Charlie Penson

[Committees of the House, June 20th, 2002]

Mr. Speaker, I rise on a point of order. I wonder if there would be consent to go to petitions and then go back to the order of business as it stands at the moment.

[Species At Risk Act, June 11th, 2002]

Mr. Speaker, I rise on a point of order. I think we need some clarification from the Chair. I believe my colleague from Souris--Moose Mountain thought he was speaking on the amendment and has therefore missed his opportunity to give his speech on Bill C-5 at third reading. Could you clarify that?

[Species At Risk Act, June 11th, 2002]

Mr. Speaker, because this is important to Canadians, does my colleague agree that all Canadians should share in the cost of protecting the endangered species that she and other members have spoken about?

The reason I ask that question is that a lot of landowners in my area will have to bear the cost themselves if the rest of society does not agree to share in paying for lost land that may be the habitat for an endangered species. Is it not important that all Canadians share in the responsibility of paying to protect the endangered species?

[Supply, June 6th, 2002]

Mr. Speaker, I congratulate my colleague who has just spoken and who made us really aware of the difficulties this would present to a province like British Columbia which is now in the have not category, which is a very big change in short period of time.

I remember the province of British Columbia contributing to the equalization formula for a great many years, I believe ever since it was set up, until just recently. Various provincial governments made things so difficult that it drove out investment. British Columbia is now a have not province and will be able to claim under the equalization formula.

Does my colleague believe that the federal government bears some responsibility for having miscalculated this program for at least 10 years? Does that fact not have to enter into the mix, that if the government is responsible it should bear some of that responsibility and not penalize the provinces?

[Supply, June 6th, 2002]

Mr. Speaker, I would like to just remind the member that it was the same Liberal government that had formulas for funding for health care back in the late 1960s when health care was put into effect. I remind him that at the time his government told the provinces that its portion of the funding would never fall below 50%. We know that is not the case now. In the case of Alberta, I think the federal government's contribution is only 12%.

National programs were put into effect and the provinces thought there would be a funding formula that would be adequate. They have had to go basically their own way in funding over the past several years as governments have backed out.

Also the health and social transfers grants were changed to the provinces in the mid-1990s as the federal government, the hon. member's government, balanced the budget. This had severe impacts on the provinces in terms of how they would fund their programs. At the same time these overpayments were occurring, almost 10 years of overpayments.

It would seem to me that the government does not have a very good record in this regard. It walks away from programs and program formulas when it is to its advantage, but when it is not to its advantage, now it wants the money back from the provinces after it has been spent. I would like a reaction from the hon. member to that.

[Supply, June 6th, 2002]

Mr. Speaker, the member for Medicine Hat has a very good understanding of the history that has led to a lot of the difficulties with the provinces from the federal government side of things.

I would like to ask him more about the history of the former finance minister and the Liberal administration from 1993 to the moment. They have not been very good at doing the books for the country.

They seem to have overestimated the need for employment insurance premiums from both employees and employers. There is something like a $30 billion surplus in that fund. Even last year there was $3 billion more than was needed. They have been putting money into foundations, $7 billion, which the auditor general says is really hurting the accountability factor and reporting to parliament.

The former finance minister was good at low balling or underplaying the surplus. Last year he estimated the surplus would be $1.5 billion. Many economists are saying it looks like it will be more like $7 billion to $10 billion. This was a fairly consistent way in which the former minister operated.

I ask my colleague from Medicine Hat, is that not an irresponsible way of accounting by the federal government?

[Supply, June 6th, 2002]

Madam Speaker, I would like to thank my colleague from the Bloc, the finance critic, who has made a good intervention this morning. He did talk quite a bit about the previous finance minister and what his practice was, it seems, of not being very good at accounting. He talked about the employment insurance surplus that year after year has built up a tremendous amount of money for the federal government. Even in this current year there is $3 billion more collected than what is required by the chief actuary. This surplus has been built up to something like $35 billion over the term of the former finance minister.

There is also the matter of the foundations that the former finance minister funded, of which the auditor general is very critical, with essentially over $7 billion in off book foundations.

As well, there is the practice of underplaying or lowballing the federal revenues in his budget to always make it look like he is doing better than he had projected. In this current year it looks like there will be a $7 billion to $10 billion surplus. The finance minister had projected $1.5 billion. It seems to me that was a practice that the former finance minister engaged in. I am not sure what he was trying to do. Perhaps it was to build up funds for an election year or his own campaign or whatever.

Again, it seems to me that it goes with this whole problem the government has of problems with calculations made by Revenue Canada and with overpayments, this current matter we are discussing today. If the federal finance minister and his department cannot run the department in a better fashion than that, is that not really a serious problem we have here in Canada?

[Supply, June 6th, 2002]

Yes, we agree with that, Madam Speaker.

[Supply, June 6th, 2002]

Madam Speaker, I would like to thank the member for his question. I can understand him wanting to make a speech on the finances of the nation thinking that perhaps the position of finance minister might be available again very soon, considering that the finance minister holds so many different positions. My understanding is that his caucus was all over the map on this issue and on many other issues in the last few days so he should be used to it.

He talked about how well the economy is doing, and I have to agree, but it seems strange that the Prime Minister would fire the finance minister under those kinds of circumstances if that is the case.

If we look at it in the bigger light of how we are doing internationally and how we are doing against our major trading partner, the United States, and he raised these issues, the facts of the matter are that we still have the highest personal income taxes in the G-7, we have only 80% of the productivity of the United States and our standard of living is only 70% of that of the United States. This has been happening during the time that the Liberal government has been in power, 1993 to 1997.

I guess the linkage he is making is that the government should recover the money from the provinces that have even more money, but I am suggesting this: What is the government's record in spending this money once it has it? I thought I made a fairly clear point that there has been a tremendous amount of waste in the government. It has happened through patronage projects. We have seen it for months in the House. It is raised almost every day with a new scandal about waste of taxpayers' money. As well, I have suggested that government priorities are all wrong with things like corporate statism and corporate welfare. Money that hardworking Canadians struggle to raise is going to big corporations.

The point I was raising is that yes, we could take the approach the member talks about and we could recover the money from the provinces. That is one approach we could use, but as I put it, that to me seems to be a confrontational approach. The federal government made the error, not just in one year but for almost 10 years, year after year. The provinces have spent the money, so they are going to be put in the position that they somehow have to recover it. In the case of Ontario $2.5 billion would have to be paid back. What are their options? That is what I was pointing out to the hon. member. What are their options? Are they going to raise taxes to do it or are they going to cut program spending?

In the case of Manitoba the premier has told us that money has long since been spent on social programs, education, health and building roads in the province. Does the federal government want the province of Manitoba to pay that back and to suddenly have to come up with some new taxes in order to do so? I think that is the wrong approach.

The Liberal government does not have a good record in provincial-federal relations. Now is the time for it to help clear the air. It could say “We made a mistake, it is our mistake, and we recognize that we could get it back but there is still only one taxpayer out there”. While the government is at it, maybe it could also admit that it does not have a very good record in spending public money to begin with. We see numerous examples of that in the House almost every day.

I think that the better approach, and our party supports it, is to forgive the overpayment, clean up the problem so it does not happen again and move on.

[Supply, June 6th, 2002]

It is just unbelievable, as my colleague just said.

In a sense the government has just admitted that this is not a loan at all. It is not a loan to Bombardier. It is not a loan to Pratt & Whitney. It is not a loan to General Electric. It is an outright grant. At least the previous government was honest with what it called it. It called it a grant and there was no intention that it would ever be paid back.

We have seen millions of dollars of taxpayer money given away to these large corporations. Essentially the government tells us that the companies will give us research and development. We see that Bombardier is in a huge international subsidy war with Embraer of Brazil. The World Trade Organization has been very critical of the federal government for subsidizing Bombardier. The WTO said in its latest ruling that Canada had to stop. The federal government has not stopped this practice.

What happens? We recover the $3.3 billion from the provinces. The provinces have to go to their taxpayers and say that they have to up provincial taxes to get the money to give back to the federal government, money that the provinces thought was theirs and was spent on social programs over 10 years. Now the provinces have to raise provincial taxes or cut services. That is the option. It is as simple as that.

What will the federal government do with this money when it gets it? Hopefully it will be spent wisely. That is not always the record that we see in the House.

Taxpayers in Ontario and Manitoba will be asking, when they pay increased taxes, if the money will go to a hotel in Shawinigan, or motels, or arenas, or golf courses, or regional development programs that the auditor general criticizes routinely as essentially digging a hole in the ground and pouring the money in. That is the record.

Instead of these kinds of programs and state corporatism on which the government has been spending money, perhaps it should be looking at cutting income taxes and let people get ahead. That has not been their practice in the past.

It is really a matter of priority. We could take the confrontational approach that the government seems to be bent on with the current administration, the current Minister of Finance and I say the current Prime Minister because who knows how long that will last. Really what we need is a program, because Canadians deserve better than they are getting, an end to wasteful spending and a better co-operative approach with the provinces.

The federal government has made the mistake. I say let the federal government eat it and get on with matters.

When the Prime Minister says that we lose a few million dollars here and there, I do not think Canadians accept that. They would not want to see their taxes raised in those provinces or program spending cuts for health and education in order for the federal government to receive this money back and then waste it in that style.

As the premier of Manitoba has noted that the extra funding it received, which was calculated in error, was spent on hospitals, schools and roads.

What is the Liberal government doing on the other side of things? It has stashed $7 billion in off-book foundations, most of which is being invested, sitting in bank accounts not even being spent.

Some people suggested that the money was designed for the next election campaign. It could pull it out and use it as it wished during that time, $7 billion of which the auditor general has been critical as recently as the day before yesterday. In a speech in a Senate committee, the auditor general said that this was not acceptable accounting practices.

When the federal government gets the money back, what will it to do with it? The provinces received the money in error. We have seen that they have spent that money on hospitals and schools as opposed to the record of the Liberal government which has spent it on Swiss-style bank accounts with foundations and on patronage payments.

It is bad enough that the federal government has moved into social areas. I am just talking about the souring of relationships with the provinces and federal-provincial jurisdiction. If we take the confrontational approach, as the Prime Minister is basically saying we should, I suggest it will continue to sour relationships with the provinces, partly because the federal government does not have a very good record in this area. It moved over the past 30 years to take over a number of areas of provincial jurisdiction. It has muddied the water. It has even offered cost sharing programs that entice the provinces to accept some diminishment of provincial responsibilities in the jurisdictional area to get federal government money. It is like the proverbial carrot dangled in front of their noses.

Some of the areas that the federal government has moved into in the last few years that belong to the provinces are basically social areas clearly defined in the constitution as provincial areas such as health care, labour force training and education through such things as the millennium scholarship grants. We see more and more of this approach by the federal government through not minding the store in its own areas of jurisdiction and not doing the things it ought to, as was assigned to it over 100 years ago by the fathers of confederation.

Defence was an area that was clearly given to the federal government in the constitution. What has happened to monetary policy? What has happened to security and immigration? The government has messed up big time. In fact it has hardly paid any attention. If it paid any attention at all, it was to diminish the role of the defence department. Our armed forces are struggling to maintain even uniforms for use in desert conditions. My understanding is that they have them now though. They got the new uniforms just in time to come home. Is that not something? The defence department was cut back for years in the federal government's program of priorities.

What is it doing instead? It is muscling into provincial jurisdiction. It is none of its business. Why does it not pay attention to its own areas of jurisdiction? It does not have a good record there.

September 11 will show how weak the federal government has been in its own areas of jurisdiction such as security, immigration and refugees. I and my party say that the government should get back to the business that was assigned to it in the constitution by the Fathers of Confederation and stop meddling in provincial government affairs.

It seems to me that the approach the federal government is taking is one of confrontation. We believe that it should recognize that it was the main problem in the overpayment. It was a year after year miscalculation. Why does it not let it go, let the provinces solve their problems as best they can, get out of provincial areas of jurisdiction and really get back to what it should be doing?

Balancing the federal budget was done on the backs of the provinces. The Liberals already muddied the waters with the provinces. The federal government took $20 billion out of the provinces by way of transfers just to balance its own budget. We recognize it needed to balance the budget but why would it do it on the backs of the provinces and force them to accept many lesser amounts from the federal government? The provinces had to really scratch and cut in order to balance their books.

The federal government cut transfers to the provinces by $25 billion by the year 2000. What is happening? The federal government's budget was up with an increase in spending last year of almost 12%. About 2% of that happened because of increased security and defence spending.

The other 10% is just a Liberal increase, which has been so connected with this Liberal government over the last 30 years. It cannot resist increasing spending. With another $3.3 billion coming from the provinces, what is the government going to do with it? Probably it will just increase spending again.

The Canadian Alliance does not support this. We support a more co-operative approach with the provinces. Let us write this off as a mistake, correct the problem so it does not happen again and move on toward better provincial-federal relations.