Mr. Speaker, before expressing the position of the Bloc Québécois, I would like to come back to the motion we are debating. It is the motion presented by the Liberal Party, which reads as follows:
That this House regret that the party now forming the government has abandoned the principles respecting the Atlantic Accords, equalization and non-renewable resource revenues as articulated in the motion it put before the House on Tuesday, March 22, 2005.
I must say that such a motion was indeed put forward by the Conservative Party in 2005. I completely understand that to some regions in Canada it may appear that the Conservative Party is going back on its promise, with what it has proposed regarding equalization in the budget speech, and that is cause for frustration.
I also understand that roughly 2.5 million Canadians, who believed the current Prime Minister's promise on income trusts, feel swindled by this government today. I want to remind the House that the Prime Minister promised during the election campaign not to change the tax rules as far as income trusts were concerned. He did not keep his promise. It is in the budget.
In this case, as with equalization, I understand the frustration of the people, whether they are from the Atlantic provinces or the western provinces. I also understand the frustration of the pensioners who believed the Prime Minister.
However, I must say that in the case of the moratorium—it is more than that, it prohibits the conversion of corporations into income trusts in future—we cannot disagree with the government. This caused a problem both in terms of economic development and of tax avoidance. That said, there could have been mitigation measures, as suggested in the Standing Committee on Finance.
As far as equalization is concerned, as I was saying, I can very well understand the frustrations of certain premiers, those from certain provinces in particular. But one fact remains: the equalization formula, even the one in the current budget, is not fair for Quebec. For that reason, the Bloc Québécois cannot support this motion. If we went back to the former principles of equalization, then Quebec would lose a great deal of money.
I would remind the House that the old formula would have given Quebec $5.202 billion for 2007-08, while the new formula, which we feel is incomplete, gives Quebec $7.16 billion, which is a difference of $1.958 billion. How could anyone think that the Bloc Québécois would masochistically support nearly $2 billion less in equalization for Quebec? Thus, it is entirely understandable that the Bloc Québécois will oppose this motion.
I would also remind the House that the government's proposal—we will see how the budget implementation bill will turn the budget announcements into reality—includes either 0% or 50% of natural resource revenues, to be decided by the receiving provinces. At least there is a choice.
I wonder why the government did not propose 100% of natural resource revenues, as the Bloc Québécois is calling for, and will continue to call for, and as the Quebec government, all parties of the National Assembly and the Séguin commission also called for. The provinces therefore have the choice.
The 10-province standard means the elimination of the floor and ceiling provisions, which we opposed in the old formula, because it seriously penalized Quebec. In that regard, there is some progress in terms of the fairness of the equalization formula.
The tax bases used in the calculation have been reduced in number from 33 to 5, which we find much more transparent. Quebec's argument was also accepted—and I imagine this is true for other provinces—that property values must be calculated at market rates.
As I mentioned, this is what budget 2007 proposes. This does not fully satisfy the demands of Quebec and the Bloc Québécois. While we now have an equalization formula that is headed in the right direction, it is not quite there yet, and therefore, it is entirely understandable that we will not lose ground or regress to a situation of inequity for Quebec.
What we want is to reform the equalization formula to take into account not only the ten provinces, but also 100% of revenues from natural resources, renewable or not, and to also take into account, as I already said, the true value of property taxes.
In our opinion, this would make it possible to increase the overall equalization envelope. In the budget, this overall envelope is currently valued at $12 billion. It would increase to $16 billion in 2007 and 2008. We have made some progress, and I had the opportunity to say so. My Bloc Québécois colleagues also had the opportunity to say so in our reaction to the budget speech. However, a definitive solution to the fiscal imbalance has still not been found. The formula proposed by the Bloc Québécois is the only one that enables equalization to meet its goal of providing recipient provinces with a per capita fiscal capacity equal to the Canadian average.
It does not make sense to have gone with only 50% of revenues from natural resources. One thing that explains the fiscal disparity between Canadian provinces, unfortunately still including Quebec, is the fact that some provinces have oil and natural gas in the ground. Of course I am thinking of Alberta, but also Newfoundland and Labrador. This geological accident explains why some provinces are richer.
Take Newfoundland and Labrador, for example. Last year and this year, growth was close to 11%. Why was this? It can be linked to the start of the Hibernia project.
If we do not take this reality into account, the equalization formula is biased, and we are preventing the equalization formula referred to in section 36(2) of the Constitution Act from working. The section states that equalization is meant:
—to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.
By not including any revenue from natural resources, equalization does not play the role set out in the Canadian Constitution. I am often amused when I point out to Quebeckers and my colleagues from other parties that the Bloc Québécois is about the only party that strives to ensure that the Canadian Constitution is respected.
In this case, I would point out, equalization plays an extremely important role for the regions of Canada. However, in order for it to play this role, we must look at the whole picture and not just parts of it. The former formula, which the Liberal motion would reinstate, was based on a standard calculated using five provinces. The poorest and the richest were excluded, which had the effect of lowering the national standard or, rather, the pan-Canadian standard—since this House has recognized that Quebec is a nation, I must set the example. It was recognized that the pan-Canadian standard, based on the average of the five provinces, was lower than if all provinces were included.
I would also like to remind the House that, at that point, the real value of property tax was not reflected. This value was determined by rent paid or mortgages paid by owners which resulted in property values of certain provinces being underestimated. As I already mentioned, all this led to Quebec being penalized. It still is because 100% of natural resources are not included in the equalization formula.
A solution for the fiscal imbalance—one which is just beginning to emerge—must have several components. First, we need an equalization formula that works. We need not retrace our steps. We must continue to work towards truly attaining the objectives of the Canadian Constitution, that is transfer payments that will enable provinces that fall below the pan-Canadian standard to have access to revenues that will allow them to reach this pan-Canadian standard.
Second, we need transfer payments that meet the needs of the provinces and Quebec.
As we have said, the last budget did not keep these promises and did not meet the expectations of the education system, particularly with respect to post-secondary education. This is true everywhere in Canada and in Quebec. So there is some work to be done on increasing transfers to the provinces and to Quebec.
To ensure that we no longer run the risk of the federal government making unilateral decisions, we recommend transferring the federal tax base to the provinces and Quebec. The Séguin Commission, the Government of Quebec and all parties in the National Assembly have recommended the same thing. With access to guaranteed, permanent and predictable revenues, Quebec will be empowered to address responsibilities in its areas of jurisdiction independently. Obviously, this applies to these areas of jurisdiction.
There also has to be some control over federal spending power. During the last two question periods, the Prime Minister was asked to commit to negotiations. Unfortunately, I must emphasize that yesterday, the Prime Minister said there would only be negotiations with a federalist Quebec government. That sounds a lot like blackmail to me, and it is unacceptable. If the Parti Québécois comes to power next Monday, March 26, which seems likely, the government will give it the silent treatment. I find that totally irresponsible.
Let me review the facts. During question period, the leader of the Bloc Québécois asked the Prime Minister about the federal government's willingness to begin negotiations to limit federal spending power. This was the Prime Minister's answer:
We are still prepared to consider the possibilities. To have such fiscal relations with the provinces, it is necessary to have a federalist government in Quebec and a government here in Ottawa that respects provincial jurisdictions.
This is truly a departure from democracy. Surely the Prime Minister misspoke himself because this would be a totally anti-democratic attitude and disrespectful of the people of Quebec.
However, he did say what he said. I imagine that during question period today he will be asked to tell us exactly what he is thinking. He certainly did not hold back. In response to a question I asked him, he said:
This government is prepared to meet with the new provincial government—which I hope will be a federalist government—to control federal spending power.
Does that mean that the Prime Minister not only wants to select judges and people to be on the immigration board, but he also wants to select provincial premiers, in Quebec in particular? This is totally unacceptable.
That is why we have to be able to free up some of the federal tax room and transfer it to the provinces that want it—Quebec wants it—in order to avoid this type of blackmail.
The best illustration of the fiscal imbalance is that the federal budget was dragged into the Quebec election campaign. Imagine if Quebec's budget had been brought down during the federal election campaign. Would anyone have been concerned during the federal election that Quebec's budget would have an impact on election results in Quebec? No one would have cared.
We can barely balance the books. Last year, Minister Audet had to sell off $800 million of the Government of Quebec's assets in order to balance the budget. This finance minister is not seeking re-election: he must be tired from trying to balance his budget. The auditor general, Mr. Breton, said that there was some accounting sleight-of-hand and that the budget had probably not actually balanced. This had no impact, which shows that the federal government has too much money in relation to its responsibilities.
Accordingly, we would like taxpayers to pay just enough taxes to the federal government that it can handle its responsibilities, yet pay enough to Quebec that it can handle its responsibilities as well.
Earlier I quoted the Prime Minister's responses. He said that Quebec needed not only a federalist government, but also a government that wanted decentralized federalism, as the Conservative Party in Ottawa advocates.
I have watched governments come and go in Ottawa. I have sat in this House for seven years, but I have followed federal politics for a good 40 years now. My parents were very interested in politics.
In reviewing the budget, I noticed that the phrase job training kept coming up:
The Government is prepared to consider providing future growth in funding for labour market programs after consultations with provinces and territories on how best to make use of new investments in labour market training and ensure reporting and accountability to Canadians.
This is in the chapter or part that talks about the labour market program, which, as we know, falls under Quebec's jurisdiction.
What does it mean? This phrase can be found not only regarding education and job training, but also regarding post-secondary education, social programs and child care. It is repeated several times in the budget. These are not federal jurisdictions. The equalization formula is a federal jurisdiction. If the federal government wants to change it, it can. Naturally, we hope it would change the formula in a way that best serves the interest of all Canadians, and especially the best interest of Quebeckers. However, it does not need to ask for permission, as the Prime Minister and the Minister of Finance seemed to suggest for months and months.
Besides, the Liberal government changed the equalization formula a number of times, to the detriment of Quebec. Based on the wording, we can say that, when it comes to provincial jurisdictions, the Conservative government is reserving the right to spend in consultation with the provinces, but it is not giving them the right opt out from these programs unconditionally and with full compensation. Thus, we still have a centralizing government in Ottawa. Only the paint colour has changed. They talk of open federalism but the reality is, we are dealing with a government that advocates a centralizing federalism. Quebeckers need to know this. If we want to be able to stand up to this government, as we have stood up to other governments, we must have a government that stands up for itself. Next Monday, we must have a Parti Québécois government.
As we can see, the work required to resolve the imbalance is far from over. Negotiations must continue, not matter who is in power. The Bloc Québécois will continue to pester the Conservative government and all governments as long as it is in this place. We will remain here until we achieve sovereignty in order to ensure that certain principles are respected and that the Government of Quebec, and the governments of other provinces, will have the financial resources needed to provide viable programs. That is also our hope for the others who share the Canadian political space. This requires accountability. That is found in the quote I just read.
However, when the Conservative federal government speaks of accountability, as did the previous Liberal government, it is referring to the accountability of the provinces and of Quebec towards the federal government. That is not the accountability I have in mind. I am referring to the accountability of provincial governments, of the Government of Quebec, towards their citizens, their voters, in their areas of jurisdiction. In areas of federal jurisdiction, the federal government must be accountable to the citizens of Canadian and Quebec when elections are held. We are not at all talking about the same thing.
In addition, equalization payments must be predictable. We are still in a situation where, tomorrow, the government could change its mind and amend the equalization formula or even reduce transfer payments in the areas of health or education. There are no guarantees and, after the election of a majority government,—whether Liberal, Conservative or NDP, and I say this to please you, Mr. Speaker; one can dream, as I always say—such a government could decide to tear up everything we now have in front of us. The only way to ensure that this does not happen is for Quebec to have an independent fiscal capacity, to have control over its revenues, in its areas of jurisdiction, and that means the transfer of tax points to Quebec.
Finally, and I do not know why the Bloc Québécois has to constantly repeat this point, jurisdictions must be respected. What I just read from the budget does not respect jurisdictions. Once again, the new Conservative federal government, just like the former Liberal government, wants to control what is done by the provinces, particularly Quebec, including what happens at election time, and that is unacceptable.
