Paul Crête

[Supply, February 10th, 1994]

Mr. Speaker, in reply, I will say that the elimination of waste was part of our platform too. Where we differ is in the sources of such waste, as was demonstrated by the way Quebecers voted. A federalist party is of course bent on trying to improve the system to make it better.

In Quebec, we have reached the conclusion that the solution was no longer to improve the system but rather to significantly alter it. In Quebec, we have lived the overlapping problem in a very different manner, because of our specific characteristics. This aspect was never dealt with in a realistic or concrete manner in this House, leaving the problem unsolved. We believe that it is because there has never been in this House members whose sole interests were those of Quebec; often, people were held back by their federalist vision, and their commitment to federalist principles.

As far as the helicopters are concerned, as we said all along during the election campaign, we were ready to cancel the contract, but, contrary to the Liberals, we wanted to avoid the loss of research and development funding, and the elimination of the high tech jobs it was providing. What was needed then was new projects to utilise this highly skilled labour force. During the weeks immediately following the election, we suggested a high speed train project. In my view, to have highly skilled and well trained people on unemployment insurance is not a sound investment for the long term. We have to put them back to work as soon as possible.

I might add that the infrastructure program, for example, will meet certain needs in that area and create jobs for a certain kind of workers. But for those to whom that really matters, who make good wages and who put money back into the economy and into the area where they live, the vision of members on this side is more forward looking than that of the government, regarding the proposed course of action.

[Supply, February 10th, 1994]

Mr. Speaker, the Official Opposition is using the first business day of which it is controlling the agenda to deal with the issue of federal government expenditures. In doing so, we are responding to an expectation that was repeatedly expressed by the people during the election campaign. The urgency of the situation speaks for itself. The deficit is reaching a record high and is out of control to such an extent that, as a percentage of the gross national product, it is 63 per cent higher in Canada than the average in the G-7 countries.

Half of this deficit is due to structural problems. Canada's structural problems are legion and most of them are related to the very structure of our federalism. For instance, interference of the federal government in the areas of provincial jurisdiction as well as a loose definition of the jurisdictions of each of those levels of government lead to numerous duplications, a waste of energy and conflicting policies. Other structural problems simply reflect bad government managemnent or policies.

For instance, Canada invests very little in research and development which is a major sector if we are going to try and meet the challenges of foreign competition. Furthermore, at the international level, Canada has a poor record on public debt management. In fact, since 1989, government expenditures in Canada have increased more rapidly than those of all G-7 countries.

According to the review of The Report of the Auditor General of Canada made by Mr. Yves Séguin, bad public expenditures management has resulted in a $5 billion loss each year for the past three years.

Add to that the cost of overlappings. Sixty-seven per cent of the federal programs overlap provincial programs to a certain extent. They account for 65 per cent of all government expenditures, besides payments made for the public debt and unemployment insurance. For example, if Quebec took over the present federal programs and offered the same services, the savings would amount to $233 million for transportation and communication, $289 million for expenses related to collection of custom duties, income taxes and other taxes, and $250 million in salaries, all that for one year and for Quebec alone.

It can be reasonably estimated that just by eliminating duplication of services we would save two to three billion dollars. These figures are the financial result of duplications in the services provided by both governments, plus the increased need for co-ordination created by the claims of each government. The overlaps reduce the efficiency of government measures due to the competitive, if not conflicting, nature of federal-provincial relations. Witness the flag wars that have been waged by the two sides for the last 20 years.

In June 1988, Quebec and Ottawa signed an agreement on regional economic development which was to result in an investment of $820 million over five years, divided as follows: Ottawa, $440 million, and Quebec, $380 million. Now, believe it or not, it took a little over two years for Ottawa and Quebec to agree on the programs and on their respective roles. Five years after this agreement was signed, the two governments had spent only $281 million, that is to say a mere 34 per cent of the $820 million agreed to. This is a far cry from what was expected as the result of this allocation of funds.

The overlapping of services also increases the burden on individuals and companies seeking access to the programs and services offered. A lot of energy is wasted just to find one's way through this regulatory and administrative maze. I think that since we have been elected, everybody realized that, because it took us a few months just to learn to know all the existing programs. As I said, we are wasting a lot of energy just to make our way through this administrative maze.

When a firm wants to make a plan for the development of its human resources, for example, it has to convince both the

professional employees from the federal government and the people from the Société québécoise de la main-d'oeuvre in order for its employee placement plan or employment assistance committees to be implemented. Small businesses often have to pass on to consumers the costs of the redundant representations they make to both governments. Without realizing it, consumers end up paying for the cost of federalism through an intermediary.

Keeping up with programs and services is in itself an important additional cost for individual businesses. Furthermore, the few sessions held by the industry committee allowed me to realize that it was a problem felt throughout Canada.

An ENAP study found that out of a sample of 221 federal programs and 244 Quebec programs, 197 overlapped to various degrees and were seriously jeopardizing the efforts to enhance the management of government policies.

For example, the following sectors, among the most depressed in the Canadian economy, accounted for more than 75 p. 100 of all the program overlaps between the federal government and the Quebec government: fisheries, housing, education, secondary industries, financial markets, territorial management, labour and employment, and of course regional development.

These overlappings also reduce the control citizens have on their government. As a result of this competition between governments, no government alone has the ability to carry out projects that have been undertaken, while allowing each governement to throw the ball back into the other's court.

Citizens do not directly pay for the programs available to them and cannot avoid paying for a program which they feel is less satisfactory. What is ultimately questioned is the principle that a person who pays taxes has the right to be represented. Under the Canadian system, taxes paid to one government are often spent by another government, whose criteria do not necessarily coincide with the other's criteria. This may explain the lack of confidence voters have shown in the Canadian electoral system and their elected representatives.

Competition between governments seldom improves the quality of the services they offer, because governments do not operate in the same way as the private sector. The constraints are not the same.

The government's other objective is to deal with the poor management practices observed and criticized annually by the Auditor General of Canada. Horror stories aside, we should pay particular attention to the substantive recommendations made by the Auditor General. To ensure that the situation is corrected, we suggest a careful follow-up of these recommendations in order to return control over the budgetary process to Parliament. Members can then be heard before decisions are finalized and can influence those decisions, with the help of adequate information on the use of public funds by departments and Crown corporations.

This year again, the Auditor General's report criticized departments for their lack of emphasis on program evaluation. In 1991-92, expenditures for 16 programs totalled $124.5 billion, and only two of these programs were given a thorough evaluation.

We cannot tolerate taxpayers' money being spent without an evaluation of the efficiency and effectiveness of the activities involved. It is necessary to do the right thing and to do it right. One must be able to evaluate what is being done. On the basis of the information for 1991-92, the Auditor General observed that over a seven-year period, only 18 per cent of the programs had been evaluated.

Considering the urgency and seriousness of the situation, the Bloc Quebecois is asking the government to strike a multiparty committee of the House of Commons with a mandate to examine all the government's operating budgets. The government must guarantee this review of government spending will be an open and transparent process.

To ensure that the instruments required to provide for sound management of public spending are put in place, the government should undertake to react officially and promptly to the committee's recommendations.

There are many avenues to explore, but for this exercise to be successful, parliamentarians must lead the way. Ministers, members, senior officials and all other players in the administrative apparatus must realize there is an urgent need for a change in attitude, from "it does not matter, the government is paying" to "this is everybody's money and I must ensure it is used effectively".

By carefully examining operating budgets, we should be able to eliminate a number of obsolete programs that have continued to exist by sheer force of habit.

The most striking example is military expenditures. We approved the cancellation of the helicopter contract, but we believe the government is engaging in the same kind of non-productive expenditures by not transferring the high-technology jobs involved into a really comprehensive project and by letting them go instead, thereby increasing unemployment insurance costs.

We think it would be possible to reduce defence expenditures by 25 per cent, that is an amount of $3 billion.

Another example we should look at is the natural tendency to self-justification within the bureaucratic machine. The first thing that comes to mind is the considerable amount of energy and resources spent for the preparation of perfect forms and detailed instructions, even before anyone knows who the users will be. Please let us not put the blame on those who already

have trouble enough surviving the financial crisis; they are only the victims.

On that point, tax expert Yves Séguin said that the fat in social programs was much leaner than the fat on the other side; that there were more savings to be made by curbing waste than by cutting social programs because, except in cases of gross abuse, these are not overly generous in the first place.

Why is the Bloc Quebecois putting so much energy in this fight against waste if it wants Quebec to redefine its relationship with Canada? Simply because it is the wish of everybody in this country and particularly of taxpayers who pay their income tax regularly and keep the system going. But also because Canada and Quebec cannot look ahead to any kind of future if they do not succeed in curbing that monster the federal system helped create.

[Supply, February 10th, 1994]

moved:

That this House urge the Government to strike a Special Committee of the House, composed of representatives of all the official parties, with a mandate to examine public expenditures by the federal government, in light of the Report of the Auditor General of Canada, concerning overlap between federal and provincial government programs and in accordance with the following guidelines:

(1) the Committee's deliberations would be an open and transparent process allowing for the public examination of official matters;

(2) the Committee would have the power to subpoena any witnesses whose testimony would be considered helpful;

(3) the Committee would be required to report to the House by June 23, 1994;

and that this House urge the government to promise to provide an official reaction to this Committee's Report by tabling in the House its response to the recommendations on the first sitting day after September 1, 1994.

[Federal-Provincial Fiscal Arrangements And Federal Post-Secondary Education And Health Contributions Act, February 9th, 1994]

Madam Speaker, I would like to say to the hon. member-if he has children he will understand-that we have a situation where a group of people or a region is a like a child that grows up. When Quebec entered Confederation, it was looking for some form of security, and it helped to found the Canadian Confederation.

As the years went by, it realized it had no control over the way the house in which it lived was run and that, once past adolescence, it was not treated as an adult. But at some point, you have to go from adolescence to adulthood.

Equalization gave Quebec a chance to survive at least for a couple years? We never said it did not. What we are saying is that the system undermines Quebec's desire to be autonomous.

The equalization system treats us like children who have to be told what to do.

Quebec will no longer stand for being treated like this by societies other than its own.

We have taken charge of our economic development, especially since the sixties when we created instruments like the Caisse de dépôt et de placement, which we had to wrench from the federal government. Otherwise we would have no control over this area today. We nationalized electricity at the expense of outside authorities as well. Little by little, we reached the conclusion that we had to get out of this system.

I think that Quebecers, especially since 1968, have tried a lot of things: we tried a federal Liberal government, with 74 Liberal members, and we did not get what we wanted. We tried "le beau risque" with the Tories, and we did not get what we wanted. Now the people of Quebec have decided to clarify the situation with Canada, and that is our role here, as representatives of the Bloc Quebecois, elected by 50 per cent of the population of Quebec.

[Federal-Provincial Fiscal Arrangements And Federal Post-Secondary Education And Health Contributions Act, February 9th, 1994]

Very, very simple indeed.

The standard of equalization is the per capita revenues resulting from the application of the representative tax system in five provinces, namely Ontario, British Columbia, Saskatchewan, Quebec and Manitoba. In 1993-94, the standard was $4,731. Together with equalization come floor or minimum payment level provisions protecting each recipient against a sudden annual drop in equalization payments.

Bill C-3 would renew the equalization program for another five years, from April 1, 1994 to March 31, 1999. The maximum payment level would be maintained at the 1992-93 level. Note that the Department of Finance plans to maintain this ceiling for the five years covered by the bill. This will limit the growth of the payments made to the provinces.

The Department of Finance also planning statutory changes to the tax bases used in the equalization formula. The complexity of the process hints at its inefficiency.

Bill C-3, An Act to amend the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, can be considered from various angles.

First, one could wonder about the actual impact of the goals of this piece of legislation. Let us not forget that equalization was established to compensate a major shortcoming in the Canadian federal system, in which the federal government has the power to spend tax revenues without authority over provincial areas of jurisdiction.

Equalization was instituted in the federal system based on the proceedings of the Rowell-Sirois commission. Since then, equalization has prevented Canada from breaking up, but it has created negative effects of its own which, among other things, have contributed to the loss of faith of the people in the tax system governing them.

Not being able to establish a direct link between the government levying taxes and the one providing services makes it difficult for the Quebec and Canadian taxpayers to assess fully how each level of government is carrying out its responsibilities.

The main negative effect however has certainly been the introduction of a ceiling on the amount that can be paid to a so-called have not province. This ceiling thwarts the initial goal of equalization by widening the gap. Quebec will have to assume 60 per cent of the cut imposed on recipient provinces, solely because of this ceiling.

Let us recall the basic objectives set by Quebec's finance minister as the basis for provincial transfer reform, in order to adjust to the financial and budget realities of the 1990s.

These basic objectives are: to better balance government responsibilities against tax revenue; to improve the redistribution of wealth in Canada; and to enhance Canadian public sector efficiency.

Mr. Bourbeau, Quebec's finance minister, is known as a passionate federalist. But he went on to say: "I nevertheless find it difficult to accept that the federal government has decided to maintain the ceiling provision of the equalization program". The finance minister of Quebec and his critic in the National Assembly agree on this. Poorer provinces will, paradoxically, help to trim the federal deficit.

I think this provides compelling evidence that the federal system does not work. Only an extensive reform of the overall transfer program structure can correct the present situation.

This reform should be based on the following elements: no cuts in real terms and per capita to provincial transfer payments; no national standards incompatible with Quebec's specific situation; non-interference by the federal government in areas of provincial jurisdiction, which is a well-known cause of inefficiency. This reform must be aimed at a better redistribution of revenue among the provinces, particularly in terms of equalization payments. The equalization ceiling must be removed.

This bill clearly shows that Canada's Liberal government paid no attention whatsoever to the message delivered by the people of Quebec, who elected 54 members of the Bloc Quebecois. Quebecers no longer want to be dependent on a system that encourages them to stay poor. The current system is an incentive to inefficiency.

In spite of all this, the federal government has decided to deal with equalization as if it were business as usual. If I were a member of the majority defending Canadian federalism, I would oppose maintaining the ceiling provision of the equalization program for the sake of equity within the Canadian federation. Unfortunately I did not hear many members opposite say the same thing.

But, as a member of Quebec's national community that has pursued self-sufficiency for 50 years, I know that maturity entails specific responsibilities and powers that will allow people to determine their government's effectiveness. Nevertheless, the removal of the ceiling is a cure the current system cannot do without.

To determine if the equalization system meets its objectives, we should check if it has corrected economic, social and cultural inequalities among the various parts of Canada since its implementation. Unfortunately, that is not the case. If you compare unemployment rates, the exodus of young people from various regions of Quebec in the last 20 to 30 years, the system is a failure as all indicators clearly show.

Furthermore, the imposition of a ceiling does not meet the objectives of the equalization program. This program makes it difficult for taxpayers to assess its effectiveness. That is one of the main reasons why voters distrust politicians like us as well as the process itself because Canadians cannot tell if the money they invest in taxes comes back to them in the form of adequate services. The people we pay our taxes to are not necessarily those who deliver services and I think this is an important shortcoming that should be addressed.

Taxes are collected by the federal government. The federal government then transfers the money to the provinces who, in turn, distribute it among their various programs, while the poor taxpayer must determine the effectiveness of this and that and find out what is going on.

All this to say that, by tabling Bill C-3, the government has demonstrated that it has set aside the real changes expected by Canadians. While waiting for a comprehensive reform package we are asking it to at least remove the ceiling.

[Federal-Provincial Fiscal Arrangements And Federal Post-Secondary Education And Health Contributions Act, February 9th, 1994]

Madam Speaker, it is not an easy task to explain the equalization process so that our voters, the people of Canada can assess this thing, but I think that it is important that we do so. It is one of the responsibilities that fall upon us as politicians.

As a preamble, I would like to quote the statement the Minister of Finance made on January 21, 1994, when he unveiled the details about the renewal of the equalization program for five years.

He said this: "This is a key program to reduce disparities between provinces in terms of their revenue raising capacity".

He also said: "I have indicated to my colleagues that I will proceed with this renewal in a financially responsible way, taking into account both the needs of the citizens in each province and the need for the seven provinces that receive equalization payments to enjoy the necessary stability for planning".

This is a little arid, but it is important to understand what this statement implied.

Equalization payments are calculated using a method prescribed by federal legislation which takes into consideration the overall capacity of each province as well as local governments to raise revenues through taxes and various dues. This includes personal income tax, corporate income tax, sale taxes in general, taxes on fuel, tobacco products and alcohol, fiscal levies on natural resources, property tax and many more not so far-reaching taxes.

Each year, the fiscal capacity of the provinces is compared on the basis of their individual estimated revenues if the same tax base and tax rate were applied in each case. This requires a standardized tax system known as representative tax system in which provincial governments' revenues are divided up based on 33 different revenue sources, each having a base representative of those actually used by the provinces. The size of the tax base is then calculated for each province and, using the average provincial tax rate from each source, the revenues of each province is calculated for each source separately and globally.

[Federal-Provincial Fiscal Arrangements And Federal Post-Secondary Education And Health Contributions Act, February 9th, 1994]

Madam Speaker, I rise on a point of order. Would the House allow the hon. member for Rimouski-Témiscouata to reply to the hon. member?

[Federal-Provincial Fiscal Arrangements And Federal Post-Secondary Education And Health Contributions Act, February 9th, 1994]

Madam Speaker, I thank the hon. member for Broadview-Greenwood for his speech, because finally he got into the substantive issue.

The people of Quebec all know what is in this bill; for 25 years, we in Quebec have been debating this situation of money from the federal government that fluctuates from year to year. For us the time for plumbers is over; for us now is the time for architects.

We do not care that you wanted to give us fish with a law like that. We want to be able to fish. What we want is to control things ourselves and have a free hand to run our own show. For that, what is most important to us is to have a government that raises taxes giving services to the people for the taxes it raises.

Now, because of the problem with Canadian federalism, to begin with, whereby the federal government has the right to raise taxes in areas it does not control, we have this fantastically hypocritical situation where the federal government says that it is giving us money back. It is not giving us money back; it is collecting our taxes and distributing them differently and for 125 years we have fought it because it never suited us.

That is why we in Quebec decided that there was no longer any point in coming here to fight with federalist members. Thus Quebecers elected sovereigntists because, as I was just saying, they no longer want to change the plumbing; they want to change house.

What I also wanted to tell you is that there are still problems with this bill, because from the time a ceiling was set, the following perverse effect has been created: Quebec's payment is 60 per cent of what it would be without the ceiling. When the federal government was run without the present level of deficits, we could afford this reduction, setting aside the basic problem with the federal system.

Since the federal government has no more money because it mismanages ours, not only Quebecers' money but that of all Canadians, it set a ceiling. With the ceiling, Quebec's share is decreasing systematically.

I quite agree with what the hon. member said about Richard Séguin-I know him well, and also his twin sister, who is a great singer; they are about my age and we have the same dream-we want to control our means of development so that our future can turn out as we want.

[West Coast Ports Operations Act, 1994, February 8th, 1994]

Mr. Speaker, I want to point out to the members of committee of the whole that we must make a decision based on the best resolution of conflict formula, so as to enable these professionals to deal with such a situation in the future. Indeed past experience in this sector is not a very good guarantee for the future. Therefore, what is needed is a solution which will provide a guarantee for the future.

Finally, selecting the best offer means that there is a winner and a loser. Someone will be able to say afterwards: "It is your collective agreement. You are the one who got it from the government, so you have to live with it". By experience, after having gone through decrees on collective agreements in the public sector in 1982-83, I know that this is no fun, neither for the employer, nor for the union concerned. It is important that everyone be a winner in this exercise and, for that to happen, both sides must have the impression that they suffered and had to give something during the negotiation process. At the point where we are now, the only solution is to convince the two sides to submit proposals to the referee, and this referee must be able to decide what is best for both sides.

An important technical aspect is that in a single offer, there are always areas regarding which the party making the offer would have been willing to give more and to bargain with the other party, but did not do so because it tabled what was a global and comprehensive offer no individual aspects of which could be amended.

From this point of view, I do not think that the proposal will provide a solution that will make people as happy as possible afterwards and ensure them an adequate work environment. The worst thing which could happen, and which would prove that we are inefficient would be to find ourselves in the same committee of the whole in two or three years, following another breakdown in labour relations.

I believe it is important for us to find a solution which will lead to an improvement in labour relations in that sector, because right now both sides seem to think that "in the end, the government will decide". We must put the two sides in a situation where they have to take their responsibilities, and the best final offer formula is not the solution, because then the whole process becomes a gambling exercise.

[West Coast Ports Operations Act, 1994, February 8th, 1994]

Mr. Speaker, I have a comment for the hon. member who just spoke. I make these comments as a former personnel director in an educational institution which has weathered the stormy seventies and seen better times later in terms of work relations. I think that there is a principle that is sacrificed with the best offer proposal: in labour relations, we must always have a win-win situation.

Yet this proposal will inevitably lead to a choice being made, a situation where there will be a winner and a loser. When I look at past labour disputes, in 1972, 1975, 1982, 1986 an so on, it is clear to me that the worst thing we could do would be to make a decision where one side would win and the other one lose. This would create a situation where, in terms of labour relations, they would always be at one another's throats and, when the time to negotiate a new agreement comes, they would dig their heels and ask themselves what would be the best way to play their hand with the legislator in order to end up on the winning side instead of the losing side.

I think this is not a good way to put the responsibility in the hands of the bargaining parties. This is especially true in the present case where, beside the fact that the dispute has a major economic impact, it would seem that neither labour nor management exhibited totally inappropriate behaviour. The problem is much more due to the historical background.

To conclude, I would like to ask the hon. member if, based on the foregoing arguments, he would not favour instead the option to let the adjudicator set what the new work conditions will be for the workers involved.