March 27, 2003

CA

Charlie Penson

Canadian Alliance

Mr. Charlie Penson

Mr. Speaker, the reality is that the tag team of the Prime Minister and the former finance minister increased personal and corporate taxes 53 times since 1993. Budget 1994 increased spending $1.7 billion and increased taxes by $1.3 billion. Let us remember that the early budget of the former minister of finance had a deficit of $37 billion in it, $37 billion adding to that national debt. It was not until the budget of 1995 that the Liberals were forced to reduce spending but still managed to increase taxes by $1.4 billion. Then again, the deficit for that year was $28 billion.

The early years of the former finance minister, the member for LaSalle—Émard, what was his record? It was to increase taxes, increase spending and run another deficit. When those guys inherited the government from the Mulroney team the national debt, which is the accumulated deficit, was $508 billion. What did they do? They ran it up to $583 billion before the message got through that we simply could not do that any more.

What caused this change? What were the events that led up to the change in the Liberal philosophy of actually having some fiscal discipline for a few years? I think they were forced to the wall. There was the Mexican situation where the peso was in crisis in 1994, fears that New Zealand would fall into insolvency and Canada's own debt was downgraded by many of the debt rating agencies. The message was pretty loud and clear that the Liberals had to do something.

They did take some action. What did they do? This is important. Was it done fairly? No, not really. The former finance minister and his team took the easy way out. They offloaded their problem by slashing transfers to the provinces. According to national accounts, federal spending decreased by just 9% or $11.3 billion. This was a time of crisis. They had to get a hold on this so they decreased their own spending by 9% but slashed the transfers to the provinces for things such as health care by over 20%.

The crisis that we see in health care today, the money that had to be pumped in and today's fiscal problems between the provinces and their municipal governments, are a product of the Liberal government. It is a product of the government offloading its big problem to the provinces.

As soon as the Liberals had an opportunity, and once we started to get to the stage where we were no longer deficit spending, when the U.S. economy was growing by leaps and bounds, when 87% of our exports were going to the United States and when roughly 40% of our GDP came from exports, we were dragged along.

What did the Liberals do when they had the opportunity and things improved? They did not make the fundamental changes that were required. They returned to their old practices. They returned to their old tax and spend ways. It did not take very long. The aberration was only two years.

Federal program spending has been on the rise since 1997 and has increased dramatically since 1999. Those are all years that the former minister of finance was here. The tag team of the Prime Minister and the former minister of finance did it together.

Over the last two years federal spending has increased by 6% on average. That outpaces the formula for population growth and inflation by roughly 4%. Those are the kinds of things that put us into the difficulties in the 1970s to begin with.

The current finance minister, as I said, could have changed course but instead he opted to spend and spend. Federal spending is forecast to increase 83% faster than population and inflation growth between 1999-2000 and 2004-05.

I submit that budget 2003 is not an aberration at all. It really just ups the ante of the old Liberal spending patterns. As soon as the Liberals had a little cash in the bank, instead of improving the fundamentals, they went back to their old ways of tax and spend.

The Minister of Finance likes to brag about how Canada is a true northern tiger. He must know, as do many in government and the private sector, that despite recent reasonable economic times there is still considerable distance to make up for the bad public policies that the government and other governments have engaged in since the 1970s.

The industry committee conducted three separate studies in terms of Canada's productivity and competitiveness. What it found was a long standing decline in Canada's competitive position in the world going back 30 years. I submit that it is not an accident. This has a direct correlation to public policy. That public policy is just bad government not recognizing what Canada should be doing.

Thirty years ago the United States was number one in terms of productivity which equates to living standards. Canada was number two. That is a long term historical fact. The United States has not changed. It is still number one in terms of productivity and living standards, but Canada has fallen to 13th place in terms of productivity in the world.

In the Globe and Mail today, Canadian Manufacturers & Exporters reported that Canada's competitiveness has fallen to 50% of the G-7 average. The report prepared by Canadian Manufacturers & Exporters said:

The competitiveness of Canadian industries continues to fall compared with their G-7 counterparts, although this country's businesses no longer hold last spot--

It is no longer in last place. That is some consolation. It does not really address the issue of Canada and United States. Canadian Manufacturers & Exporters went on to say:

--the so-called excellence gap between Canadian industries and those in other Group of Seven nations has widened “significantly” since the period before the Sept. 11 terrorist attacks in the United States.

It continued:

The CME's last assessment, undertaken in the summer of 2001, put Canada's performance at 62 per cent of the G-7's overall best practice. Its most recent analysis, however, shows that figure has fallen to 50 per cent.

We have had a long term decline in the economy in Canada. We have seen it; we know it is there. We recognize it because the Canadian dollar is in big part a reflection of that. But this is 30 years of decline and 30 years of bad management by the government.

In the 1970s and onward we saw huge increases in government spending and in the design of government programs. Deficit spending was characteristic of the government and, in fact, it ran up the accumulated deficit to $583 billion. It now has it down to $536 billion and it is cheering that it is some kind of victory. I say it is not very much.

Decades of spending increases have increased Canadian tax burdens so now government represents 42% of all of the GDP of Canada. That is how much it is sucking out of the life blood of Canadians. Compare that with the United States where government takes 29%. If that was productive spending maybe we could accept that, but what do we have? We have waste in the government. We have a lot of misdirected industrial policies where it is pumping billions of dollars into so-called winners. I suggest that those winners are showing the tendency to be more losers these days than winners.

We have the aerospace sector, for example. The government has poured literally billions of dollars into that sector. I believe that it should not be involved and the Canadian Alliance believes that we should not be in the business of trying to pick winners and losers in our society.

Our standard of living has fallen to only 70% of that of the United States over a 30 year period. Canada has one of the highest personal income tax rates in the entire G-7. Once a historical home for direct foreign investment, our share of direct foreign investment has been falling over 30 years. Investors see other countries as better places to reap a profit. It is no wonder with the taxation levels on the corporate and personal side that we have in Canada.

Even Canadians are looking increasingly outside our borders, particularly in the United States, as a good place to invest. There is an article in the National Post today to that effect. Canadians are investing billions of dollars outside our country. Why? Because they see it as better place to get opportunity to have return on their investment. That should not be the case. It is tragic that it is actually happening.

Yes, they should have opportunity to look outside our country, but they should also have the opportunity to get good rates of return here. The government's response has been to devalue the dollar. We have become the big discount sale house of OECD countries. Our dollar has seen a little bit of strength in the last couple of months as the U.S. dollar is depreciating against European currency, but still we have seen a decline to where we are at 68¢ U.S. today. We have been as low as almost 60¢ and it is no accident that the dollar is a reflection of Canada's productivity and standard of living.

A National Post article today by Jacqueline Thorpe talks about the Conference Board study and what it is saying. Is it not ironic that our industries are now saying “Do not let the dollar go too high because we cannot compete”. Why can they not compete? They cannot compete because the government has not taken advantage of good times to make the fundamental changes that are necessary to allow that dollar to naturally rise and exporters to be able to benefit.

I am talking about tax decreases. Let us get off the backs of the corporate sector. Let them make a profit and we will see more investment in Canada. We will gradually see our Canadian dollar rise as it should. But the government has not taken that opportunity in good times. If it does not take the opportunity and make the fundamentals right in good times, when will it ever happen? It certainly will not happen in a downturn which we may be seeing.

This is the kind of problem that I am talking about, long-term historical problems where we see a Liberal government that has a total disregard not only for the economy and Canadian standard of living but also for its constitutional mandate.

It is clear what the division of powers were when the Fathers of Confederation designed the Constitution . The provinces were largely responsible for social areas and the federal government was responsible for foreign affairs, defence, trade, monetary policy and security. However, we have a federal government that has muscled its way into provincial jurisdiction. We see it in the budget of February 18 with all kinds of intrusions into provincial social areas, but what is the government's record in its own areas? I say it is dismal.

Let us take foreign affairs as an example. This House is being consumed with that issue in the last several weeks but it goes further back than that. Our place in the world has slipped dramatically. What are we doing to protect Canadian industries in trade agreements? What about agriculture, where we have been beaten up really badly? What about softwood lumber and defence policy? The government has deliberately gutted the Department of National Defence so it could use the money that it would save in the budget to throw at some of its special pet projects and patronage.

We have seen waste in government, and waste in the gun registry of $1 billion and running to $2 billion shortly. We have seen waste in the HRDC scandal where the minister was largely credited or discredited with blowing $1 billion, not knowing what happened to it. We have seen advertising scandals. And this is just the tip of the iceberg.

Together with waste and misdirected policy no wonder Canada has been in decline. We need the opportunity to get this country back on track. We need political parties that would get the federal government into the areas that it is responsible for and work cooperatively with the provinces in areas that the provinces are responsible for. That would seem to make perfect sense in a federation, but instead, that is not the case.

This country could get back on its feet fairly quickly if we had a party that would stand up for the things that Canadians should be standing up for and exercising responsibility that is really required. The Canadian Alliance has a totally different view than the Liberal government. We do not believe in intervening in the economy. We believe that we need to put the framework in place for business to do well, that we should be the stewards for Canadians, that we should not be interfering, and that we should not be investing in business.

It seems to me that the time has come for that to happen to get Canada back on track. We can no longer afford to have the kind of interventionist government and a poor public policy that has put us in this deep hole. It is a deep hole that I am concerned about. We are not recovering. In fact, it threatens our economic security.

It makes us so dependent these days that we have trouble acting. We are in a huge trade dispute. What is our answer? We have trouble defending our own economic sovereignty. The government has put us in a hole where we are $536 billion in debt. Out of every tax dollar 21¢ goes to Ottawa to pay interest on the debt. That makes us very vulnerable. The government did not do anything about it in good times, when is it going to? That is going to represent a bigger part of the total scene when things get bad and it may well happen.

The United States economy has not recovered. It had 12 years of growth and in any economic cycle we will see that growth period followed by a period of stagnation before it can happen again. Canada has not really entered into that although I believe that we are vulnerable.

These policies that we have in the budget would not protect us. They would not give us the kind of tax relief that we need to have to make this a more viable situation for Canadian individuals and companies.

We must ask the question, why would a party think that government needed to increase in size? Historically that has not been the case. In fact, we are pretty much out of the loop in terms of the business cycle in North America. At one time there was never a period when the economies of Canada and the United States did not act in a similar way. We can chart that over a hundred years. There are people that do that. It is an analytical way to approach business. They chart when business cycles are on the upturn, when there is inflation, and when there is a decline.

Up until about the 1970s we can see that the economies of Canada and the United States have been very closely together in terms of that economic cycle. However, after the 1970s there started to be a divergence which became fairly acute. People have been doing a lot of work to decide why that took place, what is this aberration?

Former Prime Minister Trudeau was successful in increasing the size of government with his public policies. There were a lot of social programs that were introduced. Even in Ottawa, during the days of the 1970s, the growth was phenomenal in the city, particularly the growth in government buildings.

Let us look at the employment insurance program, for example. It became not an employment insurance program any more because it also had a social element to it. Maybe there is a role for government in that, but we would not think that the government would expect employers and employees to fund it. However, that is exactly what it did.

The result is that Canadian unemployment figures are about 3% to 4% higher than that of the United States all the time. In good times and bad times they are 4% higher. That was not the case up until 1970. It was roughly the same. Our cycle might have been out a little bit but it was basically the same. Why is that?

The reason is that we have built a lot of components into the system. There are something like 40 different areas in Canada where qualifying for employment insurance is different. Maternity benefits are just one example of that and there are many others.

In addition to that, what did the government do with employment insurance when it came to power in 1993? It decided this would be the vehicle to generate a fair amount of money for the government. Even though the chief actuary said that in order to ride out a cycle in the economy we probably needed about $15 billion in the employment insurance account, the government decided that this was a cash cow that it simply could not resist. What did it do? It overcharged Canadian employers and employees to the tune of over $30 billion.

Supposedly, there is a fund somewhere that has $45 billion in it for employment insurance. We all know that is not the case because it went into general revenues and has long been spent. The government took advantage of this cash cow and how did it decide to spend this money? It spent the extra $30 billion of employers' and employees' money in a number of ways that I am not sure that employers and employees would think was reasonable.

There are regional development programs in many areas that take up billions of dollars a year. The Auditor General has been very critical of those programs from coast to coast. Whether it is western economic diversification or something else, no matter where it occurs, it is like pouring money into a hole in the ground.

In many cases once the money is gone and the business is no longer collecting the money, it cannot exist. In fact, some businesses receive money from regional development programs that their competitor down the street does not receive. For example, if someone receives a government grant and builds a service station and the existing one down the street goes out of business, is there any net gain to society? The Auditor General does not think so.

Billions of dollars have been wasted in that program, as well as billions of dollars in economic development programs. I do not think government is very good at this. That is one reason I do not think government should be in business.

Businesses in Canada have benefited from programs like technology partnerships Canada to the tune of billions of dollars. The aerospace industry, I pointed out earlier, is just one of those. Companies such as Pratt & Whitney, General Electric, Bombardier, some of the biggest companies in the world are receiving money from Canadian taxpayers.

In addition to the technology partnerships program, what else is there? There is Export Development Canada, a bank owned by the taxpayers of Canada. It subsidizes the credit so those companies can sell their products to Air Wisconsin and United Airlines in the United States at a lower than market price in terms of interest rates. Who pays the bill and who has the vulnerability if something goes wrong? There have been all kinds of cancellations for aircraft orders not only in Canada but in places like Brazil which have similar regional development and economic development programs. I understand our aerospace sector makes up something like 70% of the exposure at the Export Development Corporation these days. If something goes wrong, who pays for that?

Those are the kinds of misguided public policies which I think have gotten us into trouble. It shows why the government is addicted to having more taxes rolling in all the time. The government is going to have $195 billion in tax money coming to Ottawa in the next year.

The growth in the size of government is unprecedented. It is returning to the levels of spending and taxation of the 1970s. For 25 years the government seemed to be drunk with power and had to expand the economy not only in government, but in all kinds of pet projects that it thought was best for the country, such as economic development in certain areas, whether it was through business or regional development. Those are the kinds of programs that have to stop.

Canada has been a member of the World Trade Organization and the OECD. They are critical of a lot of those kinds of programs. They are critical of export credit. They want to move away from that. Canada should be a leader. Canada at one time was a leader, but I think we have abdicated our responsibility pretty seriously.

What is the role for government? What role should government really play? The Canadian Alliance feels that government has a very serious responsibility. It is pretty clear in the Constitution how it is set out. Traditionally Canadian governments moved into other areas such as health care. We do not disagree that health care funding needed to be brought up to new levels. We recognize the need for that. When the government in the 1970s brought in the Canada Health Act, it said that federal government funding for that program would never fall below 50%. What happened over time is the provinces could not trust the federal government. They simply could not trust it.

Spending levels by the federal government last year fell to something like 12%. Provincial governments were left with the balance, having to struggle with that even though they had this guarantee from the federal government that they would never fall below 50%. No wonder provinces are knocking at the door telling the government that it is putting the constraints on them in asking them to have a national system, which they accept, but the federal funding levels have dropped.

As I pointed out, it was a pretty easy target in the mid-1990s when the tag team of the former finance minister and the Prime Minister decided they had to do some cutting. They were sort of at the wall and were being downgraded in terms of credit and they had to do something about it. What did they do? They cut transfers to provinces. What is the largest transfer to the provinces? It is health care and $25 billion was taken out of the health care system during those years.

No wonder the provincial governments had trouble with their municipalities and their own services. Imagine a federal government that would hardly do anything in its own backyard in terms of cutting spending, but it would attack the easiest target. That was the easiest target, so it cut the transfers to the provinces. That is the type of thing that worries Canadians for the future.

The commitment made in the budget that the federal government put about $35 billion into health care is the kind of commitment that was needed to increase the health care funding to the required level. The provincial premiers and others must wonder what will happen the next time there is a bit of a downturn. What is the commitment worth from the federal government? The experience from the mid-1990s under the former finance minister was not that good. The government took the easy target.

The role of government must be to recognize the jurisdictions given to it in the Constitution and actively work hard to improve things such as relations in foreign affairs. Our relationship with our major trading partner is in serious decline. Historically we have had an excellent relationship with the United States. We are a next door neighbour to the United States. As I have said, our trade relationship has grown greatly, which seems to be a natural outreach.

Mr. Trudeau back in the 1970s decided that he wanted to distance himself from the United States. He wanted to direct business so that there was more trade between Europe and Canada and less dependency on the United States for trade. It was a pretty superficial look at it. At the same time the European countries were busy developing the European Union, which is a very inward looking organization. They were not looking at trade with Canada. In fact their trade with Canada declined dramatically during that time.

The natural consequence of being close to the United States and having similar cultures means that trade between Canada and the United States has grown dramatically. During the 1970s, 60% of our exports were to the United States and today it is 87%.

It would be nice to diversify that, but that is a pretty easy place to do business, or it has been until now. The government seems intent upon sticking its finger in the eye of the United States and souring that relationship. I wonder how much support there will be for the government when people start to lose jobs as a result of what members on the other side of the House have been saying recently about our closest ally and closest trading partner. It seems to me to be a pretty silly policy to tweak the noses of our friends in the United States, our major trading partner, because that is the kind of relationship we need.

Instead of working in the areas the federal government was given in the Constitution, in foreign affairs, to improve trade relationships, to do something about improving things so Canada is not hit with trade actions any more on a number of issues, what is it doing? Tweaking the nose of Uncle Sam. It is not good enough. The government has to do better. A Canadian Alliance government would take this role a lot more seriously.

We do have a place in the world. We are not a superpower but we are certainly a midsize power. There is an increasing capacity in the country, a potential to reach a much bigger proportion than we have today in terms of influence and also economic size. However it will not be done with a government that has such inward looking policies and policies of trying to be interventionists in a control command economy.

A free market economy is a very powerful engine. We should unleash it and let it work. We should take the constraints of high interest rates, high income taxes and high regulation out of the government, off of our industries and let them work. That could have a dramatic effect, but it seems the Liberals across the way do not share those views. They think that this sector has to be controlled.

Canada has a whole set of regulated industries. A lot of them are looking for the harness to be thrown off. Our telecommunications companies are asking for foreign investment limits to be removed. They want access to foreign capital. That has not been the case. The transport sector has been highly regulated and look at the results of that. It looks like the government is going to be pumping more money into Air Canada.

It seems that the Liberals have not grasped the idea of a market economy. Maybe there is a reason. Maybe they feel they have to have their hands on the levers of power so they can stay in power and grease enough palms along the way that the money will come back. That seemed to be working pretty well up until now, but it does not serve Canadians well.

Defence is an area of responsibility given to the federal government. A lot of people in the defence industries and analysts say that the defence department needs about $2 billion a year to help out in its capital expenditure to get it back to some reasonable level so our forces can perform in peacekeeping or peacemaking operations. It is sad that our fighting men and women who belong to this organization do not have the ability to get over to the operations. We do not have the ability to fly them there. We have to rely on the United States to do that for us.

We rely pretty heavily on the United States for our defence. We are a member of NATO. Our funding level for our military in terms of GDP is the second lowest of all NATO countries. Luxembourg is the only country lower than us. Either we belong or we do not. This latest conflict in Iraq and the war on terrorism point to the need for Canada to do something to improve the morale and the conditions for our service men and women and improve the equipment for them.

The responsibility for defence was given to the federal government in the Constitution. Instead of working to improve things in foreign affairs and defence, what is it doing? The government is getting involved in provincial jurisdictions. It sees its role as being more that of a provincial government. Maybe that says something about the mentality of the government. It needs to respect the constitutional authority it was given and do something. It needs to improve the conditions. It needs to work in the areas it was given responsibility for, such as foreign affairs and defence.

What more could the government do in trade policy? In the next little while Canadian Alliance members will be speaking more specifically about a number of areas. Trade policy is one of them.

We need to be moving in areas such as agriculture. The Uruguay round only made small changes in agriculture. Huge subsidies are still being given by the European Union and the United States. Our Canadian farmers have been beaten up badly as a result. In addition, even with the small amount of progress that was made, 15%, in the Uruguay round, what did the government do? It went beyond the cuts that were necessary according to our contribution level and it cut heavily in the area of agriculture.

Some would argue that New Zealand does not have any subsidies and that is a good thing. However, when other countries are subsidizing very heavily, such as the United States and the European Union countries, we get frozen out of market share. There is work to be done to bring some discipline and some trade rules to other sectors of the economy in agriculture in other areas such as the European Union and the United States. Canada has a dyslexic position and I do not think it is respected very much. More work needs to be done in trade areas.

Let me talk about monetary policy for a moment. Canada has a 68¢ dollar today versus that of our major trading partner, the United States. That is higher than it has been for some time. A lot of people think that the U.S. dollar needs to be lower than it has been because the U.S. has a fair amount of deficit in its current account. People thought it would come down over time. Not too long ago our dollar was almost as low as 60¢ and it could well go back there. What does that do to Canadians? Let me talk about farming for a second because I was on that subject.

Combines do not cost $100,000 any more, but let me take a figure of a piece of farm equipment that would cost a Canadian farmer $100,000. That same equipment made in the United States would cost a farmer $68,000, and most of the equipment is made there, so we have to import a lot of product into Canada. That puts us a disadvantage.

Some would argue that of course we have our exports that take advantage of the low Canadian dollar. Yes, they have, but to some extent it has been a bit of a crunch. The proof is when we see the Canadian dollar start to go up a bit, Canadian companies start to get concerned. They say that they cannot compete because taxes and regulations are too high.

I want to introduce a motion, but just before that I want to conclude by saying that things could be a whole lot better. Public policy is directly related to how well the country does and how our badly our standard of living has slipped. The Canadian Alliance will be outlining that over the next few days in this debate. I move:

That the motion be amended by deleting all the words after the word “that” and substituting the following: “therefore Bill C-28, an act to implement certain provisions of the budget tabled in Parliament on February 18, 2003 be not now read a second time but that it be read a second time, this day, six months hence”.

Topic:   Government Orders
Subtopic:   Budget Implementation Act, 2003
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The Acting Speaker (Mr. Bélair)

I declare the amendment to be in order.

Topic:   Government Orders
Subtopic:   Budget Implementation Act, 2003
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BQ

Pauline Picard

Bloc Québécois

Ms. Pauline Picard (Drummond, BQ)

Mr. Speaker, I am pleased to rise today to speak to the Budget Implementation Act, 2003.

In the days after the federal budget was brought down, there was generalized criticism of it, and justifiably so.

There is nothing reassuring about this budget, because it marks a return to the irresponsible habits that brought Canadian public finances to the verge of bankruptcy. Was it not necessary to require a very considerable effort by the taxpayers in order to balance the budget and eliminate the deficit?

For 2003-04 alone, the budget announces a record rise in expenditures in the order of 11.5%. The last hike like this was also of the Liberals' doing; 20 years ago, in 1983-84, the finance minister of the day raised expenditures 12.8%. So, you might say, nothing ever changes.

The budget documents also call for substantial increases for subsequent fiscal years. In all, there will be an increase of $25.3 billion between 2002-03 and 2004-05.

How can such expenditures be justified, when the government refuses to acknowledge the existence of fiscal imbalance within the Canadian federation?At any rate, only the Minister of Intergovernmental Affairs still believes, and still states at every opportunity—to people's amusement—that there is no fiscal imbalance.

However, from one end of the Canadian federation to the other, all the stakeholders, ministers, and even the provincial premiers, are in agreement and admit that there is a fiscal imbalance.

The Liberal government has a habit of announcing that the federal debt is higher than provincial debt. We could have understood the government keeping a tighter grip on the public purse. It is true that the debt is the government's largest expenditure.

But the Minister of Finance is sending a clear message by deciding to untie the purse strings. There is money and lots of it.

Some seasoned financial observers have called this budget a spending orgy. Despite the conflict in Iraq and tensions in the Middle East, the government has opened the floodgates and started to spend. Its timing is quite unfortunate, since we do not know the economic repercussions of the war led by the American-British forces.

I would like to review each item in this budget. Health care gets most of the headlines these days. Health care represents the biggest expenditure for each province, along with education and social services.

In Quebec, currently, health care represents 42% of the government's total budget. In a few years, the budget for health care, education and social services will represent at least 80%—in any case, more than 75%. There will probably be 15% left for the other expenditures, such as transportation. This is unacceptable.

Expenditures, particularly in health care, are growing faster than provincial revenue streams, which depend in part on federal transfer payments to the provinces.

When the premiers came to Ottawa, they spoke of the consequences of the federal government's withdrawal from health care funding. The needs are great: Quebec requires $1.6 billion for service delivery. However, after numerous protests and despite Ottawa's enormous surplus, the federal government has granted Quebec a measly $800 million.

During this meeting, the Liberal Prime Minister told the premiers, “It is my wallet, and you will take what I give you, period”. That is disgraceful.

This is a clear indication that health is not a priority for the federal government. The numbers speak for themselves. The federal government announced a $6 billion investment over three years, yet it is sitting on a $30 billion surplus.

Once again the federal government tried to overestimate the true value of its reinvestment in the health system, not to mention that it tried to shove its health reform down our throats with huge ad campaigns.

The measures announced are inadequate to meet the provinces' health needs. Health costs are enormous and the federal government refuses to give the provinces enough money to pay for them. Health is a provincial responsibility. The Liberals need to understand that once and for all.

There is no greater disappointment than what happened with employment insurance. The minister was unable to be transparent and meet our demands to stop pillaging the fund. Instead of creating an independent fund, he chose to form a consultation committee. If ever there have been consultations, it was for employment insurance.

We agree with the principles that were announced to make the contribution calculations transparent and to ensure balance between revenues and the cost of the program. However, all this has already been largely agreed to. It has been settled. Why does the Minister of Finance keep flip-flopping? He should have the courage of his ambitions and set up an independent employment insurance fund. Instead, he is going to continue consulting and in the meantime, continue to pillage the fund, help himself to the surplus, let it build up, and have us believe in some sort of virtual accounting. Under this type of accounting, money goes directly to the debt. The surplus is not mentioned when it comes to consultations or priorities in terms of what the public needs.

I agree with the Liberals' claim that this budgetary item has seen a $2.3 million reduction, but this is not fair. There is nothing planned for accessibility to employment insurance. There is nothing to help older workers who lose their jobs; nothing for the many families in Quebec who are suffering financially because of the softwood lumber dispute.

The unions said they were especially upset by the Minister of Finance's plans for the employment insurance system. The president of the Centrale des syndicats démocratiques, François Vaudreuil, said:

The minister sidestepped the real problem. Instead of improving access for the unemployed—six out of ten unemployed people do not qualify—he reduced the premiums by an amount that was laughable.

Social groups have also demonstrated their disagreement. The spokesperson for the Mouvement des chômeurs de l'Estrie, Denis Poudrier, had nothing good to say about the announced decreases in EI premiums. He said:

In 1989, 93% of unemployed persons qualified for employment insurance. Now only 40% qualify. Instead of lowering premiums, the federal government should freeze them and strengthen the program, to re-establish access to the plan for 90% of the unemployed.

Among those who are dissatisfied with the situation is Nathalie Saint-Pierre, the head of the Union des consommateurs, who said:

Lowering the premiums is all well and good, but no one qualifies anymore. The government should have allowed access to this source of income for workers who do not qualify because of increasingly strict rules. Particularly since the fund is overflowing and that Ottawa has been dipping into it freely in recent years.

There is only one small consolation with regard to EI, when it comes to the budget. The government has agreed to establish six weeks of benefits coverage for compassionate leave.

It is too bad that this comes so late and that implementation is a long way off. It is premature to congratulate the government for this; we need to know the exact criteria that will determine what will be considered a serious illness. And, the worker will have to have accumulated at least 600 insurable hours of work in order to qualify. The self-employed again are not included.

It must be said that the provinces are ahead of the federal government on this. Quebec already provides coverage. Parents are eligible for five days to take care of a minor child who is sick, and in May, they will be granted 12 weeks coverage to care for an immediate family member with a serious injury or illness.

Given that the provinces are doing more than Ottawa, why would the federal government not reach an agreement with the provinces whereby compassionate leave would be granted under a provincial program, to which the federal government would transfer the necessary money?

Now for air security. In the aftermath of the tragic events of September 11, 2001, the Liberal government decided to address national security on an urgent basis, as was its duty. But the unfortunate part of this is that the now former Finance Minister, the member for LaSalle—Émard, rushed in a new tax, a new direct tax on air travellers. Things were already going pretty badly in the airline industry and they did not need one more tax. This was shameful.

The member for LaSalle—Émard has admitted that he did not carry out any impact study before imposing this tax. How did he come up with the figure of $12 for a one-way trip and $24 for a round trip? The Lord only knows, and he did not tell us, as they say.

The former Minister of Finance has never been able to demonstrate his logic to us; instead he took refuge behind the promise to review the air passenger security charge later on. This is later on, yet we still do not really know what the money collected with this tax has gone for. We do not know whether the new systems are all in place and are effective.

But here we have the new Finance Minister announcing a reduction in the charge, from $12 one way to $7, but only for domestic flights. If someone has to go out of the country, the charge remains $12. In most cases, the same airport, sometimes even the same airline, is used. This is a very odd situation.

Air passengers are entitled to wonder whether they are being had. Where does the $329 million being used to reduce passenger charges come from? We are entitled to wonder whether the government has not been able to purchase the necessary security systems. Is that why they have surplus money on their hands?

I am quite amused by the note that Department of Finance officials took care to add at tab 6, page 2 of the briefing book they prepared. Among the questions and answers, one finds this: “During the process—of reviewing the amount of the charge—no substantive questions as to the amount or the structure of the reduction were raised by sector representatives.

Representatives of this sector are not stupid. When they came to Ottawa for prebudget consultations in the fall of 2001, they were told that there was nothing particularly scientific about how the amount had been arrived at. I remember the jaws of Department of Finance officials dropping when my hon. colleague for Saint-Hyacinthe—Bagot and I asked for impact studies and the guidelines used in deciding on the amount.

I remember also the waffling of the member for LaSalle—Émard, the former Minister of Finance, who finally admitted that no such study existed. He had nothing to justify his decision; not a thing. And to think that he wants to be the next Prime Minister. This is not very reassuring.

In summary, this debate is letting us shed some light on the fact that the government has announced insufficient additional investments in high need areas, such as health care, and given funds to programs and organizations that are infringing in areas of provincial jurisdiction.

The federal government clearly has no intention of doing anything about the fiscal imbalance. The creation of new organizations, programs and other initiatives will only make intergovernmental financial relations more dysfunctional.

The public's needs will never be adequately met because the provinces are not getting sufficient resources from the federal government.

When we vote on the Budget Implementation Act, 2003, many of our constituents will be disappointed. The list of measures that were not announced in the budget is long. There is no cut in the excise tax on gas or in the GST per litre of gas. The higher gas prices climb at the pump, the more the federal government pockets in sales taxes. Lord knows the price has jumped in recent weeks.

There are no new income tax cuts; no noticeable short-term increases in RRSP contribution limits; no increases in pension adjustments; nothing for seniors or women; and no significant decrease in EI premiums—just a measly $231 million from now until 2005. There are no increases in old age security—and Lord knows that seniors need this money because, although they founded our society, they are its most disadvantaged members—and no new measures to increase taxes on hidden salaries.

Directors of publically traded companies have cashed in at least $1 billion in recent years by selling shares acquired at bargain prices thanks to lucrative stock options. This is allowed, yet salaries are taxed at a combined federal and provincial rate of 48% in Quebec, while the earnings from cashing in options are taxed at only 24%.

The budget contains no tax deductions for volunteer work, and no additional deductions for charitable contributions.

In the end, there is not much to write home about in this budget and its implementing legislation.

We had hoped for more. However, since the era of the member for LaSalle—Émard, budgets have been characterized by extreme caution, which has always resulted in underestimated surpluses that get put toward debt reduction without any sort of debate.

In closing, our constituents have not noticed any changes to their paycheques. There are no new tax cuts on top of the $100 million announced by the member for LaSalle—Émard in 2000. At most, there is a two cent decrease in premiums per $100 of insurable earnings. That will be effective in 2004, so only next year.

There is nothing in this legislation to extend accessibility to the program or increase benefits. There is nothing to allow a taxpayer to contribute more to his RRSP.

I am also thinking about comments from retirees who feel completely ignored. One of them said:

We as middle class retirees did not benefit from $5 daycare, maternity leave, student grants and loans. We did not have a $13,500 RRSP limit, let alone $18,000. Yet, we pay a surtax on our old age security pension. Between 1994 and 2002, the cutoff for the pension went from $53,215 to $56,698, which is less than the increase in the cost of living. They said this surtax was meant to reduce the deficit. But these are just words from politicians whom we longer trust.

It is sad.

For once in Quebec, the three political parties were on the same wavelength in denouncing the federal intrusions contained in the budget that will become reality through the implementation act.

I will stop here, with an example not from someone in Quebec this time, but from Ontario's Minister of Finance, Janet Ecker, who basically said that the federal government was taking more money from taxpayers than it needed in order to fund its programs, while the provinces were having a terrible time funding the two largest programs in Canada: health and education. If this is what Ontario thinks, then the people on the other side will have to admit that fiscal imbalance indeed exists.

The Prime Minister's legacy budget is nothing more than a tool for political visibility. It is so scattered that Canadians have a hard time figuring out which direction it is taking.

Instead of this terrible situation, Quebec is offering a clear direction to its people; a plan that is also taking hold in western Canada. We propose to them the only true alternative: sovereignty.

Topic:   Government Orders
Subtopic:   Budget Implementation Act, 2003
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NDP

Judy Wasylycia-Leis

New Democratic Party

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP)

Mr. Speaker, I am pleased to be able to participate in the debate on Bill C-28, the budget implementation act. You will know already, Mr. Speaker, that the members of the federal New Democratic Party caucus stand in clear opposition to the Liberal budget of 2003. We express again today our lack of confidence in the government and its current budget. That will not come as a surprise to you, Mr. Speaker.

I want to indicate to the House that while we have a lack of confidence in the budget before us today, we will work very hard and do everything we can through the legislative process dealing with Bill C-28 to make improvements and to try to convince the government to make the necessary changes that will reflect the realities of Canadians.

One would think in listening to the Liberals today and in the weeks preceding this debate that they have had an awakening, that they have had a sudden new enlightenment about the priorities of Canadians and have presented us with a budget that will correct the errors of their ways in the past and put us on a new course.

This is the question for us today: Is this truly an awakening or is it a snow job?

Many have commented on the real meaning of the budget, despite all the spin and some of the positive media coverage. In fact, I want to reference some analyses of the budget that may not have appeared in the mainstream media or have been covered by national media outlets. Here is the question that Andrew Jackson of the Canadian Labour Congress put to Canadians: Is this budget “a real U-turn or just a curve in the road to a much harsher Canada which we have been on for so long?”

That is an important question for us today. Is this a new beginning or is this simply a twist in the road that does not address the systemic issues and barriers facing Canadians' full participation in the life of this great country?

In an article posted on February 25 of this year, Andrew Jackson goes on to say:

There has certainly been a re-ordering of Liberal priorities from debt reduction and tax cuts to social spending. But this is still a Budget which continues the tax cut agenda, and will pay down debt. The brakes on new spending can be quickly applied. It is far from clear if we have seen a real break in the long-term trend towards erosion of the public sphere.

That is an important commentary on the bill before us today.

Let me go further and quote from an article that may also not have appeared in the mainstream media and the national journals of the day, one by Bruce Campbell and Todd Scarth, who are both with the Canadian Centre for Policy Alternatives. They wrote an article on February 18 entitled “The Real Chrétien Legacy Budget”. Pardon me, Mr. Speaker. I realize I should not use the name of the Prime Minister in the House and I will try to quote from this article without doing so. The authors of this article state:

In reality, the plan the Liberals announced yesterday is fiscally conservative dressed up as socially conscious, and fails to make needed social reinvestments. In other words, it is an appropriately weak legacy for a Prime Minister who oversaw the shrinking of program spending levels, relative to the size of the overall economy, to levels not seen since the early post war years.

Finally, I will quote the national president of the Canadian Union of Public Employees, Judy Darcy, who, I might add, has recently made an announcement that she will be retiring from her position as president of the Canadian Union of Public Employees.

I want to take this moment to put on the record the appreciation of members in the House, I assume from all sides, for the work of Judy Darcy over the years in representing members of her union but also for her leadership on social justice issues and her ongoing contribution to the struggle for equality in our society today and for a universally accessible publicly administered health care system and justice in the workplace.

Let me put on the record her words in response to the federal budget. She said, after welcoming the new funding for social programs, as all of us in the House have done, that the budget doesn't erase the Prime Minister's real legacy: a decade of budget cuts that have been devastating for Canadians. She stated, “After years of bread and water, a Timbit looks like a feast”.

I think those comments reflect what we are really dealing with. Those particular insightful looks at the federal budget put this debate in perspective, because there has been a tremendous amount of spin around the budget, a tremendous amount of hoopla and a clear suggestion that the budget represents a whole new direction which will ensure that the priorities of Canadians are addressed in full and that our country is now on a path to economic security and prosperity.

In reality, as these analysts have stated so well, through this budget the government in actual fact says to Canadians that if they have pressing social needs, they can wait. This is not, as the media or the Liberals themselves have said, a “spending spree” budget.

Let us put it in context. In the year 2001-02, federal program spending was running at 11.2% of GDP. With all the budget's heralded new spending, by 2004-05 it will only rise to 11.8%, and that is well below the 16.5% when the Liberals took power. So let us be real: This is not a big shift in terms of social spending. The government has created the illusion, perhaps, of big spending, but in real terms, in ways that will meet the needs of Canadians, this budget cannot be categorized in that light. It should also be noted that the headlines seldom point out that massive Liberal tax cuts will result in government revenue being lowered over the next two years from 15.7% to 15.2% of GDP.

One of the issues we have to deal with in the debate, which is particularly relevant today as we near the end of this fiscal year this coming Monday, is what the government has done in terms of the surplus and how it has tried to fool Canadians about the money it has collected from Canadians in terms of expenditures on their priorities.

I think the first question we have to ask is, which surplus? The government in fact makes Enron look like amateurs when it comes to keeping two sets of books. There is the initial fictional version and then later the non-fictional version. Sometimes one would think the Liberals just pick a number out of the hat. It is like Liberal election promises, would we not agree? Before the election is the fiction, then over the next five years they release the non-fiction version of what they really intend to do.

Let us remember that since 1993 the government has underestimated the surplus each and every budget year. We are talking about billions of dollars of surplus that have not been reported to Parliament and to Canadians. The government has exceeded its official budgetary targets for eight years in a row, by as much as $15 billion in one year. That is not an easy thing to do, but we have to call the government to task on it. What kind of game is it playing? Why is it lowballing the surplus? What does it mean in terms of this supposed set of estimates before the House reflecting the values of Canadians?

For this fiscal year, which ends on Monday, March 31, it is estimated that the surplus for the federal government is at least $4 billion. There are varying estimates and we will not know the real figures until well into the next fiscal year, but let us keep in mind that the alternative federal budget, which has been accurate year after year in forecasting the budgetary surplus of the government, predicted that the government would have a budgetary surplus for this year of $8.9 billion. That is not far out from the Conference Board of Canada, which said $8.7 billion. We cannot forget the TD Bank, which said $5.8 billion. The government's own economic and fiscal update said $4 billion.

Even if we take into account the fact that some of that surplus has been spent on programs, and even if we take into account the fact that there is, as the government states, an intention to put some of this money aside in the name of prudence on a contingency basis, it would appear that, come Monday, the end of this fiscal year, there will be $3 billion in surplus that will end up going toward the debt: not toward the priorities of Canadians, not into filling the Romanow gap on the health care front, not in terms of the growing concerns around the spread of HIV and AIDS, not in terms of child care and meeting the demands of working mothers trying to juggle parenting and work responsibilities. No, it will go to the debt.

We must keep in mind that it was this government that said in the 1997 election it was going to follow a balanced approach whereby half the surplus would go to the debt and half to new social programs. Did that happen? I do not think so, not by a long shot.

That pledge was repeated in the 2000 election, but let us look at the actual facts. I want to reference a study by the Canadian Centre for Policy Alternatives. Those who would question the validity of this study should keep in mind that the Centre for Policy Alternatives has been accurate each and every budget year in terms of the government's budgetary surplus. The CCPA found that over the whole period from 1997 to 2001 only 2% of the underlying surplus was allocated to genuine enhancements in program spending. The other 98% went to debt reduction.

We also know that the Auditor General has raised the issue about the reporting of the budgetary surplus. On November 4, 2002, the Auditor General accused the government of deceiving the public about the government surplus. She disputed the Prime Minister's assertion that “Under the acts of Parliament, at the end of the year, the surplus is automatically applied to debt reduction...”. She went on to say, “There is no law, there is no accounting rule, that says you have to pay down the debt by the amount of the surplus”.

All we are asking for today is that the government live up to its 1997 and 2000 election promises to take the surplus and split it in terms of half going to social spending and programs that need reinforcement and support from the government, and the other half going to the debt.

I could make a strong case for why I think the whole amount should go to social spending, given the fact that the focus has been on debt reduction over the years, and given the fact that our debt to GDP ratio is at an appropriate and manageable level, and that the money available today could in fact deal with the social debt for a change and deal with some of the gaps in services and programs that are still there after the budget is said and done.

I think we are dealing with a serious issue of budgeting by stealth. The way in which the government handles the surplus is one example. There are many others. Let me reference, in fact, how the government talks about increased transparency yet is slinking around outside of the budget limelight bureaucratically reallocating $1 billion in government spending over the next year without any public disclosure.

It creates a great deal of suspicion in the government's budgeting process. It calls into question its commitment to advance the ideas of transparency and accountability when on the one hand it gives us a budget, wraps it all up in nice ribbons and wrapping paper and says it is spending in terms of the priorities of Canadians and, on the other hand, turns around and demands that all departments come up with $1 billion over the next two years.

What kind of impact does that have? What does that mean? Let me give the example of the weather services in this country. Over the last 10 years the government has reduced the weather services budget by 40%. By its own reports, the system and the service is in bad repair. There are serious problems because of that kind of cutting, hacking and slashing. What does the government do at a time of some fiscal flexibility and a budgetary surplus? It chops the weather stations from 14 to 5. It puts the safety and security of Canadians further at risk.

How does that make sense? Would it not be reasonable to expect that the government would first do a cost benefit analysis to provide that information to members of the House and to Canadians? That is one example. There are many other examples of how the government has it both ways.

Let me give the example of employment insurance. It has a $45 billion surplus as a result of the government's changes to the EI program and the fact that it removed so many people from the EI rolls because of changes in policy, and yet it has the gall and the nerve to propose that all job search kiosks be shut down. That is what was done. I know because I happen to have in my constituency a job search kiosk in a public place that is the most heavily utilized in Canada. People turn to job search kiosks to do what the government wants them to do, which is to find a job.

How does it make sense for the government, with a $45 billion surplus as a result of cuts and changes to the EI program, to turn around and chop job search kiosks? It is certainly my hope that because of the community uprising and in light of this proposal that the government will change its mind and have second thoughts about that kind of silly decision making.

There are many other examples but what we really need to focus on in the few minutes that I have left are the priorities of Canadians and how the government has failed to live up to the fundamental issues so important to Canadians.

If the government were truly concerned about dealing with the social debt, surely it would tackle poverty, surely it would put in place a meaningful national childcare program, and surely it would allow women who work part time because they have to look after young children to collect employment insurance benefits.

Why in heaven's name would Kelly Lesiuk from Winnipeg need to go to the Supreme Court of Canada to get her rightful entitlement? This is a woman who worked part time so she could care for her children did not quite have the 700 hours required by the government. She won her case at the adjudication level and the government appealed it. Now the case has gone to the Supreme Court. Is that not a waste of money when what we are talking about is the fundamental right of equality and requires the government to simply rethink its arbitrary cuts and changes to ensure that women who work part time, and who do so on an ongoing basis, and who are part of the permanent labour force, are able to collect employment insurance?

Let me just fit in two more issues before my time is up. The government promised child care for 10 years. This year it says that it has done it. It has allocated $935 million for all the provinces and territories over five years, which means $25 million for this year. That means 3,000 childcare spaces over the next couple of years will be created, which is hardly commensurate with the demand and the need of working families and mothers who need quality, licensed childcare.

Let me put that in perspective and tell members what that means for Manitoba. It means $24 per month per staff or $12 on each pay cheque, or three-quarters of a space more per child care centre. Does that make sense? Is that a national child care program?

In conclusion, the government has failed in terms of ensuring that the Romanow blueprint on the future of health care was accepted and acted on. There is a Romanow gap in terms of funding and in terms of accountability which means privatization will continue. In fact, it means that our medicare system, our cherished national health program, is still in jeopardy.

Topic:   Government Orders
Subtopic:   Budget Implementation Act, 2003
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PC

Norman E. Doyle

Progressive Conservative

Mr. Norman Doyle (St. John's East, PC)

Mr. Speaker, I am pleased to say a few words in the debate today on budget 2003.

First, the budget does include some good news dispersed throughout various parts of the budget. The first piece of good news is that the child tax credit was increased in the budget. The House is on record as being committed to the eradication of child poverty. We all remember back to a number of years ago when we said that we would eradicate child poverty by the year 2000. Of course that deadline has long passed and we are certainly playing catch up on our commitment to eradicating child poverty by the year 2000.

About three years ago I was part of a committee that travelled the country between Newfoundland and Vancouver looking into the issue of poverty and child poverty in particular. We held public hearings all across the country. It was a real eye opener for me. A number of people who came before our committee told us personal stories about poverty and how an individual or a family could get into a cycle of poverty from which they could not escape. A lot of it has to do with the fact that the federal government, and governments generally, are not coming up with good programs to address the whole issue of poverty in the country.

The faces of poverty are many in this country. We have the working poor. We have people who cannot find jobs and who sometimes live in a state of poverty from which they cannot escape. Children, in particular, are hurt by poverty. Impoverished children, as we are all very much aware, come from impoverished families. The government is not entirely blameless when it comes to the various causes of poverty that we see today.

In my part of the country, in Newfoundland and Labrador, people were negatively affected when the fishery closed down a number of years ago. We also had people who were negatively affected by some of the programs brought in by the federal government, namely the employment insurance program, which the government cut back on drastically. It was probably instrumental in causing the out migration of roughly 70,000 people over a seven or eight year period. These were people working in seasonal industries and who had seasonal employment.

I have always been disappointed to see some of the policies of the federal government as it pertains to seasonal employment. We have to recognize that in certain parts of the country seasonal employment is very important. The fishery is important but, by its very nature, it is seasonal and therefore employment is seasonal. It cannot be done sometimes in winter months in some areas. The same can apply to the forestry or mining industries. The federal government has hit those industries particularly hard because of the various changes that it has brought about through employment insurance.

Another area for which I have been concerned has to do with the massive cuts to the federal transfers to the provinces for health care. That has hurt a lot of provinces and the territories. It has hurt people of all ages.

The cuts in transfers to post-secondary education is another area on which we need to concentrate. These cuts to post-secondary education, for instance, have resulted in provincial student grants being changed to provincial student loans. It is heart-rending to see students coming in to my office on occasion who have just graduated and who have a $50,000 student debt. They are looking for jobs and very often the first job they acquire is a low paying job because of lack of experience and what have you.

When we speak of poverty we have to look across the spectrum. We will see that many students out there today are living in poverty after they graduate because of the massive debtloads they are carrying and trying to pay off. How do we expect the average graduates to get homes, mortgages or cars which they will need to travel back and forth to work? How do we expect them to marry and raise families when they are carrying those kinds of massive student debtloads?

Those are important areas and contribute to the various steps that we see regarding the number of people who are living below the poverty line. The government in essence helped create a generation of impoverished students and debt-ridden graduates, which is not fair. The federal government should be looking at that a little more closely.

Any kind of government initiative that puts more money into the hands of low income families with children will get my applause. The child tax credit increase is an initiative that I was pleased to see. As well, I applaud the funding for day care and early childhood education. It will help low income families. When our committee travelled these were things that we heard. Single mothers told us that it was very difficult to find a good day care for their children so that they could go out and pursue employment and try to get out of debt and the cycle of poverty in which they find themselves.

I am pleased as well that the budget incorporates the latest arrangements between the premiers and the Prime Minister on revitalizing our national health care care system. While the current health care arrangement is an improvement, most commentators today, as I am sure members have heard, indicate that much more funding is necessary if we are going to fix our health care system and bring it back to what it was prior to 1992.

Because the funding is done on a strictly per capita basis, again I have to refer back to the effect that it will have upon my own province because the funding is done on a strictly per capita basis. Newfoundland's slice of the multibillion dollar pie is a paltry $200 million over a three year period, or about $70 million a year. That is not a great deal of money when we put it into context, because the population is aging and shrinking at the same time, and it is spread over a huge geographic area. This is definitely a losing formula for Newfoundland and Labrador.

The government, as we are all very well aware, replaced the established program financing formula, the old EPF system of transfers, with the Canada health and social transfer, called the CHST.

Under the old EPF system of financing, moneys were transferred specifically for health care and the formula would take into account the difficulties of delivering health care to the many scattered communities all over Newfoundland and Labrador.

The CHST which is allocated to the province is without regard to the age of the people or population or how the population might be spread over a very large geographic area. In our case, we have 400,000 square kilometres with 520,000 people. That is quite a large area.

The old EPF system took into account the huge geographic area to which it had to deliver these health care dollars. However the new formula, the CHST, does not take any of that into account. As a result we are under a losing formula when it comes to CHST.

The simple fact of the matter is that in the province, as I said, we have an aging, shrinking and geographically dispersed population. The health care transfer system needs to be adjusted to reflect that fact. How many times have we said that? That would be fair. It is only fair to reflect the fact that there is a huge geographic area to deliver limited health care dollars. These are a few of the areas for which I have some concern.

When we speak of health care, recently the Prime Minister went on record as saying that the per capita funding formula does not serve well in the case of the territories. I could say to him as well that it is not only the territories. He is right when he says that it does not serve the territories very well, but it does not serve large areas of the country that will receive limited health care dollars. As I said and will repeat, there are 400,000 square kilometres in Newfoundland and Labrador.

Another area which I want to touch on is the whole area of equalization. How many times in the six years I have been here have I spoken on the current equalization formula. I would imagine I have spoken on that one subject alone at least 20 times. The budget was silent again on equalization and the clawback provisions in the equalization formula.

Newfoundland and Labrador does not reap the full benefits of development of our natural resources. What else is new? For example, the income from oil or mining royalties is clawed back through reductions in the equalization formula. In other words, we have a formula whereby if a dollar is earned, a dollar is also lost. A dollar will be clawed back by the federal government from the resource revenues that are generated. It may not be exactly a dollar, but it is almost a dollar. It is a formula that one could accurately describe as: earn a dollar, lose a dollar.

Today in my province, we are bringing down a $4 billion the budget. Guess what? It will have a real deficit of about $600 million on a $4 billion budget. The only reason that the credit rating agencies are keeping the credit rating of the province in a fairly good position is the fact that our growth has been quite good over the last three years in particular. I believe we led the country in growth over a three year period. I know we are leading the country in growth this year and probably did last year as well.

Here is a little province with a $4 billion budget leading the country in growth. It has a $600 million deficit and a decent credit rating because its future looks pretty good. We have a Voisey's Bay development coming on stream in the next couple of years, the largest nickel find in the world. We have an oil industry. We have a crab and a shrimp industry that is worth in the neighbourhood of $1 billion. We are doing decently well in mining and forestry. Therefore we are generating quite a lot of revenues. However that revenue was clawed back by the federal government dollar for dollar, practically.

We have a $4 billion budget, a $600 million deficit, we are leading the country in growth and we are the poorest province in Canada. How do we figure that one out? Producing oil, producing the largest mining operation in the world like Voisey's Bay, $1 billion crab and shrimp industry, only 500,000 people, people leave the province in droves, $600 deficit and we are the poorest province in Canada. Obviously it is because of the way the funding formula for equalization is set up: earn a dollar; lose a dollar.

We very often hear the federal government say that it cannot do anything about changing the formula because provinces like Ontario or Alberta would not agree, provinces which are net contributors to the country but are not really getting too much out of equalization. I cannot figure out how it is in the best interests of the federal government, Alberta or Ontario to have a province like Newfoundland and Labrador as the poorest province in Canada when it is producing so much in the way of fish, oil and mining royalties.

It is not in the best interests of the country to have that equalization formula punishing the poorer provinces like Newfoundland and Labrador, Nova Scotia, Prince Edward Island or New Brunswick.

The government has said that it cannot act unilaterally on equalization to improve the clawback to the equalization from the poorer provinces. That did not stop the government from unilaterally lifting the ceiling on the total cost of the equalization program back in the year 2000, which was an election year. The government lifted the cap on equalization unilaterally, then once the election was over, it unilaterally again reimposed the program ceiling. So much for the theory that it needs widespread consent.

This has always been the thing, the government needs widespread consent from places like Ontario or Alberta to change the equalization formula, but it changed the ceiling unilaterally back in the year 2000. It did not stop the federal government tinkering with the equalization program back then, and once the election was over it tinkered again and put the cap back on equalization.

Yes, it can unilaterally change the equalization formula to make it a bit easier on the have not provinces like Newfoundland, Nova Scotia and the Atlantic area generally. We should deal with this terrible formula of the province earning a dollar and the federal government taking a dollar. By doing that a bit of fairness can be injected into provinces that are struggling, that are making money, that are working very hard, but cannot keep the money because of this despicable formula, this unfair way of dealing with provinces like Newfoundland and Labrador.

Topic:   Government Orders
Subtopic:   Budget Implementation Act, 2003
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LIB

Brent St. Denis

Liberal

Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)

Mr. Speaker, I listened to the member talk about a number of things and I noticed that his remarks focused on equalization.

My riding is in northern Ontario. I would argue that in relation to southern Ontario, it is disadvantaged. Like much of Newfoundland and Labrador, we are a resource based economy and have often raised concerns about shipping our resources south and elsewhere and not always getting back from the provincial treasury what we have felt is our fair share.

The Federal Economic Development Agency for northern Ontario, FedNor, an agency of the federal government, does not and should not provide the southern parts of Ontario with complete assurance that we are getting our fair share, but the federal government is doing its best to balance the scales.

I am sure the member has a sense of fairness. Would he not consider that there are other federal programs such as the Atlantic Canada Opportunities Agency, the Newfoundland and Labrador share of the recent health accord and numerous other federal initiatives that provide his part of this vast country with its fair share of the nation's riches? We are a fortunate nation in that regard. Would he not at least allow a little room to consider that Ontario never benefits from equalization and therefore northern Ontario never benefits from it either, and not to pit one region against another? The federal government does step in in other ways to balance things out. Would the member at least concede a little room that things are not as unfair as he might have suggested in his remarks?

Topic:   Government Orders
Subtopic:   Budget Implementation Act, 2003
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PC

Norman E. Doyle

Progressive Conservative

Mr. Norman Doyle

Mr. Speaker, I could not agree more with the hon. member. There are all kinds of good programs that the federal government has come up with which have helped Atlantic Canada. I can refer specifically to the Atlantic Canada Opportunities Agency, ACOA.

ACOA has been good to the Atlantic region. It has helped Newfoundland and Labrador quite a great deal. I cannot help but feel that these programs are not doing the job that they should be doing.

I do not know if the member was here when I was telling the House about the budget that will be brought down today in Newfoundland and Labrador. This is a $4 billion budget with a $600 million deficit for a little area such as Newfoundland and Labrador that has a population of 500,000. It is scandalous to have that much of a deficit.

We have so much in the way of natural resources. It becomes frustrating when these programs, such as ACOA, which were originally intended to give poorer areas in the Atlantic region a leg up do not really seem to be producing or putting the economy back on its feet the way they should.

It would be more beneficial if the federal government said to Newfoundland and Labrador, for instance, that since it is into the Voisey's Bay development, and it is a big development--the largest nickel find in the world--and since the Newfoundland and Labrador cod fishery has gone down quite a great deal, the federal government would help by giving perhaps a five year equalization clawback holiday.

In that way the province could reap some of the benefits that Voisey's Bay would produce or that the much improved crab and shrimp fishery would be producing. It is a billion dollar industry. Maybe the federal government would give an equalization clawback holiday. The federal government would not make a complete change in the program, but would give a holiday so that the province could reap some benefits from the royalties from Hibernia, White Rose, Ben Nevis or Voisey's Bay.

In that way, when Newfoundland and Labrador would get its standard of living up to the national average and would be able to compete economically with the rest of the country, then the federal government would reimpose the original equalization clawback provision. That would be a step in the right direction for the federal government to take for provinces in need.

I can readily identify with the hon. member's comments with respect to his own area in northern Ontario because there are problems there as well. These things should be worked out for these poorer areas.

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Subtopic:   Budget Implementation Act, 2003
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CA

Ken Epp

Canadian Alliance

Mr. Ken Epp (Elk Island, Canadian Alliance)

Mr. Speaker, I listened intently to the hon. member's speech. I was particularly interested in his comments regarding the huge debt that students face in this country and the real tepid measures in this budget to do anything about it.

I have ideas about things I would like to see done. I would like to hear more from the hon. member since he talked about the huge debt, up to $50,000 and sometimes even more, for a graduating student. How would he suggest this should be handled by the Canadian government on behalf of Canadians and particularly on behalf of students in order to allow them to do as we did in our generation, that is to graduate debt free?

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Subtopic:   Budget Implementation Act, 2003
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PC

Norman E. Doyle

Progressive Conservative

Mr. Norman Doyle

Mr. Speaker, that is a very serious problem for students. As I said a few moments ago, students come to my office on a daily basis. They are so frustrated with the current system. They have a $50,000 debt and are trying to get a job, build a home, obtain a car or look after a mortgage. Their plans to get married have to be put on hold because they cannot afford to have children and to raise them, especially when they have that kind of debt load and debt problem to deal with.

Massive cuts to these federal transfers for post-secondary education resulted in provincial student grants becoming provincial student loans. The old provincial student grant system was a whole lot easier to manage than the provincial student loans that we have today, but maybe we have to take a whole new approach to the way education is financed at the post-secondary level.

Ireland took some progressive steps a number of years ago and introduced, essentially, a free education system. Maybe it is time we had a royal commission to look at the way we finance post-secondary education. It is a very important area. The future and well-being of the country depends solely upon the educational system that we have and how people are able to take advantage of it and avail themselves of it.

Maybe it is time we had a truly progressive think tank who sat down and had a look at post-secondary education, using the models that Ireland used a number of years ago to finance its educational system.

I do not have an answer that I can provide for the hon. member in a nutshell, but it is of sufficient importance to warrant some kind of new approach to the whole system of financing education in Canada.

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Subtopic:   Budget Implementation Act, 2003
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LIB

Geoff Regan

Liberal

Mr. Geoff Regan (Parliamentary Secretary to the Leader of the Government in the House of Commons, Lib.)

Mr. Speaker, I will be splitting my time with the hon. member for Algoma—Manitoulin.

It is my pleasure this afternoon to join in the debate on the 2003 budget, the budget implementation act, Bill C-28. This gives me a good occasion to talk about the recent budget tabled by the Minister of Finance last month and some of the important measures that are in this bill.

There are a variety of topics that I am interested in and are covered in the budget including things like health care, infrastructure, defence, the environment, and many other issues, such as help for the homeless people in our country.

The budget process is the most important process of the year for the federal government and budget day is the most important day because it is the day when the decisions are announced on a process that begins many months before. In fact, shortly after the previous budget is announced the process begins for different departments, different interests, and different groups who have ideas about what should be in the budget. Whether they be groups of members of Parliament or groups in departments, they begin their initiatives to get their priorities included in the budget process by trying to get as much funds as they can for the initiatives they want to see funded.

When the budget day is announced, it is the accumulation of a long process of working through all these priorities and announcing what the priorities are for the government, and how the resources of the government and taxpayer dollars will be spent that year. It is an important day and an important process.

This particular budget was important in a variety of ways. First, it was important in terms of health care. I had a number of meetings in my riding of Halifax West in January of this year to talk about health care. I had a series of four forums across different parts of Halifax West and heard from people in my riding about their needs and concerns: to make health care our top priority and to keep health care a publicly paid system. They did not want a private system of health care. People in my riding have strong views about this and strongly stated that they want to maintain the publicly paid and publicly delivered system.

The increase in transfers for health care to the provinces in the federal budget was very satisfying. It was good to see that. Of course, we always want to see more money and the government puts in as much as it can. We must recognize that health care, while it is the number one priority of Canadians, is also one of many priorities. There are other important priorities like the environment, our cities and many other things.

Let us talk about some of the things that the budget did in relation to health care. It provides, for example, a five year, $16 billion health reform fund. This is the key to this because I heard, throughout the forums that I held with people in Halifax West, that people wanted to see the kind of thing that Roy Romanow talked about in his report. They wanted to see money being put into health care to buy change, to make a better system, and to build a system that is more sustainable for Canada.

That is exactly what this $16 billion health reform fund is all about. It is for the provinces and territories to target primary health care, home care and catastrophic drug coverage. Those are certainly areas of concern that I heard about from people in my riding. I also heard about it elsewhere, whether in letters to me, e-mails, or from people I run into at the local mall or wherever. These are big issues, particularly in relation to home care. I had a lot of people call me with their concerns about caring for elderly people, about getting home care for themselves, and about not having an adequate system in our province of Nova Scotia.

The problem in Nova Scotia has some similarities to the rest of the country. There are challenges in home care across the country, but I can tell members that in our province, where we have a $13 billion debt for a very small province, there is no question that it is a crushing burden on the ability of the provincial government to pay for services like this. Now, there are things that the province could do better, perhaps provide better services and do a better job on home care, but there are things this money would enable the province to do that it could not do before. Nationally, this $16 billion would be very important in terms of helping move forward the area of home care and other areas, in particular primary health care.

In fact, I am going soon to a clinic in the north end of Halifax which is already an operating example of primary health care in action. I look forward to seeing that because it is important to look at new ways to do things which will make more sense, provide better long term health care and also provide us with the maximum bang for our buck in our health care dollars.

Another item that is part of the health care expenditure is $9.5 billion in increased cash transfers to the provinces and territories over the next five years. That is important because clearly the provinces and territories have their own challenges to face in terms of meeting their current needs. It is one thing to put money in, change the system and create a better system. However, while we create that new system, we also have to maintain the existing system and obviously pay for the acute care that is so important to Canadians.

There is also an immediate investment of $2.5 billion through Canada health and social transfer to relieve existing pressures in the health care system. That is immediately, in this fiscal year which ends in a few days. That will be very helpful in the current fiscal year.

There is the $1.5 billion over three years for a diagnostic medical equipment fund to improve access to publicly funded diagnostic services. One vital thing is these funds are not only to be used to pay for new MRIs, CAT scans and even PET scanners, which I have learned about recently, but they also will be used to help provide new technicians and doctors who are trained to manage or to run these systems and to interpret what the diagnostic systems tell them. It is important that we move forward in this area because clearly one of the big concerns people have is waiting lines.

Not only is it important to have more people trained to run these machines and interpret and work with the machines but it is also important to co-ordinate better the system of using these machines. One thing Mr. Romanow talked about was this. How long people wait to get an MRI or CAT scan is not always a question of how many are available or how long the wait is overall. Sometimes it can be a question of people's doctors and how long their lists are. Really there ought to be more co-ordination among hospitals and doctors. There needs to be a better information system so that people are in line one after another and not depending on which doctor they have. There should be a proper system to get them there as quickly as possible. I think this will help to do that.

Another item is $600 million to accelerate the development of secure electronic patient records. One thing we heard through the process on the review of health care in Romanow report and the Kirby report was that patient information was not always shared properly. There needs to be a quicker way to do that. Putting money into electronic records will help doctors share information quickly with other doctors or hospitals. It will get information to a person's file quickly so medical personnel know about their health background and will enable them to help more quickly and avoid problems as well.

Another item is $500 million for research hospitals for the Canada Foundation for Innovation. Clearly putting money into research in a health care area is another priority for Canadians and another area in which they think is very important for us to spend.

I know I only have a short time left and there are many other issues I would like to cover. There are so many other things that are funded in the budget. I am pleased that I could talk about health which is clearly the top priority of Canadians. However there are other things we should talk about for a moment.

I want to talk about infrastructure because the budget provides more funds for infrastructure. I would like to see more over the long run. I hope we can increase those funds in the coming years. In ridings like mine, Halifax West, it is probably the fastest growing area east of Ottawa. The growth is not being met with the kind of facilities we need, whether it be roads, rinks, schools or various other kinds of facilities. We do not pay for schools through this program, but obviously there are other kinds of things which would be important to assist a growing area like mine that needs those kinds of facilities. Therefore I am pleased to see the increased investment on top of the $5.25 billion already allocated in recent budget for infrastructure.

After my work on the Prime Minister's task force on urban issues, I see this as a very important area. We have to keep working on this.

I am pleased to see money for the environment. I want to see us put more money into things like transit. I look forward to progress in these areas.

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Subtopic:   Budget Implementation Act, 2003
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LIB

Brent St. Denis

Liberal

Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)

Mr. Speaker, I appreciated the member for Halifax West's comments on this very good federal budget. I would just point out a fact of political life in Ontario and ask him to comment in the hope that things are not much different in his province.

Around the time the Prime Minister was negotiating with the premiers and territorial leaders, he tried to impress upon them the importance of accountability. If the federal government was to transfer money to the provinces, money a commitment that was almost historic in its size, he insisted on our behalf that the provinces provide, not to the federal government but to the people of Canada, some accountability so Canadians would know that every dollar of this new federal transfer was going into health care in their provinces. The Premier of Ontario at that time said that he was not sure Ontario would use all the new federal health money for health care, which of course would be a tragedy because of the need for increased investment in health care.

In the experience in his province, is there an understanding by the public of how important the federal investment is in health care, even though it is the responsibility of the provinces to deliver that health care? Does he agree with me that accountability to the public, to citizens, is a key part of the puzzle?

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Subtopic:   Budget Implementation Act, 2003
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LIB

Geoff Regan

Liberal

Mr. Geoff Regan

Mr. Speaker, I want to thank my hon. colleague from Algoma—Manitoulin for that excellent question because it gives me a chance to talk about something I had not talked about and had forgotten about briefly, which is of course accountability.

I can assure him that in my riding and in the forums I held accountability was a priority and an item that would come up frequently in people's comments. They wanted to see this money spent well. They wanted to see new money from the federal government to the provinces for health care being spent on health care. That was a vital concern of theirs, to ensure that it not be spent on things like lawn mowers or other things which we heard about, regrettably.

They also wanted to see measures of performance in health care that were independent of provincial governments. They wanted something of a national system, something like a national council like Roy Romanow suggested, that could look at how each province was performing and give people nationally a picture of how the health care systems in their own provinces were performing. They could then assess them in comparison to other provinces and try to determine whether people were really getting value for their money.

To me that is vital. It is something we have heard constantly. People say that it is costing more and more for health care. They believe they are paying enough money for health care and they should be able to have a very good publicly paid system. However they want to know that it is being managed well.

How do we do that if we do not have some system nationally of overseeing the system, of examining it, measuring it and comparing it as well as going over things like research and trying to ensure that we are going in the right direction, in a variety of ways, in improving the management of our health care system nationally? I constantly heard about this priority in Halifax West.

I was surprised that the representative from my province in those meetings, Jane Purves the minister of health, did not feel that accountability should be a priority. I think that as a result of the meetings, we do have some accountability process but I hope we can strengthen that in the future.

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LIB

Brent St. Denis

Liberal

Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)

Mr. Speaker, I am pleased to share my time with the previous speaker, the member for Halifax West, as we debate the most important piece of work that a government does in the cycle of a parliamentary year, that being the federal budget.

I would like to congratulate the Minister of Finance on his first budget. I believe the broad measures in this budget will benefit everyone. The budget continues the Liberal government's record of strong fiscal management while at the same time making investments in key areas such as health care and support for Canadian families.

Budget 2003 heralds a moment of great opportunity for Canada. Where once we followed the economic performance of other nations, today Canada leads the way in growth, job creation and debt reduction. Canada led the group of seven nations, the G-7, in growth last year and we expect to do the same in 2003.

I would like to point out for the benefit of members, and some of them may have noticed this in their offices a few weeks ago, a scorecard produced each year by the Canadian Institute of Chartered Accountants. This scorecard covers the last fiscal year and I expect that next year's card will be even better. If I could, I will just provide members in the House a summary of the results.

We forget sometimes that when we were elected in 1993 we inherited an annual deficit at the time of $42 billion a year. Every year $42 billion was being added to the total debt of the country. Now we are in our sixth budget year that we will have a surplus.

We tend to take for granted the impact that has on the finances of the nation. It allows us to make extra investments in health care. It allows us to support economic development in our regions. It allows us to reduce EI premiums. It allows us to participate in the rebuilding of Afghanistan and now, tragically, the rebuilding that will be needed in Iraq. It gives is the flexibility not only to serve our own citizens better and provide a better future for our children and grandchildren but it also allows us to play a very positive part in the search, as difficult as it might be sometimes, for global peace.

Let me just give members the highlights of the scorecard. The debt to GDP ratio came in at 7.1. All these numbers are out of 10. The Canadian Institute of Chartered Accountants says that this is the best score in more than a decade. According to their report, the year's score reflects a meaningful reduction in government debt as a percentage of GDP over the past five years. The surplus to GDP ratio came in at 8.6. Again all these numbers are out of 10. The report goes on to suggest that once again the Canadian economy staying in surplus is still the best result among the G-7 nations.

I will conclude with the fifth item here, which is foreign held debt in relation to net government debt. This came in at a perfect score of 10. Currently only 17% of our national debt is foreign held, a clear indication of strengthened fiscal position. That means the 83% of national debt is held by Canadians and Canadian pension funds. That is very important because 83% of our interest payments on national debt goes to Canadians, whereas at one time our foreign debt was, in percentage terms, very large. That percentage is dwindling and that is thanks to a very aggressive, positive and assertive debt management practice by the government.

I would like to go on by suggesting that Canada's resilient economic performance is thanks to not only the efforts of the government but the sacrifices of all Canadians. It is a testament to the federal government's responsible fiscal record since elected in 1993.

Budget 2003 recognizes the critical link between social and economic policy. This means building the society Canadians value, building the economy Canadians need and building the accountability Canadians deserve. It means making investments in the needs of individual Canadians, their families and communities; remaining fiscally prudent and deficit free, while promoting productivity, innovation, skills and learning; and making government more accountable to Canadians.

Through budget 2003, the government continues to build a society that responds to the challenges we face as a nation and capitalizes on the opportunities available to us all. The budget fosters a successful economy and continues to deliver prudent management of Canada's finances.

I will summarize the broad thrust of the budget. The previous speaker gave an excellent description of the initiatives under health care so I will not go into great detail, but I will underline that the investment of $34.8 billion over five years in support of Canada's health care system will pay significant dividends.

I concur with the member when he says that the public wants accountability. The public wants to know that this new federal investment, plus the provincial commitments to health care, will indeed be spent to improve health care and to bring us closer to improved core funding of our hospitals and move us toward a national home care system and a national system to deal with the catastrophic cost of drugs that some families have to face.

The budget also provides support for families, children, Canadians with disabilities, communities of all sizes and aboriginal communities, and it includes six weeks of EI benefits to allow for the care of a gravely ill family member.

I will say a few things about the initiatives in support of our families, such as the increase to the national child benefit supplement which the federal government, together with the provinces and territories, established in 1997. They established this benefit to help families with children get off welfare. Since that time, the government has seen a reduction in welfare dependency and child poverty.

Budget 2003 announces a significant increase in the benefits to children living in low income families through the Canada child tax benefit. This benefit provides increases to the annual supplement of $150 per child in 2003 and an additional $185 per child in each of 2005 and 2006. This will bring the maximum total child benefit for a first child to $2,642 in 2003, growing to $3,243 in 2007. In fact, assistance to families is projected to reach over $10 billion by 2007, more than double the level of 1996.

All Canadians have an interest in ensuring that all Canadians benefit from our education system, our productivity and our economic growth. We cannot allow any part of our society to be left behind, whether it is on issues of literacy or it is simply an issue of insufficient income to provide the basic necessities, which in their own way prevent some people from taking advantage of those best parts of Canadian life and what this country has to offer. We simply cannot afford to leave anybody behind.

I would go on to add that for those who have members of their family with disabilities and who are caring for children with severe disabilities it imposes a very heavy burden on families. In recognition of this, effective July 1, budget 2003 introduces a new $1,600 child disability benefit. This will be targeted to children with a severe and prolonged mental or physical impairment.

The federal government will also give Canadians with disabilities the tools they need to actively participate in Canadian society. In so doing, the federal government is renewing a funding commitment of $193 million per year to assist disabled persons in strengthening their prospects for employment.

I could go on about the very beneficial impacts that the budget will have on Canadian society but I will conclude by saying that I was very pleased with the new investment in support of our military. We all wish, I am sure, a very quick and peaceful outcome in the Middle East.

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Subtopic:   Budget Implementation Act, 2003
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NDP

Judy Wasylycia-Leis

New Democratic Party

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP)

Mr. Speaker, I am pleased to hear the member's comments about people living with disabilities and the families that support them. In that context, I would ask the member why he and other members of his caucus, along with members from the Alliance Party, chose not to support a very important proposal before the House, that being Bill C-206, the private member's bill on caregiver benefits, presented by my colleague, the member for Sackville—Musquodoboit Valley—Eastern Shore.

The member will know that Bill C-206 was a proposal to the House to deal with the fact that the burden for caregiving falls heavily on women's shoulders and requires a meaningful solution by way of using some of the $45 billion EI surplus.

Given the need that he has identified and the fact that we had a constructive proposal, why did he and so many others in the House choose to vote against that constructive proposal and instead create a situation where families continue to grapple with the need to provide care for children with disabilities, for aging parents, for sick members of their family or for people who are dying, and do so without a meaningful alternative?

I think the member needs to explain to us what was wrong with that proposal and why he and others would reject something that was so positive.

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Subtopic:   Budget Implementation Act, 2003
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LIB

Brent St. Denis

Liberal

Mr. Brent St. Denis

Mr. Speaker, I believe it was recently that we had the vote on Bill C-206. While lauding the initiative of the member who proposed that private member's bill, according to my understanding there were several aspects to the bill that were technically impossible to deliver given the current framework.

I would suggest to the member that Rome was not built in a day. I am sure she could find room in her heart to say that the federal government is at least moving in the right direction. In fact, a number of provisions in Bill C-206 were, as I understand it, announced in the budget and that it might have been a duplication of effort and initiative to support that bill.

That said, the member and I are of one mind when it comes to doing what we can to support those who are disabled or the people who support those who are disabled. I believe she will at least agree with me that the initiatives that have taken place under our watch since 1993 have seen remarkable improvements. However we can agree that there is always room to do better, whether it is this file or the other files that constantly face a government.

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Subtopic:   Budget Implementation Act, 2003
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CA

Randy White

Canadian Alliance

Mr. Randy White (Langley—Abbotsford, Canadian Alliance)

Mr. Speaker, over the years, particularly since I have been here, 1993, we have been picking the government up on wasteful spending, things that really ought not to have occurred. I will not go into any of the detail of them. However over the years nothing has been taken out of the budget of the federal government. It is just a reallocation of dollars.

If we have identified virtually billions of dollars over the last 10 years of inappropriate spending, why has that money remained in the government's coffers? Why do we not cut back on the budget itself and remove those kinds of items?

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Subtopic:   Budget Implementation Act, 2003
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LIB

Brent St. Denis

Liberal

Mr. Brent St. Denis

Mr. Speaker, I guess it is a matter of perspective. As I said in my remarks, we inherited a huge deficit so clearly we did something right in turning the finances of the country around. He did not give me any specific examples but there were some serious adjustments and cuts in the government's expenditures or we would not have achieved the elimination of the deficit and the long overdue return to surplus.

I would suggest to the member that while no one should ever believe that governments cannot make mistakes, we are not perfect nor is any government, I believe that the citizens of this country have been led by a very responsible government that has managed the resources of the country extremely well in my view and in the view of all those on this side of the House.

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CA

Randy White

Canadian Alliance

Mr. Randy White (Langley—Abbotsford, Canadian Alliance)

Mr. Speaker, I want to talk at length about some of the difficulties with the government's budget in terms of not committing to the national drug strategy, and I will in a minute, but I want to follow up on the comment that was just made by the member across the way.

If the hon. member wants specifics, I did not bring with me the litany I have of wasteful spending by the government, but when we look at some of the research programs that it is into and some of the largesse to friends and relatives and so on, things that were just a complete waste of money, we would have thought that over the years the government would have gone through some kind of zero based budgeting procedure, whereby it would look at all these kinds of expenditures. The government would determine that if it was spent one year and was picked up on, why would it spend that next year and the year after, so it would just be removed from the budget.

That really never was done. The big cuts of the 1994-95 era were made at the expense of the provinces through the equalization formula and the Canada health transfer program as well. That money is really still in the budget. That is a shame, because it will not get out of there until we get in and make those kinds of reductions.

That being said, I want to talk about something else that is not in the budget but that I think is in fact very important to a lot of people in this country. I can recall bringing into this House about two and a half years ago a motion to establish a special committee to study the non-medical use of drugs. It was adopted unanimously. We did 18 months of study on that. We went to Europe to look at programs and we went to Washington, New York and all across the country to see what was going on. We made some recommendations to the House of Commons, and lo and behold, on these 41 recommendations one would have expected the government to acknowledge that it had a committee looking at the drug problem. It acknowledged that in the throne speech and said that it would do something, but when it came time to do something in the budget, which is really what drives the initiatives of a government, nothing was said or done. Why is that?

In the interim, at the time we were meeting on the drug issue, the justice minister happened to announce that he would decriminalize marijuana. He just blurted it out without any particular study. He just said we would do it. The committee was not through with its study or its recommendations, so I think the government had its own agenda. Meanwhile, the Minister of Health said the government was in Vancouver looking at the dreadful situation with hard narcotics, crack and heroin, and he said that he thought the government would get involved in pilot studies and start some so-called safe injection sites. I will get into how safe they are in a minute, but there we had two significant announcements blurted out by two separate ministers, basically unauthorized by government and unsubstantiated by a committee.

In fact, the committee was going in neither direction at the time they were announced. Subsequent to those announcements it turned out that our committee, which had a majority of government members, started to move toward recommendations based on safe injection sites and the decriminalization of marijuana. We knew where that direction came from.

I am at a loss as to just exactly why there is no money in the budget for some of the recommendations that we did make. It seems to me that these recommendations were not all that tough, one being “the appointment of a Canadian Drug Commissioner, statutorily mandated to monitor, investigate and audit the implementation of a renewed Canada's Drug Strategy”. To us that made infinite sense. We would put one person in charge and finally get some direction among these departments. The two worst we found were Corrections Canada, courtesy of the former solicitor general, not this one--but it does not matter, it is still there--and Health Canada. We found that the two worst departments were actually heading the drug strategy itself.

We wanted to appoint a drug commissioner to try to get these departments in line and follow some form of notable and practical prioritization of the issues. We asked why a biennial cross-Canada survey could not be undertaken. It would cost money, but not that much money in comparison to the cost of the drug issue itself.

Lo and behold, we found out that in 1997 the government, as some form of cost cutting measure, decided it would no longer survey our young people on the use of drugs in our country. Canada is the only country in the western hemisphere not to do this. We were the only committee ever in a democratic House that did not have that kind of data available to us when we sat down to discuss the drug issue itself. Why? Because the government said it did not need to know how much our kids are using and decided to just ignore it. We asked the government to put some money back in and let us survey and find out where we are at in this country. That was not done.

Let us find out, we said, and let us make a recommendation that under a renewed Canada drug strategy Health Canada be provided with “dedicated research funds” to systematically and regularly collect and retrieve various information across Canada. Notwithstanding the fact that Health Canada was doing diddly-squat on the drug issue, we asked for it to be given some money to see if this could be organized. Was it included in the budget? No, it was not.

We asked what else we could do. We could try to implement “effective Canada-wide mass media prevention and education campaigns”. That is not done in this country today. I think that Canada is the only country that does not. We said, “Let us put some money into the education of our young people and let them know how serious the drug issue is”. We made this recommendation and expected it to be in the budget. It was not there. Maybe the government did something else.

We recommended that the government recognize the need to treat individuals addicted to drugs “in a timely manner”. We suggested putting in some money for that. Was it done? No, it was not. Today this country is virtually void of any effective and consistent national strategy on detoxification of people addicted to drugs. Rehabilitation is almost non-existent for many tens of thousands of addicts, very many of them under the age of 25.

What consistency do we get in this country? What kind of programming do we have? How is it supported? The fact is, it is not supported. It is not supported by government even though it had these recommendations. The government could have said that because this is becoming a real problem--which it already is but at least we could get an acknowledgement--the government would fund something, not a big program, but fund something and see what it could get with that.

We made more recommendations. We talked about a pilot project of “the establishment of two federal correctional facilities reserved for offenders who wished to serve their sentence in a substance-free environment”. Corrections Canada is a virtual sieve for drugs. It is the worst anywhere that we could find. Quite frankly, it would take very little to clean it up. We suggested that two of the prisons in Canada be dedicated to drug and alcohol rehabilitation and detoxification. That would not take very much, quite frankly. I talked to the last solicitor general about it, who actually listened. I know that supposedly we have zero tolerance in prisons, but that is not quite the way it is. It is in the commissioner's directives, but it is not the way it is.

Let us take two facilities. There are facilities such as this. I have been in them. I have been in them in the United States, actually, where they were very effective, where zero tolerance meant zero tolerance but the people who went into these prisons went in there by application and recommendation before they were released from prison so they could get their act cleaned up before they got out. They were not sending inmates out of prison addicted to drugs. I do not think that is such a lofty goal that it could not be achieved or at least tried. It could at least be tried. It has not been and there is no indication in the budget that it will be.

I want to talk about the cost of the decriminalization of marijuana. A lot of people in this country are saying that we should decriminalize marijuana because we do not want young people to get criminal convictions for having a joint or two. That would make sense to virtually everybody, I would think. The difficulty with this concept as the government will come out with it, which scares the living daylights out of me, is that it does not quite have the concept right. It is not going to be good enough to just say “30 grams of marijuana is for personal use” and if a person uses that there will be a summary conviction, which is a fine.

Here is the problem. Thirty grams of marijuana basically rolls anywhere from 30 to 60 joints or, if they are thin, up to 70 joints. That is not personal use. If someone is hanging around with 30, 40 or 50 joints in their pockets, that is not personal use in my opinion. In fact, in Holland 30 grams was personal use and they reduced it to five grams. Five grams makes anywhere from three to seven joints.

If the government said that it would give people that, that it would decriminalize five grams, it means that if someone is caught with roughly five grams there is a fine. That seems simple enough. We would not give a criminal record to those who are caught with that, like students, the university students, the high school students and so on and so forth. That sort of makes sense.

The problem with that concept is that before this goes into place the government has to come up with some conditions. Some of this costs money. It should have been in the budget. There have to be conditions upon which one goes from five grams to a criminal conviction for marijuana.

The conditions are these. After the five grams, the legal industry out there, the judges and the lawyers, has to understand that somewhere there is a criminal offence. There has to be some kind of sentencing grid or schedule. Otherwise, decriminalization is a waste of time. As it is today, for a person caught with 50 grams, in British Columbia courtrooms the judge usually will say, “Bad guy. Don't do it again. Go home.” That is not a criminal offence. That is not how a criminal offence is treated.

The problem will be if the government does not come in with a condition that will treat five grams as decriminalized, and for over five grams, if the sentencing grid is not identified then we have the same problem all over again. It is just a different amount, that is all. This has to be taken care of. There has to be some money spent, not only for training of these judges and lawyers, if we can imagine that they need it, but a commitment on it has to be received from all the provinces.

There also has to be a schedule for the fines that are imposed. The provincial attorneys general have told me that they already have a difficult time collecting on summary convictions, speeding fines and so on, so all the federal government would do is throw more fines at the provinces for collection. They cannot collect what they already have, so how are we going to do this?

When I meet with the advocates for the legalization of marijuana from time to time they tell me that even if we fine them they will not pay the fines.They said that they would force us to take them to court and that they would hold their breath, cross their arms and wait for the judges to eventually say that they cannot deal with it so it might as well be legalized.

What have we achieved so far? We have achieved nothing, but that has to be a condition of decriminalization. We need to have a progressive fine schedule, which has to be a condition, whether it is $200, $400, $600 or whatever. The inconsistency in the courts today is a serious problem. We need to have a consequence of the payment of fines. Fine revenues should be directed to the communities where they were collected. We made that recommendation in the drug strategy itself. We also need a national advertising program on the problems with drugs, which was not in the budget. We asked for it to be in the budget. What is the point of going through all this stuff if we are not telling the young people that there is something wrong with it?

The whole process of implementing these kinds of strategies in this nation, which are very important, is being ignored on the other side. Unless there is something to back it up with money and action, it is lip service.

We asked for a national advertising program but it was not done. We need drug driving laws and roadside assessments to be in place before we decriminalize. That has not been done. These things are all left alongside because some minister blurts out what the government will do and the amount that it will do it with, with absolutely no forethought to all the other issues.

I will talk very briefly, because I will have time to talk about it a little later, about the national sex offender registry, which I, quite frankly, wrote about two and a half years ago and modeled it after Christopher's Law in Ontario. It takes money and some commitment to do that. I note that the government has tabled a bill for a national sex offender registry, which was like pulling teeth.

Basically what we asked for was put into the bill, with the exception of the last two pages. I would like to get some kind of logical commitment from the Solicitor General that the government will at least look at the two very serious problems in this, which are serious indeed. We should not use the Canadian Charter of Rights and Freedoms as an excuse not to do what is right because Ontario did not.

The first thing is the idea of retroactivity. If we implement that particular registry and do not include those sex offenders who currently are incarcerated provincially and federally, we are making a very serious mistake. The recidivism rate for those individuals is high and we know that crimes committed tomorrow will be committed by individuals who are sentenced today for sex crimes. I have a long list of them here but it is not worth going through at this point in time. I want the government to understand that that is a very serious problem.

The legislation has two other problems. The government wants to leave it to lawyers, the crown, to make the application for a person to be a sex offender, which is a big mistake. I have a litany of cases where they have made mistakes on that. The government also wants to leave it to a judge to decide, after all this, whether a person goes on to the registry. Again, judges these days are making more and more serious decisions in the negative in courtrooms than ever before. I would not leave it to judges and lawyers in the courtroom to express the will of the Canadian people, which resides here in the House of Commons.

I want to say that a budget is only as good as the issues contained within it. We spend a great deal of time and money in the House of Commons trying to implement a rational, progressive national drug strategy and it has no consequence in the budget. It is not even there in the government's budget. I would hope that the message gets across to the other side.

In closing I want to say that I just listened to Tony Blair, the Prime Minister of Great Britain, and the president talking about the war in Iraq. When I listen to Tony Blair, I am so proud and pleased to hear him being so decisive and direct and who knows where he is going. I am embarrassed, to say the least, that what we have on the other side is not even close to that. I hope one day the House of Commons has a leader who is decisive and for whom we can be proud when we send him or her to other countries of the world.

Topic:   Government Orders
Subtopic:   Budget Implementation Act, 2003
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LIB

Paul Szabo

Liberal

Mr. Paul Szabo (Mississauga South, Lib.)

Mr. Speaker, I am not embarrassed about Canada or about Canadian military involvement. The member should know that Canada was there in Somalia and Kosovo. On September 11 we received 40,000 Americans and took care of them at a time of crisis in the United States. We were there for the war on terrorism against Osama bin Laden and the al-Qaeda. Some three weeks ago we committed an additional 2,000 troops to the Afghanistan war on terrorism and freed up resources for the Iraqi theatre.

Canada has a strong and deep relationship with the United States of America. Our reputation as a peacekeeper and as an international champion of human rights is unparalleled. We are a sovereign country. The member should know that Canada is a sovereign country and even the best of friends can disagree but still respect their mutual sovereignty.

Topic:   Government Orders
Subtopic:   Budget Implementation Act, 2003
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CA

James Rajotte

Canadian Alliance

Mr. James Rajotte

He was talking about Great Britain and Tony Blair, Paul. Wake up.

Topic:   Government Orders
Subtopic:   Budget Implementation Act, 2003
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March 27, 2003