Tony Valeri

[Special Import Measures Act, November 26th, 1998]

Mr. Speaker, I would like to also speak on Motion No. 1.

The WTO requires that countries avoid publicizing the receipt of complaints until an investigation is actually launched. As well when we look at what Canadian industry actually does, it also does not publicize its complaint. From that perspective one can generally avoid third party submissions. In effect it is the industry that in some sense controls whether third party submissions actually appear.

Revenue Canada considers relevant third party submissions that it may receive consistent with its WTO obligations. That is quite explicit in the anti-dumping and subsidy agreements. It is required to examine the accuracy and adequacy of information that may be contained in a complaint prior to initiating an investigation. By following this process it can be advantageous in some respects to the complainants who can actually rectify any possible deficiency that one may have in the actual complaint they are putting forward.

The department does not solicit such third party submissions before the initiation of the investigation.

For the reasons I have indicated, the government does not support Motion No. 1. I have heard from the other parties. They have indicated that they do support it. It is for the reasons that I have previously indicated that it is not something that occurs generally because of the process being followed.

[Parliamentary Privilege, November 25th, 1998]

Madam Speaker, when the government first took office in 1993 it was faced with a $42 billion deficit and certainly the overwhelming Canadian priority was to balance the books.

But even in that climate all four of this government's previous budgets undertook targeted tax reductions to achieve social and economic objectives by providing assistance to education, children, charities and the disabled.

Now that the fiscal situation has improved we have begun a process of tax relief and our first priority has been to provide tax relief to those who can least afford to pay, low and middle income Canadians.

The hon. member cites the example of a $32,000 single wage earner family. In the 1998 budget we increased the basic exemption that essentially put more money in low income Canadians' hands, that is money they can receive on a tax free basis. We eliminated the general federal surtax for Canadians earning up to about $50,000. We have also taken important measures to assist low income families with children. In particular, we realize the challenge we face is certainly one that requires the assistance and the partnership of the provinces.

The hon. member does not feel that there is any benefit or any worth to the national child benefit program that was put in place. I tend to disagree and I am sure that there are thousands of Canadians who also disagree with that.

I think it is fair to say that the initial phase of our program was to balance the budget. The second phase is to continue to build on the 1998 budget which targeted tax relief to those Canadians who can least afford to pay and who have the least amount of earnings. We have begun the process. We are committed to continue that tax relief.

We have provided $7 billion in tax relief over three years in the last budget. The Prime Minister, the finance minister and this government are certainly committed to putting more money into those individuals' hands.

[Balanced Budget Act, November 24th, 1998]

I have said often in the House that the debate about employment insurance is not whether to reduce employment insurance premiums but by how much. This government has clearly demonstrated over the years that there is a commitment to reduce employment insurance premiums.

While the hon. member continues to provide us with rhetoric what I am trying to do is lay out the facts for Canadians as they are.

The government has already pursued a deficit reduction strategy that was deliberate, responsible and successful. Now that the government's finances are on track we have entered a new era of fiscal responsibility that includes debt reduction.

Much like we eliminated the deficit, we have committed to continue to keep the debt to GDP ratio on a downward track. If Canadians look at our record and look at history, this government since 1993 when faced with a $42 billion deficit committed to eliminate it. We have.

We have committed now to keep paying down the debt and to ensure the debt to GDP ratio is on a downward track. We will continue to so and will not waver from this course.

[Balanced Budget Act, November 24th, 1998]

Mr. Speaker, besides the rhetoric I will actually speak on the bill before us. Essentially, beyond anything else the key to ensuring that the federal budget remains in balance is a strong political commitment to maintain fiscal health.

Past history and experience has shown that legislation itself is not sufficient to deliver balanced budgets. The previous government tried to follow that approach without success. The Spending Control Act, 1992, put legislated limits on total program spending with an end goal of eliminating the deficit. We all know how successful that approach was.

The government has balanced the budget as a result of the resolve of all Canadians to do so. In 1993-94 we were facing a difficult situation. The federal deficit stood at a record $42 billion. We said at that time that we would bring down the deficit steadily each and every year until it was eliminated, and we did. In 1997-98 Canada recorded a $3.5 billion surplus, the first surplus since 1969-70. It is an historic accomplishment for Canadians.

Balancing the budget required difficult decisions and many sacrifices but it is an achievement that all Canadians can be proud of and one that will have permanent benefits.

We did not need balanced budget legislation to do it. We accomplished it with a strategy that has worked. We set two year rolling fiscal targets and have consistently achieved and surpassed them. For budget making purposes we used economic assumptions that were less optimistic than the private sector and we built into our fiscal plans a $3 billion contingency reserve. It provides an extra measure of back up against adverse errors in the economic planning assumptions.

We will continue to use this approach. It worked so well in the past and it ensured that the budgets will remain in balance for the future.

Instead of debating legislation on how to ensure a balanced budget we prefer to focus the government's resources on the measures needed to strengthen Canada's economy and Canadian society.

The government has a balanced plan to address the challenges we will face in the future. Despite our fiscal success, the debt burden is still too high by historical and international standards and we need to reduce it.

We have a debt repayment plan. We are committed to ensuring that the debt to GDP ratio continues on a permanent downward track. In 1997-98 the debt to GDP ratio fell to 66.9% from 70.3% in 1996-97, a 3.4 percentage point decline.

It is the largest single year decline in the debt to GDP ratio since 1956-57.

As well, we continue to invest in the highest priorities of Canadians. Clearly health care is at the top of the list for all Canadians. The Prime Minister has said in the past that the government will invest more of our resources in the years ahead to reinforce our public health care system.

The final part of our plan involves tax reduction. Initially as it became affordable we were able to provide targeted tax relief where the need was the greatest, tax relief for students, for charities, for persons with disabilities and for children of working parents with low incomes.

In the 1998 budget we started a process of general tax relief, reducing tax rates for 90% of taxpayers and providing $7 billion in tax relief over three years.

We will build on these measures as we can afford to and we will continue to do so in a measured and responsible way.

Clearly there is no need for this bill. It would allow deficits and we know Canadians want governments to live within their means, just like they do. It is a bill that says to Canadians let's run a little deficit this year and we will make up for it later. I do not think so and Canadians do not think so.

The hon. member brought up the issue of credibility of the forecasts. Eight years ago Tory finance ministers were accused of using inflated economic predictions to mask huge deficits. Now we are being accused of being too cautious. I would rather be called too cautious rather than reckless if it meant we were protecting Canadians' victory over the deficit.

In 1998 the consensus forecast for GDP growth was 3.5% when the budget was introduced. Today the consensus as forecast has fallen to less than 3% and the outlook for next year has fallen from 2.9% to only 2%.

So while the hon. member argues about how the finance minister meets these targets and makes accusations that the finance minister is not being transparent, it is the first time in the history of Canadian governments that we have a budget building process like we have today.

On the average of Canadian economic forecasters with respect to the GDP, the average of what Canadian forecasters say the interest rates will be as we move forward, it is not government or the departments that are setting these forecasts but the private sector, and we are making use of all that expertise as we build these budgets.

For the first time we are saying governments should set a target and in setting that target it should be the very least we could do, always striving to do better.

Rather than debating an issue about legislation to balance budgets, I would submit to the hon. member that it is the political commitment that is required and that is very important. Past efforts have shown quite clearly this government is committed to balancing the budget. we are committed to no deficits. We are committed to keeping the debt to GDP ratio on a downward track. We are committed to continual investing in Canadian priorities.

The finance committee, as it travelled across the country on prebudget consultations, clearly heard that health care was at the top of the list of priorities. This government is committed to reducing income taxes for Canadians.

[Supply, November 19th, 1998]

Mr. Speaker, again and again we hear the rhetoric. The hon. member talks about jurisdiction.

I wish for once, instead of worrying about jurisdiction, they would be concerned about the impact on Quebecers and Canadians. They are so focused on jurisdiction. What this is all about is a reinvestment in health care, a reinvestment in Canadian priorities.

I would like to set the facts straight. Let us be clear. The decrease in transfer payments accounts for less than 3% of Quebec's revenues. The cuts that Quebec has imposed on the municipalities account for close to 6% or almost double the amount of the federal cuts.

Quebec in its 1997-98 estimates announced its intention to cut health care and education spending by 3.2% and 5.8% while at the same time indicating that other spending has increased by 4%.

While the hon. member might be arguing that health care is a priority, obviously as shown in Tuesday's debate health care is not the priority of the provincial government. I do not know why the hon. member is up here arguing for more money for Quebec.

[Supply, November 19th, 1998]

Mr. Speaker, I would be saying the same thing to the premiers. I asked the hon. member whether she was advocating that the provinces give back the tax points.

The premiers in their press release are also focusing on the cash transfers. The reality is that transfers are made up of total entitlements: cash and tax points.

I ask the hon. member again, what is her position, not the Reform Party's, but her own?

[Supply, November 19th, 1998]

Mr. Speaker, it is always interesting to hear from the Reform Party. Depending on what day it is, some days it is tax cuts, EI and pay down debts and other days it is health care. It just depends I guess on which way the wind is blowing.

The first point I want to make concerns the reference to the 33% cut. The hon. member should come clean. If she is going to stick with a 33% cut, then in essence what she is saying is that the tax points that form part of the total entitlements to the provinces have no value.

Is the Reform Party now advocating that the provinces should in fact give back that tax room that was given to them by the federal government since in the eyes of the Reform Party it has no value and then the federal government would give that back in cash? I am not sure, but when we talk about transfers to the provinces, the tax points have to be included. They form part of that total entitlement, it is tax points in cash.

I want to illustrate that point. The hon. member is from British Columbia. No one has denied that cuts were made. Cuts had to be made. We were facing a $42 billion deficit. We cut $1.5 billion from the CHST cash transfers between 1993-94 and 1998-99 for British Columbia. Tax points grew by $1.2 billion. When that is offset, the actual cut that British Columbia experienced was some $300 million between 1993-94 and 1998-99.

If the hon. member does not want to recognize the tax points, I ask her to stand up in this House and advocate that the federal government take that room back.

[Supply, November 19th, 1998]

Mr. Speaker, I guess the hon. member did not have an opportunity to listen to what I said, even though he said he did.

What I said in my intervention was that the $10.4 billion is there. If he reads the Fiscal Monitor , which goes out to Canadians, he would see the figure.

The part he did not listen to, though, was that the government does receive between 25% and 40% of corporate returns the first half of the year and that private sector economists are saying that $10.4 billion surplus there today will not be there at the year end. They see a deterioration of that number because of the second half of the year. There are private sector economists like Robert Normand from Quebec who are pessimistic about 1999, indicating that the GDP is probably going to be on a bit of a downward track.

We are not going to hit a wall or anything. All we are saying is that the economy will experience a bit of a slowdown because of what is going on around the world. No one is denying it. I do not think the hon. member can say that I in any way indicated that health care was not a priority of all Canadians and that the government, through the prebudget consultation, is hearing from Canadians that health care is a priority. The government has not said that there would be no additional resources to health care. But I think it is responsible of a government to wait until there are the hard numbers on resources before making these types of decisions.

We spent the last 28 years and more in deficits. We were in a situation in 1993 of a $42 billion deficit. Canadians clearly do not want to enter that era again. The argument we are putting forward is that it is foolhardy to Canadians that we make an initial investment of $2 billion today, in fact immediately was the amendment, based on a mid-term number that may not hold up by the end of the year.

It is okay for opposition parties to make those statements, but government cannot be irresponsible, as I suggest the hon. member is being.

[Supply, November 19th, 1998]

Mr. Speaker, on the surface today the opposition motion calling for an immediate $2 billion boost in federal transfers to the provinces for health care is certainly both timely and constructive. It is timely and useful because the government is right now engaged in its annual pre-budget consultation, a process spearheaded by the finance committee.

It is clear that the issue of health care will be a top priority in the upcoming budget. We welcome advice on the design and amount that this support for health care should take. But what can seem like good intentions does not necessarily guarantee good policy.

Good intentions when they ignore the basic realities and constraints can often lead somewhere very unpleasant, and that is the problem with today's motion. To justify their call to add billions of dollars to federal transfers with an initial jump of $2 billion, the opposition cites a mid-year figure showing a federal fiscal surplus of $10.4 billion. The logic seems clear. The opposition would have Canadians believe that the government is awash in extra funds, so why not open the purse strings right now.

I think we need to be clear. Good policy demands looking beyond the narrow now to tomorrow and the day after. Good government cannot afford to ignore real economic risks in the pursuit of election style spending promises. That is the reason why our government cannot and will not support this motion. It would involve making dramatic spending commitments based on superficial numbers at a time when the global economy faces significant risks and uncertainty and Canada cannot break away from the global economy and ignore the impact it may have on governments and their fiscal outlook in the months ahead.

I welcome the opportunity to address the key issue of the supposed surplus this year. But before I do I want to make clear something about which there is no question and no debate. Health care is at the top of the list for Canadians in every region of the country. It is at the core of how we define ourselves as a national community and it is one of fairness and compassion.

That is clearly why, as the Prime Minister has said, the government will invest more of our resources in the years ahead to reinforce our public health care system. That is to my mind an absolute and unequivocal commitment.

But we also have an absolute and unequivocal commitment to good fiscal stewardship. We will not risk putting Canadians back into the cycle of deficits and debt that put our health care system and our entire social safety net into jeopardy in the first place. That is why in making decisions on further support for health care we will make sure that Canadian priorities are addressed with prudence, not just passion. In other words, we will take the sort of effective long term action that can be sustained year in and year out and not just based on a potential short term windfall.

This takes me right to the issue of the $10 billion mid-year surplus and to the criticism which is implicit in this motion today, that the federal government should not be so cautious about making spending commitments.

One of the reasons our government came to office and was returned last year was that Canadians had seen what happens when government relies on rosy forecasts and wishful thinking. The result was the $42 billion deficit that we inherited and the second largest debt burden in the G-7. We recognized that we had to apply caution to budget planning for a very good reason, so that we could restore confidence in the ability of the government to manage the country's books. That is why we set the two year rolling targets, so that the public could keep our feet to the fire.

As important, we used economic assumptions that were much more prudent than the average of private sector forecasts. This is reflected in a fundamental fact, that with Canada's high debt burden we could not simply rely on assumptions that had only a 50:50 chance of being right. If we were wrong it was the Canadian taxpayer and the Canadian social safety net that would bear the burden and feel the pain.

Now after years of efforts and sacrifice by Canadians to clean up the mess, and despite the fact that our debt burden is still high, there are critics who want people to believe the government should be less careful with the nation's finances. They refer to recent numbers as evidence that the government is being overly cautious and potentially hiding large amounts of money.

Today's motion is a case in point. The hon. member is trumpeting the fact that the results for April through September of this year have been quite strong, with a cumulative surplus to date of $10.4 billion. His implication is clear. Whatever happens in the coming months, he wants us to believe there will obviously be a substantial pile of funds at year end that should have been drawn on now to boost health care. It is easy to jump to the conclusion if we are not responsible for the results. But for a government it is both dangerous and misleading to do so.

First, given the recent downward revisions to the Canadian economic outlook as a result of the global economic situation, there is a real risk of a significant deterioration in the fiscal situation. We have already seen the preliminary indications of the impact of slower economic growth on government revenues. Since June we have had only one month in which the surplus was larger than that recorded a year earlier. The weakness in the economy could easily reverse the gains that we have made to date.

Second, the hon. member does not seem to realize that the government receives between 25% and 40% of corporate income taxes in February and March. That is the settlement period for large corporations. There are some real implications for this year's ultimate fiscal situation. It means that the full impact of slower growth in corporate profits will not be evident until the end of the fiscal year.

Third, the income tax cuts announced in the 1998 budget just started to come into effect in July. This will reduce personal income taxes by $1 billion this year alone and by $2.3 billion next year. In other words, the first half's surplus involves a mixture of apples and oranges when it comes to the full year revenues.

Finally, spending measures announced in the 1998 budget for this fiscal year are still being put in place. That means they have not shown up yet.

All these considerations explain why, at the time of the finance minister's October economic and fiscal update, already showing a surplus of $8 billion for the period of April to August, that led to private sector forecasters such as the Royal Bank, CIBC and Nesbitt Burns to revise down their expectations for this year's surplus to about $5 billion.

There is even a more dangerous flaw in a motion that takes a six month surplus and extrapolates this into the longer term spending capability. Fiscal results are for a single month or a quarter or for a year. But spending like the CHST continues year after year. A $2 billion increase now means providing that additional $2 billion next year. In other words, whatever the final outcome for the current fiscal year, the 1999 budget must be based on the fiscal situation that will prevail in 1999-2000 and beyond. New spending programs and tax changes, both of which by their very nature are a permanent expense, can only financed if an ongoing fiscal dividend of sufficient size is available.

One of the vital skills of good government and effective leadership is to expect the unexpected. In today's volatile world economic environment, large differences between a government's original forecast and final outcome for a particular year are not unusual or unique. For example, the United States February 1996 budget originally projected a deficit of $196 billion U.S. for 1997-98. By last February the government was projecting a $10 billion deficit U.S. Both projections fell far short of the final result, a surplus of $70 billion U.S. by the close of the fiscal year.

At the time of our last budget many criticized our government for too being prudent. But the dramatic downward revision in the private sector forecasts since then clearly illustrates why we must stick to our plan.

We are not going to let Canadians return to the deficit house of horrors, not after having balanced the budget for the first time in 28 years. Fiscal prudence is not something we embrace when times are tough and throw out the window at the first sign that our income may being going up. It is a principle that has to be pursued all the time.

There is no doubt there is a need to further support health care in Canada. That need is real. We will make that support a priority. We have said that before. But we will do it in a way and in the amounts that the health care system in Canada can count on. That is why I urge the House to reject today's motion, not because it means rejecting new support for health care but because it means showing Canadians that the support for the health care system we all cherish must be real, reasonable and reliable in difficult times as well as in times of prosperity.

[Employment Insurance, November 6th, 1998]

Mr. Speaker, I guess we should also look at the bigger picture. The unemployment rate announced this morning was 8.1%. The job grouth pace for the first 10 months is outpacing the first 10 months of last year. We have numbers that are improving. Canadians are back to work and they are full time jobs.

While the hon. member wants to continue to talk about this issue to advance his own political perspective, we are working for Canadians.