Mr. Speaker, this debate on government finances is extremely important for all Quebecers and Canadians. I am particularly pleased to participate in this exercise and I want to take this opportunity to thank the Minister of Finance for having made this debate possible today.
As the member for La Prairie, I have the honour of representing in this House the citizens of Brossard, Candiac, La Prairie and Saint-Lambert. These people are middle-class workers. They have worked very hard to get what they have and they often find it revolting to see political leaders and elected politicians unable to control the public debt and the budget. They are annoyed because, in many cases, they have saved every dollar by not going over their weekly budget and, more importantly by not relying on other people's money, money which is not theirs and which leads to debt and dependency, as is the case for Canada right now.
The lack of control over government finance is reflected by the fact that from 1960 to 1994, the debt-to-GDP ratio in Canada went from 34.6 per cent to 71.8 per cent. This means that the debt increases faster than the government revenues which could be used to pay off that debt. While the debt-to-GDP ratio is an indication of the scope of the problem inherited, the evolution of the deficit versus the GDP enables us to find out when, over a period of time, the federal debt simply grew exponentially.
Between 1970 and 1984, the deficit as a percentage of GDP rose from a negative balance of-0.3 per cent-in this case, a minus sign means a budget surplus so in Canada, in 1970, we had a budget surplus-to 8.1 per cent, which was exceeded only in 1985. So in 1984, this percentage peaked at 8.1 per cent. Subsequently, the ratio gradually declined to 4.5 per cent and then rose to 6.2 per cent in 1994, under the new government. In other words, the Liberals have been mainly responsible for the deterioration of public finances in Canada. The Liberals are
responsible for the ensuing expansion of the public debt, and they mismanaged the impact of the oil crises in 1973 and 1980.
The Bloc Quebecois is aware of the need to revamp public finances. We must stabilize the debt/GDP ratio over time. However, we cannot increase the tax burden on a middle class that has already been severely affected by the recession and is particularly vulnerable during this period of slow and painful economic recovery.
According to the Bloc Quebecois, to put the government's financial house in order means, first of all, introducing tax reforms that aim for greater fairness by eliminating tax loopholes enjoyed by taxpayers with high incomes. The hon. member for Saint-Hyacinthe-Bagot spoke at length on the subject earlier today. Second, we must reduce government spending. We believe such measures would generate greater flexibility and a potential savings of $10 billion for the government. The aim of this budget policy is to avoid shifting the burden of federal deficit reduction to the provinces. Its aim is also to protect the neediest in our society and prevent any cuts in the budget envelope for social programs.
The Bloc's budget policy wants to strike a balance between two priorities: job creation and revamping public finances. That is why we intend to allocate the $10 billion saved by cutting gross expenditures and tax spending as follows: $5 billion would be allocated to job creation and $5 billion to reducing the deficit.
Our plan to reduce spending consists of two parts: first, a $3 billion cut in the defence budget. The budget of the Department of National Defence for 1993-94 totals nearly $12 billion. The budget breaks down as follows: $9.1 billion for operating expenditures, $2.9 billion for capital expenditures and $356 million in transfer payments. Our proposed spending cut represents 25 per cent of the current budget of the Department of National Defence.
The remainder of our expenditure reduction policy is about eliminating waste and poor management. The hon. member for Joliette discussed this at some length this afternoon. Eliminating duplication of services by provincial and federal governments would, we believe, generate a potential savings of $2 to $3 billion, while duplication among various federal departments would also be a prime target. Operating expenditures of departments and federal agencies would be cut as well.
Incidentally the government's gross operating expenditures totalled nearly $35 billion, or 27 per cent of gross program spending, in the 1993-94 Estimates. Some departments have relatively high operating expenditures: Public Works, 10 per cent; Transport, 6 per cent; National Revenue, 6.5 per cent; RCMP, nearly 5 per cent; Supply and Services, 3 per cent.
Our policy for reducing operating expenditures also aims to increase the relative size of government capital spending in relation to operating expenditures. Capital expenditures help generate income for several years because these are investments. No more borrowing money to pay the groceries. We also have to change the nature of the government's capital expenditures.
In the 1993-94 Estimates, more than 53 per cent of gross capital spending was for the Department of National Defence, mainly to purchase warships and weaponry. The Bloc Quebecois feels this kind of investment is not very productive.
With respect to managing public expenditures, the Bloc Quebecois also advocates a thorough evaluation of government spending programs. Program evaluations address three needs. The information gathered is used, among other things, to help make decisions about resource allocation, to help Quebecers determine the value obtained from their tax dollars and to enable public servants to take responsibility for results rather than process.
I would also like to point out that departments spent only $28.5 million of the overall government budget on the program evaluation function in 1991-92. The central branch reporting to the Office of the Comptroller General spent only $2.9 million on evaluation.
It should also be noted that two major problems, one quantitative and the other qualitative, are associated with the evaluation of government programs. As for the quantitative problem, it is worth noting that in 1989-90 and 1991-92, expenditures related to program evaluation fell by 28 per cent. In fact, the number of program evaluations has been declining for the past seven years, that is since 1987-88. Since that time, 99 program evaluation reports have been produced, whereas in 1991-92, only 90 evaluation studies were produced. That is very few indeed and the number is steadily declining.
Government expenditures for 16 programs totalled $124.5 billion in 1991-92. Only two of these programs were the subject of a thorough evaluation. Not enough attention is paid to major programs. Evaluation studies conducted over a seven-year period covered approximately 24 per cent of the government's program expenditures in 1991-92.
Thus, if we take into account expenditures on servicing the national debt, only 18 per cent of expenditures were in fact covered in the last seven years. Evaluations did not focus on the most expensive programs. It is estimated that the rate of coverage of programs with expenditures of over $250 million is less than half that of programs spending $250 million or less. In short, the number of evaluations is steadily decreasing. Very few have been conducted and those that have been cover programs with smaller expenditures.
As for the qualitative problem I referred to earlier, by locating the evaluation units in the departments, the immediate needs of managers take precedence over the needs of government and the interests of the general public. When questioned by the Auditor General, those responsible in the departments for the program evaluation function responded that in their view, the main purpose of an evaluation was to help management solve operational problems. Thus, they are overlooking the essential purpose of program evaluation which is to assess the efficiency of programs and call them into question if necessary, all in the interest of ensuring optimal resource allocation.
It should be noted that this kind of information would be most useful to Parliament in helping it decide how best to allocate resources and to the public in helping it rate the government's performance. The fact of the matter is that evaluations cover only operational matters, not those aspects relating to the relevance or cost-effectiveness of programs.
Evaluations cover only portions of programs or small-scale programs. There is no systematic process in place for evaluating programs affecting more than one department. We in the Bloc Quebecois find the situation within the federal government with respect to program evaluation totally unacceptable. The President of the Treasury Board and the Minister of Finance must take action as soon as possible to remedy the problem.
The information that could be culled from well-produced program evaluations would be very useful to parliamentarians. Indeed, it would make it possible to identify successful programs which no longer produce the desired results and which could be replaced by more efficient ones.
Given the size of the deficit and the to say the least anemic economic recovery, it is critically important that existing resources be allocated and utilized as efficiently as possible. Program evaluation becomes an essential exercise under the circumstances. Without effective program evaluation, the government is simply not in a position to allocate in the best possible way the financial resources it receives from the taxpayers. Parliamentarians are being asked to work in the dark and to allocate resources without knowing all the facts.
According to a study made by the Auditor General, proper program evaluation can result in significant savings. For example, in 1990, the Department of Finance carried out an evaluation on the effects of the Cape Breton Investment Tax Credit. Since the study indicated that the program was not doing what was expected of it, it was abandoned. This tax measure involved more than $500 million in tax revenue foregone during the period it was in effect. The loss in revenue would have continued to accrue while this inefficient program was allowed to go on, which is why it was abandoned.
The people would benefit from better program evaluation and would also be able to assess the performance of their elected representatives, which would help to improve democracy.
In conclusion, I would like to say that, in order to avoid waste and to optimize the allocation of tax resources, the Bloc wants all programs to be subject to an evaluation process and the civil servants in charge of program evaluation to report directly to a Standing Parliamentary Committee on Program Evaluation. The officials in charge of these programs have to be accountable to Parliament and justify the allocation and use of public resources on their programs.