Mr. Speaker, I am also very glad to support the motion before the House of Commons today.
As we all know, our social programs reflect a vision of Canada that is ambitious and very dear to us, a vision of Canada as a world leader in accessible health care, knowledge, innovation and compassion, as well as a vision of a nation providing its citizens with a sense of security and many opportunities.
We hold tight to this vision, not because of our political affiliation, but because we are Canadian. The people of Canada do not expect anything less.
Although Canada's social programs are the envy of the whole world, we do not want to rest on our laurels. It is in this spirit that this government has constantly and thoroughly tried to ensure that our social programs keep improving, meeting the needs and reflecting the priorities of Canadians, wherever they live.
All of the provinces and territories share this commitment and I am sure that the current negotiations on social union will benefit everyone. Our social safety net relies on co-operation between the various levels of government.
The health care system in Canada is constantly under pressure to keep pace with technological developments. The demographic situation also exerts some pressure. In fact, the health care system has to deal with a population that is growing as well as ageing. So, Canadians have every right to be concerned about the preservation of the quality of our health care system and of its accessibility.
Health care has to be the main area in which we invest next. I for one believe in the future of the health care system in Canada. Some will ask me how I can be so optimistic given the huge pressure being exerted. Well, it is because I have seen how this government has managed to meet other huge challenges.
I remind the House that in 1994 the deficit was $45 billion. In 1998, we have a balanced budget. Also in 1994, the accumulated debt was over $500 billion and still rising. Today, in 1998, the debt to GDP ratio has started to go down for the first time.
Quite simply, we were faced with a debt and a deficit of catastrophic proportions. We had to deal with this problem immediately. I do not mean to sound alarmist, I am merely stating the facts.
During the first years, the government implemented unprecedented restraint measures. We reviewed all programs and activities; we reduced the size of the public service; we consolidated programs; we privatized; we commercialized; we moved heaven and earth.
These measures were not simply emergency measures to limit spending. They were fundamental structural changes stemming from a comprehensive reorganization of our country's priorities.
Our restraint measures were aimed essentially at program spending. But we had to look at the whole picture. Federal spending on transfers to the provinces account for about one-fifth of our total spending. Accordingly, we could not ignore this sector in our efforts to save money.
It must be remembered, however, that the federal government gave itself a larger share of the burden of budget cuts than it did the provinces.
The results of this fiscal discipline are eloquent. The circumstance surrounding the debate on Canada's finances are now much more favourable than they have been in recent decades. The budget is balanced, and the debt to GDP ratio continues to drop.
This does not mean that we are protected from the financial market fluctuations that have hit the world's economies. These problems have slowed the growth of our own economy and have resulted in a drop in the value of our currency.
How can we be so confident? Because of the financial adjustment we struggled to achieve. In the last fiscal year, we were the first central government in all of the G-7 countries to present a balanced budget.
This adjustment, in which the reductions imposed on the provinces played a real role, I will admit, is not an abstract accounting concept. It means that Canada has not been in such a good position to deal with world economic fluctuations in decades.
I do not want to start an endless debate on what our situation might be exactly, had we not cut spending so categorically. I can, however, give a brief summary: our dollar would dropped further; interest rates would be much higher; thousands more would be unemployed; we would be paying billions of dollars more in debt servicing.
Fortunately for us, these issues are theoretical. Suffice it to say that, in the short term, we had to tighten our belts, not only to be long term winners, but in order to survive.
As to the present, the questions facing us involve striking a balance among funding social programs, cutting taxes and reducing the burden of the debt. We have clearly established that health care is an absolute priority.
In fact, once a balanced budget was within reach, we increased the minimum funding to the provinces for health under the Canada social transfer. This cash floor was increased from $11 billion to $12.5 billion annually, up to the year 2003.
This means an additional $7 billion for health care, for each province and not, as Bloc Quebecois members claim, $7 billion just for Quebec.
But the cash floor is not the only component of the Canada social transfer for health and social programs. There is also the transfer of tax points, which Bloc Quebecois members never talk about. When the economy is growing, as it is now, the value of these tax points increases, as has been the case for the past several years.
In 1993-94, the value of the tax points transferred amounted to $10.1 billion. This year, it will be around $13.3 billion. If we add that amount to the cash floor of $12.5 billion, we get a total of $25.8 billion. These are facts.
Moreover, increasing the cash floor was not the only spending commitment made to improve the situation in the health care sector. Indeed, in our last three budgets, we have allocated more money to new initiatives in that area.
Lower interest rates also result in reduced debt servicing costs for the provinces. Based on our estimation, lower interest rates have resulted in a $1.8 billion dividend for the provinces, during the two-year period from January 1995 to December 1996.
Therefore, provinces are also benefiting, since they collect more taxes as more Canadians are working, not to mention lower social assistance costs.
Even Canadians who are young, healthy, educated and employed benefit from the social security network.
Today I started by reminding the House that the Canadian social security system was build through co-operation among the various levels of government. It is this tradition of co-operation that will ensure the survival of our social programs.
We really want to do our share. As the finance minister said when he delivered his economic and fiscal update to the Standing Committee on Finance, and I quote: “We welcome the assurances of Canada's premiers that any additional federal funding provided to the provinces for health care will indeed be used for that purpose. We share strongly their desire—and the desire of all Canadians—to have confidence in the health care system restored, and we want to work in partnership with the provinces to secure that confidence”.
By putting its fiscal house in order, this government made sure it would continue to play a role in the building of a strong and prosperous country able to educate its young people. This is our goal.
