Yvan Loubier

[Division No. 281, December 1st, 1998]

Mr. Chairman, on a point of order, I would like to put a question to the President of the Treasury Board.

He answered a question from the hon. member of the Reform Party. In what way are these statements similar to those tabled in the two previous years? I would like him to elaborate on that.

[Balanced Budget Act, November 24th, 1998]

Mr. Speaker, I would like to make several comments. I will start with what the Parliamentary Secretary to the Minister of Finance said in his critique of my bill.

He said it was not necessary, that transparency and clear objectives were far more important. He used the exact same words the Minister of Finance did on February 10, 1998 when the Bloc Quebecois members started to speak of a balanced budget act. He has said exactly the same thing, the Minister of Finance. He said that greater transparency and clear objectives were far more important. The parliamentary secretary has learned his lesson well, but he has contributed nothing to the debate.

What I have heard from the other side of the House is propaganda about the government's achievements, transparency and caution. However, the importance of a bill on a balanced budget transcends not only the performance of a government but also the present. We must think of the future. Anything can happen in the future.

The same mistake can be repeated. The error that led us to an accumulated debt of $550 billion, that is endless deficits over 25 years, can recur in the future. At the moment, it is perhaps less obvious on the government side, but we must think of future generations. My Conservative Party colleague rightly referred to the pages, who will be laden with a real tax burden in the future.

The parliamentary secretary mentioned that they are cautious. This is no longer about caution. When the figures presented are 100% at variance, between 62% and 100%, six months apart or at the most nine months apart, this is no longer a forecasting error. This is no longer a matter of caution. It is a lie. It is totally undemocratic.

The money we have handed over to the government is taxpayers' money. It does not belong to the Minister of Finance. What if you had an account with a bank or a credit union. You deposit your money, and the banker refuses to tell you exactly how much is in the account. What are you going to do? This is a terrible anachronism. And yet this is exactly what the Minister of Finance is doing. He does not give a true picture of the state of public finances. His forecasts do not make any sense. This is ridiculous and it does not help the legislator to make sound management decisions.

In addition to providing for some control over public finances, the bill on a balanced budget makes the Minister of Finance responsible and accountable to Parliament.

This being said, I am very favourable to the suggestions made by the opposition parties. The speeches made by members from the Reform Party, the NDP and the Progressive Conservative Party were constructive. Some interesting ideas were put forward and would deserve to be included in a new bill.

I will not stop with this attempt. I intend to table another bill which will take into account the suggestions made by the Reform Party, the NDP and the Progressive Conservative Party. I hope it will be a votable item, because this is an important issue.

I agree with the Reform member who said that, to achieve a balanced budget, the government can either reduce spending or increase revenues. I agree with him that some provisions should be included to control excessive spending, and particularly to deal with the fact that the government can impose any tax increase, year after year, as the Minister of Finance has been doing for the past four years, taking $37 billion from Canadian taxpayers.

I also listened to the suggestions of the NDP member with regard to his social concerns. I felt I had implicitly provided for these in my bill when I said there could be deficits if there were exceptional circumstances and a significant deterioration in economic conditions. As I see it, a deterioration in economic conditions would imply social deterioration, but I note his suggestions.

As for the suggestions of the Progressive Conservative Party, I will probably discuss them with my Progressive Conservative colleague privately because I was not very clear on the reasons for his reluctance to support the bill. He mentioned the role of parliamentarians.

The role of parliamentarians is strengthened by a bill of this sort because the Minister of Finance is forced to be accountable to parliament, and to us, for any budgetary overrun, deficit and accounting change that could alter the picture of public finances.

Monetary policy has nothing to do with it. An anti-deficit bill can apply to a federal government, just as it can apply anywhere in the world, and monetary policy makes no difference. The fact that the federal government must intervene with respect to monetary policy has nothing to do with its fiscal management.

So I will have a talk with him. I am sure my arguments will convince the Progressive Conservative Party to support this bill or another amended one in the near future.

[Balanced Budget Act, November 24th, 1998]

moved that Bill C-375, the Balanced Budget Act, be read the second time and referred to a committee.

Mr. Speaker, I am pleased to address this bill from the Bloc Quebecois dealing with the issue of a balanced budget. This is more commonly referred to as an anti-deficit law.

Why should we, at this point in time, turn our attention to such a bill? Incidentally, I would have preferred that this bill be a votable item, since it deals, in my opinion, with a fundamental issue. I can tell you that I will continue to work in the coming months to have this bill put again in the Order Paper as a votable item.

Why a Balanced Budget Act at a time when we are increasingly talking about surpluses? In fact, for the last fiscal year, the surplus exceeded $5 billion. For the current fiscal year, we are talking about a real surplus, that is if you look at the actual figures, not if you talk to the Minister of Finance, who says all sorts of things. But if you look at the real figures, you will see that the surplus for the current fiscal year is between $12 billion and $15 billion.

Why introduce a balanced budget act, an act that would prevent the government from running deficits? Simply because we are not protected from what we have experienced in the past 25 years. In fact, it is a Liberal government that started running major deficits, and the first major deficit was incurred under the current Prime Minister of Canada, when he was Minister of Finance.

We are not protected from the old ways of the Liberals, and of other federalist parties. They kept running a deficit year after year, always thinking that it could be eliminated the following year, without taking their responsibilities, with the result that these cumulative deficits turned into a debt. We were paying interest on the debt and leaving that accumulated debt to future generations.

Old habits die hard. I remind members that several provincial governments in Canada, including Quebec, and several American states, passed similar legislation banning deficit or rather balanced budget legislation. These states and several Canadian provinces have now balanced their budgets and have surpluses.

However they passed this kind of legislation to protect themselves and future generations, who have and will have to carry the burden inherited from previous generations.

It is so easy for Liberals to slip back into their old habits as witness the initiatives put forward by the government in areas of provincial jurisdiction these past three years.

They have no qualms about creating new programs parallel to existing provincial programs, infringing on areas of provincial jurisdiction, wasting billions of dollars often for nothing.

Let us look at the millennium scholarships. This program is going to cost taxpayers $2.5 billion. We are not too sure how useful it is going to be. However there is one thing we are sure about, some provinces, including Quebec, already have their own scholarship programs which work very well and have low overhead costs. They have been in place for years.

The federal government prefers visibility to efficiency. When partisan politics and a need for high profile supersede efficiency, the result is perpetuation of the situation that began 25 years ago: no particular concern for a balanced budget, and recurring deficits.

If the Minister of Finance has a deficit of under $3 billion, the bill requires him to fully repay this deficit the following year, during the next fiscal year, and therefore to present a one-year budget forecast of a $3 billion surplus the following year, so as to recover the current year's shortfall. A basic deficit is forbidden, but if overshooting the budget leads to a deficit, the Minister of Finance must adjust his aim within a year.

The Balanced Budget Act also makes it possible, under certain circumstances, to go over budget, or even have a deficit, even a recurring deficit. For instance, if there is a natural disaster having a major impact on federal expenditures, large amounts over or under budget are allowed.

If there is a major deterioration in economic conditions requiring the federal government to intervene with social programs, the Minister of Finance is also allowed the flexibility to exceed his forecast and to end up with a deficit despite this Balanced Budget Act.

There is a similar exception if Canada is involved for example in a military conflict which would require federal government disbursements not forecast in the budget presented by the Minister of Finance.

In these three specific cases, when the federal government has a deficit, it must submit for each year of the deficit a reabsorption plan over six years. It must, over six years, repay all of the deficit it incurred in the current, subsequent and third year as well.

In the first three years of this six year plan, it must have repaid 75% of the deficit it incurred in the initial year, and in the remaining three years, it must repay the other 25%.

It must therefore table a specific plan in the House of Commons, a six year plan, and provide Parliament with a schedule for the repayment of the deficit it incurred in the current year over a six year period.

That is what spending and deficit controls involve. I repeat that, despite our being in a surplus period, we must not, especially for the sake of future generations, again find ourselves in a situation similar to what we went through over the past 25 years in which we accumulated deficits. These deficits have become a huge debt worth at the moment over $550 billion net.

It is therefore important to have a legislative framework to ensure that budget overruns, uncontrolled spending, visibility spending and partisan expenditures that could drive us into a budget cul-de-sac do not recur and that there are very restrictive provisions governing the Minister of Finance and forcing him to repay the entire deficit over six years.

There is a second very important aspect of this bill. It concerns the accountability of the Minister of Finance. As everyone here knows, even our colleagues across the way, since his appointment, the Minister of Finance has been telling us whatever he likes about the estimates, even about expenditures and how revenue is entered. Every year, he is way off in his estimates. But forecasting errors of 62% over six months concerning the deficit are more than just a wrong estimate.

We have said repeatedly, and so has the press, and the public is very much of the opinion that the Minister of Finance lacks transparency when it comes to the estimates. For four years now, he has been telling us just about whatever he likes about the deficit and, since last year, the same is true with respect to the surplus. He is in no way accountable to parliament for his estimates, for the figures he submits, for the overruns and for items that were not in the estimates.

The bill forces the Minister of Finance to be serious, transparent and honest in the estimates he tables and in his economic statement. His statements no longer bear any resemblance to reality.

I will give examples of things that this anti-deficit bill would help improve. In 1996-97, the Minister of Finance forecast a deficit of $24 billion. Mid-stream, he revised his forecast. He said the deficit would not exceed $19 billion. In fact, we had been telling him for a year that the deficit would never top $10 billion. In the end, the 1996-97 deficit was $9 billion.

The same thing occurred in 1997-98. Initial projections set the level of the deficit at $17 billion. At the time, with the figures we had on monthly revenues, it did not make any sense to forecast a $17 billion deficit in 1997-98. A surplus of over $2 billion was more likely. For a second time, the Bloc was right. The surplus was around $3.5 billion.

Initially, in 1998-99, the finance minister forecasted a $9 billion deficit. He recently revised his projections and is now talking about a tiny surplus. Once more, hard facts will confirm the Bloc projections, because we have always been right each and every year, because the finance minister is not transparent in his forecasts and because there is no mechanism to force him to make honest projections. He has no accountability, but the bill would provide for this.

This year, the minister is talking about a tiny surplus, but we are forecasting a surplus of $12 to $15 billion, even if the economy has slowed down because of the crisis in Southeast Asia, and the economic collapse of countries in the former Soviet Union, especially Russia.

The bill would require the finance minister to report to the House on his deficit or surplus projections, and his earlier projections, and to explain the discrepancy. In other words, when he makes certain projections in his budget and he realizes later on that the deficit or surplus will be different, he should he required to explain why.

There is no such requirement at this time. He tells us whatever he wants and, when the margin of error on his six month deficit or surplus forecast is 63%, the only opportunity we have to say anything to him about that, without him having to be accountable to parliament, is when he presents his economic statement to the finance committee. He tells us “Excuse me, our tax revenues were higher than expected so our forecast was off by 62%; things are better than we thought”.

An economist in the private sector who made the same kind of error the finance minister made in his forecast would certainly lose his job. He would be fired.

Under this bill, the minister would be required to table a report in the House of Commons. He would have to justify any error in his forecast. That would certainly be an improvement from what we have seen, from what the opposition parties have seen and from what Canadians have seen over the last five years. They are given wrong information, which is not democratic. Passing this bill would certainly be an improvement.

What is even more important, he would be required to inform the House of any changes to his accounting methods and to explain what impact these changes may have on his budget forecast or budget results.

The finance minister is the master of accounting tricks. He does not have his match anywhere, disregarding the practices and strict standards of accounting.

For instance, after signing an agreement with three Atlantic provinces to harmonize the GST with provincial taxes, he reported $941 million right away, in the 1995-96 fiscal year, as opposed to the year in which it would actually have been expended.

Recently, he did it again with the millennium fund. While the first millennium scholarships will not be handed out until the year 2000, the finance minister has already charged against the previous fiscal year an amount of $2.5 billion. He did the same thing with the innovation fund.

The minister was strongly criticized by the auditor general for taking such liberties with generally accepted accounting principles, which suddenly change when applied by the finance minister. He was strongly criticized by the Auditor General of Canada, who is the watchdog of public finances and is accountable only to parliament.

Do you know what the finance minister's response was? He said that they had been told by private corporations that it was all right. This is another affront to the institution of the auditor general.

The bill would require a stringent report by the Minister of Finance to the House of Commons, to parliament, on his changes in accounting, interpretations and justifications of the budget level.

I hope, therefore, that I will obtain the support of my colleagues, both those in opposition and those in government, and that bill will be votable next time.

[Budget Surplus, November 18th, 1998]

Mr. Speaker, the Minister of Finance is working on a good one: miniscule drops in the EI contribution rates. Then he will take off with most of the surplus and reduce taxes for the rich.

Does the Minister of Finance know that the ministers, the members and certain professionals do not pay into the employment insurance plan? Does he not find it shameful that the unemployed are being made to pay for the ministers' reductions in taxes?

[Budget Surplus, November 18th, 1998]

Mr. Speaker, there are always limits. Is the minister going to understand that the employment insurance surpluses belong to the unemployed who were denied benefits and to the contributors who overpaid?

I would like him to answer the following question: What does he want to do with the billions of dollars he has accumulated on the backs of the unemployed? Let him answer us today and not slip us a lump of coal on December 23 when the House is not sitting.

[Budget Surplus, November 17th, 1998]

Mr. Speaker, now that the minister is done saying things that make no sense, I am asking him what he has to say to the president of the Canadian Chamber of Commerce, who recognizes that there will be a surplus in excess of $10 billion by the end of the current fiscal year, who accuses the minister of playing with numbers, and who asks, on behalf of all Canadian entrepreneurs, that the Minister of Finance show a little more respect.

[Budget Surplus, November 17th, 1998]

Mr. Speaker, the chief economist for the Mouvement Desjardins predicted a $15 billion surplus by the end of the fiscal year, while this morning the Conference Board anticipated a surplus of $10 billion. These are the true figures.

For three years now, the Bloc Quebecois has accurately forecast the situation of our public finances. This year, the surplus will, in our estimation, reach $15 billion. We are proposing to allocate $7 billion to the employment insurance fund, $6 billion to health and $2 billion to tax reduction, for a total of $15 billion. This is our proposal.

What is this minister, who plays with numbers to hide the reality, proposing?

[Budget Surplus, November 16th, 1998]

Mr. Speaker, being 100% wrong one month is certainly the minimum in terms of skill.

If the minister wants to use part of the surplus for something other than debt reduction, he knows he can table a supplementary budget to increase, for example, health transfers.

So why does the minister not want to use part of his $10 billion surplus to increase health transfers, when all the provinces are asking him to do so, when he has the wherewithal and when he can do so by tabling a supplementary budget this week?

[Budget Surplus, November 16th, 1998]

Mr. Speaker, the latest financial review reveals a surplus of over $10 billion in the first half of the current fiscal year.

However, last month, the Minister of Finance was maintaining his harebrained prediction of zero budget surplus for 1998-99.

Will the minister confirm that by so shamelessly hiding the surpluses, his plan for them is to apply them all to the debt, since under accounting rules all unplanned surpluses must be applied to the debt?

[Harmonization Of The Goods And Services Tax, October 28th, 1998]

Mr. Speaker, the Prime Minister says he needs a consensus before he will budge. In St. Andrew's, all the premiers asked him to review his GST harmonization program, which unjustly deprives Quebec of $2 billion in compensation. Even Jean Charest thinks that Quebec was had.

If the Prime Minister is serious, why does he refuse to budge?