April 28, 1993

NDP

Nelson Andrew Riis (N.D.P. House Leader)

New Democratic Party

Mr. Nelson A. Riis (Kamloops):

Mr. Speaker, my question is directed to the Minister of Finance who has accomplished the impossible. He has brought in a budget that has caused outrage in virtually every part of the Canadian economy and right across Canadian society. Even his own corporate friends have said the government has brought in an inappropriate budget.

For the first time this country's credit rating is going down. The dollar is dropping. Interest rates are going up. Will the Minister of Finance now admit, with the condemnation that his budget has received across the country, that what this government is doing is wrong and not in the best interests of the Canadian economy?

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PC

Donald Frank Mazankowski (Deputy Prime Minister; Minister of Finance; Vice-President)

Progressive Conservative

Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):

Mr. Speaker, the hon. member who gets up and asks the question with glee had better wipe the smile off his face because what the budget has achieved is it has driven a wedge between the federal NDP and the provincial NDP.

Imagine this, Mr. Speaker: "Federal New Democrats are sharply criticizing Ontario's Bob Rae for what they call the provincial NDP government's Draconian attempts to cut the deficit. In an unprecedented break in party unity, federal NDP finance critic Steven Langdon says Rae is on the wrong track".

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NDP

Nelson Andrew Riis (N.D.P. House Leader)

New Democratic Party

Mr. Nelson A. Riis (Kamloops):

Mr. Speaker, I want to say to my hon. friend what a member of the House has stated about the Rae government is not supported by this federal caucus. This federal caucus is strongly behind the Rae government in its actions in Ontario.

I noticed that the minister chose-

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Some hon. members:

Oh, oh.

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PC

Gerald R. Ottenheimer (Speaker pro tempore)

Progressive Conservative

Mr. Speaker:

The hon. member for Kamloops has the floor.

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NDP

Nelson Andrew Riis (N.D.P. House Leader)

New Democratic Party

Mr. Riis:

Mr. Speaker, I want to go back to the Minister of Finance and point out that he refused to answer my question. I will repeat it for him. The budget that was brought in did absolutely nothing to assist those

April 28, 1993

Oral Questions

four million Canadians who are either unemployed or underemployed. Those who were calling for serious deficit and debt reduction have been ignored.

Will the Minister of Finance not acknowledge the fact that his budget, after eight and a half years, reflects the mismanagement of this particular government in dealing with the economy? Should he not do the honourable thing for Canada and Canadians and offer his resignation to the Prime Minister?

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PC

Donald Frank Mazankowski (Deputy Prime Minister; Minister of Finance; Vice-President)

Progressive Conservative

Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):

Mr. Speaker, the Liberals do not agree with that. However, I am sure the Liberals are as concerned as I am about what the hon. member has just done. We have now discerned more division within the NDP ranks and he has just repudiated the party's finance critic. He has literally fired him on the floor of the House of Commons. What a shameful, shameful gesture.

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Some hon. members:

Shame.

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Some hon. members:

Resign.

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NDP

Nelson Andrew Riis (N.D.P. House Leader)

New Democratic Party

Mr. Nelson A. Riis (Kamloops):

Mr. Speaker, in the media today there was reference to the budget and this government as being a lame duck government. It is not a lame duck; it is a dead duck government and this budget reflects that.

Forget the Minister of Finance, I want to ask my friend the Prime Minister: Will he not acknowledge the fact that after eight and a half years of fiscal mismanagement, after eight and a half years of being in office, this country still has the same levels of debt and deficit and that nearly four million people are either unemployed or underemployed? Will the Prime Minister not do the right thing, send hope to the people of Canada and ask the Minister of Finance to step down from that position?

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PC

Martin Brian Mulroney (Prime Minister)

Progressive Conservative

Right Hon. Brian Mulroney (Prime Minister):

Mr. Speaker, this is indeed an historic day. There has been the repudiation of the finance critic of the NDP. There has been further division between the federal and provincial NDPs and now, in terms of what has just transpired, they are going to have to get rid of that national anthem of Solidarity Forever because it is gone.

I do not want to hurt Mr. Rae, but I think most members of the House would indicate that the premier

of Ontario is on the right track in deficit reduction. He is trying to contain the cost of government expenditures. I regret that this finds disfavour with the federal NDP because it is the same policy that Mr. Romanow is pursuing and that Mr. Harcourt is pursuing.

The leader in this has been the Minister of Finance. I point out to my hon. friends one fact only, and they can make up their minds whether they think it is valuable. In 15 years program expenditures in Ottawa increased at a rate of 13.8 per cent a year, every single year for 15 years. In the last nine years this rate of increase has been reduced to 3.8 per cent. I think that is a remarkable tribute to this Minister of Finance as well as his predecessor.

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LIB

Jean-Robert Gauthier

Liberal

Mr. Jean-Robert Gauthier (Ottawa-Vanier):

Mr. Speaker, my question is directed to the Minister of Finance.

It is obviously very embarrassing and unfortunate for a government to have the Auditor General of Canada point a finger at it. It is unfortunate and embarrassing to see a Conservative government, especially after nine years in power, trying to hide the whole truth about the increase in the budget deficit.

In an article in today's Globe and Mail, Mr. Desautels, the Auditor General of Canada said and I quote: "This is not the first time it has happened. There is very little information in the budget explaining why we are off target by so much this year".

I therefore want to ask the Minister of Finance why he can provide no clear justification for a deficit that will be $8 billion over his own 1992 projections.

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PC

Donald Frank Mazankowski (Deputy Prime Minister; Minister of Finance; Vice-President)

Progressive Conservative

Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):

Mr. Speaker, I would be very glad to provide that information to the Auditor General because it is public knowledge.

I outlined that in detail during the December statement. I indicated that the slippage in the deficit was caused totally by the slippage in revenues which I estimated at $8 billion at that time.

In the budget I explained a further deterioration that had occurred since that time to the tune of about $1.1

April 28, 1993

Oral Questions

billion. It has been the slippage and the deterioration in revenues that have caused the slippage in the deficit.

That is indeed public knowledge. I would be very glad to provide it to the hon. member and certainly send it over to the Auditor General.

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LIB

Jean-Robert Gauthier

Liberal

Mr. Jean-Robert Gauthier (Ottawa-Vanier):

Mr. Speaker, for two years the Auditor General has called upon the government to publish a score-card with the budget to compare results with projections. Obviously the Tory government does not want Canadians to see the score-card of the tired old government that has lost control of the budget reins.

The Auditor General suggests that unless the government explains in detail why it so widely missed the mark on the deficit this year, last year and the year before, Canadians should be sceptical about the projections of this year's budget.

I ask the Minister of Finance: Why should Canadians believe his projections or those projections this year when he has missed the mark in the last four years?

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PC

Donald Frank Mazankowski (Deputy Prime Minister; Minister of Finance; Vice-President)

Progressive Conservative

Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):

Mr. Speaker, there are a number of questions posed there and I hope I can answer them all.

First and foremost that is precisely why I made a statement in December, to lay before Parliament, indeed the public of Canada, the state of the financial affairs of the nation. I did it very openly. I did it again in the course of the budget. That information is all public knowledge.

The hon. member questions my figures. I am projecting a growth rate this year of something under 3 per cent. The IMF, in its latest forecast just issued yesterday, said that it sees Canada's growth rate for 1993 at 3.2 percent. Next year, 1994, it says that the growth rate for Canada will be 4.4 per cent, much in line with what we are providing.

I repeat and I say to my hon. friend who has been a long-standing member of this House and has seen Liberal years and Conservative years that he will know when we assumed office in 1984 the deficit to GDP at the time was 8.7 per cent. We have cut it in half. It will be 4.5

per cent this year and going down to .9 per cent at the end of the fiscal framework presented in this budget.

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LIB

John Paul Manley

Liberal

Mr. John Manley (Ottawa South):

Mr. Speaker, the budget presented on Monday resulted in a decline in the value of the Canadian dollar, a rise in the bank rate, Canadian debt being downgraded by the CBRS and unprecedented criticism of the budgetary process by the Auditor General of Canada.

The minister's budget does not meet the expectations of two of his cabinet colleagues when it comes to deficit reduction. It is clear the international markets have declared a lack of confidence in the minister as a result of their reaction.

In light of the lack of confidence in the minister and his budget, and given that confidence in the Minister of Finance is of vital concern to all Canadians, does the minister not have to choose between presenting a new budget and offering his resignation to the Prime Minister? Which will he choose?

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PC

Donald Frank Mazankowski (Deputy Prime Minister; Minister of Finance; Vice-President)

Progressive Conservative

Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):

Mr. Speaker, the hon. member knows that yes, there have been some jitters in the exchange market that have been overcome. The market is strengthening. The dollar is going up and interest rates are moderating. The spreads are moderating.

I think the statement made by the Canadian Bond Rating Service has been largely dispelled by the action-

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An hon. member:

Discredited.

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PC

Donald Frank Mazankowski (Deputy Prime Minister; Minister of Finance; Vice-President)

Progressive Conservative

Mr. Mazankowski:

-and, as my hon. friend said, discredited by the action of the major credit rating agencies, namely Standard & Poor's and Moody's. There are a number of other international financial organizations that have expressed similar scepticism about the rather curious action on the part of the Canadian Bond Rating Service agency.

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LIB

John Paul Manley

Liberal

Mr. John Manley (Ottawa South):

I should think, Mr. Speaker, that the minister would be more concerned with the judgment of the markets which have been quite clear.

I would also like to ask him about the opening premise to his budget in which he said that there were no tax increases, yet by reducing by $625 million the amount of the GST rebate payable to low income Canadians in the

April 28, 1993

Oral Questions

current fiscal year he has effectively increased the net GST return for the current fiscal year.

Why did the minister try to pass off his budget as one that did not contain tax increases when he raised this year's GST burden on the poorest Canadians?

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April 28, 1993