Mr. Speaker, it is a great honour to represent the citizens of Lac-Saint-Louis in Parliament. I believe the West Island of Montreal, a large section of which falls within the boundaries of Lac-Saint-Louis, is a unique and politically significant part of Canada. It is unique because of its geographic location on the great St. Lawrence River and because of the linguistic and cultural makeup of its population. It is significant because of the insight it can bring to our nation's politics by virtue of being a microcosm of the larger country.
Lac-Saint-Louis is a community of minorities. Its anglophone population is a minority in Quebec while its francophone population is a minority within Canada. As for the number of other linguistic and cultural groups that enrich the life of the riding, not only are they minorities in Canada and in North America, but often they are new to the West.
No doubt, because of its diversity, the West Island is a community of tolerance and moderation. It is a community that rejects radical change that can disrupt meaningful human connections. It is a community that prizes unity over division. It is a community inspired by political visions, rooted in high-minded principles rather than by ideologies that encourage retreat into one's own space. Lac-Saint-Louis is anything but a community of firewalls.
The people of Lac-Saint-Louis are committed federalists. In 1995 they voted massively “no” in Quebec's second referendum. They support the federal Clarity Act adopted by the previous Liberal government. They believe that political decisions should be clear and informed and that rights such as the right to remain in Canada as a Canadian citizen cannot be suppressed by a simple majority of votes in a highly charged plebiscite on a question that is the object of wordplay.
The people of Lac-Saint-Louis know Canada is not a political straightjacket, that it is not, as the Bloc likes to tell us, an overly centralized and centralizing state. In the United States approximately 80% of federal transfers to state and local governments are conditional grants. In Canada no less than 76% are now unconditional. These figures do not portray a rigid, constricting and inflexible Canadian federalism.
The Conservatives have confirmed their support for a deconstructed federalism. They do this subtly and softly by, for example, acquiescing to the theory of the fiscal imbalance. They sometimes do so more explicitly, as did the Prime Minister during the first question period last week when he spoke of a centralizing federalism.
The fiscal imbalance theory suggests that Quebec and the other provinces are financially mistreated by federalism. The residents of Lac-Saint-Louis know that is not true. If the Conservatives go ahead and modify equalization by removing oil revenues from the equation, then provinces without oil, such as Quebec, will certainly suffer.
The Conservatives are playing a dangerous and deceptive game by agreeing with the Bloc Québécois on the existence of a fiscal imbalance when so many facts disprove this theory.
The debt to GDP ratio of the provinces is far less than that of the federal government. Furthermore, federal transfers to the provinces increase more quickly than federal revenue.
What is more, all the provinces have posted budgetary surpluses in four of the past six years.
Finally, when Ottawa made cuts to federal transfers to the provinces in 1995, as part of its successful efforts to slay the deficit dragon created by the Mulroney government, the cuts imposed on the provinces were proportionately much less than the ones Ottawa made to its own programs. If there is a fiscal imbalance in Canada, it is not between different levels of government but between governments and individual taxpayers, and that fiscal imbalance, the real fiscal imbalance, has not been addressed in the throne speech.
Last fall the Liberal government introduced the second phase of its tax relief plan for Canadians. The first phase was the multi-year, $100 billion tax cut announced in the year 2000. In the fall the Liberal government forged ahead and reduced the tax rate on the lowest income bracket and raised the amount Canadians could earn tax-free. The Conservative government owes it to Canadians to cancel its plans to do away with those Liberal tax cuts, otherwise Canadians will see their paycheques, after deductions, shrink this July.
Canadians need and want meaningful and honest tax relief. Canadian families are overtaxed. Many are overburdened with mounting household debts, which put tremendous pressure on family life. Canada now has a negative savings rate of 0.4%. Does the Conservative government really care about families, or is family just a convenient buzzword in the Conservative campaign lexicon?
It is hard to find an economist in Canada who would agree that, given the choice between lightening the tax burden on Canadians through income tax cuts or doing so by reducing the GST, the government should opt for a GST cut. If both are possible, then fine, but aggressive income tax cuts should take priority.
First, a GST cut encourages even more consumer debt and overstimulates an economy whose problem is not weak consumer spending but weak business investment. More investment would lead to higher economic growth in a competitive global economy, where staying ahead of the productivity curve, through capital investment, is the name of the game.
Second, a GST cut will not transfer more money directly into people's pockets. Liberal income tax cuts, on the other hand, would produce extra disposable income for Canadian families that would, in the aggregate, be channelled into productivity-enhancing business investment.
A number of companies that offer mortgages, such as banks, do not even charge GST on their products and services. In those cases, reducing the GST will not lead to savings for the consumer. It will only reduce costs and increase profits for the company.
Some retailers include GST in their prices. Movie theatre operators will not decide from one day to the next to reduce the price to see a movie from $9.95 to $9.86 just because the GST has been cut by 1%. Hairdressers are not going to lower their prices either, and some corporations will benefit simply from their monopoly position to increase their prices ,thereby profiting from the bit of play created by the GST reduction. Gas stations are a good example.
The Conservative GST promise was politically clever and strategic. Some call it calculating. Whatever it was, it was not good policy. As Globe and Mail columnist, Jeffrey Simpson, has said:
Of course, having campaigned on the GST cut, [the Prime Minister] will be obligated to implement it, thereby costing the federal treasury $5-billion-plus and aimlessly stimulating an economy that doesn't need that kind of stimulus. After that, however, the Conservatives' mental cupboard is shockingly bare....
Mr. Simpson goes on to say:
--the Prime Minister knows his party's election platform was just that -- a political document that sufficed for enticing the electorate but will not do for serious governing.
While the Conservative government has opted for a clever but weak tax policy, similarly its so-called child care policy is one dimensional, lacks vision and fails to address the tax system's bias against families with a stay at home parent. Although it was sold primarily as a measure intended to help stay at home parents, as the Globe and Mail editorial board has said, the Prime Minister's plan is “little more than a symbolic gesture” toward these parents.
Again, smoke and mirrors.
Let us be honest. The promised $1,200 taxable annual payment to families is an improvised attempt at a tax cut, but not an honest and sweeping income tax cut like those introduced by the previous government.
The Liberal government pursued an intelligent and comprehensive approach to helping Canadian families. It outlined broad income tax cuts and at the same time negotiated child care agreements with 10 provinces to help build a network of quality, developmental child care. This flexible system would not only have been available to parents who work full time. It would also have been available to those who wanted to use the system part time because one parent was at home. The Liberal government believed it was possible to have parallel policies that reconciled both these contemporary Canadian realities.
The Liberal government took a major step in addressing the needs of children and families, including those with a stay at home parent, when it created the national child benefit in 1998. For example, the national child benefit includes an annual supplement of $243 for each child under seven years of age when no child care expenses are claimed on the family's income tax return. The government should increase this amount for stay at home parents while at the same time maintaining previous Liberal commitments to support a quality educational child care system for families who need it.
The problems of modern societies are complex. Their challenges cannot be met by superficial approaches. The throne speech is a thin document. It is a sketchy road map for a government that is travelling light and not intending to go far on behalf of Canadians.
