Preston Manning

[National Defence, March 10th, 1994]

Mr. Speaker, will the minister then acknowledge that what happens to these 16,000 people being laid off by his department is a fair test of the government's ability to help the unemployed in general?

In other words, if the government cannot guide 16,000 people laid off by the minister's department into a new economy, who in heaven's name would believe that it could help 1.6 million unemployed people to that destination?

[National Defence, March 10th, 1994]

Mr. Speaker, I would remind the minister we are not talking here about 16,000 tanks or trucks but about 16,000 people with families.

My question is for the minister. Would he be prepared to submit to the House a registry containing the names of these 16,000 people so that Parliament can monitor how many are forced on to UI or welfare or on to dead end jobs and how many in fact make their way to jobs in the new economy the Minister of Industry is talking about?

[National Defence, March 10th, 1994]

Mr. Speaker, my question is for the Minister of National Defence. It is also on the social implications of the budget.

The minister has announced plans to reduce the size of Canadian forces in his department by 16,000 people. Many of us in the House regard this downsizing as a test of the capability of the government to help workers shift from employment in one sector to productive employment elsewhere.

Specifically what steps are the minister's department and the department of human resources development taking to help these 16,000 Canadians find and fill productive jobs elsewhere?

[The Budget, March 9th, 1994]

Mr. Speaker, I thank the member for his question. Again I think he is labouring under two misapprehensions.

First of all we were invited by the minister to have this meeting to try to thrash out our views. We welcomed that but we did not initiate it. This came from the hon. member's side not our side. His speech is well directed but it ought to be directed to his side of the House.

My second point is we have participated in public debate on the deficit and debt reduction for 18 months now. Personally I have given thousands of speeches on this subject, many of them in public meetings with open question periods. We welcome that and we welcome doing it in this House. I was making the point that as many members know, when one debates these issues so often the partisan aspects get into it and we get away from the real issues.

We know in question period if we raise some hot topic about the jets and the $140,000 expenditure on that we can get a great hit on the evening news. We can get a great deal of attention by doing that. However if we raise some structural problem with the health care system which can probably save $1.5 billion to $2 billion that is not even newsworthy because it is complicated and it cannot be discussed in short exchanges.

I welcome all kinds of opportunities for public debate and debate in this House. However I do think there would be some merit in accepting the minister's invitation to sit down around a table and get into the details of some of these issues. Then those discussions could be carried into the House as well.

[The Budget, March 9th, 1994]

Mr. Speaker, first of all I should correct the impression the member gave in his question. I appreciate the member's question.

I was trying to make the point particularly for Bloc members because I have studied their speeches, that there is no way any government is going to get the deficit or debt under control without doing something about social spending. This was simply my point. The reason is that 55 per cent of program spending is in this area.

The Bloc often talks as if the deficit could be brought under control by cutting administrative fat from the government. My point was that the entire government operations sections could be cut from the budget and still we would be only halfway toward controlling the deficit. I am trying to make the point that it is of necessity and not particularly because we want it.

My second point is if social spending has to be reduced, the way to do it is to target spending to those who are most in need. In other words reduce the entitlements for people above a certain income level. This is where we could have a great dispute.

When we get together with Department of Finance officials, there are conflicting figures on how much social assistance, how much unemployment insurance, and how much OAS is going to families above the national household average. Some economists say it is up to $20 billion and some say it is far less. We have to hash that out.

Our point is that spending should be targeted to those in the lower income areas. We say that in virtually every social spending envelope. Significant amounts of dollars can be saved by doing it.

[The Budget, March 9th, 1994]

I thank the member for his question.

I do not think there is a simple answer to the question of whether centralization or decentralization is better. We have got into a pattern where one generation of politicians seems to think that the answer is to centralize all the power in Ottawa-I think we had a lot of that under the Trudeau administration-and the next generation says "No, the answer is to flow all the power out to the provinces". I do not think the answer really is either of those extremes.

It seems that what you have to do in a federation like ours is go through the entire set of power. In some cases you want to strengthen the federal power or the central power, in other cases you want to decentralize.

Our program, for example, calls for strengthening the federal commerce powers, the ability of the federal government to strike down interprovincial barriers to trade. That is a strengthening of the federal power.

On the other hand, we would like to leave the jurisdiction over linguistic and cultural distinctiveness more in the hands of the provinces and the non-governmental sectors. Therefore we decentralize certain aspects of power and centralize others. I think that is the balance we are seeking and not just a knee-jerk reaction one way or the other.

[The Budget, March 9th, 1994]

We are going to exhaust the question period.

The words in the minister's remarks that I think are the ones I can agree with are when he said: "I do not understand".

What we have had in this exchange is perhaps one of the problems of debate in this Chamber. The minister made a number of statements about the Reform Party's approach to deficit reduction in which either he misunderstands our position or we have not communicated it clearly.

Even our growth projection figures, which are based on about 3.5 per cent and which we now acknowledge are a little bit high, are not that much higher than what the minister is using. We can defend our spending reductions. We would be prepared to do this. I think the more proper forum for this-and I think the minister has invited us to do this-would be on one of these nights, away from the media, away from where we are scoring political points, for the minister to bring his officials who can roll up their sleeves, we will bring ours, and we will hash over these numbers.

I have enough faith that I think the government is seriously enough concerned about this that if we can score points in that debate and say: "Look, here is an area where something more could be done", it will listen. If we are wrong on some of these projections, we will back off on those in our public presentation. I think that is the place where we are going to make a contribution or not.

There is a second point I would like to make. I think this is where there is a philosophical difference between ourselves and the government. It is a question of how jobs are created and what is the role of the government in that versus the private sector.

I have looked at the minister's budget. I notice that when the government talks about reducing unemployment insurance premiums by $725 million to $2 billion over three years, it says the effect of that will be to create about 40,000 jobs. In other words, by leaving money in the hands of businesses and taxpayers it is going to create about 20,000 jobs per billion dollars. Then the government comes along and says: "But we are going to have an infrastructure program and we are going to tax $6 billion between the three levels of government out of those taxpayers, and we are going to reinvest that and we are going to create 65,000 jobs, in other words about 10,000 jobs per $1 billion spent".

There is an inherent contradiction in those numbers. If you can create 20,000 jobs by leaving a billion dollars in the hands of taxpayers, why would you not leave the $6 billion in the hands of those taxpayers and create that many more jobs? This is the philosophical difference between our approaches. I look forward to hashing it out.

What we are interested in, and I am sure other members are, is getting answers. We are not interested in just scoring political points on this. We want to get to what is the best way to create self-sustaining employment. If our way is better we hope you would acknowledge it; if your way is better we would be pleased to acknowledge that.

[The Budget, March 9th, 1994]

Mr. Speaker, I rise to address the budgetary policy of the government as presented by the Minister of Finance on February 22. My principal reason for rising is to register a profound sense of disappointment and apprehension concerning the fiscal and the human aspects of the 1994 budget.

The blunt truth concerning the fiscal aspect of the budget is that it does not bring federal overspending, the federal deficit or the federal debt under control. Nor does it lay the foundations for doing so in the future. Projected spending for 1994-95 is $164 billion or $3 billion more than was spent in 1993-94. The federal deficit for 1994-95 is $40 billion or 5.4 per cent of GDP. The government spending plans add another $100 billion to the federal debt over the next three years, a debt which already stands at $511 billion.

After all is said and done, the only improvements in the government's financial position are mere projected improvements for future years, projections which are no more believable than those of the previous government.

It is the implications of the budget for Canadians in human terms which turn my disappointment into apprehension and even alarm. Because the budget fails to come to grips with overspending it offers no hope whatsoever to millions of hard-pressed taxpayers for tax relief. In fact it assures them of nothing but future tax increases.

Because the budget adds another $100 billion to the federal debt over three years it diverts another $3 billion to $6 billion of revenue per year into interest payments on that debt. Federal financial support for health care, education and pensions will thus continue to deteriorate. This is bad news for the recipients of those services.

Because the budget fails to come to grips with the deficit and the excessive taxation of Canadians, it sends a strong negative signal to private sector job creators. The net effect of the budget is to discourage private sector job creation. This is bad news for the 2.5 million unemployed and underemployed in the country.

In summary, the federal budget stripped of its rhetoric and politically inspired optimism is a failure of the first order, a failure whose heaviest impact will fall on taxpayers, recipients of social services, the unemployed and the underemployed.

Based on this assessment it is appropriate for us as members of Parliament to consider the following question. If the Government of Canada were a great publicly held company with 27 million shareholders and we were its directors; if we had just received a financial statement showing our 21st annual loss in a row, this time for $40 billion; if our balance sheet showed we were carrying half a trillion dollars worth of debt; and if this Chamber were the great board room of that company and we met here today, many of us as new directors, with a legal responsibility to our shareholders to face up to fiscal realities, I ask how would we likely respond.

We know that some members would choose simply to deny the reality. They would say a $40 billion deficit is not that bad; we

can always borrow more; the lenders will never cut us off; it might happen to New Zealand but it will not happen to us. Others might try to escape the fiscal reality by flights of fancy. They would say: "Let us focus on next year; next year things will be better". Still others would be looking for someone to blame and be saying: "It is not our fault; it was the previous director's fault". Yet again some of us might simply look for an exit strategy: "Let's make sure we don't get hurt. Let's make sure our golden parachutes are in order. Let's take some subsidiary of the mother corporation, separate it out and go off on our own".

There is another response that is possible under these circumstances. That response is to face up to the fiscal reality that the budget downplays and to develop a contingency plan for the day when its shortcomings become evident to all. Instead of going into denial or flights of fancy or blaming someone for trying to get out, we should say one to another: "Let us develop a contingency plan that really comes to grips with the overspending, the deficit and the debt, a contingency plan that protects the taxpayer, the workers, the unemployed and the users of social services from the injuries the budget will ultimately cause. Let me briefly outline the key elements of a contingency plan for Canadians to cope with the failures of the 1994-1995 budget".

First is a contingency plan for real deficit reduction. The budget presented by the minister last month proposes spending cuts for 1994-95 amounting to only $2.2 billion or about 1.3 per cent of total spending, achieved mainly by cuts to defence spending and unemployment insurance. Those of us who believe federal spending must be reduced more quickly and in greater amounts must complete a more detailed and extensive list of spending cuts and keep it current as a contingency plan for real deficit reduction.

The Reform Party has a list of about $20 billion in proposed spending cuts which could be updated and made part of this contingency plan. This list was tabled in the House during the prebudget debate.

To his credit the Minister of Finance has said that he and his officials would be willing to sit down with us to review the feasibility of this expanded list of spending cuts. We look forward to that opportunity.

Various provincial governments, in particular Alberta and New Brunswick, are further along the road to controlling overspending than the federal government. Their deficit reducing activities should be scrutinized for elements which could be incorporated into a federal contingency plan.

In any event a contingency plan for real deficit reduction must be developed and kept current for the day the government and the House realize the federal deficit is much more serious than the 1994 budget acknowledges.

Second is a contingency plan for taxpayers. The budget presented by the minister last month provided for the federal government to extract $9 billion more out of the pockets of taxpayers than in 1993-94 and $600 million of that from tax adjustments contained in the budget itself.

The government was wise to heed the wishes of Canadians and back off proposals for reducing RRSP contribution levels and for instituting new taxes like a carbon tax. The fact remains that too many Canadians are responding to excessive taxation by going into the underground economy or taking their capital out of the country. Those of us who recognize the seriousness of this problem need to provide taxpayers with some other options. We need a contingency plan for taxpayers and here are four suggestions.

(1) We can make sure that every major taxpayer group in the country becomes aware that further tax increase are inevitable unless the government gets far more serious about cost cutting.

(2) We can invite taxpayers to communicate their concerns to the government, perhaps by sending a tough letter of protest with every tax return so that even the most obtuse member of the government will realize that further tax increases are not a politically viable option for solving the government's fiscal problem.

(3) We can solicit from taxpayers their proposals for government cost reduction and their ideas on what form tax relief must take in order to stimulate private sector job creation.

(4) We can show taxpayers a tax relief light at the end of the cost cutting tunnel. If Parliament would pledge itself to reducing the deficit to zero by the end of its term then and only then does genuine tax relief become a real possibility.

Third is a contingency plan for workers. In its election campaign and in its red book the government said that job creation was its highest priority. Yet the real job implications of the budget are bleak indeed. The most real and immediate job impact of the budget is the elimination of 16,000 jobs by the defence department; a reduction, not an increase in employment.

The finance minister predicts a reduction of only one-tenth of one per cent in the unemployment rate in 1994 as a result of his budgetary measures.

The Minister of Industry and the Minister of Human Resources Development however are more optimistic. The Minister of Industry in his response to the budget spoke well and extensively on the new information based, export oriented economy emerging in the country. He assured us the government

had the knowledge and the policies to enable workers and businesses to find a place in that new economy. The Minister of Human Resources Development in his response to the budget said rightly that there was a job crisis in the country and that the Chamber must seriously consider how jobs are created.

How is a self-sustaining job to be created in the 1990s? The government seems to feel that government is the primary engine of job creation, whereas Reformers believe that the best job creation process is as follows.

First there has to be a customer or a consumer somewhere with a demand for a good or a service and money to activate that demand. Then there must be an entrepreneur or a business that sees that demand and decides to fill it. The role of that business is to assemble the resources, the capital and the labour required to satisfy consumer demand. When that is successfully done employment opportunities, jobs, are created for workers qualified to fill them.

The essential role of the government in all this is not to initiate job creation but to support it. The employment aspects of a government's budget, therefore, should not be measured primarily by how many jobs government spending and programs create but by the signals that budget sends to private sector job creators, by how many more dollars it leaves in the pockets of consumers and investors, and by the support programs it provides to workers.

Measured by those standards the budget presented in the House is a failure. By not coming to grips with the deficit the only signal it sends to business and investors is a negative one: more tax increases ahead. This signal kills rather than stimulates private sector job creation.

A contingency plan is required for the unemployed and the underemployed whom this budget fails. A part of that plan will be the real deficit reduction measures discussed earlier, but the second part of that plan must include measures to assist workers to find and fill jobs in the new economy referred to by the Minister of Industry.

In this regard I suggest we submit the government's employment enhancing measures to a simple test. The minister of defence says that he is going to cut 16,000 jobs in the defence department. The Minister of Industry says that he knows there are new jobs waiting in the new economy, and the Minister of Human Resources Development says that he has the programs to equip people to find and fill those jobs.

Therefore let the minister of defence submit to the House the names of the 16,000 people whom he is laying off. Six months from now we will contact them to see how many are on UI, how many are on welfare, how many are in dead end jobs in the old economy and how many in fact are on their way to jobs in the new economy. If even 75 per cent of those 16,000 are on their way to jobs in the new economy, we will be the first to congratulate the government and to encourage it to further refine and develop its employment initiatives. If more than 25 per cent of those 16,000 are on UI or social assistance or stuck in dead end jobs in the old economy, it will be clear to us and the whole country that the government does not have an answer to the job problem and never did.

In other words, if a government cannot guide 16,000 from the defence department to jobs in the new economy, who would believe that it has the policies and the programs to guide 1.6 million unemployed to that destination?

Finally the House must address the question of where the guidance and leadership will come from to correct the failures of the 1994 federal budget and to produce a contingency plan for Canadians. I am genuinely sad to say it is apparent this guidance and leadership will not be coming from our chief executive officer, the Prime Minister of Canada. This is regrettable because experience in this country and others has shown that major efforts at government cost cutting are almost never successful unless they are fully and vigorously backed by the leader of that government.

Unfortunately the present Prime Minister made it clear on his visit to Alberta last week that he could not be counted upon to provide that kind of leadership. He is quoted as telling an Edmonton radio audience there will not be a new round of tough spending cuts. There may be some changes in reference to the reform of social programs but there will be no spending cuts in the next three years other than those announced in last week's budget.

Second, it is equally apparent that guidance and leadership in correcting the failures of the 1994 federal budget will not be coming from the Official Opposition. If you analyse the speeches made by the Bloc members in response to the budget you find they are totally negative with virtually no constructive alternatives to offer.

It is not enough simply to point out the weaknesses and deficiencies of the budget. Anyone can do that. What desperately needs to be done is to provide constructive alternatives, contingency plans to remedy those weaknesses and deficiencies, something the Official Opposition has failed to provide.

We also notice that underlying most of the budget speeches of the opposition is the assumption that you could balance the federal budget by simply cutting administrative fat. If Bloc members would spend even five minutes studying table 17 on page 56 of the budget plan, they would see that federal transfers in support of social programs in 1994-95 will amount to $67 billion or 55 per cent of all program spending whereas the total spending on government operations is $20 billion or 16 per cent of government spending.

In other words you can cut the fat, the tissue, the muscle and the bone out of government operations and you will still only reduce the deficit by half or, put another way, there is absolutely

no way the federal deficit and debt can be brought under control without reforming social spending.

The responses of members of Parliament to the federal budgetary problems are totally negative or utterly unrealistic and cannot be counted on to develop viable contingency plans for this or for any other ship of state.

If we cannot count on the Prime Minister or the Official Opposition to remedy the failures of the 1994 budget or to produce contingency plans for coping with its negative impacts, whom can we count upon?

Reformers say that in this instance as in all others affecting affairs of state we can count first and foremost on the people themselves, the taxpayers, the workers, the unemployed, the underemployed, the recipients of social services, the people whose interests are most seriously injured by the failures of the 1994 budget and the absence of realistic contingency plans.

It is the intention of Reform members to register our disappointment and apprehension concerning the 1994 budget in debate and in committee, but it is our intention to do more. It is our intention to call for the development of a contingency plan for Canadians and we invite other MPs and concerned Canadians to contribute.

We envision a contingency plan that really comes to grips with the federal debt, deficit, and overspending by proposing the needed additional spending reductions that are missing from the budget. We envision a contingency plan that calls upon taxpayers to register their opposition to overtaxation and their desire to secure tax relief.

We envision a contingency plan that puts our social programs on a more secure financial footing and that directs public social spending to those that are most in need.

We envision a contingency plan that responds to the needs of the unemployed and underemployed by the stimulation of private sector job creation and by supporting workers in their journey from the old economy to the new.

We envision using our positions, offices, and resources as MPs to combine our ideas with those of the public into a contingency plan for Canadians to control federal spending, secure tax relief, stabilized social services and stimulate private sector job creation.

This is the Reform response to the 1994 federal budget and when the day comes six months, one year, or two years down the road and Canadians realize how badly the 1994 budget missed the mark there will be a constructive alternative to which they can turn.

[Government Expenditures, March 9th, 1994]

Mr. Speaker, I remind the Prime Minister that the net difference between what the federal government has taken from the province of Alberta over the last 25 years and what it has spent is in the vicinity of $100 billion, so his implications are a little bit off.

I have a further supplementary. The government's budget projects spending cuts of almost $4 billion by 1996-97 through the reform of social programs. Many Canadians do not believe the government will follow through on these social spending reductions during the same time period that it will be making a special effort to sell the benefits of federalism in Quebec.

Will the Prime Minister unequivocally tell the House that the federal government will follow through on these proposed spending reductions no matter what?

[Government Expenditures, March 9th, 1994]

Mr. Speaker, the fact remains that the deficit is in the vicinity of $40 billion to $45 billion. The government is carrying half a trillion dollars worth of debt. The weakness and the uncertainty in the Prime Minister's answer does not inspire confidence, particularly among investors and lenders.

Will the Prime Minister acknowledge that his failure to speak and act vigorously on the deficit and debt problem is now contributing to the weakness of the dollar and to the rise in interest rates?