June 7, 1993 (34th Parliament, 3rd Session)


Chris Axworthy

New Democratic Party

Mr. Chris Axworthy (Saskatoon-Clark's Crossing):

Mr. Speaker, on March 18 I raised a question with the Prime Minister about the implications of federal offloading on to the province of Saskatchewan, that is the reduction in transfers to the province of Saskatchewan and the impact on that province's debt picture.
Off-loading is the deliberate effort by this federal government to reduce its own costs by passing on the costs of programming to provincial governments. It occurs in a number of different forms, reducing or eliminating federal transfers, such as the ceiling on equalization payments, limiting the growth rate of federal contributions to levels below the growth in the cost of providing those services. For example, there is the freeze on established programs funding transfers for health and post-secondary education, the young offenders agreement, manpower and labour force training. It is also imposing new conditions on federal programs which impact on provincial program costs, for example unemployment insurance changes, or the withdrawal from the provision of services for which a need exists and the public expectation of continuance is being created, for example programs for aboriginal people and agricultural support payments.
The implications ever since the mid-1970s, first under the Liberals and then under the Conservatives, have been dramatic for the province of Saskatchewan. The total off-loading in 1992-1993 of $538 million is a little more than the deficit of the province of Saskatchewan. The recent economic statements of the Minister of


June 7, 1993

Finance and particularly the one in December 1992 will add millions of dollars more to this cost.
The province has a number of very difficult choices to make in consequence. It could reduce the programs and services for which Ottawa has reduced its contributions, or raise provincial taxes to make up for those reductions, or allow the provincial deficit to rise, or some combination of these options. However this puts pressure on local governments and others that depend on provincial financial support.
To illustrate the impact of this off-loading, its cost to the province is more than the entire receipts from provincial sales tax or about half of the estimated receipts from personal income tax.
Social service expenditures for those in need could more than double had it not been for federal off-loading. The impact of the off-loading has grown over the past decade and will continue to grow in the years ahead, in particular as provinces face extras burdens because of the increased health and education costs.
This has generated in Saskatchewan and other provincial governments an unfair burden, an unfair sharing of federal restraint. In particular it is unfair because 40 per cent of expected total federal savings from its expenditure control plan in 1991-and the numbers are not very much different for other years-40 per cent is comprised of reductions in federal transfers to the provinces. Transfers themselves only account for 20 per cent of the total federal program spending. This is a very hard blow to provincial budgets because of the concentration on the transfers to the provinces.
It is essential if we are going to maintain adequate social programs with national standards such as health care that there be adequate financial support from the federal government. The total cutbacks in Saskatchewan are in the order of $538 million, $247.9 million in losses to health care and post-secondary education, and $215 million in losses to agriculture programs.
The burden of agriculture support used to rest 100 per cent on the federal government. That has been shifted so that $215 million more a year has to be paid by the province of Saskatchewan. Seventy-five million dollars has been added to the burden on a whole range of other
Adjournment Debate
issues, bringing the total to $538 million in 1992-1993 alone. In total from 1977-1978 when the Liberals began this trend to 1992-1993 the total is $1.2 billion taken out of the revenues available to Saskatchewan.
What we need is some co-operation, some work together in the solution of these problems, not off-loading, not sending the burden off to the provinces.

Subtopic:   SITTING RESUMED The House resumed at 5.31 p.m.
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