House of Commons photoWon his last election, in 2000, with 65% of the vote.
Budgetary Policy November 30th, 1994
Mr. Speaker, we have done this over and over again for two years. We have tabled this already. We have tabled the Reform Party zero in three program for reducing the deficit. Now we are in the process of updating it, using the minister's latest figures. The first phase was the $10 billion in detailed, specific cuts that were laid before the finance committee last week.
The problem is not getting the list. The problem is finding a government with the political will to implement it.
Budgetary Policy November 30th, 1994
Mr. Speaker, I thank the member for his comments. Let me respond on two fronts. I believe the member's comments demonstrate exactly what I was saying, that with all due respect the Bloc members do not have the foggiest notion as to how to balance a budget.
With respect to unpaid taxes, we could collect all the unpaid taxes referred to in the Auditor General's report, the $5 billion to $6 billion, every one of them, and we would not even help the finance minister to get up to his soft target. He needs $6 billion to $9 billion.
This idea that they can tax our way out of the problem we are in, either in Canada as a whole or in Quebec, is completely fallacious. Any government that attempts to do that will turn itself into the most highly taxed jurisdiction in Canada. If they followed their advice they would end up having the most highly taxed jurisdiction in Canada.
On the second point, that Reform goes after all the things that people hold dear, the $10 billion in spending reductions that we advocated in front of the finance committee are outside the social area. That is one of the reasons for focusing there first. Second, I challenge this whole thesis. It has been people who said: "Don't reduce your spending because all these things are sacred" in many other countries that have helped destroy those very things they said were sacred. They let the debt get higher and they let the interest on the debt get higher until it eroded every social service they considered important.
My point, and I conclude with this, is that to demonstrate social concern today is not to use the rhetoric of the 1930s that we need more social programs. It is to come up with ways of making essential social services financially sustainable. That is the social conscience of the 1990s.
Budgetary Policy November 30th, 1994
Mr. Speaker, I rise today to participate in the debate with three purposes in mind: first, to hold the federal government accountable for its management of public finances over the last year; second, to put forward constructive alternatives where the performance of the government has been weak or inadequate; and, third, by accomplishing these first two things to endeavour to assist the finance committee and the finance minister in the preparation of the 1995-96 budget.
The focus I would like to make is on five major deficiencies in the government's fiscal performance, all of which have negative consequences for the economy and, second, to make some recommendations for remedying those deficiencies.
The first deficiency pertains to the inadequacy of the government's deficit reduction targets. The government's target to date has been to reduce the deficit to 3 per cent of GDP in three years. The target is simply inadequate. It is too modest. The business community says that it is inadequate. The money markets say that it is inadequate. Just this week the IMF said in no uncertain terms that it is inadequate.
Why is it inadequate? It is inadequate because it does not get the job done, because it permits the government to add over $155 billion to the federal debt over the next two years, because it does not stop the erosion of social programs, because it creates upward pressure on taxes, because it fails to stimulate private sector confidence thereby retarding job creation.
Most important, the 3 per cent of GDP target is inadequate because it will not eliminate the deficit during the current upward swing in the business cycle. When the business cycle turns down, the deficit will not have been eliminated and it will be infinitely more difficult to make the spending cuts required under those conditions.
In other words, the government will have missed its window of opportunity for deficit reduction just as the Mulroney government missed its window in 1984-85. The reality is that the government's deficit reduction target is totally inadequate and our recommendation is that the government set a fiscally responsible deficit target soon. That target should be to aim to reduce the deficit to zero by the end of this Parliament.
The second deficiency is the inadequacy of the government's grasp of the real costs and benefits of social spending. Over 50 per cent of total federal government's spending is now spent in the social areas. Yet the Auditor General has pointed out that this is the area where the federal government has the poorest grasp of the actual cost of what it is doing and the values received.
If the auditors of a resource company that had over 50 per cent of its business in the oil and gas development area were to issue a statement saying that the company's accounting was defective with respect to both costing and values received in the principal area of its business, the stock of such a company would be driven through the floor.
This is, however, the great weakness of the discussion paper produced by the Minister of Human Resources Development: insufficient and inadequate data on the real costs of social programs and values received and virtually no data on the costs and benefits of alternative social programs proposed.
Professed social concern without fiscal responsibility makes a mockery of social service. In the 1990s the politician who is genuinely concerned about the well-being of the young, the old, the sick, the poor or the unemployed will ensure that the programs upon which those people are dependent are financially sustainable. The old style Liberal politician who fails to ensure that will do more to damage the people dependent on those programs than the most hard headed fiscal conservative.
Our recommendation in this area is to bring the Minister of Human Resources Development, the Minister of Health and the Minister of Canadian Heritage before the finance committee of the House and to grill them on the costs of their existing programs and proposed alternatives; to have that committee ask them the hard questions that they never ask themselves and are
rarely asked by their own officials; to have them answer those questions before they run the Canada pension plan into the ground, before they run medicare into the ground and before they run the Canada assistance plan into the ground; and to ask them those questions until they learn the meaning of fiscal responsibility in the 1990s.
The third deficiency concerns the insufficiency of the government's spending reduction proposals. In October the finance minister made a sobering presentation to the finance committee and the public, saying that he could not meet even his soft deficit reduction targets without cutting an additional $6 billion to $9 billion in spending. The minister presented no list of spending cuts. The minister was coy and he asked the committee and the public to provide that list for him.
Members of the business community have since presented such lists to the finance committee. Last week Reform members of the finance committee provided it with a detailed specific list of $10 billion in spending cuts outside major social spending areas.
During the same period of time, however, various parliamentary committees have been treated to the spectacle of ministers-the Minister of Foreign Affairs, the Minister of Canadian Heritage, the Secretary of State for Multiculturalism and heads of agencies like the CBC-endeavouring to protect and defend high levels of spending and high levels of overspending rather than putting forward responsible proposals for spending reduction, which is what the finance minister asked for. In other words they just do not get it. They are not listening to the finance minister. They are part of the problem, not part of the solution.
Reform members of the finance committee have provided that committee and the minister with a $10 billion spending reduction list. We challenged the committee to endorse it and to implement it. If we cannot persuade the government or Bloc members to support our list, perhaps we can stimulate their imagination to produce their own spending reduction list.
I ask Liberal members to put themselves in the place of the finance minister and pretend they have just received a call from their fiscal agent that the money markets are rejecting a major Canadian government bond issue. The Government of New Zealand once got such a call. The Government of Sweden got a call like that a little while ago. What then?
They would have to reduce spending overnight. Where would they make the cuts? They would have to produce the list. There would be no other alternative. We are saying produce the list now while there is time to buy time.
I ask the Bloc members to imagine themselves as finance minister of Quebec, the most highly taxed jurisdiction in North America, or soon to be.
They have just received a call from their fiscal agent saying that the latest Quebec bond issue cannot be sold. It has been rejected by the market. They cannot borrow any more. Quebec Hydro cannot borrow any more. What then? It would have to reduce its spending overnight. It would have to produce the list. We are saying why not produce the list now while there is time to make a difference.
The fourth deficiency: The incapacity of the government to estimate the employment impacts of either government overspending or deficit reduction. For 30 years the federal government has operated on the assumption that government spending and overspending is a stimulus to economic growth and job creation. It is finally discovering the falsity of that assumption. The finance minister acknowledged this in his grey paper.
If government spending and government overspending could indefinitely stimulate an economy and job creation, Canada would have the highest economic growth rate and the lowest unemployment rate of any country in the G-7. However, Canada has over one million people unemployed. The premise that government overspending creates jobs is false, particularly when you are overspending at high debt levels and high taxation levels.
Increased government spending and the increased taxation that goes along with that kills private sector job creation, particularly under those conditions. The policy models and the econometric models used by the government do not measure this. It is infected with the Keynesian virus that ignores the negative effects of government overspending and underestimates the positive employment effects of deficit reduction.
The premise that deficit reduction, particularly deficit reduction that leads to tax relief, is a powerful economic stimulus to the private sector is not built into the equations of those models. In effect we are flying blind when it comes to estimating the negative employment effects of government overspending and the positive employment effects of deficit reduction.
The finance minister is flying blind, the finance department is flying blind, the finance committee is flying blind and the Bank of Canada is flying blind on both of those issues.
Recommendation: That the finance department, with the assistance of the finance committee of the House and the Bank of Canada, issue a request for proposals for a new econometric model that accurately reflects the employment impacts of government overspending and deficit reduction. The finance department and the Bank of Canada need a new compass to chart their way through the years ahead and they should order that now.
The fifth deficiency: The unwillingness of the government to explicitly recognize the connection between the management of
federal finances and the management of the national unity issue. One of the principal arguments that separatists will make against the federal system is that the federal government systematically mismanages its finances and then tries to offload its mistakes and its debts on to the provinces.
The current size of the federal debt, the current size of the federal deficit, the current federal tax burden and the decline of federal-provincial transfers will all be offered as evidence in support of this thesis. These arguments will be made by separatists in Quebec despite the evidence shown every day in this House that most members of the Bloc do not have the foggiest notion how to balance a budget either federal or provincial.
Two recommendations, one general and one specific. If the finance minister and the government cannot be persuaded to redouble their efforts to eliminate the deficit in the name of fiscal responsibility, if the finance minister and the government cannot be persuaded to redouble their efforts to reduce the deficit in the name of social responsibility to preserve the financial underpinnings of the social service safety net, perhaps they could still be persuaded to redouble their efforts to eliminate the deficit in the name of national unity, to demonstrate that the federal government can balance its books thereby refuting separatist claims that it cannot or will not.
More specifically, before the national unity debate begins in earnest, federalism versus separatism, the finance committee should also make a specific recommendation to bolster the confidence of investors and lenders in the Canadian dollar and the securities of Canadian governments.
They should recommend that the finance minister, the Governor of the Bank of Canada, and all 10 provincial finance ministers, including the finance minister of Quebec, make a solemn public declaration that it is their intention to honour all the debt obligations of their respective governments regardless of the outcome of the federalist sovereignty debate or referendum. Such a declaration would be in the interests of all governments and the interests of all taxpayers no matter where they live in the country.
In conclusion, I have identified five major deficiencies in the government's management of the fiscal affairs of this country, deficiencies that have a major impact on economic performance. These are not insignificant things: the weakness of the deficit reduction target, the inadequacy of the government's data on real costs of social spending and values received, the inadequacy of the government's spending reduction proposals, its inability to measure the employment impacts of either government overspending or deficit reduction, and its unwillingness to recognize the connection between the federal deficit issue and the national unity issue.
On the positive side, I have made six major recommendations which I sincerely hope the finance committee, the finance minister and the government will take to heart: one, set the deficit reduction target at zero deficit by the end of this Parliament; two, drag the human resources minister, the health minister, and other soft headed ministers before the finance committee and grill them until they understand the meaning of fiscal responsibility in the 1990s; three, adopt the Reform Party's list of $10 billion in specific spending cuts in non-social areas or produce an equally specific alternative; four, issue a request for proposals for an econometric model that will actually reflect the employment impacts of both government overspending and deficit reduction; five, urge the finance minister and the government to redouble their efforts to eliminate the deficit not only in the names of fiscal and social responsibility but also for the sake of national unity; six, recommend that Canada's finance ministers and the Governor of the Bank of Canada issue a solemn declaration of their intent to honour the debt obligations of their respective governments regardless of the outcome of any federalist-sovereignist debate or referendum in 1995.
Gun Control November 30th, 1994
Mr. Speaker, time will tell.
With respect to consultation, first the justice department leaks its gun control proposals to the media with appropriate spin doctoring. Then it breeds the support of the interest groups and only then, five days later, does Parliament get to see the documents and the provinces are included almost as an afterthought.
The government puts public relations and interest groups ahead of Parliament every time. It has done this on social policy. It has done it on immigration, on finance and gun control.
Does this order of preference, media leaks first, interest groups second, Parliament third and provinces dead last, reflect the government's consultative priority?
Gun Control November 30th, 1994
Mr. Speaker, like the social policy reform, any proposed firearm control program cannot hope to succeed without the enthusiastic support of the provinces.
The attorneys general of Saskatchewan, Alberta and Manitoba have already implied that the minister's draft proposals for a national firearm registration system are more likely to increase paperwork than they are to increase public safety.
Can the minister tell the House which provincial governments are supportive of the minister's legislative intentions in this area and which are not?
Gun Control November 30th, 1994
Mr. Speaker, over the past year we have repeatedly seen the government float proposals and legislative intentions without having the faintest idea of what the cost or the value received would be.
This is evident in the human resources minister's policy paper. It has been evident in defence department commitments to peacekeeping and other areas. Today the Minister of Justice is once again putting forward legislative and policy proposals, this time for firearms control.
Can the minister assure the House that comprehensive cost estimates for the firearms control program exist and will be tabled prior to the introduction of his new gun control legislation?
The Economy November 29th, 1994
Mr. Speaker, the fiscal reality is the international money markets have already factored in the government's deficit target, the Canadian dollar is weak, interest rates are rising and unemployment is still at the 10 per cent level.
Unless the government adopts a more courageous stance on deficit reduction during the present recovery it will make exactly the same mistake the Mulroney government made in 1984-85.
I ask the Prime Minister why does he not expend some of his present political capital on eliminating the deficit rather than allowing ministers to fritter it away on half baked measures?
The Economy November 29th, 1994
Mr. Speaker, the minister beats around the bush. Is not the real reason that the finance minister will not commit to firmer deficit reduction targets that he cannot convince enough of his ministerial colleagues to take the necessary measures to reduce government spending?
Over the last month we have seen minister after minister and heads of agencies show up at committees pleading for increasing or maintaining high levels of spending, not putting forward major reductions. For example, the minister of heritage last week is said to have promised his resignation if the CBC were to be partially privatized.
Is the Minister of Finance prepared to make the spending cuts, the level of cuts advocated by the IMF and others, even at the expense of the resignation of some of his ministerial colleagues?
The Economy November 29th, 1994
Mr. Speaker, today a confidential document produced by the International Monetary Fund states that the government's goal of reducing the deficit to 3 per cent of GDP is woefully inadequate and will permit the addition of another $155 billion to the federal debt over the next few years.
The problem here is that the minister's deficit reduction target is essentially political, geared to appeasing proponents of high spending rather than a real fiscal target aimed at balancing the budget.
My question to the finance minister is will he follow the IMF's advice and introduce more ambitious deficit reduction targets now?
Government Appointments November 23rd, 1994
Mr. Speaker, the Prime Minister appears to believe that continued use of partisan patronage at the highest levels of government is somehow compatible with his pledge to integrity in government. He appears to believe that patronage and integrity can live in the same government and dine at the same table.
My question is for the Prime Minister. Who, if anyone, has he consulted on the ethics of this matter? Has he consulted the ethics counsellor? Did he call former Prime Minister Brian Mulroney on the phone? Who, if anyone, has advised him that patronage and integrity can coexist within a government?