Mr. Speaker, I welcome this opportunity today to speak to Bill C-76 which proposes to implement certain provisions of the federal budget tabled by the Minister of Finance in February.
Unfortunately, this bill confirms what the official opposition suspected when the budget was tabled. And how does it confirm these suspicions?
Since the Liberal government cannot go on adding to the debt, it has decided to reduce the federal deficit by offloading the deficit to the provinces. Our Liberal big brother suddenly turned into an unwilling partner, a most unwilling partner, who decided unilaterally to reduce transfer payments to the provinces by more than $7 billion over the next three years.
These cuts will not take effect until 1996, to maintain the illusion that federalism pays, especially for Quebec. An illusion that will be particularly useful during the referendum campaign.
But the official opposition is keeping a close watch. This camouflage operation is despicable. Starting in 1996, Quebec stands to lose more than $700 million, and in 1997, more than $1 billion. This is intolerable.
What we have here is an irresponsible government that is trying to make the provinces take care of a situation the government created. The provinces are stuck with the bill, but they are not being given new powers. Only the federal debt is being decentralized, not government.
In the social sector, the long-awaited transfer of jurisdiction did not take place. Appearances to the contrary, the federal government insists on interfering in areas over which the provinces have exclusive jurisdiction. It withdraws but refuses to allocate an equivalent share of tax points to the provinces. Is this the much vaunted flexible federalism?
What is so flexible about letting one's so-called partners in this wonderful federation pay the bill, while imposing increasingly restrictive national standards in several areas?
Section 48 of this bill confirms that in addition to national standards for health care, there will be new standards for social assistance and post-secondary education. And provinces that do not play by the rules will see their funding cut.
The federal government's response is that these standards will not come into force before a consensus is reached among the provinces. Then why this attempt to introduce so-called national standards before there have been negotiations between the parties?
I will not dwell on the fact that the provinces were ordered to mention the Canada Social Transfer in all advertising and documentation referring to health care services offered by the provinces. Flexible federalism is dead in the water, long live imperial federalism.
But the empire is crumbling under its tax burden. In spite of cuts in social programs and transfer payments, the federal giant will need even more money to survive during the next three years.
The Canadian government's revenues will increase from $125 billion in 1994-95 to $137.4 billion in 1996-97. Taxes will increase by more than $3.5 billion over a period of three years. In fact, we will be paying more for less.
Need I remind the House that since 1980, the ratio of government revenues to GDP has increased by 18 per cent? Since the 1980 referendum in Quebec, taxes in Canada have increased at twice the average rate for G-7 countries.
It is shocking to see that as it prepares to cut payments to the provinces and increase taxes, this government refuses to do anything to stop duplication and the outrageous waste of public funds.
Where are the real measures to eliminate waste and overlap between levels of government? The answer is obvious. With the federal system, there will always be two departments of the environment, two departments of health and two departments of justice. By nature, the federal system extends its grasp ever further. The negative effects of the federal budget, renewed in Bill C-76, will hit all the provinces hard, particularly Quebec.
According to a recent study by Wood Gundy the expenditure control plan proposed by the federal government to reduce transfer payments to the provinces and the many changes over the past decade to established programs financing have increased provincial deficits.
The Government of Quebec has estimated that the cumulative effect of these measures from 1982 to 1994 meant a shortfall for it of $14.3 billion. The federal government's latest budget confirms that this trend will increase.
Federal money transfers in fact represent an increasingly smaller portion of Quebec's revenues. I will give you just one example. In 1983, federal transfers represented almost 29 per cent of Quebec's revenues. In 1994, they represented 20 per cent.
Wood Gundy believes that the cost of the federal government's withdrawal from established programs financing alone, responsible for 28 per cent of provincial deficits in 1993-94, will grow to 60 per cent of them in 1996-97. February's budget simply announced a worsening of the situation.
On the other hand, needs in the areas of post-secondary education and health care are on the rise. The provincial governments are faced with an existential dilemma: cut services or increase their deficit.
The official opposition has no choice but to criticize the government's lack of vision in reducing the deficit accumulated over the years. The government should have put its energies into eliminating useless duplication and overlapping jurisdictions with the provinces.
It should have trimmed the fat off its still cumbersome and ever costly structure. The Liberal government could have cut nearly $3 billion more over three years at the Department of National Defence alone. It failed to do so.
If it had gotten out of areas of provincial jurisdiction, in exchange for equivalent compensation in the form of tax point transfers, it would have created significant savings for both itself and the provinces. It would have meant savings for the federal government of nearly $3 billion in health care, professional training, post-secondary education and all programs relating to human resources development.
If the federal government withdrew from these areas of jurisdication, the Government of Quebec could, among other things, establish a real job creation strategy by tailoring human resources development and job training programs to key sectors of the province's economy.
But the federal government's actions tell a different story. The official opposition feels that this bill will actually impede job creation, because, instead of withdrawing from labour and education, which would permit the provinces to get to the heart of the problem, the federal government's role in these areas is actually reinforced by this bill.
As for Canada's tax system, the federal government still has given no real indication that it was serious about thoroughly revamping it. Some people still have the joy of exploiting tax havens!
Quebecers will soon have to decide which path to take. On the one hand, they have the option of taking their own matters in hand, of being masters of their destiny by founding a country they can call their own, and investing the imagination, creativity and constant quest for excellence that they are well known for in that country.
On the other, they have the option of remaining in a political and economic system that distinctly refuses to acknowledge their existence, of sticking with the status quo, which undoubtedly will lead them nowhere as a people. A stale political and economic regime crumbling under its own debt, deficit and taxes, unable to guarantee its citizens an acceptable standard of living. A political and economic regime which, without a doubt, is doomed to failure.
Sovereignty, admittedly, is not the miracle cure for all of Quebec's woes, but it will give Quebecers the power to pull the political and economic levers which will promote Quebec's growth.
