Madam Speaker, I will be sharing my time with the member for Manicouagan.
We could talk at length about this budget, but I will focus on a few aspects and elaborate on those.
The deficit for 2021 is $354.2 billion. It is astronomical. This is the biggest deficit in Canadian history. The projected deficit for 2022 is $154 billion. If someone had told us this two or three years ago, not knowing that we would go through a pandemic and all its consequences, we would have said that it was impossible, that it would never happen. It just goes to show that we must never say never, because it did happen. Looking at all this, it may seem like it is the end of world for public finances for the Government of Canada and that we will never be able to catch up, especially with a government that has historically been considered a big spender.
In the press release issued with his “Fiscal Sustainability Report 2020”, the Parliamentary Budget Officer said, “Federal finances [are] sustainable over the long term—but most provinces and territories are not”. Despite this major hiccup, the Parliamentary Budget Officer tells us not to worry, that in the long run, things will turn out all right for the federal government. The reason is simple: the fiscal imbalance, which is the fundamental problem with the current federation.
Some people will say that the fiscal imbalance was invented by separatists complaining about the big bad federal government. However, this term was used in the 2002-03 annual management report tabled in November 2003 by Yves Séguin, a true Liberal. I have nothing against the Liberals, but in the interest of calling a spade a spade, I wanted to point out that Mr. Séguin is not a member of the Parti Québécois. He is a Liberal, just as Liberal as Mr. Gerretsen, but that is okay. Mr. Séguin mentioned the fiscal imbalance in his report.
This is yet another example of how Quebeckers are pioneers and trailblazers. If the rest of Canada wants to know what will happen in 20 years, it should just look at Quebec. In this case, the rest of Canada wants to copy Quebec's day care model, which has been around for 25 years. The Liberals noticed that Quebec's day care system was working well, so they woke up. That is how it goes. There are many ways in which Quebec has been a trailblazer.
When Quebec started talking about the fiscal imbalance, the other provinces figured that if Quebec had a fiscal imbalance, they must be in the same boat, because we all live in the same country, unfortunately. The provinces started digging and realized that they had a fiscal imbalance as well. It took them long enough.
However, what is the cause? Was it what the Liberals did in the 1970s or the 1990s? Neither. The cause dates back to 1867 and Confederation. Even then, there was already something amiss, as the Constitution of 1867 created a fiscal imbalance. The responsibilities and spending were assigned to the provinces and Quebec, but the tax base favoured the federal government. Furthermore, under the Constitution, the federal government was given very large fiscal powers, but it could also go get money in any way it liked. That was the federal government's grounds for interfering in income taxes. When it noted that this seemed to be a paying proposition for the provinces, it took over that responsibility from them and Quebec and grabbed the cash cow for itself.
Getting back to the fiscal imbalance and its cause, let us look at health spending. In Quebec, my country and the area I know best, health care takes up 50% of the operating budget. Half of what the Government of Quebec spends goes to health care.
I see that my Conservative colleagues are wondering whether that is also the case in their provinces. It probably is, but I did not check the numbers. However, it is probably close to that.
I am going to ask my colleagues to do some math. To keep the health care system afloat, taking into account inflation, demographics, the aging population and the modernization of equipment, Quebec needs to spend 5.2% a year.
There is a correlation between the revenues of the Government of Quebec and nominal GDP. I looked into it and we are talking about somewhere around 3.8%. That means that Quebec is bringing in 3.8% in revenue and spending 5.2% on health care. Who is paying the difference? There are two options. Either Quebec makes cuts elsewhere or it runs a deficit in order to keep the system afloat. That is when a structural deficit occurs.
The federal government says that it contributes to health care. People are saying that it should contribute 50%, but it actually contributes 21.7%.
According to the Canadian Constitution, given that the federal government has more revenue and does not have many expenditures, it needs to contribute to the provinces, ideally with no strings attached. The provinces are responsible for areas under their jurisdiction. I am not the one that said that.
The member for Outremont said that it is disgraceful to hand out blank cheques. Why would she say that? It is written in the Constitution. Her country is governed by a constitution. As the Constitution says, she should just hand over a blank cheque with no strings attached.
The Liberals know nothing about this field. Even in areas they are familiar with, it is frightening to see them at work. It is not hard to imagine what will happen if they get involved in something they know nothing about. They should give us the money. It would put an end to all of this, with no hard feelings.
As I was saying, the federal government contributes 21.7%. The Liberals are saying that is going to increase. If we look at the figures more closely, we see that health care spending represents 5.2%, but the federal government contributes an average of 3.7% or 3.8%. The federal government is not paying its fair share.
Will the current 21.7% increase or decrease? It is going to decrease. What will happen? Who will pay the difference? If the federal government does not give 5.2%, if it gives less, who will have to make up the difference? It is the provincial and Quebec governments.
Health care is costing the provinces and Quebec a lot of money, which means there is a deficit. There is also an additional deficit because the federal government is not contributing as much as it could. That much is obvious.
The solution put forward by the provinces and Quebec is for the federal government to contribute 35% instead of the original 50%. That would add $26 billion for the provinces, including $6 billion for Quebec. That would help us make up the difference.
It is about as easy for the federal government to understand that fact as it is to eat an apple through a tennis racquet. It makes no sense to the federal government, but it is perfectly obvious to everyone else. Something has to be done because the fiscal imbalance is not going away. It is going to get worse. Basically, there is nothing for Quebec and the provinces in the budget. The fiscal imbalance is going to get even worse.
Last year, the deficit was $354 billion, and this year, it is $154 billion. The Liberals budgeted nothing for this. They say they are going to wait until the pandemic is over. For every $100 the federal government spent during the pandemic, $1 went to the provinces and Quebec to help them with health care costs. That is a fact.
We cannot support this budget, because the government is condemning Quebec and the provinces to an endless deficit spiral as a result of its failure to assume its responsibilities.