Richard Bélisle

[Budget Implementation Act, 1997, April 22nd, 1997]

Madam Speaker, Bill C-93 is an Act to implement the 1997 budget. I will describe its major elements.

Compared to the billions of dollars cut from social transfers and taken from the unemployment insurance fund, the meagre $50 million spent this year on the child benefit sounds like a drop in the bucket. This is the extent of the compassion felt by the Minister of Finance for the poor children of this country. We will not see the $600 million announced until 1998-99, while we now have 1.5 million children living in poverty in Canada.

The Minister of Finance could have taken advantage of the present favourable conditions to lower UI premium rates by three or four times as much in order to really create jobs while spending the billions of dollars in the UI fund to increase the protection lost in the wake of the employment insurance reform.

The Minister of Finance could also have taken advantage of those three and a half years in his portfolio to undertake a real reform of corporate and personal taxation, as the Bloc Québécois has been calling for since the beginning.

We know, for example, that he could have used up to $3 billion per year from corporate tax expenditures to support small and medium size business which create jobs, as we demonstrated last November.

The minister could have done all this and more while getting the deficit down to zero by the year 2000 thanks to the government's room to manoeuvre, the extent of which the finance minister is trying to hide from us.

This budget is hiding the true face of deficit reduction. On page 7 of the budget speech, the minister claims, and I quote:

-we will meet our objectives, as in the past, by focusing on getting spending right-not by raising taxes.

The truth is the minister has hardly done anything to better manage government finances. The brunt of his deficit reduction has been borne by the taxpayers, who, in the last four years, have had to put up with $2 billion in tax increases and $14 billion in cuts, over half of which were made to transfer payments to the provinces.

Departmental operating expenditures were reduced by only $3 billion or 8 per cent between 1993-94 and 1997-98, while transfers to the provinces were cut by 27 per cent during the same period.

To stimulate job creation, the minister is announcing a scant $25 million-or one dollar per Canadian-in new money, including $15 million for tourism and $10 million to connect the region to the Internet, compared to the billions he can play with. I would say the budget the minister brought down is anti-jobs.

As I said before, this budget is full of misinformation, especially when it comes to the finance minister's forecast of the amount of money at his disposal.

He is hiding something. The deficit cannot have dropped by a mere $2 billion between 1997 and 1998 when it fell by $9.6 billion between 1996 and 1997. The minister is hiding behind a margin which he narrows deliberately to justify his inaction and the absence of true job creation measures. Most of all, he is hiding the real anticipated deficit for 1998-99 in order to avoid taking a stand on an extremely important question before the next election, that is, what to do with the eventual surpluses.

We should have commended the minister for the $800 million spent on setting up the Canada Foundation for Innovation, but we suspected all along that there was something fishy. Not surprisingly, transfers to the provinces for 1997-98 will be $800 million lower than anticipated in the 1996 budget, mainly because the economic situation has improved.

Instead of giving the money to the provinces, the federal government is using it to create a foundation which duplicates and competes with measures already implemented by the provinces. Finally, there is not a single word about compensating Quebec for the harmonization of the GST in 1991, even though it would be appropriate given the $1 billion paid to the maritimes.

This is clearly a pre-election budget. The minister does not shy away from repeating, in the budget, all the good news already announced over the last few months, but he keeps silent on the $4 billion in cuts to take effect this year. In our opinion, the Minister of Finance is showing a total lack of respect for the voters by offering them "electoral goodies" when he just cut social programs in a very unreasonable way.

All the new initiatives of the federal government really infringe on the exclusive jurisdiction of Quebec, adding to duplication, overlap, inefficiencies and costs, naturally borne by all taxpayers. The game the government is playing is very simple: cut ruthlessly in social transfer payments and implement new initiatives, often partisan in nature, without any regard for the common good.

Having created new social programs, the federal government withdraws its financing unilaterally, but continues to insist on so-called national standards.

The Minister of Finance did not revise his deficit forecast for the next two years, he is keeping it at $17 billion for 1998 and $9 billion for 1999, although he was more than $5 billion under target for 1996-1997, that is $19 billion instead of the $24.3 billion forecast. Therefore, the minister is allowing himself considerable leeway and his measures for employment and the fight against poverty are ridiculous when you compare them to what could have been done while, at the same time, aiming for a zero deficit in year 2000.

The Bloc Quebecois believes that the Minister of Finance has $8 billion to work with this year, 1997-98. He is one year ahead of his deficit reduction schedule. He will probably reach the $9 billion mark next year, instead of $17 billion, hence the $8 billion I just mentioned.

The finance minister refuses to reveal exactly how much money he can play with, because he does not want to be pressured by the provinces and by public and labour associations that would ask him to refinance social transfers to the provinces, which have been greatly reduced, as we have seen.

Thus, from 1993-94 to 1997-98, the deficit has dropped from $42 billion to $17 billion, a $25 billion reduction. To achieve this, revenues were increased by $22 billion and spending was cut by $14 billion.

Consequently, over 52 per cent of the $14.2 billion reduction in program spending between 1994 and 1998 comes from reductions in transfers to other government levels, mainly the provinces.

We know how the Quebec government's budget was directly affected by these transfer reductions. Between 1993-94 and 1998-99, the deficit will have fallen from $42 billion to $9 billion, a $33 billion reduction. In this case, to achieve this, revenues will be increased by $28 billion and spending reduced by $16.5 billion.

We may conclude that over 49 per cent of the $16.5 billion reduction in program spending between 1994 and 1999 comes from reductions in transfers to other government levels, mainly the provinces.

Since the Liberals came to office, personal income taxes have grown faster than the economy, than the GDP. This increase in the personal tax burden does not come from a review of the tax system, which the Bloc Quebecois had asked for in order to increase fairness. On the contrary, it comes especially from several subtle tax increases, such as the non-indexing of tax tables and credits.

The cuts announced in the 1994, 1995 and 1996 budgets will reduce the federal deficit by $4.6 billion this year. We may then talk about $4.6 billion in cuts and tax increases that were announced in the past, but that will come into effect this year. In 1998-99, the cuts announced in the past will reduce the deficit by $28.9 billion, that is $2.8 billion more than in 1997-98 and $7.4 billion more than in 1996-97.

The finance minister has gotten into the habit of putting off his bad news until later. But, in his 1997 budget, he bragged that he was announcing no new cuts or tax increases. Nevertheless, there

are $4.6 billion in cuts and tax increases being implemented this year, as announced in the three previous budgets.

An election year is no time for the Liberals to spend billions. By artificially increasing future deficits, the Minister of Finance has avoided setting off a debate on the use of possible future budgetary surpluses. Indeed, as long as people think we are still deeply in debt, the Liberals can go on saying that we must stay the course.

On the other hand, if a zero deficit had been announced for 1999, the next election campaign could have centred, for example, on the use of the surpluses created in the federal government's next budget, compelling the Liberals to commit themselves on this important issue.

These past few months, several economic forecasting firms commented on future deficits. Their estimates are quite different from what the Minister of Finance predicted in his last budget. The minister already had more than $1 billion in leeway this year, in 1997. Moreover, we are heading toward a $9 billion deficit in 1998, rather than $17 billion as claimed by the minister, which will give us the $8 billion surplus that I mentioned earlier. Finally, we will have a zero deficit in 1999, at least one year ahead of schedule, which will definitely allow a surplus that could even reach $9 billion.

There is nothing very original about the infrastructure program. The federal government is investing $425 million in a second phase of the Canada infrastructure works program. This amount is in addition to the $175 million remaining from the first phase, for a total of $600 million in 1997.

The budget provides that the funds allocated to the Canadian Tourism Commission will increase by $15 million a year over the next three years. This is very little, considering that the commission's partners from the private sector are already investing more than $65 million this year. An amount of $50 million will also be set aside for the Business Development Bank of Canada, so it can help finance tourist facilities in the private sector.

The budget also provides for a $7-million increase, in 1997-98, in the funds allocated to the National Literacy Secretariat. This is somewhat ridiculous, given the efforts required and already made by the provinces, which have jurisdiction over this area.

There is nothing original about the federal government's new job creation strategy. The government is dragging its feet and proposing an antiquated job creation strategy that lacks originality and dynamism. Here is a government which got elected under the slogan "Jobs, jobs, jobs", but which no longer has any idea on how to create employment.

There is nothing in the Liberals' election-minded budget for those Quebecers and Canadians who are looking for work. In terms of new money for active job creation measures, the government is only allocating $25 million for the coming year, that is $10 million for connecting the regions to the Internet and $15 million for tourism. This amounts to less than one dollar per Canadian and less than $20 per unemployed for this year.

Yet, as we showed earlier, the Minister of Finance has a financial margin of several billion dollars. For example, he could have undertaken a review of the corporate taxation system, free up $3 billion per year, and reinvest the money in the system, so as to concretely support job creation.

The budget announces a 10-cent reduction in employment insurance premiums, as of January 1, 1998. This will bring premium rates to $2.80 per $100 for employees, and to $3.92 for employers. Such an announcement is usually made in November. The finance minister will then have the opportunity to announce this good news twice. The 10-cent reduction is much less than what it could have been, in view of the annual surpluses accumulated in the UI fund.

The accumulated surplus is large enough to allow more flexibility in the insurance eligibility rules as well as a more substantial reduction in the level of contribution. You will agree that any additional yearly surplus is a hidden tax. The estimated cost of cutting 10 cents from the contribution rate in 1998 is $700 million. When this cost is compared to the annual surplus expected to reach about $5 billion in 1998 and to the accumulated surplus that should come to about $15 billion by the end of 1998, we see that the minister is not making much of an effort.

The yearly surplus in the UI account expected for the coming years will presumably come to between $5 billion and $6 billion, basically because of the new provisions that came into effect on January 1, 1997 and make it even harder to qualify for benefits in addition to decreasing benefit levels.

Here are some figures which illustrate how little effort has gone into reducing the level of UI contributions. Each percentage point change in unemployment rates could affect the cost of the program by some $1.2 billion a year. Likewise, each-10 cent change in employee contribution rates, such as a decrease from $2.95 to $2.85 per $100 of insurable earnings, means about $700 million in contribution revenues for the government.

The last recession has engulfed about $20 billion in UI costs. However, the chief actuary, Mr. Bédard, told the Financial Post on October 1, 1996, that because of the government's permanent cuts to program spending, the next recession would not be as costly. The current and projected surpluses in the UI account are outrageous. In fact, it is thanks to workers and employers that the finance minister is able to artificially reduce his deficit. The UI contribution rates are a hidden job tax. The surplus should go into a distinct account so that it cannot be used to artificially reduce the deficit. We agree

that there should be an accumulated surplus in the unemployment insurance fund, but it should not be excessive. Relatively stable contributions are needed if we are to avoid raising contribution levels during economic downturns. Unemployment insurance contributions are by far the most important of payroll taxes.

If unemployment insurance rules in 1996 had been similar to those in 1989, only $3 billion more would have been available for the unemployed in Canada. Eligibility requirements are increasingly restrictive for maternity leaves also.

While the Government of Canada, out of compassion, is about to spend a few hundred million dollars on poor children, it is taking billions out of their parents' pockets. In 1996 alone, UI benefits were cut by $3 billion, while the Canada social transfer for health, education and welfare, the cost of which the federal government is deftly unloading onto the provinces, fell by $4.5 billion over two years.

The government has undertaken to improve the child tax benefit by injecting $600 million in new money and reallocating $250 million already announced in the 1996 budget.

This will be a two-step process. First step: in 1997, the government will increase the working income supplement, which will now be calculated per child rather than per family. The maximum annual level of the working income supplement, now set at $500 per family, will climb to $605 for the first child, $405 for the second child and $330 for the following children. This will cost $195 million in 1997-98, $125 million of which has already been included in the 1996 budget.

Second step: more concrete measures are to follow discussions with the provinces. The current proposal is to merge the tax benefit and the working income supplement into a single benefit. The increase will be higher for low income families with many children.

The interim measure and the measures to be taken in 1998 do not affect families with an income over $25,921. Also, the bill does not provide for cost-of-living adjustments.

So, from all of this, we can conclude that, after making the parents poorer by cutting the social transfer and UI benefits and failing to create jobs, the Liberal government suddenly cares about the children and has cynically decided, five years later, to recycle the money promised in 1993 for child care.

Family policy and the fight against poverty are provincial areas of jurisdiction. Continuing interference by the Canadian government in these provincial areas of jurisdiction is unacceptable to us and is hampering the implementation of a truly consistent policy by the provinces.

Thus, after ripping their shirts on the non-indexation of benefits by the Conservative government, the Liberals have yet to remedy the situation.

The Caledon Institute and anti-poverty organizations estimate that an additional $2 billion a year is a minimum needed to start fighting poverty whereas the government will spend only $850 million starting in July 1998. Thus, this measure is quite unsatisfactory.

The Liberal government is using the fight against poverty as an excuse to slash social programs like unemployment insurance and social assistance.

The Liberal government broke its promise to create new child care spaces and the money that was supposed to be spent in that regard, that is, $720 million, vanished into thin air. Will the same happen to the amounts set aside for fighting child poverty?

Lastly, the Quebec government considers this new benefit to be another interference in Quebec jurisdictions. However, Quebec can hardly reject out of hand the federal proposal to inject additional funds into programs for children, since those funds can be reallocated by the Quebec government to other programs for children.

In short, the Bloc Quebecois has already expressed its opposition to the following aspects: federal meddling in an exclusively provincial jurisdiction; the non-indexation of benefits, which hurts families with children; and replacing a sound family policy with the fight against poverty.

In pretending to follow the recommendations of the National Forum on Health, the federal government has announced additional funds of $300 million for health care, including $150 million over three years supposedly to help the provinces launch pilot projects to provide home care or drugs; $50 million over three years to put in place a national information system on health; $100 million over three years to improve existing programs, namely the Community Action Program for Children and the Canada Prenatal Nutrition Program.

It is difficult to imagine, at first glance, how the program will work. Will the health minister have a veto over how the funds will be allocated? Will there be new national standards? We can be sure of one thing: health being a provincial jurisdiction, the new funds announced amount to further federal interference in a provincial area of jurisdiction.

The government ignored an important recommendation made by the National Forum on Health that cash transfers for health and social services be set at a minimum $12.5 billion, the amount

forecast for 1997-98, instead of reduced to $11 billion, as anticipated.

The new funds concern activities which are a direct provincial responsibility. It will be tempting for the federal government to implement all these policies and continue to meddle in provincial areas of jurisdiction.

In conclusion, all these examples show without a shadow of a doubt that the finance minister is not making any serious effort to help the most disadvantaged in our society, to help small businesses to grow, which would help create jobs and ensure the financial independence of families and individuals. This is exactly the opposite of what the government has done in the budget tabled by the finance minister in February.

[Quebec Estimates, March 19th, 1997]

Mr. Speaker, yesterday the president of the Quebec treasury board tabled the 1997-98 estimates. Next year, the province's health, education and social assistance expenditures will be cut by $1.6 billion.

For the same year, federal cash transfers to Quebec in these areas will be reduced by exactly the same amount as in 1996. The painful cuts now facing the Government of Quebec are, make no mistake, the sad result of decisions by Canada's finance minister and this Liberal government.

In making such cuts in the social transfers to the provinces, the federal Liberals are condemning them to paying the political price of improving federal public finances, all the while unfairly claiming credit for managing the country well.

The next election will provide an opportunity to remind Quebecers that the Liberal government must bear most of the blame for the closure of hospitals and cuts to education in Quebec.

[The Budget, March 18th, 1997]

Madam Speaker, I will rephrase my question. According to the calculations made by the Bloc Quebecois, the minister could have lowered the deficit a lot more this year. It is said to be around $17 billion, but according to the latest trends, the real figure, which will be known in the next few weeks, could very well be around $10 or $12 billion. In the next few years, probably by 1999 or by 2000 at the latest, the Canadian deficit will have been eliminated.

The Bloc Quebecois calculated that, by announcing a $17 billion deficit for this year, the Minister of Finance has kept $8 billion up his sleeve for this year and probably $14 billion for next year.

Could all the billions the minister is keeping in his pocket be given back to the unemployed who have been robbed by the

government's employment insurance scheme? Instead of hiding all those billions to bring the deficit down to zero as fast as possible, would it not be better for the government to give back the$4.5 billion cut in transfer payments to the provinces?

[The Budget, March 18th, 1997]

Madam Speaker, I listened to the speech by the member across the way, and I would like to ask him two questions.

Does the member agree that the finance minister is giving himself room to manoeuvre by hiding up his sleeve, according to Bloc Quebecois estimates, $8 billion this year and $14 billion next year?

Would the member agree that these sums of $8 billion and $14 billion should be used to restore the levels of transfer payments to the provinces? And this is particularly important since the member comes from a maritime province which greatly needs its transfer payments, which were cut by the finance minister. Moreover, instead of keeping these large amounts as a reserve, the minister could reinject them into the economy in order to help unemployment insurance claimants recover their former benefits.

Is the member ready to support the Bloc Quebecois in its efforts to have the reserves hidden by the minister used to restore transfer payments that have been cut from the provinces, and the money taken from the unemployed, since it is their money after all?

[An Act To Amend Certain Laws Relating To Financial Institutions, March 17th, 1997]

Mr. Speaker, more than anything else, Bill C-82 is a technical revision of the Bank Act. It does not contain major changes such as the deregulation of financial institutions, for example, allowing banks to sell insurance and the merger of major banks.

The government does, however, propose some legislative novelties, one might call them, which, although they do not go as far as the white paper and the Liberal finance committee report, do merit our further attention.

In addition to technical amendments to the Banking Act, Bill C-82 seeks to modify or develop legislation on two main themes: enhancing consumer protection, on the one hand, and lessening the burden of regulation imposed on financial institutions on the other. It must be noted that implementation of a new access system for foreign banks will, it seems, come in a separate act slated to come out by the end of the year.

The government will adopt clauses on the protection of confidential information, better information on the cost of credit, and protection of consumers from tied selling. After discussions with the government, the banks will take a number of steps to improve access by low-income individuals to basic financial services, as well as information on banking services which, we must admit, have been virtually non-existent until now, possibly to the detriment of users of banking services. Banks must also adopt a policy on tied selling, and set up mechanisms to handle complaints on this. Some banks have already taken such initiatives.

As for tied selling, the government is naive almost to the point of complacency. These measures apply only to banks, while the same thing is not required of other financial institutions. This is because banks fall under federal jurisdiction, while the other institutions, such as insurance companies, come under provincial jurisdiction. The federal government should let the provinces set the rules and require its federal institutions to adhere to the provincial legislation. This is the opinion of the Bloc Quebecois. That way, the legislation would not have the double standards it does at the moment.

The government also states that the clauses to amend the Bank Act so as to prevent high-pressure tied selling will come into effect only if they prove necessary. Banks are being asked to create their own internal complaint handling system, and the act will apply only if this proves insufficient-but using what criteria?

The government is therefore doing nothing concrete about tied selling. What is proposes to do eventually is not even the right thing, in our opinion. It just refers to tied selling in order to gain brownie points as the elections come closer, but in actual fact it strikes us that this is nothing but hot air.

If the government wants to do something concrete, it should make the banks subject to the same legislation as financial institutions that come under provincial jurisdiction, which offers consumers genuine protection.

We deplore the fact that the federal government is trying to interfere, through the back door, with areas under provincial jurisdiction. Under sections 254 to 259 of the Insurance Companies Act, an insurance company with a federal charter or a foreign company regulated under this act is currently prohibited from selling its policies in Canada to another insurance company that is provincially regulated.

Since most foreign insurance companies operate in Quebec under a federal charter, Quebec insurance companies cannot buy their policies when these companies withdraw from the Quebec market.

This is unfair to Quebec insurance companies for the following reasons: first of all, they cannot freely enter into transactions with another insurance company that is federally regulated, even to purchase a block of policies that are all held by Quebec policy holders. Second, it is against the spirit of NAFTA because through Ottawa, artificial trade barriers are being created in Quebec. Third, banks and trust companies do not have the equivalent in their legislation, so that a federally regulated bank or trust company may buy blocks of business from their provincially chartered counterpart.

In other words, Quebec insurance companies are not treated as well as foreign companies and this, in their own country. In a joint brief dated February 1996, the Canadian Life and Health Insurance Association, the Canadian Bankers Association, the Insurance Bureau of Canada, Canada Trust, the Trust Companies Association of Canada and the Credit Union Central of Canada-this is starting to look like quite a crowd-asked the federal government to allow, with the approval of the minister, the transfer of policies in Canada

from a federal insurance company to a provincial insurance company.

The Government of Canada did not respond to this request in Bill C-82, thus perpetuating the unfair treatment of provincially chartered insurance companies like those in Quebec. If nothing is done, C-82 will continue to restrict the opportunities for expansion of provincially regulated insurance companies, so that many will prefer to obtain a federal charter. Let us not forget that insurance is a strictly provincial matter. The federal government has always tended to forget that.

The reason the federal government is prohibiting the sale of policies by a federally chartered company to a provincially chartered company is that the latter is outside its control and supervision. On the other hand, the federal government is permitting the sale of blocks of insurance policies by a provincially or federally chartered company to a federally chartered company-the reverse is not permitted-on the grounds that the latter is under its supervision and must be a member of the Canadian Life and Health Insurance Compensation Corporation.

Clearly, it is a one way street: what goes one way does not go the other. It has been this way since 1867, always to the federal government's advantage. Over time, companies, and especially the major ones, end up with only a federal charter, because a provincial charter penalizes them by preventing them from acquiring blocks of policies from a federally chartered company.

The provincial market, which is shrinking as a result, may well disappear. Sooner or later, if there are no more companies with a provincial charter, the province, as we know, will become a redundant lawmaker, and this is how the federal government will take total control of an area that, under the Constitution, comes totally under provincial jurisdiction.

In such a situation, the Bloc certainly has nothing against the protection of consumer information, but this is a matter of civil law, an area of provincial jurisdiction. Quebec already has legislation on consumer protection, on the protection of personal information, on insurance and on market intermediaries, which is to be reviewed shortly.

The aim of the federal government is to be able to make additional regulations in an area of jurisdiction where it has no business, by duplicating and overlapping what already exists. In this regard, federal policy never changes.

This is to be found in section 459 of the Bank Act, which is amended by clause 55 of Bill C-82, which is before the House today. The government claims in its fine speeches to want to eliminate overlap and allow the level of government best suited to provide the public with the services it needs to do so. In fact, however, it continues to trample all over fields of provincial jurisdiction.

It cites an agreement between the provinces in order to legislate in this area. That is not what federalism is about. It is not because ten provinces agree on a subject that the federal government has the right to make laws and regulations in an area of jurisdiction that is not its own.

The federal government claims with Bill C-82 to be improving access to basic financial services for low income Canadians. For instance, only two pieces of identification instead of three would be required to open an account or cash a cheque, photo ID being considered desirable but not mandatory. This is a mere facade, since the problem remains.

The federal and provincial governments forbid banks to ask for some identification that most Canadians carry, including their social security number. The solution would be to think of a piece of ID that everyone has and that banks are allowed to ask for to check the identity of individuals. More often than not, the only cards they can ask for are credit cards, which very few low income people have.

Banks are not allowed to impose undue pressure on their clients, but the legislation does not say what constitutes undue pressure. In any case, it is up to the provinces to define this undesirable practice, as consumer protection is a provincial responsibility. However, the federal government reserves the right to make regulations in an area under provincial jurisdiction where there is already duplication and overlap, as pointed out earlier, in the case of Quebec. This is unacceptable to us, Bloc members.

In addition, Bill C-82 makes a distinction between undue pressure and favourable tied selling in subsections 459.1(2) and (3).

This policy raises major questions, since the goods that are tied seldom have the same life or expiry. This will make control extremely difficult, in a word, it cannot work. Why not require banks to comply with provincial consumer protection and tied selling regulations?

We know that, for the federal government, streamlining and duplication are synonyms, while harmonization really means interference. But this must stop, particularly if the government wants to fulfil the commitments made in the last speech from the throne. We feel that Bill C-82 provides the government with a good opportunity to show that it intends to fulfil its fine promises by not legislating and by not adopting regulations that duplicate and overlap what is already being done at the provincial level.

The federal government is imposing on banks standards that are not imposed on other institutions that come under provincial jurisdiction. Given that all these financial institutions are ultimately competing against each other, the only way to ensure they are subjected to the same rules is to let the provinces decide how these

institutions, including banks, must deal with the issue of consumer protection, including complaints relating to tied selling.

The Insurance Brokers Association of Canada fears that federal regulations in the financial planning sector would interfere with what is already being done. According to the association, the code of ethics on the disclosure of personal information, which is currently adhered to on a voluntary basis, is too soft on banks, given what is required of intermediaries in the marketplace.

The Bloc Quebecois expressed a number of reservations regarding Bill C-82. The government should correct the irritants that we mentioned today. Then, and only then will we be able to support Bill C-82.

[Excise Tax Act, March 17th, 1997]

Mr. Speaker, the Standing Committee on Finance held three days of hearings on Bill C-70 in January. Here are some powerful examples of what was contained in the briefs. I will provide a quick overview.

For example, the Retail Council of Canada, which submitted a brief, represents over 65 per cent of all retail business in Canada. Even though this body supports the harmonization of provincial and federal sales taxes, it opposes the inclusion of the tax in the selling price in the maritimes as a policy that will drive up costs and add to the confusion among consumers.

By approving several different ways of displaying the price with the tax and by providing a number of exceptions to these rules, federal policy seriously complicates the situation. How is it possible to compare costs at two retailers that use different methods to display a price with the tax?

Consumers will be faced with different labelling within a single store. For example, some products will display the price with the tax, others without; others will have a package label without tax, but a shelf label with it and then there will be products that are tax exempt or that do not need to have the price indicated with the tax. How are we going to know the total cost of our purchases with such a system, with such confusion? A single product could have as many as four different prices on the label: the regular price with and without tax, and the discount price with and without tax.

In short, as these examples show, it will be much more difficult for the consumer to discover the price of merchandise quickly and easily.

The tax can be included in the price over a four month period, as the legislation provides. The Retail Council of Canada claims, and rightly so, that the firms including the tax in the price ahead of the others will be shooting themselves in the foot, because they will display a price on a product that will be higher than at a competitor's.

The buffer period may well be useless, because, in all likelihood, every firm will be waiting until the last minute to display prices with the tax included.

In terms of the costs involved in Bill C-70, the Retail Council of Canada estimates it will cost the retail industry $90 million in recurring annual costs and another $85 or $90 million for the initial adjustment to switch over from the old way to the new harmonized Liberal tax.

Finally, the council vehemently criticizes the fact that hearings were held on only three days in January. It also criticizes the Standing Committee on Finance for holding hearings only in Ottawa, thus preventing a multitude of small retail merchants from testifying and expressing their opinion.

The Council said, and I quote:

"These tactics leave retailers wondering whether legislators have any interest in their views whatsoever".

It should be pointed out that the Bloc Quebecois supported the Reform motion to continue hearings in the maritimes, a motion that was defeated by the Liberal majority in committee. I clearly remember that hearing day; I sat on the committee as a Bloc Quebecois member.

In its brief to the committee, and this is a second example, Sears Canada, said, and I quote: "For Canadian retailers, tax inclusive pricing in a partially harmonized system will mean higher costs and more complex systems".

Sears will produce 52 million catalogues in 1997, but the production of "harmonized" catalogues, to accommodate the standards applying to the maritimes, will cost Sears a fortune. It may also mean fewer catalogues or higher retail prices for consumers in the maritimes.

Sears also testified that, while the purpose of this legislation is not to limit product availability in harmonized provinces, this will certainly be the result". In addition, like many other large chain stores, Sears labels its products before shipping them to its stores. With Bill C-70, the company will have to keep two separate stocks, depending on whether the price includes the tax or not, with the related increase in production costs being reflected in retail prices. Goods will have to be divided in lots and stored separately before shipping, which complicates things, be it only by imposing the use of a dual stock system.

The brief submitted by Woolworth Canada Inc., a company with over 100 stores and 14,000 employees in the provinces affected by harmonization, included the following: "Given that the proposed legislation applies only to three small provinces, and given the current proposals regarding tax inclusive pricing, we believe that costs will significantly increase for retailers and consumers, and that this legislation will also result in extreme confusion".

In its brief, Canadian Tire writes the following, and I quote:

We are opposed to the piecemeal approach to the application of tax inclusive pricing as part of the introduction of the new HST. This would create very significant ongoing costs as well as extreme confusion to our customers-for the retail industry, any benefits derived from input tax credits are more than offset by the significant cost increases resulting from tax inclusive pricing. There are no savings; in fact there are increased costs.

Here are a few excerpts taken from the Liberal minority report of November 1989 on the GST, when the Conservatives decided to introduce this consumer tax, and I quote: "The Liberal members of the finance committee maintain that the goods and services tax proposed by the Tory government is bad and that no 'repair job' of any kind will make it fair for taxpayers". You can find that quote on page 283 of the report.

What are the Liberals doing with Bill C-70, if not a repair job? Except for the fact that the tax is hidden in the price, the GST remains the same and its rate remains the same. In fact, it is the provincial tax that is being harmonized. Therefore, the Liberals are only doing a repair job on the Conservatives' GST and, if we are to believe their own words, this new HST is as bad and unfair for taxpayers as the old GST. "Moreover, if the GST is hidden in the sales price, it will be a lot easier for the government to raise it later". This is from page 298 of the same report.

Based on the Liberal logic, one can conclude that the Minister of Finance will certainly increase the GST in the maritimes in his next budget, since he is in the process of hiding that tax in the sales price. In 1989, the Liberals condemned the idea of hiding the GST in the price. However, in 1997, they are doing just that, on the false pretence that this is what consumers want.

Consumers want the Liberal government to fulfil its commitments, including the promise to scrap the GST; they do not want the government to hide it in the price or partially harmonize it.

Why, then, have the Liberals systematically refused, since they have formed the government, to carry out such a total reform of the Canadian taxation system?

Even though this ill advised promise will cost Quebecers and other Canadians close to $1 billion, all the Liberals can think about is getting out of the mess at any cost and as quickly as possible. Just as they did with the Airbus affair, Pearson and the Somalia inquiry.

This is therefore not the first time the Liberals have made colossal errors that will cost taxpayers hundreds of millions of dollars but not taken any responsibility for their actions. Even in

the case of the GST, the Liberal government showed its contempt for democracy by preventing opposition members from doing their job.

Yet the Liberals came up with 13 important amendments, those were their words, to Bill C-70, the very evening of the third and final day of public consultation, claiming that these amendments were a response to the complaints heard during the three days of hearings. If it was possible to find 13 amendments in three days, imagine how many we would have had if we had been able to extend the public hearings by one or two weeks.

In their haste to leave behind the embarrassing issue of the GST, the Liberals do not want to hear what people have to say; they are afraid that people in the maritimes will tell them the plain truth: Bill C-70 is a botched job, a very bad bill. The Liberals are standing in the way of democracy by preventing citizens from expressing their views during the legislative process, and by moving full steam ahead, worrying more about their electoral agenda than about doing a good job of serving the citizens who will pay for this new tax, and who, in the meantime, are paying their salaries.

That is why the Bloc Quebecois is opposed as a block to this bill to harmonize the GST in the maritimes. This is a botched bill. It is based purely on political and electoral considerations. It is badly written. People have pointed out all sorts of shortcomings that the government does not even want to hear about. It is not the harmonization model that maritimers deserve and are calling for.

What is more, in order to convince the three maritime provinces in question, the federal government had to promise political compensation of $1 billion, while it has systematically refused to pay Quebec, in all fairness, the $2 billion it lost by harmonizing its provincial sales tax with the GST in 1991.

If the federal government is able to come up with $1 billion for the maritimes, let it also find a way to come up with the $2 billion owing Quebec. Otherwise, everyone should receive the same treatment and the federal government should stop subsidizing New Brunswick's corporate raiding in Quebec using Quebecers' tax money.

For these reasons, the Bloc Quebecois is calling upon the government to go back to the drawing board, to start from scratch with a new bill on its plan to harmonize the GST, this time taking the time required to present a serious bill, and particularly taking the time to listen to what people have to say.

The Liberal government had winning votes in mind when it spoke out against the partial removal of the tax from books. Only educational and literacy institutions will pay no GST on books purchased, while what I would call the normal taxpayer, the person who buys books at the neighbourhood bookstore, will continue to pay it. No doubt what the Liberals want is to be able to say, during the next campaign which is almost upon us, that they have taken the GST off books. But that is not true.

In conclusion, I would like to say that, with the Senate amendment to Bill C-70, there will be no further reference to including the GST in the price as long as a minimum of 51 per cent of the population of Canada does not have a provincial sales tax system harmonized with the federal sales tax. During all of the House debates on Bill C-70, the Bloc Quebecois spoke out against the government's haste to get rid of the GST business before the election.

The Bloc Quebecois spoke out against, and voted against, Bill C-70, asking the government, as I have said, to go back to the drawing board, to propose another model for harmonizing the sales tax, since this one was full of defects.

Unfortunately, the Liberals would not listen to us. But now we have the Senate proposing an amendment to Bill C-70 which is, basically, along the same lines as what we were finding fault with in the bill, and the Liberals are preparing to adopt it.

I would therefore like to say in closing that the Minister of Finance has stated, on a number of occasions, that Bill C-70 would introduce inclusion of the GST in the price in response to the wishes of the people. Now that they are preparing to remove inclusion of the tax in the price from Bill C-70, what is left of Bill C-70? Nothing. The GST is still the GST. What is being harmonized is the provincial tax, not vice versa, despite what they are trying to make us believe. And for that they are going to pay the maritimes $1 billion, while Quebec gets turned down when it asks, in all fairness, for $2 billion for having done the same.

[Program Cost Declaration Act, March 13th, 1997]

Mr. Speaker, this bill, C-214, was presented in this House by the hon. member for Durham. It is intended to provide for improved information on the cost of proposed government programs.

I know the hon. member for Durham well, as he was vice-chair of the Standing Committee on Public Accounts when I was chair. From that time on, I have been aware of the interest the hon. member has in any administrative or legislative measure with a potential for improving the government's accountability and responsibility, more necessary than ever because of the astronomical amounts invested by the taxpayers annually in the workings of the federal government.

Like the hon. member for Longueuil, who has already spoken on Bill C-214 on behalf of the Bloc Quebecois, I wish to assure the hon. member for Durham who introduced this bill of my support and to require the Liberal government, at the time of introducing a bill in Parliament that authorizes the program, or when the regulation that authorizes the program, to make a declaration of the estimated annual cost of each new program, expressed as a total cost and as a per capita cost.

The bill also calls for the auditor general to be involved, providing proof that the method of calculation of the costs is valid and a good estimate, as stated in the hon. member's bill. This evaluation of the method of calculating and estimating costs by the auditor general would reassure the public about the objectivity of the calculations and cost estimates.

The objective of Bill C-24 is to require all departments to provide a financial analysis or a detailed cost breakdown of any new legislative measure. Assessing these costs on a per capita basis will enable each citizen to have a better grasp of what each new piece of legislation will cost him personally, what will really come out of his pocket each time the government creates a new program.

This bill is also intended to make legislators and public servants more aware of the financial impact of the various legislative measures. It is also intended to get the public to scrutinize the various government expenditures more closely.

The Liberal government prefers camouflage to transparency and to the analysis of the true costs of government programs. The Liberals' policy has always been: it is better to keep the public in the dark about the true costs of programs, and it is far better to keep the auditor general at a distance, for he could make an objective and transparent judgment of them.

We saw this during the finance committee hearings on the transfer of $2 billion in Canadian capital to the United States, tax-free. The Liberal majority and the chair of the committee himself tried to back the auditor general into a corner for having dared voice a dissenting opinion on the controversial decision by Revenue and Finance concerning this unusual transfer of funds to the U.S.

In terms of political debate and public morality, we have seen better. Instead of going after the message, the Liberals go after the messenger. They want to continue to ensure that the Office of the Auditor General gets involved only after the fact, when the deed has already been done, and taxpayers' money has been committed and spent.

Bill C-214, introduced by the member for Durham will not, unfortunately, be given the support of his party, because he calls for innovative administration, public transparency and objectivity defining the role of the auditor general. Such an honest, open and frank approach to voters and taxpayers is also totally foreign to the tradition and the culture of the Liberal Party of Canada.

Bill C-214 will likely, regretfully, remain wishful thinking, whereas the astronomical debt of $600 billion will urgently require greater transparency and vigorous action, which the government to date has been unable to provide.

The latest budget is indicative in this regard. The Minister of Finance could have done a lot better. He could have taken advantage of an extraordinary economic situation, shall we say, and real manoeuvring room-much more than he claims to have-to really help the unemployed and children in poverty.

These diversionary tactics of which the Liberals are past masters may well abort Bill C-214, and its objectives will no doubt remain a dead issue.

[Federal Public Service, March 10th, 1997]

Mr. Speaker, the minister says he will look into the facts, but how can he claim to care about the fate of these former public servants, who used to earn $11 per hour and who, because of the minister's agreements with companies such as Drake International, will only get $9 per

hour in Ottawa and $7 per hour in Quebec City, for exactly the same work? Why such an injustice?

[Federal Public Service, March 10th, 1997]

Mr. Speaker, my question is for the President of the Treasury Board.

The government has decided to transfer to the private sector the management of the 150 casual employees who were working for its regional cheque printing facilities. These 150 people, who hold precarious jobs, will now have to decide whether to accept a 40 per cent salary cut or stay home.

Given that, in a release dated August 2, the President of the Treasury Board stated that he wanted to act responsibly and in a spirit of fairness regarding the cuts affecting government employees, what does he intend to do to correct such an unfair situation?

[Underground Economy, March 5th, 1997]

Madam Speaker, the member for Guelph-Wellington has tabled Motion M-243, which reads as follows, and I quote:

That, in the opinion of this House, the government should continue and enhance its efforts to address the underground economy, which costs Canadians anywhere from $23 billion to $156 billion dollars in lost revenue and wages, by working with other levels of government, industry, and unions in developing a plan of action, which includes a national education campaign and increased enforcement.

I would like to begin by congratulating the hon. member on her initiative in calling on the federal government to step up its fight against the underground economy, even if it must be pointed out that this initiative has come on the heels of numerous requests by the Bloc Quebecois and of action undertaken by the Government of Quebec in this connection.

Quebec has once again been a step ahead of the federal government. An education campaign is already under way in Quebec. Viewers will recall the television ad showing a young child sitting on a table while adults exchange money underneath it.

The Bloc Quebecois has often asked the federal government to step up its fight against the underground economy, in its analysis of the auditor general's reports for instance, and again quite recently in the paper setting out our expectations with respect to the finance minister's last budget.

In this paper, we estimated that, for the federal government alone, the underground economy represents annual tax losses as high as $6 billion; this figure comes from a Statistics Canada estimate, and we argued that the government could easily recover at least $500 million by hiring more inspectors.

The auditor general has already pointed out that his inspectors cost an average of $35,000 each in salary, and that each one brings in on average almost half a million dollars in additional tax revenue annually.

Economists would advise the government that it should hire these workers as long as their training and salary costs are offset by what they bring in in additional tax revenue.

Right now, they are bringing in ten times more than they cost, which suggests that the revenue minister would do well to hire more of them.

It goes without saying that concerted action by the provinces, industry and unions has a better chance of succeeding than unilateral action by the federal government. We think that Quebec will very likely co-operate with the federal government in this endeavour, because this is a phenomenon that has a negative impact on the tax revenue of all levels of government, while there is only one level of taxpayer. If the federal government indeed acts along with the others involved, instead of harshly imposing its views and interests in this area, we consider this plan to be extremely viable and highly desirable.

The underground economy has two components: there are activities which are fundamentally legal but not reported for taxation, like moonlighting, and then there are illegal and criminal activities, like drug dealing and fencing stolen cars.

We believe that an education campaign ought to focus particularly on people liable to get involved in the first category of activities, and that increased enforcement-stricter legislation and inspection, for instance-need to be looked at for both categories, with particular attention given to controlling and eliminating the second category of activity.

We fully subscribe to the notion that, in a country where the community decides to provide public services, crooks and deadbeats who deliberately avoid paying taxes, who will do anything to avoid paying their fare share of tax, are guilty of antisocial behaviour. That is why we must first of all make people aware of the social significance of underground activities, while at the same time setting up active control measures in areas where such activities are more frequent.

We must, however, avoid going too far and considering everyone a potential crook and deadbeat. We live in a system where people are presumed innocent until proven otherwise, and this must continue. Ways must be found, however, to get at those who are knowingly behaving as bad citizens.

The public must be educated and informed about what their taxes are used for, so that they do not get the impression that they are paying them for no purpose. This implies that the government must first and foremost set an example, and prove that this is true. The public needs to be convinced that the rich, and the big corporations, are paying their fair share of taxes.

Our young people do not need the auditor general telling them that stock mismanagement costs them $1.25 billion, that the federal government spent $30,000 to move a ship in order to save $71 on a repair bill, that the RCMP ordered 4,000 too many hats.

The federal government still has a lot to do in this connection. There are two types of approaches to eradicating moonlighting and tax evasion: deterrents and incentives. The main deterrents are to increase controls and monitoring and to increase fines and penalties. We believe that the federal government should stress incentive measures including lower taxes, deregulation, simplifying the task of taxpayers and government officials faced with the complexities of the tax system, continued improvements in public administration and finally, tax amnesties, which, however, remain an exceptional measure.

In concluding, I believe that education is also helpful, as is the degree of visibility of consumer taxes and increased employment, which might reduce the pressure on taxpayers.

All these measures should be part of a comprehensive plan to fight the underground economy. Unfortunately, from what we have seen in recent months, including latest budget brought down by the Minister of Finance, there can be no doubt at all that the Liberal government is not really interested in fighting the underground economy, in spite of the efforts of the hon. member for Guelph-Wellington.