Mr. Speaker, the next speakers for the Bloc Quebecois will each take 10 minutes.
This budget contains a number of desirable initiatives that have been described in great detail by government members. According to the Bloc Quebecois, however, these measures remain incidental. There is no comprehensive plan with specific objectives, no global vision providing a medium-term perspective and supported by strong measures to put public finances on a sound footing, make drastic cuts in the government's operating expenditures and improve the employment situation.
During four prebudget seminars, the minister consulted his socioeconomic partners as they had never been consulted before. I think we all remember that. The minister had mobilised his partners. The public was prepared to tighten its belt, provided the cutbacks were fair and would require all taxpayers to do their fair share, all of course, to help reduce the public debt.
Still in the initial months of its mandate, the so-called honeymoon period, the Liberal government had a unique opportunity to send out the right signals and change the course of Canada's public finances. However, consulting is one thing but making difficult decisions is another thing altogether. Instead of changing course, as all Canadian taxpayers expected the government to do, what happened? We expected leadership, a change from 20 years of letting public finances slide in this country, a process that started under Pierre Trudeau's Liberal government, as you will probably remember.
I think the government should look at what is being done by Premier Klein of Alberta, who is of course too far to the right for the present Liberal team. Nevertheless, by cutting where he has no other option, Mr. Klein will eliminate Alberta's deficit in three years, and in the future, this may be the only Canadian province that can maintain an adequate social safety net, all because the inevitable cutbacks were done at the right time and not under pressure from international lenders who, one day, will force the federal government to make these choices.
According to us, the deficit reduction forecast in the budget brought down by the Minister of Finance is far too timid. The deficit for 1993-94 was artificially inflated to $45 billion, but according to us, this legacy from the Conservatives should be more like $42 billion. The forecast deficit of $39.7 billion for 1994-95, just under the $40 billion mark, is based on an expected $9 billion increase in tax revenue. If this increase does not materialize, the deficit for that year will be $46.9 billion. We see the same scenario applied to the projected deficit for 1995-96.
The Department of Finance expects the 1995-96 deficit to be $32.7 billion. This would require an increase in tax revenues of $8.1 billion-another increase for the second consecutive year. The government hopes to bring the deficit down to $32.7 billion by March 31, 1996. To do so, it is projecting a total increase of more than $17 billion in tax revenues over the next 24 months. However, it has yet to deal with the problem of smuggling and the underground economy, most tax shelters have been maintained and taxpayers' ability to pay has already been stretched to the limit.
The adjustment of Canadian companies to the new global economy, with all the industrial restructuring and manpower adjustment that involves, is not yet complete. There is also the much needed conversion of military infrastructures to viable civilian projects, but instead, the government has decided to close or downsize a number of military bases in this country.
At a time when rapid change is making new directions mandatory and a new economy is emerging that will impose certain costs before it can be viable, can we expect a real increase in tax revenues as projected by the government? The government's projection is based on a 15 per cent increase in tax revenues over the next two years, in the uncertain climate we have just described.
The deficit will not go down. It will not reach 3 per cent of GNP by the end of this government's mandate. It is clear the government has missed the boat. Like Tory ministers Wilson and Mazankowski, the government is depending on a putative increase in tax revenue to deal with the deficit, while the only way to reduce the deficit in the short term and eliminate it in the medium term is to make drastic cuts in government spending.
The revenue forecasts are unrealistic, and even if they prove to be true, the federal government's net debt would still be $511 billion by March 31 this year, it would go up to $551 billion by March 31 next year and would reach $583 billion by March 31, 1996.
The government has failed completely in its much-awaited initiative to reduce its own operating expenses. Imagine, trimming $413 million from a program budget of $122.6 billion for
1994-95. This represents a reduction of roughly one-third of 1 per cent. The government has failed to make the kinds of deep budget cuts demanded by taxpayers during the last election campaign.
The Minister of Finance tells us that he has begun to put in place the principal components of a plan which should reduce the deficit to 3 per cent of GDP by the end of this legislature. Cutting operating expenditures by one-third of 1 per cent cannot be viewed as a serious deficit reduction effort.
The government will never meet its target. It has pulled the wool over the voters' eyes. Departmental operating budgets will be trimmed by $1.6 billion over three years, while unemployment insurance and social security transfer payments to the provinces will be reduced unilaterally by $7.5 billion over the same period.
Quebec, which has its considerable share of unemployed, will be especially hard hit. Is this what is meant by viable federalism? Having failed to clean up its own house, the federal government will demand from the unemployed and the least privileged an effort nearly five times greater than that which it will be asking of its five federal departments.
In conclusion, this budget does not solve anything. It does nothing to ease the tax burden of middle-class families who clearly could have boosted the level of consumption. The budget also fails to deal with the problem of administrative laxity repeatedly criticized by the Auditor General. Once again, in moving to broaden the tax base, the government has ignored family trusts and the idea of a minimum corporate tax. The problem of administrative overlap and disagreements between Ottawa and the provinces will be fuelled when Ottawa sits down at the bargaining table with $800 million to invest unilaterally in occupational training.
This budget only postpones the hard choices. They will be that much harder to make and the provinces will have an even heavier burden to bear, whereas the federal government will be shifting responsibilities onto these same provinces' shoulders without transferring to them the relevant tax fields. The entire tax base will be barely adequate enough to support the federal debt which has grown to prohibitive proportions.