Peter Milliken

[Budget Implementation Act, 1994, March 25th, 1994]

Mr. Speaker, the hon. member can argue that if he wishes. I will go back to Mr. Mazankowski's budget deficit figure last year which I think was $35 billion, if I am not mistaken. If the hon. member subtracts $18 billion from $35 billion, my arithmetic takes it down to about $17 billion. Where were the other $17 billion in cuts? The question is the same. It is only a matter of the amount. However $17 billion is $17 billion. Maybe it should have been $25 billion, I will not argue that. I still ask: Where are the other $17 billion in cuts?

The Reform Party had no idea where those cuts would come from. It still has no idea where those cuts would come from. We will never hear from them as to where those cuts would come from because I predict that when the time comes for the Reform Party to tell us those figures it will be a dead duck.

[Budget Implementation Act, 1994, March 25th, 1994]

Mr. Speaker, the Reform Party likes to talk about its steps to reduction plan. As I read the figures, it announced an $18 billion reduction in government expenditures and said that $18 billion would bring the deficit to zero in three years.

The deficit we now know is something like $45 billion or $47 billion. Whatever it is this year it is a very substantial figure, and $18 billion off that takes it down to about $28 billion. Where would the other $28 billion come from? That figure was a fraud. The whole paper put forward by the Reform Party during the election was a complete fraud. I invite hon. members to tell us the truth. Where was the $45 billion coming from? That is what the deficit is. We have never heard that figure from anybody in the Reform Party and we never will.

[Budget Implementation Act, 1994, March 25th, 1994]

Mr. Speaker, I am surprised to hear this from the hon. member for Surrey-White Rock-South Langley because she is a member of a party that keeps telling us there is only one taxpayer. It does not matter two hoots if the federal government raises the salary costs for these people but then recoups 90 per cent of the cost from her municipality which taxpayer is paying. It is the same taxpayer that is going to pay that cost. It is just that instead of the federal government paying it, the municipality or the province in which she resides is going to pick up the tab.

She nods her head that that is okay. Yet the other members of her party, and I am sure she has been part of this, keep telling us there is only one taxpayer and we have to cut costs. When we do it I am surprised we face criticism from the Reform Party on this matter.

Let me turn to the essentials of the question. She says it would not cost the federal government anything to allow the increments to go into place for a group of RCMP officers in the province of British Columbia. I do not know for certain but I would bet any money that the rates are the same across the country. If the federal government is to give that kind of increase in British Columbia, it will have to give it in other parts of Canada too. It will have to give it in parts of Canada where it does not receive a subsidy from a province for operating a police force such as all RCMP forces in Ontario and in Quebec. While there may be fewer, the cost would still be significant for the federal government.

Surely the hon. member agrees with me when I tell her that it would be unfair to give the increase in the provinces where the federal government picks up only a part of the share and not give it in the provinces where it is paying the full shot. I think she would agree with that. She must recognize the wisdom of the government's decision in this matter, given the regrettable circumstance that led to it, the very substantial deficit that her party said it would eliminate in three years.

The next time she asks a question, I ask her to tell us where she was going to make the cuts to eliminate the deficit in three years. She would not have only frozen the increments. She would have slashed the wages of these people and she knows it. She would face much tougher criticism then.

[Budget Implementation Act, 1994, March 25th, 1994]

Mr. Speaker, I am surprised to hear my colleague from the Reform Party talk about the virtues of undoing any of the freezes the government has put in place, given that party's obsession with deficit reduction.

The government chose the freeze as the method of dealing with this problem. It was not because it was going to be a popular method or an easy sell to the public servants, the members and the senators who are affected by the freeze. The government chose this option because it was very concerned if it did something else, it would result in substantial layoffs in the

public service. We have witnessed that in the provinces, particularly in Ontario where there was a social contract put in place with rather disastrous consequences.

The purpose of the government in choosing this particular option was to ensure that as many members of the public service as possible could retain their jobs. In spite of the significant cutbacks in funding that are available for all manner of government programs, by freezing we have avoided the necessity to eliminate jobs while others get an increase.

Even if the increments could be allowed to employees, as I am sure the government would like to do, that would result in an increased salary cost to the Government of Canada. That would have to be met out of the existing budget. Since the government has no additional funding to give to government departments for this purpose the only solution to capping the total salary cost would be to eliminate someone else's job. That is why there is a freeze on the increments and that is why there is a freeze on salary increases.

I do not think it is popular. I do not think it is the greatest thing by any means. However it is the best thing the government could come up with given the financial circumstances we are facing.

I know the hon. member and his party are very supportive of government cutbacks and government freezes. I am delighted to know he will be supporting this part of the bill.

[Budget Implementation Act, 1994, March 25th, 1994]

Mr. Speaker, I noted the hon. member for Calgary West who just spoke was bemoaning his lack of opportunity to vote against segments of this bill, but I assure him that he will have that opportunity in committee and if he moves the appropriate amendments at report stage, as I indicated in my argument this morning. We will see how many of the clauses of this bill he supports and in fact would vote for.

I look forward to the support of the Reform Party for a large part of this package because this package of proposals I submit is a sound one.

Last month this government introduced its first budget and today we are considering legislation that will help turn the budget goals into a bottom line reality for the long term benefit of Canadians.

Just a week ago, the Minister of Finance and a few other ministers attended in Detroit the G-7 special Summit on unemployment. The G-7 members confirmed the view held by many that February's budget was exactly what Canada needed at this stage of its economic development. This budget promises no panacea. Instead, it restores confidence in our capacity to cope successfully with the economic, financial and social challenges we are facing.

We will succeed because our budget proposes innovative measures taking effect immediately to deal with three major concerns raised by Canadians in our pre-budget consultations. It contains measures to ensure job creation and stimulate economic growth. It reduces expenditures and brings them under control to enable us to substantially lower the deficit. Finally, the budget is laying the groundwork of an unprecedented reform and renewal of our social security system.

Each of these points is dealt with in one way or another in this bill before us in second reading. Together, these measures will help set the strong foundation on which the future of our country will be built.

I congratulate the Minister of Finance on the leadership that he has shown to Canadians in presenting this budget of which this bill is the obvious manifestation in legislative form. I congratulate him also on the consultation process that he engaged in that has resulted in a budget that is acceptable to so many Canadians.

Before describing the specific measures in this legislation we should remember the broader budget context that the measures reflect. In the lead-up to the February budget the Minister of Finance and his colleagues, as I indicated, listened to what Canadians told them.

Canadians wanted a government to set the stage for job creation and this government has done that. Canadians wanted action to restore our country's economic vitality. This budget does that.

The government responded with such important measures as the $6 billion shared cost infrastructure program, the restoration of the residential rehabilitation program, new programs for apprenticeship and youth service and support for technological innovation and for the small business sector in particular.

Canadians also told the government that they wanted to have the deficit reduced. They wanted to have the government stop pushing the tax burden constantly higher.

The February budget makes fiscal responsibility part of a job strategy for Canadians. At the same time it recognizes that getting the deficit down is important. It also means that getting economic growth up is very important. Increasing economic growth will result in a decreased deficit and increased economic growth will lead to greater employment for Canadians.

That is why this legislation contains key measures that will reduce the demands on the public purse and accordingly on the taxpayers' wallet. These are measures affecting Parliament, the public service, the private sector and Canadians in all regions of the country.

The measures in this legislation work to one clear goal. They will set us on the path to bring down the deficit to our interim target of 3 per cent of gross domestic product by 1996-97, as promised in the famous red book.

I note that members of the opposition delight in quoting from the red book. I am delighted to see that they have taken the time to read and study that work because as my colleagues know it represents a blueprint for action. Although it is a red book it is a blueprint for action by our government and one that we as candidates in the last election were proud to support. It represented, in my view, the standard by which all other parties' programs were judged and Canadians expressed a clear preference for the blueprint in the red book.

There should be no question about the government's ultimate objective, and that is to deliver a balanced budget. Equally important, over the next three years there will be $5 of spending cuts for every dollar of revenue increases on a net basis.

Under our budget plan, gross fiscal savings including the savings announced in previous budgets and secured by this legislation total $28.6 billion over the next three fiscal years. Net savings in that period after taking into account the cost of new economy boosting initiatives total $20.4 billion.

These measures will help shrink the deficit from $45.7 billion in the year just ending to $39.7 billion in 1994-95 and to $32.7 billion in the year thereafter. The measures announced in the budget will be supplemented with further initiatives next year as we reform major spending programs. The government is taking action now and will take action in the future to ensure that the deficit continues to decline steeply.

What I would like to do now, Mr. Speaker, is turn to the specific elements in the bill before us today.

First, the bill proposes amendments to the Unemployment Insurance Act. In making these changes the government had two goals in mind. First, it wanted to provide a concrete incentive to the private sector to create jobs and, second, it wanted to begin to deal in a fair way with the serious problem of dependency that the unemployment insurance system has created for many Canadians.

Payroll taxes are recognized as a significant barrier to job creation. To ease this burden the government will roll back the unemployment insurance premium rate for 1995 and 1996 to $3. As a result, by the end of 1996 the government expects there will be 40,000 more jobs in the economy than would be the case if the premiums were allowed to rise to $3.30. That is the level required by 1995 under existing legislation if the government takes no action.

This rollback must be done in a way that supports deficit reduction. That is why this legislation proposes measures to reduce unemployment insurance expenditures by $725 million in 1994-95 and $2.4 billion annually thereafter.

It must be stressed that we are taking these steps to encourage job creation while ensuring the financial integrity of the unemployment insurance program.

Members of the House can also be assured that the unemployment insurance changes in no way prejudge the social security form process announced by the Minister of Human Resources Development. Indeed, many of the provinces have undertaken their own work in this regard and of course the federal government will continue to work closely with the provinces to ensure stability for Canadians.

Second, the bill deals with the process of social security reform which will involve the federal government and the 10 provinces and the two territories.

The common goal of all will be to renew and revitalize Canada's social security system over the next two years. The government will preserve and protect those most in need in order to survive. The government will work to improve incentives for Canadians to work and the government will ensure that the social safety net remains affordable.

To help create a positive, co-operative climate for this challenging task the government is providing a two-year period of predictability and modest growth in social security transfers under the Canada assistance plan and established programs financing.

This means that in 1994-95 there will be no new restraint measures applied to either CAP or EPF transfers. The legislation before us today however will place a ceiling on subsequent CAP transfers to each province. As a result, these transfers will not exceed their 1994-95 levels. This ceiling will remain in place in 1995-96 pending social security reform in 1996-97.

Established programs financing transfers are not affected by this legislation. However existing restraints will be maintained. EPF will grow in line with the population in 1994-95 and then a GNP minus three percentage points for subsequent years.

The following part of this bill affects us all personally. It extends the present salary freeze for public servants, the Prime Minister, members of Parliament and senators, federal magistrates, the Canadian Armed Forces, the RCMP and other government workers for a two-year period. Also, pay increments will be suspended for two years.

We recognize that this measure will have repercussions. Some 391,000 people will be affected by this freeze. The need to take this action is explained by a simple inescapable reality: salary

costs make up much of the government's operating budget. Any measure to control the deficit must take these costs into account.

Many public servants in my riding are affected by this freeze. Like them I feel the pinch the government has applied in making this applicable to all members and to all members of the public service. I do not think there is a member in this House who has not had some comment from a constituent about the freeze. It is regrettable but it is a necessary part of the government's fiscal program.

Next, this bill provides for changes to regional transportation subsidies under the Atlantic Region Freight Assistance Act, the Maritime Freight Rates Act and the Western Grain Transportation Act. Some brief background perhaps would be helpful.

Under the first two acts, government payments defray part of the cost of certain freight shipments in the four Atlantic provinces and the Gaspé region of Quebec. Payments to the railways under the third act help reduce the transportation costs paid by western grain producers.

The budget proposed to reduce these subsidies by 5 per cent. This legislation takes that action. As well, it implements the 10 per cent reduction announced by the previous government for 1995-96 and subsequent years, a reduction not yet implemented in legislation.

This saving is in keeping with the overall reduction being made in most federal grants and contributions. It is important to remember that during the pre-budget consultations a constantly repeated suggestion was to reduce subsidies to business. This measure honours that advice. The 5 per cent cut to these subsidies announced in the February budget will save in the order of $40 million annually.

The bill also confirms a reduction in transfers under the Public Utilities Income Tax Transfer Act. These transfers return to provincial governments most of the federal business income tax paid by privately owned utilities.

In 1990 the federal budget established a ceiling on PUITTA transfers. Then in 1992 a 10 per cent reduction was imposed for 1993-94 and 1994-95. This legislation confirms last year's budget announcement which extended both of these measures beyond 1994-95.

Finally, this bill implements a measure to provide flexibility to the CBC. We propose to give the CBC authority to borrow up to $25 million subject to case by case approval by the Minister of Finance. As well the granting of this borrowing authority will be reviewed in two years' time.

This borrowing authority will allow the corporation to operate more efficiently. It will give the CBC the flexibility to take advantage of investment opportunities that promise a healthy return. It supports the government's pledge to provide this important national institution with a more stable funding environment.

Mr. Speaker, as you can see, the bill before us today is an essential element of this government's program to put Canadians back to work. This bill would ensure that our budget goals translate into concrete results. It is based on the advice we received from every region of the country. It outlines our overall socio-economic situation and meets the challenges facing us. In short, it proposes measures to create jobs and revive the economy, measures to reduce the deficit and bring the debt under control, and measures to overhaul and sustain a social safety net all Canadians are proud of.

By taking this action this bill, as with the budget announced by the Minister of Finance, builds a solid foundation for success. It is one based on frugality, on fairness and on a clear focus on the future.

With that in mind I urge all members of the House to join the Minister of Finance, his cabinet colleagues and members on this side of the House in supporting this bill.

[Questions On The Order Paper, March 25th, 1994]

Mr. Speaker, I would ask that all questions be allowed to stand.

[Committees Of The House, March 25th, 1994]

Mr. Speaker, I would also move:

That up to 10 members of the Standing Committee on Finance and up to 10 staff be authorized to travel to Toronto, Winnipeg, Regina, Edmonton and Vancouver between April 10 and 16, 1994 and up to 10 members of the said committee and up to 10 staff be authorized to travel to Quebec, Fredericton, Halifax, St. John's and Charlottetown between April 17 and 22, 1994.

(Motion agreed to.)

[Committees Of The House, March 25th, 1994]

Mr. Speaker, I move:

That the fourteenth report of the Standing Committee on Procedure and House Affairs presented to the House today be concurred in.

(Motion agreed to.)

[Committees Of The House, March 25th, 1994]

Mr. Speaker, I have the honour to present the 13th report of the Standing Committee on Procedure and House Affairs.

Your committee has considered Bill C-18, an act to suspend the operation of the Electoral Boundaries Readjustment Act and has agreed to report it without amendment.

I also have the honour to present the 14th report of the said committee on the membership of the various standing committees.

If the House gives its consent, I intend to move concurrence in the 14th report later this day and I would ask for the consent of the House to dispense with the reading of the report.

[Budget Implementation Act, 1994, March 25th, 1994]

Mr. Speaker, I am surprised that the hon. member has raised this point today in the House. The bill has been before the House for a period of time. I am surprised that if he had objections to the format of the bill he would not have raised them in a procedural way before.

However having done so, it is only fair for the hon. member to bear in mind this is not a particularly onerous bill in terms of the material contained in it. It is actually quite short. It is only 21 pages and by any standard in this House it is not a thick bill. There are ones with many more pages which have been introduced in this session already.

I also note that all the provisions in this bill are ones that arose out of the budget presented by the Minister of Finance a month ago. As such they were debated in the House for four days in the course of the budget debate. All the issues were discussed during those four days and those same issues will be discussed again on second reading of this bill.

The issues are exactly the same as those raised by the minister in his budget address and which have been debated by the House

already. I do not think there is anything unusual about lumping these together for the purposes of debate. The hon. member suggests they are totally disjointed and I suggest they are not. They are part of the overall economic plan of the government as announced in the budget.

There are many different acts involved in terms of amendments because of the freezes imposed on various parts of the public service, including members of Parliament, judges and so on. All those amendments to the various acts that are involved in those freezes are part of an overall freeze on payments made by the government.

Similarly the changes to the Unemployment Insurance Act fall into the same arrangement. The changes with respect to the Canadian Broadcasting Corporation deal with freezes that were put in place in previous legislation and previous budgets and allow for some borrowing authority.

While the subject matter may be diverse, I suggest to the hon. member that given the fact they were all introduced in the budget, they form a whole, unified policy thrust which the government has put forward and which it will be defending in the course of the debate on this bill. Therefore in my submission, the bill is entirely in order.

In support of my position I refer to Beauchesne's, sixth edition, citation 634. I recognize the hon. member for Calgary West quoted a citation from Beauchesne's and quoted from a ruling of the Speaker in 1971 which is quoted in citation 634 of Beauchesne's. Notwithstanding his very able argument, I think he has missed the point. Citation 634 reads:

Speakers have expressed deep concern about the use of omnibus bills, and have suggested that there must be "a point where we go beyond what is acceptable from a strictly parliamentary standpoint". Nevertheless, the practice of using one bill to demand one decision on a number of quite different, although related subjects, while a matter of concern, is an issue on which the Speaker will not intervene to divide the bill.

I do not know what the hon. member is asking, if he is asking Your Honour to divide this bill or not. The authority in Beauchesne seems to be that the Speaker will not intervene to do that. I suspect he is really raising this matter this morning as a bit of a red herring.

I point out citation 635 of Beauchesne sixth edition. It says:

In the case of an omnibus bill, the Speaker has encouraged the use of motions to delete a clause at the report stage, pursuant to Standing Order 76(2) to permit the House to decide a specific issue contained in an ominbus bill, even though the motion might offend the principle of the bill.

If the hon. member genuinely believes that this is an omnibus bill that involves too many subjects for him to deal with in the committee or for the committee to deal with in a reasonable way, he has a remedy. He may propose amendments at the report stage to delete sections of the bill that would constitute obviously a one policy thrust if indeed he regards this as a series of different policy thrusts and have the House make a decision on that at report stage.

I suggest that is a fair and reasonable remedy, certainly in this situation. I do not think this falls in the category of a bill that deals with a host of subjects that are massive in their import. This is a relatively modest bill by any standard. As I have indicated it follows from a major policy thrust, namely this year's annual budget from the Minister of Finance.