Pierre Paquette

[Excise Tax, May 15th, 2003]

Mr. Speaker, that did not prevent the government's attorneys from making agreements with the school boards in January and in April.

Having received a letter from the Barreau du Québec and the Canadian Bar Association denouncing this retroactive measure, which seriously erodes the principle of the authority of a final judgment, is the Minister of Justice finally going to assume his responsibilities and stop his hon. colleague from finance before he causes irreparable harm?

[Excise Tax, May 15th, 2003]

Mr. Speaker, despite the Bloc Quebecois' attempts to amend Bill C-28, the budget implementation bill, the federal government is going ahead with its plan to retroactively amend the provisions of the Excise Tax Act as it relates to school bus transportation.

Can the parliamentary secretary tell us why, when his government brought in legislation regarding the transfer of family trusts abroad, it was content to legislate for the future, without retroactively reversing the decision made earlier by public servants, but in the case of school boards, it overturns court judgments in favour of the other side?

[Budget Implementation Act, 2003, May 14th, 2003]

Mr. Speaker, I am pleased to speak today on Bill C-28, the budget implementation bill. In speaking on this bill, I truly feel I am doing what the Bloc Quebecois was sent to Ottawa to do, which is to defend Quebec's interests.

What most observers and commentators have stated is that this bill will implement a nondescript budget that is more of an exercise in propaganda for Canadian federalism and for the Liberal Party of Canada. This budget is a budget of many measures. I counted them. There are 74 different spending initiatives and 14 tax measures.

Of the 88 measures in total, not one manages to capture the imagination of Canadians or Quebeckers. Why? Because none of these measures resolves a single problem presently facing Canada and Quebec.

And there is worse to come. We had hoped that the new Minister of Finance would not follow in the footsteps of the member for LaSalle—Émard whose reputation for lack of transparency in public finances was well deserved by the time he left the finance portfolio. When the estimate of future surpluses is sometimes off by 300%, that is not a coincidence. It is simply one way the federal government hides the true state of public finances from the people, in order to use the taxes paid by Canadians and Quebeckers for purposes other than those for which they were levied.

Thus, it is sad to see that the budget tabled on February 18 fits so well into the pattern of budgets we have grown used to ever since the Liberals regained power in Ottawa. The true figures have been disguised, especially since the surpluses began, which would be in 1997. This is a budget we must describe as non-transparent, particularly with regard to the issue of surpluses.

First, I remind the House that the new Minister of Finance has invented a new category in order to try to artificially reduce his surplus. During the previous finance minister's tenure, we saw the invention of a contingency reserve. It was about $3 billion. So, that was one part of the surplus camouflaged. Year after year, this contingency reserve, which had no real purpose, was supposedly used—and I shall come back to this—to pay down the Canadian government's debt.

This contingency reserve has now been joined by a new invention from the new Minister of Finance, a reserve for economic prudence. We might wonder what the difference is between a reserve for economic prudence and a contingency reserve. The answer probably is that a contingency reserve is created out of economic prudence, while a reserve for economic prudence is just in case there are any contingencies.

But no one is fooled. This is simply creating accounting categories in an attempt to camouflage the size of the surplus produced, year after year, by the federal government, on the backs of the provinces, and Quebec in particular, and on the backs of all the taxpayers, in Canada as in Quebec.

Of course, it is pretty obvious. For example, in his October 2002 budget statement, the Minister of Finance announced for fiscal year 2002-03 which just ended a $4 billion surplus. For the following year, he forecast another $4 billion surplus. But as I indicated, because of the contingency reserve and the economic prudence reserve, in both cases, there was no surplus in the end. For 2004-05, the forecast was for a $5 billion surplus.

Naturally, like the Bloc Quebecois, all commentators denounced this massaging of figures. It was clear that the surpluses would be much larger, not only this year but also in coming years.

In the budget tabled on February 18, the Minister of Finance had no choice but to change his tune somewhat. For example, for the fiscal year that just ended, he announced a $6.4 billion surplus. For 2003-04, it will be $8.2 billion. The forecast has increased from $4 billion to $8.2 billion. We are slowly getting a more realistic picture, but there is still a long way to go.

For 2004-05, a $10.7 billion surplus was forecast in the budget, while in the budget statement, as I said, it was $5 billion. The amount has more than doubled. Between October and February—we are not talking about several years here, just a few months—the surplus forecast has doubled. But that is not quite the reality yet.

In October 2000, we had come up with figures of our own; we stand by these figures, and we stood by them in February. For 2002-03, our forecast was $10.9 billion; for 2003-04, $11.6 billion; and for 2004-05, $11.5 billion. It is pretty simple to do the math. All one has to do is take a look at the economic growth, rate of inflation and historical figures to come up with similar figures.

Of course, the figures I am quoting here, our estimations, we have come up with before the accounting reform. This year—and we totally agree with the new approach—we will be moving to full accrual accounting.

So, taking this full accrual accounting into consideration, for 2002-03, the fiscal year just ended, the surplus will be not the $6.4 billion announced by the Minister of Finance, but $14 billion instead. For 2003-04, the figure will be $12.3 billion, and for 2004-05, $12.4 billion.

So, before the measures announced in the budget, the surplus for the three years I have just mentioned, that is the one that has just ended and the next two, totals $38.7 billion. We can see that this allows the federal government an absolutely phenomenal amount of leeway. With it, the true problems of Canada, Quebec and the provinces could have been addressed, But no, they preferred to announce a whole series of propaganda measures, a flurry of measures that, as I have already pointed out, have not attracted the attention of either observers or the public.

As I said, our estimates put the figure at $14 billion. It is interesting that the new Quebec finance minister, Mr. Séguin, has also come up with more or less the same figure. I will quote from an article in the Wednesday February 19 La Presse , that confirms the approach, or the analysis, of the Bloc Quebecois.

According to Mr. Séguin:

If we consider that the increase in projected spending up until 2005 is higher than the average for past years—

Obviously, this is one way the federal government, that is the Minister of Finance, has of camouflaging the surplus.

—and if instead we calculate the surplus based on the historical average of spending growth—

As the Bloc Quebecois does.

—we realize that the surplus for 2005 will be not the $5 billion stated in the budget but instead $15 billion.

This is the same Mr. Séguin who headed the commission on fiscal imbalance in Quebec, and is now Quebec's Minister of Finance. We are not, therefore, the only ones not to be taken in by the subterfuges of the Liberal government's Minister of Finance.

This year, as I mentioned, taking this full accrual accounting into consideration, there will be a $14 billion surplus before the measures announced in the budget. After spending for these measures, there will be $9 billion. This means that even with the $6 billion in measures announced in the February 18 budget, the federal government will end up with a $9 billion surplus, a surplus that it will say it is putting toward paying down the debt. This is not the whole truth, and I will come back to this later.

However, given that there is no shortage of money in Ottawa, the Minister of Finance is able to solve problems. The main problems that Quebeckers and Canadians want to see solved have to do with the fiscal imbalance, the employment insurance fund and a whole series of social measures.

Instead of solving these issues using the financial leeway available to him, as I mentioned, he fudged the numbers. How did he do this? It is interesting. First, he forecast revenues based on growth that was lower than nominal GDP growth. For the benefit of those following, it is important to understand that when we pay our taxes, we do not pay our taxes based on the real growth of the Canadian economy. We pay our taxes on real growth—the actual increase in wealth—and on the increase in prices. For example, if I get a 5% increase in pay and there is 2% inflation, the real growth in my purchasing power is 3%. The federal government, like other governments, will not tax me on my 3% increase, it will tax me on the nominal increase of 5%, which includes inflation.

What the Minister of Finance is doing is not very complicated. He underestimates the growth in revenues and underestimates the rate of inflation. When we look at the department's documents, we see that the inflation rates, that is, the nominal gross domestic product, are systematically underestimated.

And conversely, the federal government, through the Department of Finance, inflates its expenditures. They are talking about $6.4 billion in the budget. But everyone who has seen how the federal government operates expects this $6.4 billion to turn out to be $5 billion. It is easy to reduce these expenditures.

As I was saying, Mr. Séguin, in his article of February 19, has explained this operation, as we have.

The federal government underestimates its revenues, overestimates its expenditures and, year after year, accumulates surpluses which are not subject to public debate and therefore not available to solve the real problems faced by Canadians and Quebeckers.

They say that these surpluses, which are basically not forecast, must be used to pay down the debt. On October 31, 2002, in this House, the Prime Minister said that, under the acts of Parliament, at the end of the year, the surplus is automatically applied to debt reduction.

The next morning, the Auditor General took him to task saying, “That is not so; that is not true”. The Prime Minister was wrong. He should have said that, by virtue of the acts of Parliament, or simply by virtue of accounting practices, at the end of the year the surplus automatically reduces the debt. I will explain it very simply.

If you have a $100,000 mortgage on your house, then you have a debt of $100,000. If, over the years, you have been lucky enough to accumulate $10,000 in your bank account, at the end of a year, when your net worth is calculated, we will not say you have a debt of $100,000, but that your net debt is $90,000, that is, the $100,000 mortgage minus the $10,000 you have in the bank. But you have not used that $10,000 to pay down your debt. It simply reduces your liabilities because you also have an asset.

It is exactly the same thing for the federal government. When, at the end of the fiscal year, we look at the picture, all the assets of the federal government—including reserves and foreign currency—all these assets are counted toward reducing its liabilities. Thus, the debt is not necessarily paid off. Simply, it is clear that all surpluses and assets go toward reducing the debt.

This is why, for example, in 2001, the surplus was $8.9 billion, much more than the Minister of Finance had estimated. Only $6 billion of this amount was used to pay down the debt, and that is already too much. The remaining $2.9 billion was put into the contingency fund to support the Canadian dollar during difficult times, which is not currently the case, and a good thing.

What the Prime Minister was telling the House is not quite true. I know that he went to law school. In all likelihood, it has been a long time since he has taken any accounting courses, but it is easy enough to understand.

The federal government, with its unforeseen, artificial surpluses—and I explained all this earlier—could very well decide, as it has from time to time, to use this money to resolve the problems that Canadians and Quebeckers want resolved, such as the fiscal imbalance, the employment insurance fund and various other measures that I will come back to shortly. The federal government has the necessary leeway to do something about these things.

Now, the money is there. This would allow the problems to fixed. But, in order to have a real debate, the real figures are needed. Unfortunately, this is not the case with this budget. I must stress this point, because there can be no real debate on the budgetary choices made by the federal Liberal government as long as the true financial picture is unknown.

This transparency problem was once again raised by Mr. Séguin, as I was saying earlier. He was the president of Quebec's commission on fiscal imbalance.

In the La Presse article of February 19 already referred to, he said two other things of note. To quote:

In fact, the federal government is announcing for the current year, ending this March, an excess of revenues over expenditures of more than $6 billion. Taking into account the usual overage noted at the end of each year, the surplus can be estimated at close to $10 billion.

This is Mr. Séguin writing on February 19, 2003. I have said that the Bloc Quebecois estimate before the accounting change was $10.9 billion. So we are both at around the same number, a number that is very far from the underestimates of the Minister of Finance.

Later in the article, Séguin goes on to say this:

Accountability with respect to public funds requires the government to table a budget, get an appropriation act passed, and collect taxes accordingly. A systematic announcement in advance of a surplus, the use of which is never made clear by the government, creates a serious transparency issue and is obviously contrary to the interests of the taxpayers, the ones who will be paying.

There is a problem of transparency, of democracy, in the way the Liberal Government of Canada is administering public funds. Part of the situation is being concealed from us, which prevents Canadians and Quebeckers from being able to give any clear indication to this government of how they want their taxes to be used.

The reality, as I have said, and continue to say, is that there is money in Ottawa. What is lacking is the political will to solve problems, and the reason it is lacking is that the Liberal government's view of how Canada should be built and of the role of the provinces is incompatible with the 1867 Constitution. I will be coming back to this point later on.

We have carried out a very serious analysis. I have spoken of our estimate of the surplus for the next three years. In the Minister of FInance's budget statement, I took his own figures for the surplus. I complemented these with Conference Board studies carried out for the commission on fiscal imbalance and the provinces a scant few months ago. Over the next 10 years, using extremely conservative estimates addressing simultaneously economic growth, interest rates and inflation rates, the accumulated surplus is going to be around $162 billion at least.

This is $162 billion the federal government will be using in large part to pay down its debt or impose its priorities.

With this money, we could easily solve the problems that I mentioned earlier. For example, the Bloc Quebecois proposed a gradual reimbursement of the Government of Canada's debt toward EI contributors and the unemployed, who have been cut off in recent years. It is important to remember that only four in ten people who contribute to EI are eligible for benefits, based on the new rules the government adopted. These benefits are lower than before and are of shorter duration.

So, with this $162 billion we could very well reimburse the EI fund gradually, with $45 million over ten years. This would allow the fund to grow a reserve and increase access and the benefit rates for income replacement. It would also help stabilize the premiums. So, that is $45 billion that could go to toward the employment insurance fund.

We could correct the fiscal imbalance. By my reckoning, this would take $67.5 billion, not just for Quebec, but for all of the provinces. Remember, four out of ten provinces are already experiencing very serious financial problems, and this year, that number is expected to rise to six out of ten.

In fact, there is only one province that is not experiencing financial problems right now, and that is Alberta. The reasons for this are obvious; they have to do with oil. However, all of the other provinces are having financial problems, or are on the verge of them. A slower economy or an increase in unemployment would wreak financial havoc.

So there is money, then, to correct the fiscal imbalance. Once we have paid back our debt to the EI fund, once we have corrected the fiscal imbalance, the federal government would still have a budget surplus of $50 billion with which it could solve a number of problems for which it is responsible. I am not talking about interfering in the jurisdictions of Quebec or the provinces, but it could solve problems that come under its jurisdiction. I will touch on this later.

Clearly there is a transparency problem with the Minister of Finance's budget. There is also a problem of democracy. There is a democratic deficit. When we are not given the necessary information for debate, then the debate is based on false premises. The public is also given inaccurate information. For example, when we are told that, by statute, an unanticipated surplus must be used to pay down the debt, this is not true, according to the Auditor General.

The government should therefore start by making a special effort to provide the public with accurate information so that good discussions can take place.

As I said, the federal government would still have $50 billion over 10 years to solve a number of problems for which it is responsible.

I will start with employment insurance, because it is important. Over the years, $45 billion was misappropriated. The one making this statement is not me but the Chief Actuary of Human Resources Development Canada, in a September 2002 report. It had reached approximately $42 billion in 2002. When we look at the surplus forecast for this year—nearly $3 billion—we can truly say that, in recent years, $45 billion in contributions to the employment insurance fund designed to cover the income security plan for those who lose their jobs we misappropriated.

So, $45 billion has been used for purposes other than what it was intended for. One of this government's ministers said so himself. The money was used to a large extent to pay off the debt, but this is still money owed.

If I owed income tax to the federal government, the fact that I chose to use the money to buy groceries or a car would not justify my telling the government, “I am sorry, I did earn the money, but I spent it and now I cannot pay you because I have no money left”. The federal government would not go for that, and neither would any other government. It would tell me, “You owe us money; you must pay. We will make arrangements”. As far as the EI fund is concerned, payments may be spread over a certain time period, but this is still money owed. The money may have been spent, but that is not the problem of those who contributed, the unemployed. The money must be paid back. We are open to arrangements; I mentioned a 10-year term to pay it back.

Now is a good time, because the Minister of Finance can see clearly that it was not a good idea to grab that $45 billion. Year after year, month after month, week after week, people write to him. I saw a letter from the Canadian Federation of Independent Business that said that for two or three years the government has been promising to correct this situation, that there is still nothing happening, that the contribution rates are much too high in comparison with what is needed. The minister has decided to undertake a consultation on the contribution rates, and he even announced it in the budget.

Of course, contribution rates mean nothing on their own. Contribution rates are related to the coverage people want from the EI program, what type of EI they want, what kind of reserves are needed to stabilize rates, and what kind of rates are required. Thus, it is absolutely unthinkable to have a consultation, as the minister thinks he can, about the mechanisms for setting contribution rates, without broadening the debate. And everyone has understood that.

At a meeting on May 6 in Gatineau, Quebec's social action groups came to tell him that they want a debate on contribution rates, the level of reserves needed to stabilize contribution rates in the event of an economic downturn and increasing unemployment, and the kind of coverage wanted.

Therefore the debate must be broadened. Contribution rates are much too high. I know that the government regularly boasts about reducing the rates. Let us look at that. I will not go too far back, although I could go back to 1993, when the Liberals came to power, but that might bore you, Mr. Speaker. I will just go back to 1999.

As you know, the term “worker contribution rate“ , means that it comes from wage earning employees. In 1999, the EI contribution rate per $100 of insurable earnings was $2.55. This allowed the federal government to get its hands on a surplus of $6.8 billion. The rate that would have been needed at that time to provide coverage, again according to the HRDC actuary, was around $1.69. Hon. members can see therefore that the contribution rate was far too high compared to what was needed to sustain the program, which was $1.69. At that time, I would remind hon. members, the accumulated surplus was already in the order of $20 billion. That was back in 1999.

The government, through its finance minister of the day, announced in its budget that it would be reducing the contribution rate, and boasted for months about this. It brought it down from $2.55 per $100 of insurable income to $2.40. I am not talking about the present Minister of Finance; it was one of the candidates for the leadership of the Liberal Party of Canada.

At that time, still according to the HRDC actuary, what was needed was a contribution of $1.43. This means that, the government's boast of having lowered the rate notwithstanding, it had not been lowered enough.

It continued to amass surpluses from the worker and employer contributions and at the expense of the unemployed. That year, the result was a surplus of $6,8 billion, making the total $26 billion.

Obviously, this led to complaints. “How can it be that no one, or just about no one, is entitled to EI? We pay at the set contribution rate and the government accumulates a surplus and announces it will pay off the debt with the money”.

Of course, the Minister of Finance of the day again lowered the contribution rate. He took it down from $2.40 to $2.25 in 2001. But, according to the actuary, the contribution rate that was needed to cover the cost of the EI fund was $1.66. This means the figure was still far too high.

Last year, it was lowered to $2.20, and the contribution rate needed for the system was $1.87. Now, we are being told that the rate will be lowered to $1.98, when the rate actually needed tis lower still. So, there will be another surplus.

The government can brag all it wants about lowering contribution rates, but it has not lowered them enough, and it has not used these surpluses to improve the employment insurance fund. It will pay, I hope, the political price for this misappropriation of funds.

Now, this must stop. I hope that, in consultation with the Minister of Finance, an ideal situation will be found, where accounting for the employment insurance fund will be done outside the federal government's general accounting.

The deficits were eliminated a long time ago. The last deficit was in 1994, almost ten years ago. So, we do not want to hear that it is because there were deficits to deal with and pay off. Now, these deficits have been eliminated, and the surplus is over $45 billion.

The debate must be broadened. In consultation with the minister, I hope that common sense will prevail, which is rare for the government side. If common sense does not prevail, I am very happy to know that the Confédération des syndicats nationaux and the Fédération des travailleurs et des travailleuses du Québec have started proceedings. Since I was the secretary general of the CSN, I was a signatory, in 1998, to the first proceedings against the federal government to recover the funds stolen from the workers and contributors to the employment insurance fund.

The proceedings started a few days ago. It is quite likely that, in the end, the courts will force the federal government to correct this situation. It would be a terrible shame for the courts to have to ensure compliance with the spirit of the Employment Insurance Act.

There is momentum for the federal government and the Minister of Finance to correct this situation and to commit to refunding the $45 billion—the money is there—to look, along with the labour market partners, at the type of coverage we want for people who lose their job.

As I mentioned, the Bloc Quebecois, along with the human resources development committee, made several proposals regarding accessibility and the income replacement rate in particular. The rate is now set at 55% and everyone agrees that it should be at least 66%.

We need to ensure that almost everyone who pays premiums is eligible for benefits, and that they receive them for long enough to avoid the problem of the gap that currently exists in the regions. This is a glaring problem, especially with the crisis in the fisheries. Many people's employment insurance ends before they start their jobs, and they are obviously not eligible for social assistance because they have assets from having worked hard all their lives. We cannot ask these people to liquidate everything they have saved, especially when it comes to providing for their children.

We must ensure that we eliminate this problem with the gap. The federal government has money to correct this situation.

Earlier, the parliamentary secretary said—and the minister repeated it in the House—that revenues this year would be almost at par with benefits. I have no idea where these figures come from. As far as I know, this is probably another attempt at covering up reality.

Let me quote figures from the finance minister's October 30 budget statement, in which he announced that the contributions or revenues would be about $18.081 billion, while expenditures would be $15.284 billion. The figures speak for themselves. I did the math, that was not very hard. The surplus is $2.797 billion.

The budget announced a 2¢ cut per $100 of insurable earnings. The budget statement had already announced a reduction in contribution rates from $2.20 to $2. So by the time the budget came around, the big news was not a reduction in contribution rates from $2.20 to $1.98, but from $2 to $1.98. No one was fooled by the finance minister. I hope he does not think he fooled anyone. This measure will come into force in 2004; it has no impact this year. It means that, this year, the surplus will be around $2.797 billion.

Next year, in 2004-05, based on the figures provided by the Minister of Finance, there will be $18.307 billion in revenues and $15.883 billion in expenditures for benefits administration. The estimated surplus is therefore $2.424 billion. These figures date back to last October; they are not that old.

Adding the 2¢ reduction announced in the budget brings the shortfall in the EI fund to $53 billion. I therefore subtract $53 billion. Also, so-called compassionate measures were announced for workers who may want to use their EI to care for a seriously ill relative, to be financed to the tune of $86 million. That is in the budget.

If we subtract the funding for the measures announced in the budget brought down on February 18, the surplus decreases, from $2.424 billion to $2.285 billion. It does not melt away, it decreases very slightly. We are talking about $130 million or $140 million less than what was forecast in October.

Let us do the same for 2005-06. The minister tells us there will be $19.129 billion in revenues and $16.685 billion in expenditures, leaving an estimated surplus of $2.44 billion. I will run through this again: let us say that the contribution rate is kept at $1.98 per $100 of insurable income; there will be a revenue shortfall that year of $178 million. As for compassionate care measures, the program will be well established. So we are talking about $221 million, but there is still a surplus of $2.045 billion.

Thus, we see that if there is not a major course correction, a change of direction, surpluses will still be accumulating and the federal government's debt to EI contributors will soon reach $50 billion, it having once more victimized the people who lose their jobs and need insurance.

This is part of the federal government's responsibilities. If it wants to be of use to the world, to Canadians, to Canada, to Quebec, to Quebeckers, let it take care of its own jurisdictions, let it settle this employment insurance problem, let it reimburse the $45 billion it owes, let it set contribution rates based on reality, with a $15 billion reserve perhaps, and let it improve employment insurance benefits. That is within its jurisdiction.

There are people working in the softwood lumber industry who are losing their jobs. I think it is sad that a year has passed since the second phase was announced. In particular, I can see the face of the Minister for International Trade, who is sad because the government is incapable of respecting its commitments to the softwood lumber industry and its workers.

True, negotiations are ongoing and we will have a decision by the WTO. But people are losing their jobs. A number of them are in that gap situation I was talking about earlier, where they have no money whatsoever coming in. Some of them have gone on welfare. Some communities are threatened with closure.

In terms of softwood lumber, the federal government is responsible for announcing a second phase and seeing, along with the Minister of Human Resources Development Canada, to protecting seasonal workers in particular.

In terms of the crab fishery, the government could do something. But no. It prefers to interfere in provincial jurisdictions, in particular Quebec's judgments. Adélard Godbout must be turning over in his grave knowing that, through a constitutional amendment, he let the federal government have jurisdiction over employment insurance. I am certain that he is extremely unhappy about that, poor Adélard.

Unfortunately, instead of fixing the problems, the federal government prefers to interfere in areas of provincial jurisdiction, in particular Quebec's jurisdictions.

I already mentioned in another speech that we had made a list of all the new intrusions, not ones that already exist, by the federal government in Quebec's areas of jurisdiction in the latest budget; there are 28 intrusions, meaning 28 measures that infringe on Quebec's jurisdiction, for a total of $4.476 billion. This amount is proof of the fiscal imbalance.

If the federal government had only the money needed for its own areas of jurisdiction, it would not have enough money to meddle in those belonging to the provinces; the provinces and Quebec would then be able to levy the taxes needed to assume their responsibilities.

Rolling in surpluses, the federal government has been able not only to pay off the debt, because it is not putting this money toward solving problems that fall under its purview, but also to use some of the money to encroach on provincial jurisdictions, in Quebec in particular, and to enhance its visibility—it is not fooling anyone with that trick either—in an attempt to stifle sovereignist sentiment in Quebec. It has been at it for several decades, but that did not prevent the sovereignist movement from growing, with some ups and downs. Such is the history of an entire people, but at the same time people will not be bought with this kind of measure. The bottom line is $4.476 billion to encroach on Quebec's jurisdiction.

Yet, money could very well have been put into the infrastructure program to ensure that municipalities could solve a number of problems, with the provinces and Quebec, of course, remaining in charge. What was announced instead? An investment of $1 billion over 10 years in infrastructure. That is $100 million a year, including $25 million for Quebec. That is ridiculous. Across Canada, municipalities scoffed at the measure. Twenty-five million merely pays for 25 kilometres of highway. The municipalities condemned the measure. Greater things could have been done regarding the infrastructure.

As for the special tax of 1.5¢ per litre of gas introduced by the Liberals to fight the deficit, while the government has been rolling in surpluses since 1997, the tax continues to be collected and to generate surpluses that go to paying down the debt, at least that is what we were told. This tax of 1.5¢ per litre of gas could very well have been abolished, especially in the current context of volatile gasoline prices.

As for the air security tax, this morning Air Canada announced a first-quarter deficit of $354 million. The situation is a very serious one. A tax is imposed without anyone being able to explain its usefulness, to such an extent that the Minister of Finance has in fact reduced it. It should have been simply done away with altogether. Perhaps that would have helped. While certainly not the only measure the airline industry needs, a minimum of common sense would have indicated that it ought to be abolished. Probably the next budget of the Minister of Finance—who knows if it will be this one or another—will abolish it. The damage has been done, however, and it is going to end up costing the Canadian public purse dearly.

As for the excise tax on microbreweries, the Standing Committee on Finance recommended that, for microbreweries producing 300,000 hectolitres or less per year, there be a 60% reduction on the first 75,000 hectolitres. The Minister of Finance did not take this into consideration at all, and this sector is going through serious problems as a result.

As for the disability tax credit, the budget contains absolutely nothing. In fact, access to this tax credit has been restricted. It is ridiculous. The government is asking for doctors' reports that sometimes cost more than the credit itself. The tax credit is worth about $960 and sometimes people are asked to provide reports from psychiatrists that cost more than that. People are not making money off of the DTC. I saw a man who was having problems walking who was denied the disability tax credit by the federal government.

I also must raise the issue of the GST and school busing. I find it unacceptable that despite everything the parliamentary secretary and the ministers involved say, the principle of the authority of a final judgment is being ignored. I hope that common sense will prevail before this bill is passed. I hope it is not passed. We are talking about $18 million. This will not jeopardize public finances, far from it. However, it will violate a sacrosanct principle. The authority of a final judgment must be respected. Of course, cases that are pending can be overridden, but not cases that have already been determined.

In health, there has been much bragging from the federal government. They finally handed over $6.5 billion in new money, but there were $21.6 billion worth of needs.

This falls completely short of the mark.

In closing, I would like to quote a Quebec premier, who said:

We absolutely cannot sit idly by and watch the federal government introduce initiatives that would prevent us from exercising our provincial powers, even on apparently secondary matters. We believe that true respect for the legitimate autonomy of the provinces, and everything this entails, presumes that the provinces have what they need to effectively meet their responsibilities in areas under their jurisdiction.

Who said this? Was it Lucien Bouchard, Bernard Landry, Jacques Parizeau or René Lévesque? No. It was Jean Lesage, in 1963. I am happy to see that the Bloc Quebecois is continuing his fight to ensure that Quebec's jurisdiction is respected.

[Competition Act, May 9th, 2003]

Madam Speaker, I would like to say at the outset that the Bloc Quebecois will support Bill C-249. I remind the House that this bill would amend the Competition Act to clarify the Competition Tribunal's powers to make an order or not in the case of a merger when gains in efficiency are expected or when the merger would create or strenghten a dominant market position.

I think that it is important, to be able to assess the changes proposed by this bill, to keep in mind the current text of subsection 96(1) of the Competition Act. It says something like this:

The Tribunal shall not make an order under section 92—

The purpose of this section is to dispose of assets or any other measure.

—if it finds that the merger or proposed merger in respect of which the application is made has brought about or is likely to bring about gains in efficiency that will be greater than, and will offset, the effects of any prevention or lessening of competition that will result or is likely to result from the merger or proposed merger and that the gains in efficiency would not likely be attained if the order were made.

In the current act, we see that if the parties before the tribunal are able to demonstrate that the merger would have the effect of creating gains in efficiency that would be greater than the gains which would result from a lessening of competition, the tribunal cannot require dissolution of a merger, even in the case of very significant adverse effects on competition. That is the section as it now reads, and we see that there is not much leeway regarding the evidence related to gains in efficiency.

In the proposed amendment—I shall read just a little of it—in order to determine whether section 92 applies:

—the Tribunal may, together with the factors that may be considered by the Tribunal under section 93, have regard to whether the merger or proposed merger has brought about or is likely to bring about gains in efficiency that will provide benefits to consumers, including competitive prices or product choices, and that would not likely be attained in the absence of the merger or proposed merger.

We see that in the amendment proposed in Bill C-249, the Competition Tribunal is being asked to evaluate whether a merger might have the effect of bringing about gains in efficiency that would benefit consumers, and then to decide whether or not to make an order under section 92.

The spirit of the bill is to identify who will benefit from these gains in efficiency. The Competition Tribunal is being given much more specific guidelines than under the current section of the Competition Act. Already, there is a difference.

There are four positive elements in Bill C-249. First, the bill lessens the importance, as determined by the Competition Bureau, of gains in efficiency attained through mergers. The bill places limits on the use of the efficiency defence that is allowed under the current wording. It is limited to gains in efficiency that benefit consumers and not solely shareholders or foreign consumers.

In the Superior Propane case, the company had, in relation to a merger, pleaded gains in efficiency without specifying for whom. When the committee met, my friend and colleague, the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques asked Thomas Ross, of the Competition Bureau, if passing Bill C-249 would have allowed the tribunal to make a better determination in the case. In the end, the bureau decided not to appeal the Competition Tribunal's decision, even though it felt that there were numerous negative impacts from the proposed merger. Mr. Ross responded that, in fact, if Bill C-249 had existed, they would have been better able to set limits and perhaps prevent this merger as the gains in efficiency, while they do exist, apparently will not benefit consumers.

So, the first advantage of this legislation is that it lessens the importance of gains in efficiency and also lessens the defence allowed under the interpretation of the current section.

Second, and clearly specified in the bill, is that what is used to judge whether a merger is acceptable is not all pertinent factors, but specifically that gains in efficiency must provide clear benefits to Canadian and Quebec consumers, not just any consumers. The previous speaker said that the Competition Act is primary aimed at creating wealth. It seems to me that the ultimate purpose of the Competition Act must be not to create wealth but to ensure that consumers have access to a variety of quality products at a competitive price.

It seems to me that this element introduced by Bill C-249 comes far closer to the primary purpose of the Competition Act. It is therefore the second argument, we feel, in favour of passing Bill C-249.

The third is that it strikes a better balance between the interests of consumers and of shareholders when a merger is planned. This is not the case with the present provision, there will be checks to see who will benefit from the gains in efficiency. This is, of course, an exercise that will be extremely difficult, but one that is necessary.

As you probably know Madam Speaker, I am a member of the Standing Committee on Finance. We just tabled a report on bank mergers. Underlying all the recommendations made to the Minister of Finance in that report is the idea that bank mergers, through the development of international activities, can certainly serve the interests of shareholders; however, as members of Parliament and representatives of the people, we must ensure that Canadian and Quebec investors and communities also benefit from these mergers. We all know that, although they are private businesses, banks provide services of a quasi-public nature. For example, the accounts in these banks will have to remain accessible.

In our recommendations, we ask the government and the Competition Bureau, during its review, to make sure that the improved efficiency and economies of scale benefit not only shareholders, but also consumers, communities and investors, and especially small and medium-size businesses.

It seems to me that if Bill C-249 were passed, it would reflect all of the concerns of the Standing Committee on Finance regarding bank mergers. We know that this will be an extremely hot topic. I do not expect that it will be dealt with before the end of the Liberal leadership race, because this would obviously be an extremely sensitive issue for the candidates. However, we know that once the race is over, and maybe after the next federal election—let us not fool ourselves—bank mergers will be proposed.

It is in everyone's best interest that Bill C-249 be passed to set guidelines for the Competition Bureau when it comes to proposed bank mergers. That was the third argument.

The fourth and final argument is that the Competition Act, as amended by Bill C-249, would better reflect the objectives of public policy. What is the purpose of legislation? It is there to serve the public interest, not private interests, and to defend the majority of citizens. In the present case, it seems to me that Bill C-249 would make for public policy that better reflects the objectives it is meant to fulfill.

In conclusion, I will say, as I said earlier, that the Competition Act is aimed at thwarting a common tendency in our capitalistic markets. In terms of the concentration of activities resulting in oligopolies or monopolies, we have laws to regulate monopolies and the situation regarding oligopolies is being monitored. As we know, there has been a lot of debate around oil companies and refining costs. But why do we have laws? Because we know that the concentration of businesses affects productivity. At the end of the day, when there are no more competitors, there is no need to be productive. That in turn affects the quality of both services and products. It also affects prices and economic growth.

Competition serves not only consumers but also economic growth and, in that sense, Bill C-249 must be passed. As I mentioned at the very beginning, the Bloc Quebecois will support the bill.

In conclusion, I too wish a happy Mother's Day to every mother in Quebec and Canada.

[Public Safety Act, 2002, May 9th, 2003]

Madam Speaker, unlike some previous speakers, it is with a lot a frustration that I rise on Bill C-17.

This is the third time that the government has introduced a public safety bill. We first had Bill C-42, which contained a whole series of safety measures that were clearly excessive in terms of rights and freedoms. Then, marginal corrections were made with Bill C-55. And now, the government has introduced Bill C-17, which is essentially identical to Bill C-42 and Bill C-55.

Clearly, the government did not learn from its mistakes. As with Bill C-35—which was passed—as with the airport security tax, the government has adopted or is proposing a whole series of measures, in the aftermath of the tragic events of September 11, 2001, which ultimately do not seem to be of any use in the fight against terrorism. I remind the House that Bill C-35, which was passed despite the Bloc Quebecois' opposition, contains all kinds of threats and injuries to rights and freedoms and has not been of any use whatsoever in the fight against terrorism in Canada since it was passed.

I would now like to talk about the air security charge; the government has been unable to demonstrate that this tax contributes in any way to paying for the equipment and technologies necessary to ensure airport security. While the airline industry, both in Canada and in the United States, is going through a catastrophic crisis, an additional tax does not help matters. There was so much government improvisation on this issue that, in the last budget in February, the Finance Minister had to reduce the tax significantly; yet, he kept it, which akes no sense whatsoever.

As I said, the government has been unable to demonstrate that this tax was needed.

On several occasions I have wanted to make this point in the House. Bill C-17 now gives me that opportunity. We have been led to believe, in Canada and in the United States, that a person taking a taxi, a bus or a train is considered as a customer, but the Canadian and U.S. governments consider airport or airline customers as potential criminals or terrorists. No wonder people are staying away from the airlines and airports: they are being treated as potential terrorists and criminals.

Bill C-17 is very much a part of all this. I think this act is of no use whatsoever in the fight against terrorism. Members will recall that this was the purpose. The government should have realized, since the tragic events of September 11, that it should have found another way to fight terrorism. As months passed by, one would have expected the government to understand that such measures dare of no use in the fight against terrorism, and it should have dropped the idea after Bill C-55 died on the Order Paper. Yet, the government introduced a new bill, Bill C-17, which, except for one element as I said, goes along the exact same lines as Bills C-42 and C-55.

This was raised by the hon. member for Rosemont—Petite-Patrie, and I think that it must be stressed. Bill C-17 dropped the excessive idea of controlled access military zones, or military security zones as they were called in Bill C-42. In large part, this is a Bloc Quebecois victory. We will recall that these zones could be of unlimited size, without any control being exercised, that the RCMP could declare them without providing any justification, without having to check with or be accountable to anyone, and that this could be done without the consent of the affected provinces.

Think, for example, of the Quebec City summit. The federal government could have unilaterally decided to declare a controlled access military zone for the whole of Quebec City, the national capital of Quebeckers. The purpose would have been to prevent the potential arrival of terrorists, and particularly to prevent citizens concerned with the current negotiations on the free trade zone of the Americas from coming to express their concern to the leaders and heads of state of the 34 countries that are parties to these negotiations.

As I said, this idea of this kind of controlled access military zone was dropped. Still, the new proposal to establish zones through orders is cause for concern to us. Nowhere does it say that the consent of the affected provinces will be required for these military security zones to be created.

The Bloc Quebecois would have liked for all of this to just disappear, but we will remain extremely vigilant, even though, as I said earlier, the fact that the initial idea of controlled access military zones was dropped must be regarded as a Bloc Quebecois victory.

There were two other elements that worried us and that still worry us: everything related to the interim orders as well as everything related to sharing information on airline passengers, who are now viewed by the Canadian government as potential terrorists, as I was saying earlier, regardless of whom they may be. These are concerns that also have to do with the protection of privacy.

I would like to say more about both of these matters, the interim orders and the exchange of information, particularly between the RCMP and CSIS. I know what I am talking about with regard to CSIS because when I was the president of the Conseil central de Montréal of the CSN, we realized that we had been infiltrated by CSIS. This occurred even though everyone knows that the CSN and all unions in Quebec are institutions that are not only recognized, but extremely democratic and transparent. So, I may have more apprehensions than others when it comes to giving special powers to the RCMP and the Canadian Security Intelligence Service.

With regard to interim orders, the new bill stipulates—or it will if, unfortunately, it is passed—that, “The Minister may make an interimorder that contains any provision that may becontained in a regulation made under this Actif the Minister believes that immediate actionis required to deal with a significant risk,direct or indirect, to health, safety or theenvironment”.

In subsection 4, we read the following, “An interim order is exempt from the application of sections 3, 5 and 11 of the Statutory Instruments Act and published in the Canada Gazette within twenty-three days after it is made.

So, under the new section 30.1 and subsection 4, proposed interim orders will not be required to comply with the Charter of Rights and Freedoms and the Canadian Bill of Rights. It is quite significant and worrisome that a minister could decide to issue an interim order without first having to ensure it complies with instruments that are supposed to protect the rights and freedoms of Canadians and Quebeckers.

These provisions are extremely dangerous. Unfortunately, I have just one minute left, and I have addressed only the matter of interim orders. We believe that these interim orders must be required to pass the test of the Charter of Rights and Freedoms.

In conclusion, I want to say that the privacy commissioner is extremely concerned by the possibility that the RCMP and CSIS could exchange information on airline passengers, and we believe that the legislation should be much more restrictive than this.

For all these reasons, I am not only somewhat frustrated, but I will be voting against Bill C-17.

[Father Fernand Lindsay, May 9th, 2003]

Mr. Speaker, on Sunday a great citizen of Lanaudière will be celebrating his 75th birthday. Father Fernand Lindsay, founder of the well-known Festival international de Lanaudière and still its artistic director, has just announced the program for the 26th season, which will comprise 25 performances starting June 27.

Father Lindsay was honoured with the Ramon John Hnatyshyn Award for Voluntarism in the Performing Arts at the Governor General's Performing Arts Awards ceremonies this past November, for close to half a century of sharing his passion for classical music with a multitude of young, and not so young, residents of Lanaudière and other parts of Quebec.

Appointed director of the Jeunesses musicales de Joliette in 1957, and founder of the Festival-Concours de musique de Lanaudière in 1962, Father Lindsay also created the Camp musical de Joliette, before starting the Festival d'été.

Father Lindsay, you have enriched the musical and artistic scene of our region and of Quebec as a whole, and we hope you will continue to do so for many more years. Happy birthday.

[Flue-cured Tobacco Farmers of Quebec, May 6th, 2003]

Mr. Speaker, the flue-cured tobacco farmers of Quebec, almost all of whom are in the Lanaudière region, are in an increasingly precarious situation. The recent decision of multinational tobacco companies to reduce their orders will cut production by more than half this year.

Many times, we have asked the federal government to help the flue-cured tobacco farmers so they can find a new livelihood, since their future does not look very bright.

Delegates at the last Bloc Quebecois convention passed a motion supporting these farmers' demand that the federal government introduce an assistance program.

Last week, representatives of the Department of Agriculture and Agri-Food met with producers. The latter were very disappointed with the outcome.

If the federal government cannot find anything under existing programs, a special assistance program must be established so that these tobacco producers in Quebec can start growing other crops as soon as possible.

[Excise Tax Act, May 2nd, 2003]

Mr. Speaker, the difference is that the Government of Quebec has never tried to reverse the res judicata, contrary to the federal government's intentions.

Is the Minister of Justice aware that, if the government goes ahead with this, taxpayers will no longer have confidence in judicial decisions on tax law, since, if the government loses, it can always make retroactive changes in matters that have already been settled?

[Excise Tax Act, May 2nd, 2003]

Mr. Speaker, like the Bloc Quebecois in February, the Barreau du Québec and the Canadian Bar Association have criticized the Minister of Finance for wanting to retroactively amend the provisions of the Excise Tax Act, thus rendering invalid a number of judgments in favour of school boards, with respect to the GST.

How can the government be so lacking in decency as to seek to retroactively invalidate the agreements it once negotiated with the school boards, agreements that had been approved by the courts, thus giving them the value of a res judicata, a matter already judged?

[Supply, May 1st, 2003]

Madam Speaker, allow me first to inform you that I will be sharing my time with the charming member from Longueuil.

I also take this opportunity to pay my respects to all the workers in Quebec and Canada. They are fortunate to have the Bloc Quebecois looking after their interests, because neither the Liberal nor the Alliance members are standing up for the workers in Canada, the Bloc Quebecois is, along with the New Democratic Party, I must say.

On this May 1, International Workers Day, I pay my respects to all the workers in Quebec and Canada. I would like remind hon. members that, as they are aware, May 1 commemorates a tragic event. In Chicago, in 1886, labour leaders who were just fighting for their right to organize, for their right to work, for better working conditions and, ultimately, for better living conditions were subjected to brutal repression.

I find it absolutely incredible that, 117 years later, in Canada, which is described by some as the best country in the world, we are discussing in this House something as obvious as the prohibition of the use of strikebreakers. With a government like this one, which defends the use of strikebreakers, we could think Canada has gone back to the late 1800s.

I think it is disgraceful, especially since in Quebec and British Columbia, and to some extent in Ontario, there already are measures prohibiting the use of strikebreakers or scabs. In Quebec, we have been working within the context of this legislation for 26 years, since 1977, and I think that we can agree that labour relations in Quebec are much more harmonious than in many other provinces.

Let us consider the serious disputes in Ontario in recent years, while in Quebec, we were able to reach agreement, within the framework of summit meetings, especially on improving the public finance situation.

I think that we should stop the hypocrisy that has prevailed since part 1 of the Canada Labour Code was amended. The current Minister of Labour and her predecessors are not fooling anyone. By using terms such as replacement workers or replacement staff, everyone knows that, in the end, the law permits the use of strikebreakers or scabs. It disturbs the balance of power among unions, workers and employers.

That is not at all fair, because the business is allowed to carry on its activities, to continue to make money, while the workers are out on the street, trying to gain some bargaining strength, simply to be able to respect themselves.

I was secretary general of the Confederation of National Trade Unions or CSN. I know that on the Liberal side there are not many who know that, because they have never set foot in Quebec. The Confederation of National Trade Unions is the second largest labour organization, after the Fédération des travailleurs et des travailleuses du Québec or FTQ.

So, I was secretary general of the CSN at the time that the idea of amending part 1 of the Canada Labour Code got started, and I took part in the work of the Sims committee, along with other people, including the current President of the FTQ, Henri Massé. I know that the current Minister of Labour is doing nothing to quash the rumour that there was a deal made with the FTQ, the CLC and the Teamsters to leave out any anti-scab clauses. That is utterly false.

I think the labour minister should correct what she said, especially what she stated in the House. Let me read you part of the letter the President of the FTQ, Henri Massé, sent to the minister after she put forth such drivel in answer to a question by the hon. member for Laurentides. Henri Massé wrote:

Before the parliamentary committees of the House of Commons and the Senate, the differences were maintained.

We are talking here, obviously, about the differences between the position of the employers and that of the unions:

Madam Minister, organized labour, whether it is the FTQ, the CTC or any other labour union--

And that included the CSN:

--has been asking for years now that anti-scab provisions similar to those found in the Quebec labour code be included in part I of the Canada Labour Code.

Of course, in the end, we agreed that the reform as a whole was acceptable. We have to remember that we had the choice between that or nothing. That is what the Liberals did. They offered organized labour a heart-wrenching choice between, on the one hand, some kind of improvement—because there were improvements made to part I of the Canada Labour Code, but without any anti-scab provisions—and, on the other hand, absolutely nothing.

Given the circumstances, he concluded his letter by saying:

We always argued that it was not good enough in terms of anti-scab provisions.

I find it utterly unacceptable that, in the Liberal caucus, the Minister of Labour would, as we have learned, skew the reality and distort the facts, play on words simply to defend an indefensible position, that is allowing the use of strike breakers in this day and age—this is 2003, and not 1886—to put an end to strikes and break the unions, which are simply trying to represent the interests of workers.

Once again, we think, along with many others, that it is just window dressing when we are told there is a difference between replacement workers and scabs. In this regard, the current President of the CSN wrote a letter for this May 1 celebration. It helps us understand the position of the government on the amendments to part I of the Canada Labour Code. Here is what she had to say:

Right now, the Canada Labour Code prohibits the use of strike breakers only when the purpose is to undermine the capacity of the union to represent the workers. In practice, how can we know that what is at stake in a strike or lockout is the right of employees to be represented by a union and that strike breakers are used only for that purpose? It is impossible, and the unspeakable remains unspoken.

That is the truth of the matter. Even with the amendments made to part I of the Canada Labour Code, this government did not defend the interests of the population. It gave in to the arguments of the employers against the union demands. And this argument now stating that there is a balance in the Canada Labour Code is nothing new. That is utterly false. There is no such balance.

First of all, the union and the workers have two opponents to face, the scabs and the employers. That is two against one. In my view, this is not a balance. This situation breaks the balance of power and allows the strikes to last longer under the Canada Labour Code than under the Quebec labour code.

I have seen many of those, both as President of the Conseil central de Montréal and as Secretary General of the CSN. I remember one in particular, the strike at Voyageur. The owner of that company was none other than the member for LaSalle—Émard.

Scabs were used to let buses go in. I can tell you that it was very difficult for us, union leaders, to hold the members back. Three of them were affected by the lockout, because it really was a lockout. When they saw the police or security guards hired by the member for LaSalle—Émard open up the way for buses full of scabs, we had to step in to try to prevent violent confrontation. Some other time, I can show you pictures of me trying to hold back exasperated workers who wanted to fight with these scabs.

In order to reduce violence on the picket line, it is obvious that if there were no scabs, violence would not be as prevalent. In fact, there would be no violence. In Quebec, in most of the labour disputes under the Quebec Labour Code, there is no violence any longer, because the disputes are based on a real balance of power and not on an imaginary one, as is the case with the Canada Labour Code.

One must imagine also what it is like in small communities. In a village or a region where there is a large business, like a mine or a sawmill, the use of scabs pits people in the community against one another. Sometimes it is even fathers and mothers against sons and daughters. I have seen that happen.

All these aspects must be taken into account with regard to both the power relationship and the issue of labour relations. In a broader perspective, we must also take into account the nature of our society, the need to respect a social contract where unions are not only tolerated as a necessary evil, but where they are considered as partners on the same level as businesses. This is not the case right now under part I of the labour code, nor is it what this government is doing.

One could ask why, if it has been in existence in Quebec for 26 years and if it is used in British Columbia, the Liberal government, that has supported such a measure before, refuses to listen to reason.

I believe that we had the answer this morning in the National Post . Let us look at contributions to the Liberal Party of Canada. Contributions from corporations are in excess of $6,411,000, whereas those from individuals barely reach $2,384,000. This means that there is three times as much money coming from large corporations. The Liberal Party is the party of big business in Canada. It defends big business against workers and unions.

Fortunately the Bloc Quebecois is there. I invite all members to vote in favour of the motion brought forward by the member for Laurentides.