Tony Valeri

[Supply, March 15th, 1999]

Mr. Speaker, I am pleased to lead off the government's response to the Bloc's motion on the pan-American monetary union.

I am sure that the blatant irony of this motion is clear to most hon. members. We have a party that is dedicated to breaking up one of the world's truly blessed unions, Canada, and at the same time asks us to jump into bed with American monetary policy.

If we look at the real question and issues at stake here it quickly becomes clear why this motion deserves to be rejected. Would a monetary union with the United States or the rest of the hemisphere give us a better monetary policy? Would it be good for Canadian firms? Would it lead to higher living standards for Canadians? The answer to these questions is absolutely not.

Remember when in the 1960s Canada had a system of fixed exchange rates. However, this did not eliminate speculation against the value of the Canadian dollar. In fact, it in some cases led to currency misalignment. Eventually the fixed exchange rate regime was abandoned in the 1970s.

Many other countries adopted a system of fixed exchange rates after World War II. Like Canada, some of them chose to move to flexible exchange rates while others moved to make adjustments to their currency.

Today there is the Euro. That is the basis of this whole motion. The move of 11 European countries toward monetary union might seem applicable to this hemisphere but this is the sort of false apples and oranges comparison, or maybe I should say tourtiere and strudel, that falls apart the minute we look at it intelligently.

Consider the facts. The European project involves several countries with key members of a similar economic size and at a similar level of development. These countries have adopted a common currency administered by a common central bank with a board of 11 national directors.

In contrast, a pan-American monetary union would be dominated by one mega country, the United States. There would be the influence from another group of countries with records of sometime high cosmic inflation.

The bottom line is clear. In such a union, even if it were put into practice, it is doubtful that Canada would have a significant role to play in the formulation of North American or pan-American monetary policy.

This takes me to the underlying point. No matter how members try to phrase or disguise it, a monetary union actually amounts to fixed exchange rates which eliminate forever Canada's ability to conduct a flexible and independent monetary policy. This is no small or abstract sacrifice.

A flexible exchange rate regime has served Canada very well over the years, helping our economy adjust to important economic shocks and allowing our country to conduct an independent monetary policy.

Some might ask about the recent movements in the Canadian dollar. Do these movements not show that we would have been better off with a fixed exchange rate and a monetary policy under the control of others? Absolutely, definitely not.

These movements represent the natural response to international shocks. In fact, it is the currency fluctuation that has actually helped us to adjust to these shocks.

As Bank of Canada Governor Gordon Thiessen has explained on a number of occasions, the dollar weakened last year because Canada was being sideswiped by events beyond our borders. Foremost among these have been the Asian financial crises and more recently the development in Russia and Latin America.

Let us put this into context. Canada was certainly not the only country to be affected by these recent developments. Since the Asian crises began the currencies of other major commodity exporters such as Australia and New Zealand were affected even more.

Although Canada's dependence on commodity based exports has steadily declined, Canada remains a net exporter of primary commodities. Accordingly, the movements in commodity prices have had a significant impact on the Canadian economy. The U.S. on the other hand is a net importer of primary commodities. As a result Canada suffers income losses when commodity prices fall while the U.S. economy benefits. This is an important difference between Canada and the U.S.

The world prices of primary commodities have a major influence on the value of the Canadian dollar because the exchange rate adjusts to balance trade and capital flows in a flexible exchange rate system. When world commodity prices fall the Canadian dollar tends to depreciate against the U.S. dollar. This is truer of our relationship with the U.S. than other G-7 countries.

Over the past two years the ratio of export to import prices in Canada and the United States has moved in opposite directions. Our terms of trade declined by 6% while the U.S. terms of trade rose by 5%. In other words, we are receiving less attractive prices for the goods we sell abroad compared with the prices we pay for products we import while the U.S. enjoys the opposite situation.

There is an important corollary that we must remember. Canada's exchange rate flexibility has helped buffer the Canadian resource centre by limiting the damage from plunging global commodity prices. It has helped up to continue to sell goods around the world, especially in the U.S. market. The flexibility has helped more than hurt the aluminium industry in Quebec, Ontario metal mines, Alberta oil and B.C. forest companies. These industries would have suffered severely and more so if we had a fixed exchange rate, virtually pricing us out of any global sales at all.

The basic fact is flexible exchange rate arrangements are more suitable when countries tend to have different monetary policy objectives, different industrial structures and face different economic shocks. It is not the situation Canada faces as anyone who can look beyond their narrow provincial borders can say.

Let me again emphasize that a flexible exchange rate allows Canada to conduct independent monetary policy that puts Canada and Canadians first. The benefits of the greater monetary policy autonomy and macroeconomic stabilization made possible by flexible exchange rates are large. On the other hand, a fixed exchange rate would significantly curtail the autonomy of Canadian monetary authorities.

The main objective of monetary police with respect to the domestic economy is to preserve the value of money, to achieve and preserve a low and stable inflation rate. Anyone who remembers Canada of the mid-1970s and beyond understands that a high and variable inflation rate can be very costly for the economy and that aiming at low and stable inflation is the best contribution that monetary policy can make for the achievement of economic well-being.

A flexible exchange rate plays a crucial role in the operation of monetary policy in an open economy like Canada. We know that capital is highly mobile between Canada and the U.S. and it would be impossible for Canada to set an independent and effective monetary policy under a fixed exchange rate.

Independent monetary policy also allows us to better absorb what are called macroeconomic shocks. We are seeing right now that we have been able to escape the worst of last year's Asian crises. Although both the Canadian and the U.S. monetary authorities are currently dedicated to maintaining low inflation in their respective countries, it is a recognized fact that Canada has recently made more progress in this regard and we have been able to do so more explicitly about our longer term objective.

The record of many other countries in the hemisphere is by no means as good as Canada's. Would we want our monetary policy to be dictated by a board of governors that would include representatives who had run hyper inflations in the past? Fixing the exchange rate also sacrifices our ability to use monetary policy for short term economic stabilization. For Canada and the United States to be an optimum currency area they would have to face very similar economic shocks and be very integrated in terms of the movement of workers.

Here is something for the hon. member of the Bloc to think about. Although Canada and the United States are bound together in many ways, we actually face very different economic shocks. Some would argue that a fixed exchange rate would reduce transaction costs in international trade and capital flows. We have evidence that shows the opposite, that in fact the costs are very small compared to the benefits.

If the costs of currency volatility were so high, why has there been such a drastic jump in two way trade and direct investment between our two countries?

I do not think any of these attributes can be found in today's motion or in the political game playing that is going on here. If we pursued the suggestion of the Bloc, we would end up trying to tread water in tough seas, having thrown away the life preserver of our sovereign, independent, made in Canada monetary policy. It is not an option the government will ever accept on behalf of a vast majority of Canadians.

I encourage all members of the House to vote against the opposition motion.

[Income Tax Act, March 9th, 1999]

The member says it is official. According to the law that is in fact the case. Perhaps the hon. member is not making reference to the law, but what I am stating is in fact what the law states.

In contrast, tax assistance for charitable donations is greater for amounts in excess of $200 in order to encourage larger donations to charities. It is a policy decision and one that we feel is the correct one. Indeed in the case of very large donations tax credits may be claimed for donations up to 75% of a taxpayer's income in a given year. Tax credits may also be carried forward for future years should the 75% limit be exceeded.

The donations of small amounts to charities is not strongly motivated by the availability of tax assistance. Consequently the greatest effect of the proposal would be the increase of fiscal cost of tax assistance according to donations that would have been made in any case.

Charities themselves would receive little benefit. Under the existing tax policy the level of tax assistance accorded for most charitable donations results in roughly a 50:50 partnership between government and the private sector in support of charities.

The government, while adhering to and supporting the intent of the hon. member's bill, cannot support it. The current design of the charitable donations tax credit acts to encourage larger donations while recognizing the value of smaller donations. It is appropriate. The fiscal cost of the measures would be large, approximately $125 million per year, for what in fact would be of little effect on the level of charitable giving.

The greatest effect of the measure would be the increased tax assistance to donations that would have been given in any case. Consequently charities would receive little additional support and therefore I cannot support the bill.

[Income Tax Act, March 9th, 1999]

Madam Speaker, certainly the government recognizes the motivation for the hon. member's bill and fully supports the principle of offering generous tax assistance to charitable giving.

In fact the government has provided additional incentives for charitable giving in four of the last five federal budgets. Some of the measures the government has put forward include lowering the threshold for eligibility for the 29% level of tax credit to $200 from $250, raising the annual income limit for use of charitable donations to most charities from 20% when the government took office to 75%, and reducing the income inclusion rate for capital gains arising from the donation of appreciated publicly traded securities to 37.5%. These initiatives have been recent and certainly the government is monitoring the impact to see if further changes are required.

The member should also recognize that the differences in the treatment of political contributions and charitable donations reflect the different policy intents of the two measures.

The design of the federal political contribution tax credit reflects the desire to encourage greater grassroots involvement by all Canadians in the political process. It is for this reason that generous tax assistance is given to small political contributions, that tax assistance is reduced for incremental amounts to the point that the federal tax assistance is zero for amounts contributed to federal political parties in excess of the $1,150 per contributor per year.

[Federal-Provincial Fiscal Arrangements Act, March 9th, 1999]

Mr. Speaker, I know the hon. member indicated that I was smiling earlier. I was smiling because I could see in the passion the hon. member had in part of his speech his yearning to be back on the industry committee when we were talking about internal trade barriers among provinces. I had the opportunity to work with him on that.

In terms of his remarks on the equalization bill, he talks about the increased adjustments to Newfoundland and what happened. He knows that Ontario forms part of the five province standard and the increase in what is going on in Ontario really contributed to the adjustment to Newfoundland and other provinces.

The member talked about how the Reform Party would refocus the equalization system to Canada's poorest provinces. I have to ask the hon. member, which are Canada's poorest provinces? There are seven provinces today which are receiving equalization payments, the have not provinces. Which ones would he take off the list? Would it be Quebec, Manitoba, Saskatchewan?

The member said he would refocus the program on the poorest Canadian provinces. Some of them must not then be entitled to equalization payments according to how the hon. member described his Reform Party platform.

Then the member went on to say that Reform would also ensure that the poorest provinces would not have their equalization payments reduced under the Reform plan. In essence, all the adjustments that were made collectively have equalization payments going up to each and every have province.

Which would the hon. member take off the list? Which of the have not provinces would not receive equalization payments under the Reform Party platform?

[Federal-Provincial Fiscal Arrangements Act, March 9th, 1999]

Mr. Speaker, the hon. member indicated in her remarks that it was very complex topic and that the formula in the bill before us had some elements of complexity. I though I would take this opportunity to clarify a couple of things.

She made reference to Newfoundland and its ability to balance its budget. She felt that was politicization of the actual program. I want to clarify that equalization payments are made according to a formula. Every October the lookback takes place to see what has occurred not only in that province's economy but in the other standardized provinces. When we see what has happened in Ontario and compare what has happened in Ontario and how that increased the standards to what is happening in Newfoundland, we see an adjustment of the program. It is not only Newfoundland, it is other provinces.

If any provincial government decides to call an election sometime after October, I hope the member does not attribute that to politicization of the actual program.

She talked about British Columbia and the turmoil there. We know the Asian crisis is contributing to that. If British Columbia no longer has the ability to raise the kind of revenues it is raising today, it too would be eligible for equalization. Therefore this is a program that is based on formula and one that I think most Canadians support.

[Federal-Provincial Fiscal Arrangements Act, March 9th, 1999]

Mr. Speaker, it is with considerable pleasure that I rise to contribute to third reading deliberations on Bill C-65 which proposes to amend the Federal-Provincial Fiscal Arrangements Act.

As hon. members know, the legislation essentially involves two federal programs: the provincial personal income tax revenue guarantee program and the equalization program, each for an additional five years.

The major portion of the bill deals with the equalization program, a program that is really the fiscal cornerstone of Canadian federalism. Hon. members also know and are aware that the commitment to equalization payments is enshrined in the Constitution.

Payments under equalization go essentially to the heart of what it means to be Canadian. The payments provide provinces that are less well off with the resources they need to deliver reasonably comparable public services, including health care, to the their people without having to tax excessively.

Equalization has been a long tradition. It was established as a program in 1957 and has been continuously renewed and improved ever since.

The government's commitment to equalization is clearly evident in the fact that this program is one of the few to be exempted from the restraint measures that took place some five years ago.

For the next five years it is projected that the payments will be $5 billion higher, including increased payments due to the technical improvements worth an estimated $700 million over this same period. Further, last month's budget showed that payments would be even higher this year as well. Current year payments are expected to reach $10.7 billion and that is up $2.2 billion from the 1998 budget estimate.

It is clear that these transfers are indeed very significant. In 1998-99 they make up between 14% and 42% of total revenues of the recipient provinces. These payments are unconditional. This means that receiving provinces can use them as they wish. Experience has shown that they play a significant role in improving the quality of a wide array of public services.

Currently seven provinces benefit directly from equalization payments: Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, Quebec, Manitoba and Saskatchewan. There are also indirect benefits for all Canadians as well. We all benefit from knowing we live in a country where health care, education and basic public services are provided at essentially the same levels in all provinces.

In renewing the equalization program the bill proposes a package of improvements. These improvements aim to ensure the program continues to accurately measure the revenue raising ability of each province. The proposed modifications will be gradually phased in over the next five years so the impacts on provinces are smoothed over. In addition this will give federal and provincial governments time to plan for changes in the amounts of transfers.

What will make this happen? There are three components to the equalization renewal package proposed in the bill. First the equalization legislation renewal for five years provides a secure planning framework for receiving provinces.

Second, equalization ceiling and floor provisions are improved. The ceiling provision provides protection to the federal government against unexpected increases in equalization payments. In other words, this prevents changing economic circumstances from unaffordably driving equalization payments through the roof. The new ceiling will be set at $10 billion in 1999-2000 and will grow by the percentage change in gross domestic product thereafter. This change will ensure the program remains affordable and sustainable over the five year renewal period.

The floor provision is the other side of the coin. It provides protection to the provincial governments against unexpected large and sudden decreases in equalization payments. The new floor will be applied equally across all receiving provinces and will reduce fluctuations in floor protection that can result from application of the equalization formula during a period of economic change. What does it mean? It means more predictable protection for provincial governments.

The third change is that improvements will be made in the measurement of the ability of provinces to raise revenues on their own. The equalization formula measures the provincial revenue raising capacity by looking at over 30 different provincial taxes and comparing those results to a standard. It is on the basis of this formula driven exercise, and the formula is applied equally to all provinces, that the size of equalization transfers is calculated for each province.

We all know the taxation environment is not static. It changes and the changes proposed in the bill are needed to ensure that the equalization program reflects existing provincial tax opportunities and practices.

The changes in measurement which will be implemented through regulation relate to five tax bases that require significant improvements and other tax bases that require technical changes because of revised or new data. For example, changes are proposed for the measurement of the ability of provinces to raise sales tax. The new tax base will now reflect the taxing practices of those provinces that have moved to a value added tax, as well as those that have maintained retail sales tax systems.

Similarly, because of increased activity in related games of chance, the treatment of revenues that flow from them needs to be updated. Currently the equalization program only measures provincial ability to raise revenue from lottery ticket sales. The proposed changes will take into consideration the ability of provinces to raise revenue from casinos and video lottery terminals.

In addition a number of resources such as forest products and natural gas will be measured according to value rather than by volume as is currently the case.

It bears repeating that these modifications will happen gradually. The proposed tax base changes would come into effect in stages over the five year period. This renewal caps more than two years of consultation with the provinces. Considerable technical work was performed by both the federal and provincial officials and then that technical work was reviewed by ministers of finance at both the federal and provincial levels.

It is important to review the equalization program on a regular basis to assess accurately what change is needed. I submit to the House that this has been done. Bill C-65 was introduced in the House at the earliest opportunity. It is important to remember there are a number of other inputs like the Statistics Canada reports which contribute to the final outcome of this review. As is sometimes indicated by members of the opposition, the government did not drag its feet on the bill.

Passage of the bill continues a Canadian tradition of providing and showing that we all care deeply about the well-being of residents of provinces that are less well off than others. The renewal we are considering will provide substantial and reliable support. The legislation intends to see that we maintain the fairness with which the equalization program is delivered.

I cannot stress enough the importance of the legislation. It continues a Canadian tradition of generosity and fairness. I believe all members know this. The agreement, as all members know, expires March 31 and must pass in both the House and the Senate.

I am looking forward to the House expediting the passage of the legislation because I know that it is the kind of legislation all members of parliament can support.

[Supply, March 4th, 1999]

Mr. Speaker, I understand that the hon. member has a great interest in this particular issue. He is out there promoting his position.

I often take exception to the fact that the whole basis of the question and of today's motion is the belief that other members of other parties in this House do not support the work done by Canadians who choose to stay home to raise their families. That is fundamentally wrong. That is the basis I take exception to. To stand up in the House and point to another member, to a government, or to a party and say “You do not believe that the work that Canadians do in raising their children at home has any value”, I take exception to that. We have taken initiative in trying to assist those Canadians who choose to stay home.

The hon. member talks about the child tax benefit and says that it does not in effect assist those Canadians who decide to stay home or the one earner versus the two earner family. Speaking directly to the motion today perhaps after I give the response, Reform members might look at the child tax benefit in a different light.

The Canadian child tax benefit is targeted on the basis of family income. A one earner family receives substantially more money on average from the child tax benefit than a two earner family when the 1999 budget measures are implemented. If hon. members would take the time to do the analysis, they would find that the 1998 and 1999 budget is enhancing the tax position of one earner families versus two earner families.

I am not sure whether the hon. member across the way has taken the time to do that.

In the haste to get into this us against them, one earner versus two earners, they completely ignored the measures the government has taken to try to provide fairness in the tax system.

Again, is he fundamentally opposed to the progressivity in the tax system? Underlying the member's motion here this morning is opposition to that very principle.

The Reform Party, by putting forward this motion and the arguments I have heard so far, has never once mentioned or indicated to the House that it supports the progressivity in the tax system, that those who earn more money have certain obligations in terms of the tax system.

Could the hon. member across the way speak to that and say that his party supports the progressivity in the tax system?

[Supply, March 4th, 1999]

Mr. Speaker, I am very pleased to take this opportunity to respond to today's motion and reject the suggestion that the tax system is consciously and perversely unfair to one earner families with children. I recognize that the member for Calgary Southwest who moved this motion has sincere intentions but I submit that his logic does not stand up.

Simple comparisons like these do not tell the whole story or the true story. What causes the tax differentials between one earner and two earner couples is the application of two basic principles of our tax system: progressivity on the one hand and taxation that is consistently based on the income of the individual. Let us look at how the principles work.

Progressivity means that as individuals move up the income scale, they pay a larger share of their income in taxes. Is the Reform Party suggesting that we should tax someone who is earning $50,000 at the same rate as someone earning just $25,000? Should someone who is earning $1 million be taxed at the same rate as someone who is earning $10,000? That is patently unfair.

Individual taxation means that someone who goes to work outside the home pays taxes based solely on their individual earnings, not on the income of their spouse. That is only fair. It also means that individuals do not face increases or tax reductions when they choose to marry. That too is only fair.

If the Reform Party wants to eliminate the tax differentials between one earner and two earner couples, it has to be prepared to do away with these basic principles of our tax system.

Today's motion is not an appeal for equity. I submit it is a Trojan horse hiding its real agenda under the guise of family values. Does the opposition party object to progressive taxation, to the idea that more affluence must be accompanied by more obligations or by certain obligations? Why does the Reform Party not tell us up front that it wants the tax burden on lower income Canadians to be the same as the tax burden on higher income Canadians? That is what this motion leads to.

Do members of the Reform Party want a family based tax system? Then why do they not make it clear that what they want is for many women to be taxed at the higher tax rates of their husbands or vice versa? That is what this motion really does.

Does the Reform Party really believe that a husband and wife earning $20,000 and $30,000 respectively should together pay the same amount of tax as someone who earns $50,000? If this is what the Reform Party wants, it is essentially saying that every dollar that a spouse earns should be taxed at the 26% marginal rate.

On the other hand, Reform Party members stand up and pound on the table and say to cut taxes in half for everyone but not once do they mention that they would gut pensions, gut equalization or health care in order to achieve that sole objective of cutting taxes in half. How would the Reform Party party do it? The hon. member opposite talked about proposing an alternate budget, an alternate way of running the country and doing the finances of the country. The member fails to mention that the Reform Party in its proposal is also predicting surpluses in the $30 billion to $35 billion range.

The Reform Party bases its optimistic growth rates at 5.5% over the next three years. It is almost two times what the private sector consensus is for growth in nominal GDP, which is the underlying tax base.

When we talk about these types of motions, in the end the bottom line is that someone needs to pay for them. In order to do that we have to be able to plan effectively and ensure that our finances are in place in order to move forward on an effective and realistic plan.

The Reform members also assume in their plan that they want to reduce almost $9 billion in expenditures to existing programs to provide resources for new initiatives. Perhaps that is how they are going to cut the tax rates in half, by gutting programs to the tune of $9 billion or more.

Given the unrealistic surplus projection that they have put in their program, $30 billion to $35 billion over the next number of years, basing their revenue growth forecast on an average of 5.5% for the next three years, almost two times what the private sector consensus is, by gutting these other programs, cutting almost $9 billion, or more, we see what this motion is all about. It is all about gutting the programs that we have in place and jumping on this hobby horse under the guise of family values.

At the same time, I have no trouble whatsoever making it clear where this government stands and where I stand, not just as a member of parliament, but as a husband and a father and as a citizen of this country. I appreciate and I commend the hard work and dedication of Canadians who choose to stay home to raise their children. I commend them. And while I do that, I also support the underlying principles which form the basis of the tax system.

I am not standing here talking about my political ambitions, like members of the party opposite who under the guise of family values pound on the table. But they have another agenda which I think is way below what this House really wants to get into.

We stand for a tax system that is progressive. It is only fair that individuals should pay a bigger share of their income in taxes as their income rises. I think that is an underlying principle. I think that if the Reform Party is putting forward this motion, then essentially it is saying that it does not believe in that principle. Reform Party members do not believe in the progressivity of the tax system.

We stand for a system based on individual taxation. I do not believe that anyone in this House wants to penalize women who decide to enter the workforce.

The opposition may choose to see someone earning $50,000 as no different from a couple earning $20,000 and $30,000 a piece. But if we look at the situation fairly, rather than through this moral myopia, the fact is that the economic situations of these two families can often be very different. We have to recognize that. Recognizing that these differences exist is only fair and it is only what a responsible government should do and must do.

That takes me to the real bottom line for a responsible responsive government. It is finding genuine, effective and equitable ways to help those families and children in real jeopardy and need. The answer does not lie in the so-called discrimination against one earner families vis-à-vis dual income families. It actually does more to obscure the broader debate about tax fairness than it does to advance it.

The fact remains that some one earner families are better off than some two earner families and vice versa. This means that focusing on one earner versus two earner issues misses the point completely. It certainly does not make for a productive debate on options for making the tax system fairer and reducing the burden on low income Canadians. That is why as the fiscal situation improved we have taken concrete and increasingly broad action to help reduce the tax burden for all Canadians. But we have also made it a priority to target what we can do, the largest share of that relief, to those with low incomes.

The child tax benefit, which the party opposite voted against and does not think is of any value, has been increased by $2 billion in three successive budgets to provide increased financial assistance to families with children. Of the $2 billion, $1.7 billion was targeted to low income Canadians through the national child benefit supplement.

Our approach to taxation and to families is fair. It makes some sense. It is delivering relief to families that need it most, namely low income Canadians, especially those with children. The opposition may try to reduce difficult social issues to simplistic arguments of either/or, us against them, but I believe that the majority of Canadians see more clearly and more openly.

Some parents choose to both work; others have no choice. Some parents choose to have one spouse stay at home; again, others have no choice. Each have their special challenges and concerns. There is no tax system in the world that can give each and everyone of these individuals their own special treatment and privileges.

What a responsible government must do is identify basic fundamental principles and apply them universally, equitably and reasonably. That is what our national tax system tries to do. It applies the principles of progressivity and taxation of the individual. That is the fair way. It is the open way. I submit that it is the proper way.

It is in support of those values and in the sustaining of interests of all families and children that I have no hesitation whatsoever in urging the House to reject today's motion.

[The Budget, February 18th, 1999]

Madam Speaker, I listened intently to the comments made by the hon. member opposite. She continued to criticize and to chastise the federal government for investing and reinvesting in a shared responsibility in research.

I cannot help but point out my dismay at why the member would continue to criticize an investment in research which in fact would help Canadians and would help Quebeckers.

Researchers in Quebec have said after the budget that they welcome the moneys the government is reinvesting in research. It will help to improve the quality of life for Quebeckers and for Canadians. We have reinvestments in areas like telehealth and home care.

The member went further to criticize the prenatal nutrition program, a program where the federal government works with the provinces that works directly with the communities. That is working extremely well. If the hon. member has some criticisms or some way to improve that program, I would be willing to listen to her.

She talks about all this money being spent by the government and how there is no outcome. I want to point to one specific example in terms of the service delivery. We have done some research in service delivery to individuals who suffer from a thyroid condition and have been able to improve it and at the same time save money to reinvest in health care.

I do not understand why the hon. member wants to continue to treat Quebec in the way she wants to treat it. Why she does not accept that researchers in her own province are supportive of the additional money and want to continue to do good work to help Quebeckers and to help Canadians?

[The Budget, February 17th, 1999]

Madam Speaker, the two areas that I will address, because the member was up for quite a bit of time, are with respect to the G-7. He made reference to the accounting practices of the G-7. G-7 countries make use of what is called the financial requirements way of doing their books. We actually use the national accounts system which is a bit more stringent. In fact, if we moved to the way the G-7 looks at countries and the way they do books, our numbers as a country would look much better.

In terms of the health care issue, the member was taking exception to my comments about making the health care system perhaps a bit more transparent. What I was really making reference to was when a physician perhaps in Quebec or a physician in the maritimes or a physician out west may make an advance or a discovery in terms of service delivery, there is no system in place right now throughout the country where there is an exchange of this type of information.

When there is an exchange of this type of information we end up with a better quality of health care. I am not sure that the hon. member really would want to say he does not want to have Quebecers receive a better quality system of health care. That is the whole intent of the health care budget, that whether one lives in Quebec, out east or out west, one has an ability to receive quality health care.

There is no question that the delivery of health care is a provincial jurisdiction and that there is no intent by the federal government to invade provincial jurisdiction, because I know that is a big problem for the members opposite. What this health budget does is transfers $11.5 billion to provinces in order to deal with health care. But it also provides opportunity and framework for provinces and health care providers to communicate with each other so that they can provide greater efficiency in the health care system.

That is what it is all about. It is about Canadians regardless of what province they live in. Canadians want better service and this budget will help governments deliver it.