Monte Solberg

[Taxation, February 9th, 1999]

Mr. Speaker, this year taxes will be going up $2.4 billion. We know that for sure. The finance department has been floating figures that—

[Taxation, February 9th, 1999]

Mr. Speaker, notice how the finance minister did not answer the question. He kind of ran away from the question.

Why in the world is this finance minister running around billing himself as a tax cutter when Canadians' taxes continue to go ever upward, $38 billion higher than they were five years ago? There have been 38 tax hikes since this minister came to power. How does he square the two? How does he tell Canadians he is a tax cutter when all we get are cuts to health care? How does he do it?

[Taxation, February 9th, 1999]

Mr. Speaker, under this finance minister Canadians are paying more and getting less, and that is a fact. Since 1993 Canadians have seen their taxes rise by $38 billion.

This year the finance minister will take $38 billion more out of their pockets than five years ago. At the same time savings accounts for Canadians have diminished by $38 billion.

How can this finance minister bill himself as a tax cutter when he is ripping $38 billion out of people's personal savings and their pocketbooks every year?

[Federal-Provincial Fiscal Arrangements Act, February 8th, 1999]

Mr. Speaker, we can make the same argument about equalization itself. We could say that there are pockets of Alberta where the economy is not perking along like in Calgary and therefore they should have equalization. I do not buy the member's argument.

Previous to 1971 when the reforms were made to employment insurance on the basis of regionally extended benefits previous we had a purer type of insurance program, a program that looked at individual needs and not so much at the needs of regions. Insurance should be something that is based on individual needs, not on regional needs. When we have that we see political manipulation of scarce economic resources. We see politicians using the EI fund just like we saw in the recent raid on the EI fund. We see politicians using huge piles of money for their own political ends.

In this case it has been extraordinarily damaging to workers and small businesses that paid into the fund. They have seen what happens when governments are given control over huge piles of money like has happened through employment insurance.

I reject the member's arguments. I think they are false. I would encourage him to consider that basing employment insurance on a personal insurance basis probably makes a lot more sense for everybody involved.

[Federal-Provincial Fiscal Arrangements Act, February 8th, 1999]

Mr. Speaker, I thank the member for her good question. We have made it very clear we would not cut CBC radio. We understand that there are remote communities which do not have access to private broadcasters. We have specifically said CBC television.

With respect to the land claims issue, we do not argue necessarily with the idea of having the government engage in treaty negotiations. It would be nice if it could actually come to some kind of agreement. After spending $91 million and not reaching any agreements I would come to question whether or not that is a very good use of taxpayers money.

The final point I would make on treaty negotiations is what is really important is that there be finality. When a deal is reached we do not want to see it reopened again which is what we are seeing now with Treaty 8 in northern Alberta. We think that is a huge mistake. We would like to see these things settled and settled once and for all. We think we owe that not only to natives but to Canadian taxpayers in general.

[Federal-Provincial Fiscal Arrangements Act, February 8th, 1999]

Mr. Speaker, what did Labradorians and Newfoundlanders say to him when he cut $20 billion out of health care? I would like to know that.

The Reform Party of course would not cut spending for health care and social programs. We would increase it. We have made that pretty clear. We would increase it by $2.5 billion.

My friend across the way has asked a question and I think he deserves a serious answer.

In the last election campaign we laid out exactly where we would cut about $9 billion in government spending. We sent it out to about 15 million households across Canada. I invite my friend to revisit that, but I will touch on some of the highlights again.

As we said then, we would make cuts to the CBC. We think that CBC television should be a private broadcaster. We think it is time, in a day and age when there are all kinds of private broadcasters providing services across the country, to privatize the CBC. We made that very clear.

We would make cuts to the Department of Canadian Heritage. We think that all of these grants for special interest groups are ridiculous. We think it is ridiculous to spend $100,000 on a dumb blonde joke book. I am sure even my friends across the way would question whether that was a wise expenditure.

We would cut all the pork barrel spending that goes on in regional development. It is a very unfortunate joke on Canadian taxpayers when they are paying for all kinds of patronage deals that benefit friends of the Liberal Party. We think that is wrong. We would cut the bureaucracy of Indian affairs. We have made that very clear.

Those are some of the areas where we would cut. If my friend would simply go back and review Fresh Start, he would see that we lay out the entire menu for him. He could go through it and he could use it to guide him when he wonders again where these cuts would come from.

The final point I would make is that it is interesting to me at a time when the government has cut so drastically in health care, and even with the increases it will still be about $4 billion shy of where it was, that it has still managed to ratchet up overall spending pretty significantly, by about $4.5 billion this year alone.

I have a question for the member across the way. Why is the government spending so much more on frivolous programs like millennium grants and things like that? If the hon. member cares so much about health care, why is it increasing in areas like that when it is cutting the heart out of Canadian health care?

[Federal-Provincial Fiscal Arrangements Act, February 8th, 1999]

My friend opposite, the junior finance minister, says it was. I disagree. I think that Canadians balanced it. The finance minister balanced the budget on the backs of taxpayers. He balanced it on the backs of people who are sitting in hallways in hospitals waiting for beds because he took about $20 billion out of spending for health care. He took billions out of essential programs but left lots of money for his slush fund. He left lots of money for ACOA. He left lots of money for the departments that funded the Prime Minister's hotel deal. We need to put an end to all that.

Let me talk about some specific ways in which we can benefit not only the people in Atlantic Canada and Quebec, but the people in provinces across the country.

Reformers believe that we could deliver about $26 billion in tax relief over the next three years if we hold the line on spending at $104.5 billion.

Already the government is headed for a budget this year of around $109 billion. It will probably be $4 or $4.5 billion over budget. It was $3 billion over budget last year. People probably have cause to be pretty concerned about the government falling into its old habits of spending like crazy.

If the government holds the line on spending at $104.5 billion, that frees up a lot of money. It frees up about $17 billion which could be used for debt reduction and about $26 billion which could be used for tax relief.

When that is broken down, it means about $342 million a year, or somewhere in that range, in tax relief for Newfoundland every year. As competent as my friend opposite thinks he is, I can guarantee that the people of Newfoundland would much rather have that money in their own pockets than give it to him to spend for them.

I would argue that the people of Atlantic Canada who would get a total of $1.5 billion would much rather have that money in their pockets than allow hon. members opposite to spend it for them.

We believe that the people of Ontario, who would get $10 billion in tax relief, would much rather have that money in their pockets than allow bureaucrats and politicians to spend it for them.

We argue that people in British Columbia, who could sorely use a tax break right now, would love to have billions in tax relief. It would mean a lot to them, especially as they toil under the socialist government which has done so much damage to that economy.

Our argument is very simple. We think that the money would be better used in the hands of individual taxpayers, investors and homemakers, rather than leaving it in the hands of bureaucrats and politicians who so often misuse it.

Let me touch on some of the things that we would do to help Canadians. We would eliminate the 3% and 5% surtaxes. We would fully index the tax system again so that we would stop this automatic tax increase of a billion dollars a year.

We would cut capital gains inclusion rates in half so that when people make an investment and help the economy they are not penalized heavily just because their investment may happen to keep up with inflation.

We have situations now where people invest in the economy. Their investment keeps up with inflation. All of a sudden they want to sell it, only to find that they have not made a cent in real terms but that they have to pay all kinds of tax. That is absolutely ridiculous.

We want to raise personal and spousal allowances to $7,900.

We want the child care exemption to be given to all families, no matter how they look after their children. We want to have a refundable child care credit so that people on low incomes would actually get a cheque in the mail if they were not paying any tax at all.

We want the rate on the employment insurance fund to come to an end. Instead of giving back a paltry 15% of the money that has been taken, money that was overpaid to the EI fund, we want to give it all back. We want to give back to Canadians the entire overpayment because we believe it is their money in the first place.

Those are some of the things we want to do. We want to drop the three rates down to two rates. If we add up all of those things it comes to $26 billion in tax relief. It would mean that a lot of money would go into people's pockets.

Let me give one example as I close. For the average family of four making $30,000, it would mean $4,660 in their pocket every year. That is what tax relief would do for Canadians.

My friend from Newfoundland would argue that his government could spend it better. I think that family would argue with that. It is time to embrace a new approach instead of continuing with the things that have failed for the last generation.

[Federal-Provincial Fiscal Arrangements Act, February 8th, 1999]

Mr. Speaker, it is my pleasure to address Bill C-65.

Unfortunately the Reform Party cannot support this bill. As my colleague from Calgary Southeast said and earlier my leader from Calgary Southwest said today, Reform Party does support the concept of equalization but we do think that the program as it is structured now not only is wasteful, vague and ill-defined but actually does some damage. We would like to see a different approach taken.

Before I get into that I simply must respond to something my colleague across the way said. He said that we have one tier health care in Canada today.

Let me inform my friend across the way that about 30% of health care in Canada today is funded by private individuals. Maybe he did not know that. Maybe he did not know that only 9% is funded by the federal government now. It used to be 50%, but the federal government did its disappearing act which it chronically does when the going gets tough, and now the provinces have been left holding the bag.

Of course, the member and his government provided the latest example of that when they dumped about $20 billion in spending cuts on the provinces, including his own native Newfoundland which really could hardly afford to bear that kind of loss. My friend across the way should explain to his constituents if he cares so deeply for social programs, how it is that he let his own government eviscerate health care in Newfoundland like he did. I think he has a lot of explaining to do.

I will get into some of the specifics of this bill. The Reform Party has problems with Bill C-65 for a number of reasons. I should explain first of all what this is. This is an equalization bill that seeks to extend the current equalization agreement with some tinkering for another five years. It means about $8.5 billion in expenditures or somewhere in that range per year, in other words about $42 billion over the next five years.

That is a tremendous amount of money. It amounts to about 8% of the federal government's budget every single year. Yet are we having a major task force look into this? Are we having a big discussion about this? No. We had three days notice that we were going to debate it today. Probably not too many days beyond today it will be pushed through by this government because that is the way it does business.

I would suggest that this is one of the most important pieces of legislation that can be brought before this House. There is almost universal agreement that the legislation, and I guess it is in the Constitution now, the whole formula and idea of equalization needs radical reform. There is hardly an economist in the country who would argue that the current design is good.

I want to start by pointing out that it is fraught with opportunity for political manipulation. I will mention this to my friend who just spoke, because he comes from a riding that was formerly held by the current premier of Newfoundland.

Not very long ago in January the premier of Newfoundland announced to everybody that there was was going to be a $30 million deficit. This was a great disaster. Lo and behold two days later we found out that the federal government did some tinkering with the equalization payments. All of a sudden he has $30 million in excess of his budget. He will have a balanced budget. It shows us how open to political manipulation the current system is. He went ahead and called an election on the basis of his balanced budget. That is ridiculous. It is an insult to Canadians. We need to have a system that is a lot more transparent than that.

I point out that we have a Constitution that says that equalization should provide reasonably comparable levels of public services at reasonably comparable levels of taxation. That is about as clear as it is. In other words it is wide open to interpretation. However the current government in power wants to structure it, it will structure it. It does not need all the provinces to agree because the federal government, if it so deems, will go ahead and structure a side deal with one of the provinces. We have side deals now with Newfoundland and Nova Scotia that provide different set-ups.

One of the problems with the formula, which is the most confusing convoluted thing I have ever laid my eyes on, is when it talks about calculating revenues. For instance for forestry, it does not take into account the cost of production. When we go to the people's republic of British Columbia where it costs a fortune to cut a tree and compare it to what it costs to cut a tree in Alberta, there is a huge difference. That is not reflected in the formula. Some provinces are discriminated against because of the huge discrepancies in the cost of production. In my judgment we have another disaster there.

We also have problems with this piece of legislation because it does not take into account the other types of social spending that come from the federal government. I want to give some examples of that. In my judgment and in the judgment of people who have followed this for a lot longer than I have, we constantly see in Canada various programs that seem to be equalization programs of some sort.

Look at employment insurance which is structured on levels of unemployment in particular areas. People in Alberta have to wait half a year to get unemployment insurance benefits. People in Atlantic Canada where there are high levels of unemployment may have to wait 10 or 12 weeks. It is now on an hourly basis but it boils down to somewhere in that range. That becomes a big transfer, a big equalization program.

Look at something like the infrastructure program. A lot of people did not realize that in itself was also an equalization program. It was based on levels of unemployment. Again we see a whole bunch of money going from some provinces into other provinces.

Look at regional development which is heavily skewed toward certain provinces. Look at defence spending. There is a good example. All these military bases are being put in particular ridings not because it makes military sense, not for the nation's defence, but because the government wants to plough some money into it.

I would argue that we need transparency. I would argue that we need a system today where we take into account all of this spending. Then we ask whether or not it is an appropriate amount. Maybe there needs to be a more straightforward formula. My leader spoke of that earlier today.

I do not want to make that the central part of my speech today. I want to talk about how we create have provinces. My friend across the way talked about the need to have ways to bring provinces that are currently receiving equalization into the mainstream so that they do become have provinces. I agree with that. We all agree with that. We believe there should be ways to do that. But I can guarantee that having income tax top marginal rates of 69% like they have in Newfoundland is not the way to do it.

My friend across the way who embraces collectivism or spoke of collectivism in some warm way, and gave a speech about how Canada is one big social program, would be shocked to find out that many businesses do not want to set up shop in a province with marginal rates of 69%. They are scared away by high marginal tax rates. They find it passing strange that an equalization program that actually provides incentives to provinces to have high income tax rates, because that is how they receive equalization payments, actually exists.

I think he would be shocked to find that out. But I encourage my friend to consider that perhaps there is a better way to make Atlantic Canada work better. Maybe there is a way through lowering taxes to attract investment to Atlantic Canada. That is why last week the Reform Party spoke of a plan to give Canadians $26 billion in tax relief. My friend across the way will say “Oh, but you are going to cut social programs”. Not at all. In fact we would increase spending on social programs.

We would cut spending for some things that Canadians do not consider to be very important. We would cut spending for the CBC. We think that $800 million a year spent on CBC television is a horrible waste. We think that the money that currently goes into regional development has become a huge pork barrel industry.

My friends across the way will know that even in Atlantic Canada many people are extraordinarily cynical of ACOA. They see all the manipulation that goes on whereby government ministers reward their friends.

I point out the situation in the Prime Minister's riding where all kinds of chicanery is taking place. Somebody who bought a hotel from the Prime Minister has received a bunch of federal grants. That is a little bit ridiculous. I see my friend getting hot under collar, but sometimes the truth stinks.

We argue that those things need to be cut. We would like to see the CRTC cut. It is a terrible waste of money. We would like to see all kinds of money eliminated from the bureaucracy of different programs like Indian affairs. Every year the auditor general pillories the department of Indian affairs for its wasteful expenditure of Canadians' money. In his last report the auditor general chastised the department for spending $91 million to negotiate treaties, yet not a single treaty had been negotiated. That is what goes on in the Liberal government.

We argue that we need to cut spending, absolutely; not in the high priority areas, but in those wasteful areas to which I just referred. We are going to continue to push for that to happen.

I will speak a bit about the best way to help people across the country. It is not by giving them a program. It is not by becoming a huge welfare state. It is not by embracing big government welfare programs like my friend across the way would have us do. We think that is the wrong approach. In fact I would argue that has failed in every country where it has been attempted. Instead it is time to see reality and to understand that it is the private sector which will create the jobs. It is the private sector that will create prosperity for people.

The political allocation of scarce economic resources simply does not work. The definition of insanity is to keep doing the same thing over and over again and expect to get different results, yet that is exactly what this government does. Every year it thinks that if it just throws a little more money at the problem it will get better. So it throws more money at the problem, but it never gets fixed. It just keeps getting worse and the government cannot figure it out.

It is time that my friends across the way embraced a new approach. We offer them an idea whereby we take the money that they currently dole out to their friends and instead leave it in the hands of taxpayers, entrepreneurs, investors and homemakers, the people who know far better than the government how to use that money.

I would argue that Canadians after a generation of seeing taxes go ever upward really do deserve a tax break. It is time for tax relief.

The hon. finance minister spoke in the House today about how he wanted to give Canadians tax relief. His department has been floating for weeks the idea that it wants to give Canadians a $2 billion tax cut in the next budget. What a joke. What the minister does not mention is that this year the government is going to increase taxes by $2.4 billion.

CPP premiums are rising by about $1.4 billion. Bracket creep takes about a billion dollars out of people's pockets every year. What the government trumpets as a wonderful tax cut is actually a tax hike in disguise, and so it has been with this government for five years.

Every year the government says “We are going to provide targeted tax relief because we are Liberals and we care”. It is simply not so. In fact since this government came to power we have seen taxes go ever upward. We have seen disposable income fall like a stone. Canadians have to pay $38 billion in taxes this year that they did not have to pay in 1993.

I would argue that Canadians can ill afford that. It is interesting that as revenues for the government went up $38 billion we saw the savings rate drop $31 billion. Who really balanced the budget? Was it the finance minister?

[Federal-Provincial Fiscal Arrangements Act, February 8th, 1999]

Mr. Speaker, I thank the hon. member for his “Canada is a social program” speech. It was very heart rending. I am thrilled to hear that he has embraced collectivism and has spoken warmly in favour of it, but I want to point out a few things to him.

He talked about how much his government cares about social programs, but he forgot somehow to mention that his government has cut $20 billion out of health care in the last few years. There was not a word about that. Somehow that slipped his mind.

Could the hon. member across the way tell us, if his government cares so much about social programs, why it cut $20 billion out of health care over the last few years?

[Taxation, February 8th, 1999]

Mr. Speaker, that is almost laughable, coming from a finance minister whose budget projections have been off by $50 billion in the last five years. He has a lot of nerve getting up in this place and talking to me about numbers.

The Reform plan would put $4,660 back in the pockets of a family of four making $30,000 a year. That would do a lot of good for Canadians. Why is the finance minister raising taxes and telling Canadians he is cutting taxes?