Mr. Ken James (Parliamentary Secretary to Secretary of State for External Affairs):
Mr. Speaker, in response to the hon. member for Saskatoon-Clark's Crossing, the federal government provides over $40 billion in financial support to provincial governments. Most of that support is delivered through the three major transfer programs.
Established Programs Financing, or EPF, provides provinces with financial support in respect of health and post-secondary education. EPF is provided to all provinces on an equal per capita basis, and currently increases with population. EPF transfers are expected to total over $21 billion in 1993-1994.
Equalization which will exceed $8 billion in 1993-1994 increases the fiscal capacity of the poorer provinces. It makes it possible for all provinces to provide reasonably comparable public services at reasonably comparable levels of taxation.
Under the Canada Assistance Plan, or CAP, the federal government helps all provinces finance social assistance benefits on a 50-50 basis. These transfers then are based on eligible provincial spending and are now approaching $8 billion.
Since 1984 the federal program spending has been restrained in order to reduce, as the member says, the federal deficit. Transfers to provinces have shared in that restraint but not to the same extent as the federal program spending.
As the member would know, between 1984-85 and 1993-94 major federal transfers are expected to grow about 56 per cent. This represents an average annual increase of 5.1 per cent. By comparison, total federal government spending will grow far less rapidly in the same period at an annual rate of only 3.6 per cent. Therefore these are certainly things that the member should take into consideration.
Certainly fiscal responsibility is needed to ensure that in the long term the government can continue to afford supporting national programs and services vital to Canadians. If the deficit were allowed to grow then education, welfare and health expenditures would be crowded out by an ever increasing debt.
These are the reasons why we must look at transfer
payments and continue to be diligent in working with the provinces.
Subtopic: SITTING RESUMED The House resumed at 5.31 p.m.