Réal Ménard

[Budget Implementation Act, 1995, March 31st, 1995]

Mr. Speaker, I thank the parliamentary secretary for his question. Obviously, it is quite clear to me how we should go about balancing the books. Those of us on this side of the House are convinced of the need to implement the principle of subsidiarity, whereby the mandate to deliver a service should go to the level of government in the best position to do so. The problem with Canada, and, with all due respect, the problem with the government's logic, is that all that is being offered is an observation. The observation is made that we have a debt of $600 billion, but no questions are asked about the institutional structure that led up to this debt.

Let us not forget that the federal government used to have a department of urban affairs and a department of recreation, and that is why we have the debt we do today. It is because of an imbalance that allows Ottawa to interfere in areas of jurisdiction for which it has no mandate. This is the spending power system. Unfortunately, the federalism we are seeing leaves much to be desired. This is not to say that federalism could not be interesting in theory, but for it to work in the Canadian context, it must be centralized. And for it to be centralized, interference in the affairs of the provinces becomes necessary.

My hon. colleague would be interested to know that before the Department of Health even gets around to delivering a service, a billion dollars has been set aside by the Minister of Finance for its operating expenses. Does my hon. colleague share my concern, my disbelief that Health Canada has more employees than the provincial departments of health? This is not what we should be seeing when it is not even the federal government's mandate.

The best way to reduce the debt, and I do not know whether my colleague will agree with us, is to undertake a political reorganization with the goal of establishing an association between two nations, two autonomous governments, who will obviously have economic dealings with each other where interests dictate, because we know that nations must put interests ahead of feelings. I think that the best way for Canada to reduce the debt is through an extensive political reorganization.

[Budget Implementation Act, 1995, March 31st, 1995]

Mr. Speaker, I am pleased to speak on Bill C-76. For the benefit of those who are watching us at home, let me repeat that this bill deals with budget measures, notably the important issue of transfer payments to the provinces.

I would like to remind them that, when we talk about transfers to the provinces, for this past year at least, we are in fact referring to three main sets of programs. We are referring to three categories of transfers, namely those under established programs financing, which the federal government has reduced by $21 billion for 1995-96, under the equalization program, which the government has reduced by $8.87 billion, and, finally, under the Canada Assistance Plan, which the government has reduced by $7.95 billion.

It is important to remember that transfer payments to the provinces are a matter of particular importance in a federal system, since, in a federal system, the relationship between the federal government and the provinces is absolutely crucial. Whenever financial considerations are involved, we must bear in mind that a federal system is a system made up or based on three components. In any federal system, first of all, you have two main levels of government: a central government and the so-called subordinate administrations.

Depending on the particular system, these lower levels are called provinces, or landers, or cantons, but where there is a federal system, there are at least two levels of government, each of which is supposed to have sovereign authority over every areas of jurisdiction prescribed in the constitution. In the Canadian Constitution, these areas are listed in section 91. Section 91 lists the powers of the central government and section 92, the provincial areas of jurisdiction.

Finally, the last characteristic of federalism is the constitution, which is designed to delineate the respective powers of the two levels of government. Why do I feel the need to give these elements of historical background and political definition? Because, if the Canadian federal system were harmonious and responsive to the provinces, a system in which the jurisdictions established under the Canadian Constitution were respected, we would certainly not be passing or debating a bill like Bill C-76.

Why am I saying that? Because, in a federal system with two levels of government, where each level has specific responsibilities, financial equilibrium is understandably a matter of great importance. We can appreciate that, when one level of government decides unilaterally, without consulting the provinces, as this government is doing, to cutback transfer payments to the provinces, this is designed to have a destabilizing effect. We must keep in mind-and we will have an opportunity to say it again during the various debates to come-that, for all practical purposes, the federal government plans to use this bill to cut transfers to the provinces by $7 billion.

Let us recall the three programs through which funds are transferred. First, there is the Established Programs Financing for which the federal government plans to set aside $21 billion. As you know, Mr. Speaker, the Established Programs Financing in place since 1977, is the government vehicle for financing health care and post-secondary education. Of course, we know

full well that, under the 1867 Constitution Act, these sectors do not come under federal jurisdiction. Yet, over time, they have interfered in these areas of jurisdiction. So the first vehicle is Established Programs Financing.

The second vehicle is very well-known because, for a very long time, the champions of Canadian federalism told us that an original feature of the system was equalization, for which the federal government plans to set aside close to $9 billion. Equalization was born shortly after World War II. We must keep in mind that this transfer system was aimed at giving all Canadians from Newfoundland to British Columbia access to the same range of services. Equalization saw the light of day because Canada is an impossible country, a country of regional disparities.

Because the provinces do not have the same ability to collect taxes, because they do not have access to the same resources, nor the same tax base, we decided to develop a redistribution mechanism so that funds would be redistributed from wealthier provinces with access to a broader tax base to poorer provinces.

As you know, Mr. Speaker, the equalization formula is extremely complex, involving some 40 factors, so that as we speak, since 1989, in fact, the beneficiaries of equalization have been Quebec, the Maritimes, Manitoba and Saskatchewan.

Again, to make it clear to those who our listening, there is a third transfer mechanism, namely the Canada Assistance Plan, which was established in 1966 and which is the solution found by the federal government to get involved in the financing of social assistance. Under the Constitution, as you know, the federal government has no business in the financing of social assistance programs in Canada; yet, it finances about 50 per cent, or half of the welfare costs of the provinces.

Why do I point this out? It is, of course, because this bill seeks to unilaterally deprive the provinces of some $7 billion.

Why did we end up with transfer mechanisms such as the established programs financing, equalization and the Canada Assistance Plan? It is because there was an imbalance between the tax resources of the federal government and the provinces. That imbalance must be viewed in an historical context. After the first and the second world war, the Federal government took advantage of the exceptional crisis situations generated by these conflicts to move into direct and indirect taxation.

In the fifties, the imbalance became very obvious to the provinces, which were considered somewhat like large municipalities. Consequently, some mechanisms had to be devised to transfer the wealth. These mechanisms are the three to which I referred earlier.

The federal government was urged to spread the wealth and therefore decided to finance sectors which did not fall under its jurisdiction. This created a situation whereby the provinces would provide services to their population with budgets allocated by the federal government. Again, it is worrisome and even catastrophic to see that the federal government now intends to unilaterally cut $7 billion in the transfers to the provinces.

Do you think that the federal government consulted the provinces to make sure that this measure would cause the least amount of prejudice? Absolutely not. The provinces found out, when the Minister of Finance tabled his budget last February, that there would be a cutback of $7 billion, that would break down as follows: in 1996-97, $2.5 billion would be cut from transfers to the provinces; and in 1997-98, something like $4.5 billion. That is the scenario we are given in Bill C-76.

If we consider Bill C-76 and, more specifically, its impact on Quebec, we realize that Quebec will have to absorb $650 million in forgone revenue for 1996-97 and $1.2 billion for 1997-98.

Even more alarming is the fact that the federal government is intervening in areas over which it has no jurisdiction. This intervention, which has continued to this day, has a long history. The provinces have, to a certain extent, remained dependent on the federal government for these transfers which were used to help develop health care and education services.

There are not many examples of federalism left in a continental country with a low population density and most of its population concentrated along the U.S. border. All of a sudden, because the federal government is in trouble, because this federal government is an impossible government, the government, with obvious contempt for federal-provincial diplomacy and oblivious to the impact that these cuts may have on transfers to the provinces and specific services provided to users, decides to cut $7 billion.

The federal government, centralist as always, has gone even further. It says: There will no more established programs financing or Canada Assistance Plan. Instead, there will be a new program called the Canada social transfer.

However, we do not know what criteria will be applied to redistribution of the amounts the CST will contain. Our position is that the Minister of Human Resources Development and the provinces will have to consider the criteria for redistribution of these funds, without necessarily being bound by an agreement.

The official opposition believes-and as you know, the official opposition's predictions tend to be very accurate-that the Minister of Finance, the hon. member for LaSalle-Émard, a Montreal member, may wish to put on the table a redistribution rule that might severely penalize Quebec. We think that redistribution of wealth might be based on population.

As several speakers have said in the House, the Minister of Finance, who has systematically refused to exclude the possibility of dividing the Canada social transfer envelope on the basis of population, may well decide that Quebec will have to absorb 41.7 per cent of the cuts in transfer payments to all provinces in Canada in 1997-98, which would mean that in 1997-98, if that is the basis on which the government intends to operate, Quebec will have to absorb not $1.2 billion but $1.9 billion in forgone revenue. And that is why the Quebec government has reacted very negatively to Bill C-76.

What is most absurd in this situation is that the federal government intervenes in the area of health. Here again, any outsider looking in the Constitution Act of 1867 or the one of 1982, to find the authority, legitimacy or jurisdiction behind the government's involvement in the field of health would be searching in vain.

But everyone knows that there is a Department of National Health in Ottawa, Health Canada, which requires about $1 billion just in order to operate, to pay the salaries of the public servants there. This figure does not include the money allocated by the Minister of Finance in his budget to run its various programs.

According to an article published last month in a learned publication there were more public servants at Health Canada than in the individual provincial departments of health.

This is not the least of the contradictions. There is a two tier structure, with the result that, even before any thought is given to transferring funds to the provinces so they can actually provide health care services to the public, funds must go to a structure that requires $1 billion simply to operate. This is the same sort of absurdity we find in the fight against AIDS.

The federal government is trying to establish a continent-wide health policy, which is impossible, because the level of administration in the best position to be effective and provide the finest and most useful service to Canadians, cannot be the government farthest removed from them. And the government farthest removed from them is the government in Ottawa.

The federal government's attempt to set up a national health policy, which aims necessarily at meeting the needs of communities from Newfoundland to British Columbia, is just as absurd as what it is doing in the fight against AIDS.

What happens when the government tries to intervene in the health field? Let us have a look at Canada's strategy in the fight against AIDS. In the early 1980s, with the appearance of this most terrible disease, which will cruelly mark the turn of the century, the government decided it should act.

Instead of using its tax leverage to mandate the provinces and transferring additional resources to them so they could be the real agents and fight AIDS intelligently, the federal government established a national strategy.

It is an extremely loose national strategy, which really lacks substance and is extremely inefficient, since we all well know that the governments of Newfouland, of Quebec, of Ontario, of Saskatchewan would have been better suited than the federal government to lead the campaign, given their expertise in the area of palliative care and health care.

The result is that the government has to maintain an extremely cumbersome administration and that situations arise like the one that arose last year. The federal government voted in its AIDS strategy, and allocated it a budget of $42 million which was not spent. The federal government, because it is the government level furthest removed from the people and because it has nothing to do with health care, is unable to deliver services in the field, and the concrete result of this is that it is not able to spend the allocated budgets approved by Parliament.

I see that this surprises government members, but it is nevertheless the case. I will conclude by saying that last year, of the $42 million that the government allocated for the AIDS campaign, only $34 million were spent, and not in the most useful ways. This is why people have gotten the impression that the federal government is not the most efficient level of government.

[Fight Against Aids, March 24th, 1995]

Mr. Speaker, I want to be clear: the number of AIDS patients in Canada will have doubled by the year 2000. Last year, the minister had a budget of $40 million. Since she spent only $35 million, the other $5 million was allowed to lapse. This is criminal, considering the number of AIDS victims.

My question is: What will the minister do to spend all the moneys allocated to her?

[Fight Against Aids, March 24th, 1995]

Mr. Speaker, my question is for the Minister of Health.

It costs an average of $100,000 to treat each Canadian suffering from AIDS. Every year, 2,000 new cases are diagnosed and the number of AIDS patients will have doubled by the year 2000.

Meanwhile, the government is penny-pinching by reducing the already inadequate budgets allocated to the National AIDS Strategy, whose objectives precisely include the prevention of this terrible disease.

Considering that an amount of $5 million was not spent and allowed to lapse last year, will the minister pledge to use all the moneys allocated to fight this disease, and will she display a greater sense of responsibility?

[Borrowing Authority Act, 1995-96, March 24th, 1995]

Mr. Speaker, I can only applaud the clairvoyance of the hon. member for Shefford who has an uncanny knack for predicting the future.

What the hon. member is saying is that in the eighties, when we went through the first referendum, scare tactics were used. Remember that at the time, the federal debt was $75 billion. They told us: If you leave the Canadian federation, you will end up with an economy that is not viable.

So we stayed. We stayed, and now we have a debt of $600 billion. What the hon. member is saying is that Quebec has everything it needs, together with its own economic infrastructures, to administer its own finances.

[Borrowing Authority Act, 1995-96, March 24th, 1995]

Mr. Speaker, some team, some question, would you agree? The opposition is in fine fettle.

That being said, I think the hon. member mentioned that the government had the perfect vehicle for setting up a defence conversion program. That vehicle is referred to in English as the DIPP.

The DIPP is the Defence Industry Productivity Program. In the eighties the program had a budget of about $300 million. The Liberals have emasculated the program to the point that next year, its budget will be only $21 million. Actually, the Federal Office of Regional Development, the Department of Industry and the Montreal Urban Community have set up a joint task force which is to make specific recommendations on defence conversion. With the modest sum of $25 million, it would have been possible to conduct market surveys and help businesses

that are involved in defence production to go the route of conversion.

In conclusion, I will say that, in the end, defence conversion is a matter of political will. Today we have the tools to make this happen. However, this government is acting in a very hypocritical way, and speaking out of both sides of its mouth.

Do not despair, the opposition will be there to remind the government of its promises, and we will keep up the pressure on this issue.

[Borrowing Authority Act, 1995-96, March 24th, 1995]

Mr. Speaker, you will have noted our colleague's high degree of social concern from his question and I want to thank him for it.

I think that, if we were living in a normal country, a country committed to showing greater solidarity with the workers, the government would have taken this money and used it to implement full employment policies. What is dishonest about the government's decision is that it gives the impression that cutting UI will reduce this government's debt, when in fact, since 1990, the government has nothing to do with UI, except for administration that it does not pay for naturally.

I think we should consider, and urge a number of organized bodies such as the labour movement, with which I understand you are rather closely associated, to consider legal action to have the courts overturn the government's decision to withdraw from the financing of UI while at the same time continuing to deprive workers of services to which they are entitled.

I think that, all together, in this House, we should try to figure out if these shameful and unacceptable measures could not be invalidated through legal action.

[Borrowing Authority Act, 1995-96, March 24th, 1995]

Mr. Speaker, it is always a pleasure to rise when you are in the Chair. I believe I have 20 minutes. You will understand that I want to make sure that this is indeed the case.

I am pleased to participate in the debate on the borrowing authority and, consequently, on the budget. This is the second Liberal budget and we must keep in mind the truly disastrous economic context which affects the unemployed. Once again, the Minister of Finance did not provide anything for the 1.4 million jobless. This budget is particularly unfair to Quebec, primarily because no concrete decentralization measures are proposed. There is no indication of a willingness, on the part of the federal government, to transfer to the provinces fields of jurisdiction which, in many cases, the provinces would be better able to look after.

In the case of Quebec, there is of course the issue of manpower training. As you know, there is a very strong consensus in Quebec, which includes chambers of commerce, unions, as well as the Quebec government. They all agree that Quebec would be better served if its government looked after manpower training which, as you know, is one of the links between social and education policies.

Yet, there is nothing in the budget that leads us to think that the federal government wants to fulfill the commitments it made earlier. As the hon. member for Saint-Hyacinthe-Bagot said repeatedly, this budget is unfair. It is unfair because nothing is done about family trusts. In this issue, the government acted somewhat like Star Trek, in the sense that it announced a measure, but "beamed it up" or rather beamed it forward to some time in the future.

Indeed, it was announced in the budget that the rules governing family trusts would be reviewed; however, the changes will take effect just before the year 2000. What is a family trust? It is a despicable scheme which legally allows a number of wealthy people to avoid paying taxes by using a truly outrageous provision. Yet, nothing is provided in this budget to tackle the problem.

It is also an unfair budget-this has been pointed out repeatedly but it does not hurt to say it again-since farmers in Quebec will lose $32 million, especially dairy producers, a sector which has undergone major consolidation at the instigation of the various governments we have had in Quebec in the past ten years. It is an unfair budget because farmers and dairy producers will lose $32 million, while western producers will receive an additional $2.9 billion.

One of the worst aspects of this budget, and this is one of the areas where the Reform Party and the Bloc Quebecois agree, is that it fails to provide anything in the way of tax reform. Take the banking sector. When we look at who benefited most from the 1982 recession and the subsequent recession, it is clear that the banking sector finished first. The big chartered banks in this country with their many branches across the country have made absolutely outrageous profits during the past few years. And they are the only ones that managed to emerge unscathed from the first and second recession.

Mr. Speaker, do you think the government would have had the guts and the social conscience to tax the profits and capital gains of the banks? Of course not. And that is probably the true measure of this government. A modest tax of $100 million is peanuts. Just look at the banks' profits in 1993-94 alone: $1.2 billion. That being said, we are convinced that the government could have asked the chartered banks in this country to contribute more.

What does the government do? It asks for a piddling $100 million, when the Royal Bank alone, the open-minded bank, made a profit of around $1.2 billion. The government could have asked the banks to contribute more, but it did not. Of course, one does realize there is a definite connection between the financing of certain political parties, and I am not naming any names but I am looking at them, and this timid treatment of the banks.

Another issue that gives cause for concern and which people are worried about, and no wonder, is transfer payments to the provinces.

The issue of transfers to the provinces, as you know, Mr. Speaker, is absolutely central, because it has to do with the balance of relations between the central government and the provinces. It is therefore an absolutely vital issue. Three characteristics are identified with respect to federalism, Canadian federalism, which some of your pages are studying in political science courses across the country.

It is a two level form of government, usually with a central government and a lower level of government, which could be provinces or townships, but there are two levels of government.

It is a system with a constitution providing that the governments are autonomous in all jurisdictions under their authority. A court, in this case the Supreme Court, acts as arbiter in these matters. Why am I saying all this? Because provincial transfers have been and remain the central government's traditional method of destabilizing provincial public finances.

How do you think individual provincial ministers of finance can manage to plan and establish coherent economic development policies, if the central government destabilizes public finances in every province by reducing transfers out of hand, unilaterally and without consultation? Allow me to give you some specific figures in this regard. The federal government will cut $2.5 billion in transfers to the provinces in 1996-97 and $4.5 billion in 1997-98.

These are not insignificant amounts and this will have a major impact on the provinces' ability to plan. In the case of Quebec, transfers will be cut by $700 million in the coming year. This means that Quebec will shoulder 27.1 per cent of the total cuts, whereas it has 24 per cent of the population. Things will not improve in 1997-98, because it will then have to shoulder $1.88 billion in cuts to transfer payments.

What is shocking in all this, and this is where the connection must be made, is that the present cuts to the provinces will obviously be on top of what has been cut since 1982. If you add up all the cuts in transfers to the provinces from 1982 to 1998, you will discover, hon. colleagues, that the provinces will be facing a shortfall of $48 billion. Therefore, Mr. Speaker, you will understand that this way of doing things goes totally against harmony in the federal system.

In any case, and the Government of Quebec is not the one saying so, two premiers from the west who, after reading the Martin budget, declared that it was the death knell for Canada, because there is no way for the provinces to develop coherent economic development policies if the federal government keeps on shamelessly cutting transfer payments. As we all well know, transfer payments are not something theoretical, not just rhetoric; they directly affect the provinces' ability to provide health and education services, and these services are at the heart of our citizens' quality of life.

However, I will focus my speech today on the pitiful trick played on the unemployed. The history annals of Canadian federalism for the early 1990s to the year 2000 will tell the story of the slow and despicable dismantling of the unemployment insurance system. Please remember that unemployment insurance is the only social "insurance" program offered by the Canadian government, "insurance" as opposed to assistance, that is, meaning that workers and their employers share the cost of the unemployment insurance system.

As you all know, in 1990, the Canadian government went as far as completely stopping its contributions to the unemployment insurance fund. This means that, as I speak, Canada is the only western country with an unemployment insurance system where the government does not contribute to its UI fund. This means that virtually all of the benefits paid out to workers are paid for by the work force and their employers.

We must acknowledge the fact that Canadian workers are in mourning. They have been since 1990, because from that point on Conservative and Liberal governments alike have derived a sadistic pleasure from dismantling the unemployment insurance system.

I would just like to remind you of what governments past have done, without, of course, forgetting the Chrétien government, which, led by the Minister of Finance, has disgracefully ganged up on the unemployed.

It all began in 1990 with Minister MacDougall, who dealt the first blow, who made the first attack on the unemployment insurance program. You will recall that in 1990 when the government decided that it would no longer contribute to the unemployment insurance fund, Mrs. MacDougall proposed an increase in the minimum qualifying period and a reduction in the maximum benefit period, with the overall result that, for the first time, a government reduced by 10 per cent its costs of financing the unemployment insurance program.

Not content with this initial assault on the program, in 1993 Mr. Valcourt-whom the voters, thankfully, did not re-elect-came back to the charge and lowered benefits from 60 to 57 per cent of insurable earnings. Remember that in the 1970s, benefits were at 70 per cent of insurable earnings. Now they have dropped to 57 per cent and are often below the poverty level. This is a disgrace.

What does this mean financially? Cuts in benefits of $850 million in 1993 and $1.6 billion the year after. The Liberals are obviously no better than their predecessors. And this is why the Bloc Quebecois has always said that, red or blue in Ottawa, the future is black without the Bloc. What has the Martin budget done for unemployed Canadians in 1994? Increased the minimum qualifying period and reduced the maximum benefit period. And we are not talking about 57 per cent coverage, but about 55 per cent. In 95 per cent of cases, we can expect claimants to get 57 per cent of insurable earnings. This is the kind of social solidarity that this government has decided to have with the unemployed. Did you think that the finance minister was going to stop there? Certainly not. The budget that has just been tabled talks about cutting benefits by $750 million in 1996 and 1.5 billion the following year.

In the early 1940s, UI was intended as a generous program on which all the provinces agreed. It was the first amendment to the Canadian Constitution. Look at what happened to unemployment insurance under the repeated attacks of the Tories and the Liberals. UI has become an exclusion program. In fact, the UI account, which posted a $3 billion deficit in the 1990s, will show a $5 billion surplus at the end of the fiscal year.

One would think that this government would have done the right thing, that it would have shown enough solidarity to use this $5 billion to create and maintain jobs for the unemployed. No, this government shamelessly attacked the unemployed. It will arrange for a surplus to be deposited in a deficit fighting reserve fund, although funding of the UI account does not have anything to do with the government's ongoing operations. The Liberal government has appropriated the Tories' shameful legacy.

Allow me to make a final point. We would have expected the Liberals, in accordance with the red book, to put forward defence industry conversion measures. As we know, 10,000 jobs are threatened in the coming days. That is no secret; it is a well-known fact. Both the aerospace industry and the provinces demand defence conversion measures. This demand is not exclusive to Quebec. What conversion measures did the government take? It did not put forward any concrete measure.

It is unable to plan for the future and use its leverage to help workers. There is no vision. This is an attack against the unemployed. That is why we have no qualms about presenting the golden raspberry award to the Minister of Finance for all he has done.

[Human Rights, March 21st, 1995]

Mr. Speaker, does the Prime Minister not realize that by keeping quiet and postponing his decision from month to month, he is showing his inability to silence the dissensions within his caucus and he is also indicating to the public that, as far as he is concerned, the respect of human rights and freedoms is far from being a priority?

[Human Rights, March 21st, 1995]

Mr. Speaker, in its report tabled today, the Canadian Human Rights Commission denounces the government's inability to amend the Canadian Human Rights Act so as to prohibit discrimination based on sexual orientation. In its report, the commission calls this is a fundamental abdication of our responsibilities regarding human rights.

Considering that eight Canadian provinces out of ten already prohibit discrimination based on sexual orientation and that the courts have confirmed that such discrimination was not compatible with the Canadian charter of rights and freedoms, I ask the Prime Minister: why does he refuse to act immediately, since he has made a commitment to Canadians and Quebecers?