Mr. Speaker, I am pleased to rise in the House today to address the budget.
One thing that struck me yesterday, both in this House and outside—from what we could see and hear—is that Quebecers and Canadians no longer trust this government to manage public funds, absolutely not. There are a number of reasons for this, the main one being, of course, the ever bigger scandal at Human Resources Development Canada.
When this government gets its hands on public money, what it does with that money is far from being for the well-being of the general public. More specifically, as regards this budget, we can mention three major disappointments shared by many people.
First, there is no real tax relief this year. The government had promised to lower taxes. It even boasted about it, saying “Yes the tax burden of Canadians and Quebecers will be reduced”. Well, it is not the case this year.
Second, the transfers to the provinces are ridiculously low compared to the needs that the provinces must meet year after year.
Finally, some claim that this government's heart is in the right place. Nothing could be further from the truth, because there is absolutely nothing in this budget for the poor and the unemployed.
I will discuss each of these points separately.
I could talk for hours about these issues. Unfortunately, we have very little time. Yet, we could level many criticisms at this budget.
Everyone knows the priorities of Quebecers and Canadians are health care and education. We know. We hear it talked about everywhere. So what is there in this budget for health and education? Pittance.
They talk of an increase of $2.5 billion over four years, when the provinces were unanimously calling for $4.2 billion this year alone, increasing to $4.4 billion next year and $4.6 billion the following year, that is, indexed for the following years. And what will they get? A mere $2.5 billion over four years.
The Minister of Finance could have done a lot better with the surpluses he has. He talked of $95 billion over five years, when we know very well that he will have $137 billion available over five years. The Minister of Finance is playing squirrel again.
We also learn that the $2.5 billion allocated to the one time payment for health and education will be charged to 1999-2000. Another game of the hand is quicker than the eye to make the surpluses the government has in hand disappear.
The minister is keeping his old, less than transparent management practices. They are camouflaging figures to make us believe that Ottawa does not have the means to give back to the provinces, and Quebec especially, what it stole from them for its election coffers.
There is worse to come. Quebecers, who are watching us, and I know there are many of them, realize that Quebec is the real loser in this political announcement, despite what my Liberal predecessor was saying. After being forced to cut in health care, education and social assistance, Quebec will bear over 50% of the total cuts to the Canada social transfer. It represents 25% of the population but it has to absorb 50% of the cuts. That is what federalism means for Quebec.
By including tax points, the Minister of Finance is saying that the total Canada social transfer between 1999 and 2004 will be $156 billion. I think the time is long overdue to lay the tax point myth to rest.
The increase to $156 billion is due solely to the value of tax points which, for the same five-year period, will increase from $14.9 billion to $17.2 billion. These tax points are not transfers. They are revenues that belong, and have long belonged, to the provinces and to Quebec.
According to the federal government, the Canada social transfer constitutes a transfer of cash and tax points. But the Canada social transfer does not consist of cash transfers alone, because the federal government turned over the tax points a good thirty years ago, before I was born. Furthermore, the federal government has no say in how these tax points are allocated. So always wanting to include tax points in the Canada social transfer is completely ridiculous and completely misleading.
What does the Minister of Finance also say? He says “Canada Health and Social Transfer payments will be increased by $2.5 billion. This budget announces an additional $2.5 billion in CHST support, providing an added $1 billion in 2000-01 and $500 million a year in each of the following three years. This means that the cash component of the CHST will reach $15.5 billion in each of the next four years”.
Cash transfers will not be raised $2.5 billion, because they will be put in trust, temporarily at least, until the enabling legislation is passed. This has not happened because of the decision by the Bloc Quebecois, in response to the demand of the people of Quebec, to ensure that Bill C-20 and all other bills introduced by this government are, if not blocked, at least slowed down.
Returning to this trust, we do not know what this is. Does this mean that the social union is going to apply from now on to cash social transfers? Is this to prepare us a bit in advance for the “coast to coast” programs that are the dream of several of those ministers and members across the way, who love to spend money? All this is yet to be determined? We do not know yet?
Returning to the cuts, they are a great little horror story for Quebec. Between 1994 and 2003, the provinces will have undergone $33 billion in cuts under the Liberal administration. In fact, even if the ceiling for the social transfer is raised from $12.5 billion to $15.5 billion in coming years, Quebec's share will drop from $3.9 billion in 1999-2000 to $3.6 billion in 2002-03.
What is Ottawa trying to do? Ottawa wants the provinces to struggle, their heads barely above water, while it is floating nicely along amidst a huge surplus. This is one concrete example of the extreme federalism against which Yves Michaud spoke out not so long ago. They want the provinces to be nothing more than big municipalities, with Ottawa calling the shots and the provinces carrying them out. What they are in the process of doing with the social union is to turn Canada into a kind of de facto unitary state.
This may not be what the texts say, but in fact, with the enormous surpluses Ottawa is reaping and the fact that it is keeping the heads of the provinces barely above the water line, federalism is less and less a fact. Increasingly, we are heading toward a de facto unitarian government.
As for the transfer of funds with the Canada social transfer, the provinces' situation is not improving. The cuts by the federal government have hurt very badly, especially in Quebec where the per capita shortfall in 1999-00 is $225 as opposed to $121 for Ontario and an average of $138 for Canada.
Once again, Quebec is being had. What is even worse is that the ministers and Liberal members are saying “Yes, go on, hurt us, we like that. Go after Quebec, take more money away from it than from the other provinces. Take more, we like that, we are going to stand up on our flippers and applaud like seals for the Minister of Finance, who comes from Quebec, and does it more harm than he does to all the other provinces”. This is unacceptable, it must be made known and condemned.
The annual shortfall for Quebec is $1.7 billion. The effect is dramatic. It means a shortfall of $875 million for health care, $375 million for education and $450 million for social assistance. What does it mean specifically? An additional $875 million for health care would mean the creation of over 3,000 jobs for doctors and 5,000 jobs for nurses. Why do we not have them? Because this government decided to cut health care and education.
It is interesting to compare Ontario and Quebec. Since it took office, in 1993, this government did not merely make cuts to cash transfers. It also unilaterally—they like that word, across the way—decided to change its method of calculation, at the expense of Quebec.
The Liberals respond to accusations of having sabotaged health care by saying that all the provinces suffered cuts, this in a fair manner, and that it is the fault of the sovereignist government in Quebec City if things are not going well in our province.
In fact—and everyone knows that, as I found out when I recently travelled across Canada—all the provinces suffered cuts. The only common denominator between all the provinces is the federal cuts.
As for the alleged fairness of these cuts, the federal government put in place, as early as in the 1996 budget, a mechanism “to reduce current disparities in per capita entitlement between the provinces by half by 2002-2003”.
The mechanism in question would have increased the per capita weighting from 10% in 1998-1999 to 50% in 2002-2003. But, in the 1999 budget, without a word of warning to Quebec, the federal government proposed “to completely eliminate these disparities in three years, that is by the year 2002”. This means that Quebec will absorb 50% of the cuts, when it only accounts for 25% of the country's population. This is the price to pay for federalism; this is the price to pay for not having achieved sovereignty.
The Liberal member who spoke before me talked about tax reductions. He stressed non-indexation, the fact that the government is again indexing tax tables. Let us be clear—indexing is not a real tax cut. With indexing, the taxpayer does not pay more, but he does not pay less; the effect is neutral.
We are most certainly in agreement with deindexing; we have been pushing for it for five years and it is time the government listened to us. In fact, I think that if it listened to us more often, things would improve.
That having been said, it could have done more. It could have reindexed the tax tables, as well as making significant tax cuts, which it decided not to do. Even though it is raking in surplus after surplus, this year it consciously decided not to give the public tax cuts.
Since 1993 when this government took office, the non-indexing of tax tables has accounted for between approximately $12 billion and $17 billion. Surely, with the surpluses it has, it could have relinquished a small portion of this large amount, but it made a conscious decision not to do so.
It proudly announces that it has eliminated the 5% surtax this year for incomes under $85,000 and that it will eliminate it for all incomes over the next five years, by 2004. The complete elimination of the 5% surtax in 2004 will result in a tax cut of approximately $5,600 for the 61,000 taxpayers earning over $250,000. Meanwhile, it will be less than $100 for middle income earners, who make up the majority of those listening. Is this fairness? Is this justice? No way.
The third point I wanted to raise is the lack of any improvement to the employment insurance program for the least advantaged members of society. Yet the demands of the Bloc Quebecois were very clear. Our party made itself the spokesperson of a consensus that exists, not just within Quebec, but in the rest of Canada as well.
The Bloc Quebecois called for five main points. These were: that the employment insurance fund no longer be used as a tax on employment; that the administration of the employment insurance fund be depoliticized and removed from government control, or in other words made into an independent fund; that the employment insurance fund conform to the objectives of the legislation, which is to ensure the unemployed of a decent and fair income during temporary periods without work; that priority be given to returning to contributors the benefits to which they are entitled; that it retain its role as an anticyclical measure.
Yet this budget contains nothing for the unemployed, which means that, in the aftermath of this budget, six out of ten jobless people will still not qualify for employment insurance.
In addition, this budget contains some measures that are specifically anti-Quebec. I shall mention four of them. The first one relates to the shipbuilding industry.
The federal taxation system has just taken back the assistance Quebec has given to this industry in decline, assistance that the Government of Quebec had been intelligent enough to put into place. I come from the Quebec City region, where the Davie shipyard is important for employment. Yet the federal government is doing nothing, worse than nothing, for it is taking back part of the assistance the Government of Quebec had given to an industry that has unfortunately been in decline because of the federal government.
Second, the budget tabled yesterday in the House of Commons will include retroactive taxation of the super-deduction for R and D credits announced less than a year ago by the Government of Quebec. For about 12 years now, Ontario has benefited from such a super deduction. Less than 10 months ago, Quebec set up a similar program and guess what happened? The federal government pulled the rug out from under the province by ensuring that the super deduction cannot benefit people working in research and development in Quebec.
Third, there is the deduction for interest on student loans. We are well aware that Quebec made a conscious choice to have the lowest tuition fees in North America, because we feel this is the best way to ensure the greatest possible access to post-secondary education. That approach has worked. However, because Quebec students are paying lower tuition fees and are therefore less indebted, they are getting less from the federal government. This is unfair.
Quebec adopted a very progressive and modern social measure to promote access to university, and what did the federal government do? It made sure that students from the rest of Canada can benefit a lot more than Quebec students from the deduction for interest on student loans. Quebecers are supporting students twice, first by paying taxes so that tuition fees are the lowest in North America and, second, by helping students in the other provinces, because they made a conscious decision to have lower tuition fees.
The fourth anti-Quebec measure in this budget concerns the deductions for daycare. Less is paid to Quebec families, because they pay less in daycare costs since the Government of Quebec established a $5 daycare plan.
Quebecers are being penalized once again for creating an innovative program, praised by many and the envy of all across Canada.
There are four anti-Quebec measures in this budget.
You are signalling me, Mr. Speaker, that my time is almost up, and I want just to respond to the Liberal member who spoke before me. He said that Quebec received more than its share in equalization payments and so on. If so, it is because it does not get its fair share in active spending, in structuring spending.
Let us talk about all of this. Quebec got an average of 21% of federal purchases of goods and services, 15% of current transfers to business, 18% of federal government investment between 1992 and 1997. In 1998, this translated specifically into 19.5% of jobs in the public service and 19.1% of jobs in the armed forces, whereas Quebec represents 25% of the population.
Quebec's annual shortfall in federal purchases of goods and services, the difference between Quebec's population size and the share of federal spending the province receives, is $1.2 billion. In the case of current transfers to business, the shortfall is $339 million and, for investments, the figure is $219 million a year.
I conclude on this. If the federal government gave Quebec its fair share of job creating spending, that is, $1.7 billion, over 30,000 jobs could be created in Quebec, which would mean a .7% drop in the unemployment rate. The unfair distribution of spending could explain as much as 50% of the difference between the unemployment rate in Quebec and in the rest of Canada.
That is the cost of not having sovereignty.
