply because it really did not go far enough”.

Therefore, we will support this bill, but we will continue to condemn this rip-off of middle income families and the fact that the Minister of Finance has simply let economic—and political—conditions dictate his course of action for several years, not assuming his responsibilities as he should have.

Who knows, perhaps he will make it and become Prime Minister some day, but I certainly do not wish it on Canada. As for us, we will be gone; we will have left and probably have achieved sovereignty a few years earlier. Canada deserves better than a minister like this one, a minister who did not take his responsibilities when he was in a position to effect social change, but chose not to.

[Income Tax Amendments Act, 1998, May 10th, 1999]

Mr. Speaker, would you please ask the members opposite to withdraw if they have matters to discuss? The environment is not conducive to productive exchanges, particularly not during a speech on something as basic as the future of families in Quebec and in Canada. Would you please ask them to continue their conversation elsewhere?

[Income Tax Amendments Act, 1998, May 10th, 1999]

Mr. Speaker, I am pleased to speak this morning for the last time on Bill C-72, which implements certain measures set out in the 1998 budget brought down by the Minister of Finance.

Some hon. members will most certainly recall, and I will take it upon myself to remind the others, that in 1998 when the Minister of Finance released his budget, we in the Bloc Quebecois had some years previously encouraged the government to include certain measures that were included in that budget. Minor as they may have been, they were, in our opinion, a step in the right direction. Our position has not changed fundamentally with respect to those highly specific measures.

Generally speaking, however, given the broad range of possibilities presented to the Minister of Finance in 1998, which were included in the latest budget for 1999-2000, we did not feel the Minister of Finance had gone far enough. He claimed otherwise, however, concealing the real figures on the state of the public purse. With those real figures, we were able to state that the Minister of Finance could have go much further with the broad range of possibilities available to him, if he had any real compassion.

What are the budget measures from 1998 that we find today in Bill C-72, which we had encouraged and applauded at that time, and still do today?

There is the $500 increase in the basic personal credit. We supported this measure, although the Minister of Finance could have gone even further beyond the tiny step he took.

There is the surtax reduction for individuals, to a maximum of $250. This too is positive, but does not go far enough.

There is the home buyers' plan for the disabled. Finally, after several years of battles, the plan is now in place. We worked on this. A number of my Bloc Quebecois colleagues worked very hard representing associations of the disabled from their ridings so that special measures such as the home buyers' plan for persons with a disability could become a reality. We applauded this measure.

There are the tax credits for interest on student loans. Students too deserve support in their efforts to acquire knowledge and to enter the labour market. In this case too, the government has not gone far enough in supporting students in Quebec and Canada.

There is an increase in the child care expense deduction. This is a good thing.

As regards the lifelong learning plan and the matter of tax-free withdrawal of funds invested in a registered retirement savings plan, here again, when the Bloc Quebecois made public a few years ago an analysis of a possible and positive reform of personal taxes, we were the first to ask the Minister of Finance to use the funds invested in RRSPs for purposes other than retirement.

The rate of unemployment, as we have seen, has remained fairly high. We could also see that there were urgent needs, particularly in the case of middle income families, and that we should either think about using the funds invested in a registered retirement savings plan to create self-employment, to allow taxpayers to create their own jobs, or about helping them return to the labour market, through continuing education programs.

We were happy to see that measure included in the 1998 budget. In fact, we supported that initiative when the Minister of Finance made it public.

However, we do not agree with the minister—and he is certainly not deserving of any praise regarding this aspect of his 1998 budget—when he says he could not do more than the few positive measures found in Bill C-72, because this is utterly false.

When the Minister of Finance brought down his 1998 budget, he claimed there would be a zero surplus for each of the following three years. However, we were quick to react and set the record straight regarding the 1998-99 figures and the anticipated results for 1999-2000.

In 1998-99, the surplus will exceed $15 billion. We are talking about a $15 billion surplus for the fiscal year that ended on March 31. In the next fiscal year, the surplus will be $20 billion.

The Minister of Finance is still claiming there is no money available. But he forgets to mention that, under the Financial Administration Act, all the unexpected surpluses in the previous fiscal years were automatically used to pay off part of the debt. Last year, over $20 billion went directly to pay back part of the capital on the debt.

We have nothing against paying off the debt. That is not the point. However, when one has a surplus, one must make a number of decisions as a good manager of the public treasury. Instead of using a portion of the surpluses from last fiscal and a portion of the surpluses from this fiscal to help out middle income families, he could have provided more assistance for unemployed workers and students, given the precarious economic situation in which many families have been living in Quebec and in Canada since 1997-98.

Instead, the Minister of Finance presented an inaccurate picture of the state of the nation's finances. He then used this picture to make his argument that it was impossible for the federal government to provide any more assistance to middle income families, who have been having a hard time for several years now because of him.

What could the Minister of Finance have done during fiscal 1997-98, fiscal 1998-99 and the current fiscal year? He could have done something we have been asking him to do since the 1993 election, which is to devote some of his precious time to federal fiscal reform. Since 1993, the Bloc Quebecois has come up with two possible scenarios for reforming federal taxation, one for individual taxpayers and one for corporations.

When we released our two reports, the Minister of Finance even congratulated us on our good work, but he has done nothing about reforming federal taxation since.

[Budget Implementation Act, 1999, May 6th, 1999]

Mr. Speaker, as I was saying before this interruption, there are even members from Quebec in the Liberal Party of Canada who, following the budget of the Minister of Finance, travelled around Quebec to explain that Quebecers got the largest part of the budget, that they should be happy because equalization payments, over three years, would give us $1 billion. They were supposed to be happy as well because all the jobs were going to Ontario and because the formula for calculating the funds allocated under the Canada social transfer had been changed.

It takes people who have sold out and who are intellectually dishonest to go around Quebec saying that it had won it all in the budget, when there were three winners in this budget: Ontario, Alberta and British Columbia. These three provinces were the strongest supporters of the social union framework agreement. The Minister of Finance in a way bought Mike Harris and company with the fine gift they got in the allocation of the Canada social transfer.

This is not the first time the minister has bought the silence and co-operation of the provincial premiers at a cost of hundreds of millions of dollars. Members may remember when there was the harmonization of the GST with the provincial sales taxes in the maritimes. The federal government paid the maritimes almost $900 million to keep quiet and let it have its way. That is how the Minister of Finance and this government operate.

Quebec should be concerned. Each year it pays taxes to the federal government and the members opposite are not even fair-minded enough to see that Quebec gets a demographic share of the taxes it pays.

Quebec should also be concerned when it hears that 30,000 to 42,000 jobs will not be created in Quebec as a result. It should be concerned when it knows that, if the federal government were to return to a more equitable allocation of federal funding for goods and services procurement, for research and development, and Quebecers employed by the federal government in federal laboratories, Quebec's unemployment rate would drop by more than a percentage point. Better yet, these investments would have all sorts of direct and indirect effects.

Since the Minister of Human Resources Development, who is completely lacking in compassion for the less fortunate, shamelessly tightened up the EI rules a few years ago, Quebec's welfare rolls have jumped by almost 200,000 and the Government of Quebec has picked up most of the tab. If federal transfer payments were to return to former levels, the number of people living on welfare would probably drop as well. This should also concern Quebecers.

This should be a major issue, particularly for the Quebec members of the Liberal Party of Canada, who always laugh at or make fun of figures that, believe it or not, are provided by Statistics Canada and the federal government, and that clearly show—the data is not from us, we simply refer to it—the injustice done to Quebec.

There are also things that are not included in this bill. Ever since the Liberal government was first elected, in 1993, we have been asking for a comprehensive reform of the federal tax system, which has not undergone any substantial review since the late sixties, with the Carter commission.

We pointed out, among other things, some blatant injustices in the personal income tax system. Along with the Reform Party, we recently condemned a few of these injustices regarding double or single income families. But there are others.

There is one, for instance, that has existed since 1986. I am referring to the fact that the tax structure, including tax credits, exemptions, tax brackets and income categories, is not fully indexed.

This is extremely costly to taxpayers and will continue to be until full indexation, which was eliminated in 1986, is not restored. Under the current system, any inflation rate lower than 3% is not taken into account by the federal government. The tax tables remain unchanged if inflation is lower than 3%. And since inflation has been around 1% for the past three years, and was between 2% and 3% for seven or eight years before that, there has hardly been any indexation since 1986.

It is profitable for the federal government, a kind of hidden tax. Without the government having to lift a finger, every year the lack of indexation means we pay more taxes to the federal government.

Right back in its first year of application, in 1986, this measure brought $500 million into the coffers of the federal government. If we factor in economic growth, we probably get up to $600 or $700 million per year that do not remain in the taxpayers' pockets. And then we are surprised to see that the taxpayers are getting poorer in recent years, compared to previous generations.

Every year, their assets go down. So does their disposable income. Measures like these are what is impoverishing people. But they do not show. This is why the Minister of Finance does not want to do away with this provision. All he needs do is saunter about with his hands in his pockets, and $500 million, at the very least, drop automatically into his coffers, without his having to impose any unpopular measures.

This is not small change. Looking at the cumulative losses of disposable income for Quebec and Canadian taxpayers, since 1986 the average taxpayer would have lost $7,000, in today's dollars. Had that amount been invested every year, there would now be more than $7,000. I imagine the taxpayers would have liked to have had that much in their pockets.

We are not equipped to keep the taxation level that high. And this is only one example, because there is a whole lot of bias in taxation, which means that middle income taxpayers, that is, about 70% of Quebec and Canadian taxpayers are paying more than they ought to, had the Minister of Finance done his job correctly.

He took advantage of the state of the economy. He did not do much. I have often called him lazy, and I think he is. Had he wanted to, he could have changed the tax system.

Now he is developing a bit of an interest in taxes. How long has this been going on? Since all the opposition parties rose in the House and said “Enough. Taxpayers have had it. The tax system must be changed”.

So the government struck a sub-committee to tour Canada. It will take a number of months if not a number of years before the tax system is reformed, but there is no need to reinvent the wheel.

I have an example about the lack of fully indexed tax tables. The federal government could have indexed them long ago. It could have also established a parliamentary task force to review the tax system.

When the Bloc Quebecois published two analyses, one of personal taxes and the other on corporate taxes, our stand-up comic, the Minister of Finance, rose and said “Well done, you have done a good job. It contains some interesting proposals”. He said that in the House.

We were flattered. We figured we had not wasted our time. The minister seemed serious when he said that these were interesting proposals and that he would examine them. He congratulated the Bloc Quebecois for its two reports on taxation. Since then, what has the minister done? Nothing, except to set up a task force, which worked behind closed doors for several months and postponed by several months the release of its report.

Upon reading that report, one can see why the task force delayed its release. It focussed on corporate taxes, not personal taxes. Why was the release of the report postponed? Because there was not much in it. Moreover, it even contained measures that were detrimental to the growth of businesses. It was making the burden heavier rather than lighter in the area of corporate tax.

One can understand why the tabling of the Mintz report was delayed. There is no trace of that report now. My guess is that the Minister of Finance ditched it.

This is how serious this government and its Minister of Finance, who wants to become the leader of the Liberal Party of Canada, are. It sure sounds promising.

This attitude is unfortunate, because a lot needs to be done in the area of taxation. With our small team, we were able to carry out an in-depth review of the tax system, particularly tax expenditures. We came to the conclusion that some of these expenditures have become obsolete and should be discontinued. There are also tax measures that are totally disconnected from reality, particularly as regards the labour market.

With a hundred or so specialists at its disposal, the federal government could have done the same thing, and it certainly could have implemented these recommendations for fairer taxation for everyone.

Already we can here the Minister of Finance and his faithful members telling us that the government is barely out of the woods, that it does not have the money, that it must be careful. Yes indeed, it must be careful. In fact, this is a very important issue for the Bloc Quebecois. We do not want the Liberals slipping back into their old ways of annual deficits. No more deficits.

In fact, that was the title of a paper we used last year as part of a province-wide consultation in Quebec of real people, asking them what should be done with taxpayers' money, what should be done with the huge surpluses the Minister of Finance is racking up at the expense of everyone but himself.

No more deficits: in fact, we were the only party to table a bill recommending that the deficit be reduced to zero and kept there, in other words, that the budget be balanced. We were the only party to table such a bill.

It is not true that the government has no money. The government has money coming out its ears. It keeps this very quiet, and certainly does not put it in writing. There were still zeros all through the Minister of Finance's last budget, and no sign of a surplus.

In the fiscal year that has just ended on March 31, 1999, the 1998-99 fiscal year, the Minister of Finance had a surplus of $15 billion. As well, he took $7 billion from the employment insurance fund. That is highway robbery, I repeat highway robbery, and it is unacceptable. It is unacceptable to do the same with the pension funds. There is talk of the President of the Treasury Board getting his hands on a $30 billion surplus, but that is another story. The figure for the last fiscal year was $15 billion.

In the present fiscal year, which runs until March 31, 2000, by our predictions the surplus will be $20 billion. The reaction may well be “Oh those predictions, oh those economists”. Certainly, economists do have their shortcomings, but they also have positive qualities.

One of the good qualities of economists, sometimes, ourselves included, is to be cautious. Since 1994, every year the Bloc Quebecois and its little team have predicted the deficit, as well as the surplus generated by the Minister of Finance, we have been no more than 2% or 3% off.

If a company specializing in predictions in Quebec and in Canada had such a result, it would be in great demand. The average margin of error in predictions is between 5% and 10%; ours was between 2% and 3%.

Every time we put our finger on the true deficit, which the Minister of Finance was hiding from us, we were dead on. Every time we started talking surplus, and came up with a ballpark figure for that surplus, we were dead on. So much so that the credibility of the Minister of Finance, where figures are concerned, is virtually zero, if not below zero, for most of the analyses. This is not something I am inventing.

The day after the budget is presented, you open the Globe and Mail , the Toronto Star , La Presse , any one in fact, you listen to the analysts on television; when the subject of the Minister of Finance's forecasts comes up, it is one big joke. People laugh. They double over, they twist themselves in knots, they roll around on the carpet.

And yet it is not all that funny. We have become accustomed to the Minister of Finance giving us a false picture of Canada's tax situation. Given such a totally false picture, Canadians were not aware of the real state of public finances and of the options the Minister of Finance and the Liberal government had to do things, move, help the most disadvantaged, lower income taxes.

It is a sad thing when the government knowingly presents false information, when six months later its figures are proven wrong. I remember once, two years ago I think, we had predicted there would be a certain level of surplus in February. The Minister of Finance criticized us violently, accusing us of throwing figures up in the air. He made fun of us. Six months later, our exact predictions had come true.

It is a sad thing to play with people like that, play with information, not tell people the truth and lie to their faces. It is beneath a minister of finance and a member of parliament. This is however what this Minister of Finance has done, half baked, since assuming his position. He literally and systematically hides the truth of the figures.

So, if the government had a $15 billion surplus in the last fiscal year and now has a $20 billion surplus, it should leave the current surplus of $7 billion in the employment insurance fund to workers and the unemployed. The government would still have $13 billion left to do things with.

The Minister of Finance could have done many things. As I said earlier, he could have done justice to Quebec and restored fairness in how the government spends money on goods and services, investments and staff in federal laboratories.

He could have done all that. He could have said “From now on, I will no longer use the surplus in the employment insurance fund, except to help the unemployed or to lower contributions”. The minister could have done all that. But in order to do these things, one must be honest, tell the truth and take action based on the truth. If one's actions are based on lies, one cannot do these things.

The last budget of the Minister of Finance is nothing but a wad of lies. All the expenditure and revenue items were cooked, and even the auditor general was surprised, since he has repeatedly asked the Minister of Finance to stop cooking the books like that. There are no longer any reliable figures in the minister's budget. There are zeros everywhere, instead of real surpluses of between $15 billion and $20 billion. This is terrible.

So, the minister could have done a lot. He could have done more to help children living in poverty. This is the minister's favourite theme. Every now and then, he gets up, puts his hand on his heart and starts talking about poor children. Child poverty has been on the rise since 1993, but he never mentions that. Since the Liberals have been in power and he has been Minister of Finance, child poverty has increased. People are poorer than before, children as well.

How can he rise in the House, put his hand on his heart, and talk about child poverty in Canada, knowing what he does? The Minister of Finance knows the figures, he knows how to hide them and how to make them say what he wants. He knows that child poverty has increased. How can he get up with a smile on his face and make jokes, then say that his government has done a lot for poor children and that it has worked tirelessly, with the means at its disposal, to reduce child poverty? How can he do such a thing, knowing all the way that it is not true?

How can he do such a thing and, at the same time, help himself to $7 billion a year from the EI fund? How can he say such a thing, when less than 40% of unemployed workers qualify for benefits under the new EI system? The other 60% or 70% are living in poverty, on welfare perhaps, as are the parents of these poor children the Minister of Finance says he wants to help.

If the public were to pay a little more attention to the debates in the House of Commons, it would soon be appalled. It is almost sickening to hear things presented like this when we have been fed this nonsense for six years, told that everything is fine, under control, that the Minister of Finance is working hard to put our fiscal house in order, when it is not true.

But he is making everybody else, the unemployed, the disadvantaged, those who can no longer draw unemployment, do the job. And that is truly shameful.

We in opposition will continue to fight until we drop in order to get this government to listen to reason and put into place some real measures to help those who are in greatest need, thus re-establishing justice and fairness in Quebec.

The figures I have just given are not fabrications, but ones anyone can find in the Statistics Canada data. At the present time, there are between 30,000 and 42,000 Quebecers waiting for the federal government to restore justice and fairness to federal transfers, because then they will be able to work and earn their living with dignity.

The Bloc Quebecois will continue to work on their behalf, and I can assure the House that we will spare no effort in making this government listen to reason, because what it is doing no longer makes any sense.

[Budget Implementation Act, 1999, May 6th, 1999]

I hear a member from Ontario. I would rather not reply. When you have it all and you start criticizing those who are not so lucky, it is not very nice.

With 30,000 to 42,000 more jobs, do members know by how much we could lower the unemployment rate in Quebec? It would drop by 1.2 points. This means that instead of an annual difference of two to three percentage points for the past 25 years, there would have been a difference of one to two points between the unemployment rates in Quebec and Ontario, or the average unemployment rate in Canada.

Reducing the unemployment rate by more than one percentage point takes energy, originality, economic policies and relatively good conditions for a fair length of time. Simply restoring the criterion of demographic weight, i.e. 24% in goods and services procurement, research and development spending, federal laboratories, and their staff as well, and all the salaries this research and development staff would receive within Quebec, would reduce the unemployment rate by one percentage point.

Based on the latest unemployment figures, this would mean the rate would be 7.8% instead of the current 8.8%. That is still high, but simply by treating Quebec fairly and adjusting payments and procurement of goods and services, the federal government could reduce unemployment by one percentage point, create the 30,000 to 42,000 jobs Quebecers are waiting for and are entitled to but are being denied. They are being denied a share of the taxes they pay.

The $31 billion in taxes they pay the federal government adds up over time. And it is time the federal government assumed its responsibilities and started treating Quebec fairly. We are not asking for more than our share. We are asking for 24% of spending, our demographic weight in terms of the total population of Canada. There are 30,000 to 42,000 jobs riding on the good will of the federal government and fair treatment for Quebec.

Not surprisingly, people say they are tired of hearing Quebecers' same old refrain about federal transfer payments ad nauseam. This is not something dreamt up by sovereignists or the Bloc Quebecois. The Bloc Quebecois was formed in June 1991. This situation has been going on for 25 years. Federalists in Quebec City, such as Mr. Bourassa, have denounced this situation, based on federal government figures.

We did not make up these figures. They do not come from the Bloc Quebecois, the Parti Quebecois or the Quebec Liberal Party. They are federal figures from Statistics Canada. If hon. members look in the Statistics Canada catalogues under federal government expenditures on goods and services, by province, and under capital expenditures, they will find them. They are not made up.

I have a bone to pick with the members of the Liberal Party from Quebec, across the way. It seems to me that the first thing to do, as Quebecers, would have been to demand justice of the Minister of Finance or the President of Treasury Board, as far as federal transfers and general expenditures are concerned. They have not done so. They prefer to laugh in our faces.

Every time the question of inequality of federal government expenditures and investments in Quebec is raised here in the House, I see Liberals from Quebec over there laughing, finding it funny. They find it funny that we are, year after year, shortchanged to the tune of 30,000 to 42,000 jobs. They find that funny.

When they receive people in their riding offices who have lost their jobs, mothers or fathers in their forties, or in their fifties—which is becoming increasingly frequent—they feign compassion, saying “Oh, if only we could help you, but you know the state of the federal public finances makes it impossible. We will work very hard at it, though”.

They do nothing of the kind. They are a bunch of do-nothings. The best proof of this is that, in the last budget brought down by the Minister of Finance, Quebec got nothing. Ontario got all the structural investment.

The Ontario ministers got something from the Minister of Finance's budget, but Quebec got nothing. Some Quebec MPs travelled the length and breadth of Quebec to say—