Mr. Bill Kempling (Parliamentary Secretary to President of the Treasury Board and Minister of State (Finance)):
Madam Speaker, I am honoured today to speak to the matter of full supply for the main estimates for the fiscal year 1993-94.
This year the main estimates total $161.1 billion. Through these estimates the government is seeking Parliament's approval for $48.9 billion in new spending authority. The remaining $112.2 billion represents statutory payments that have received previous parliamentary approval.
These main estimates, as well as those tabled in the previous eight years, reflect the government's commitment to eliminating waste and inefficiency, as well as divesting activities and organizations that no longer serve a vital public need in order to reduce costs and strike a proper balance between Canadians' demands for federal services and their ability as taxpayers to pay for them.
In this regard much has been achieved over the past eight years. Program spending has been held to 16.7 per cent of Canada's gross domestic product for the past two years as compared to 20 per cent in 1984.
Since 1984 the growth in program expenditures, including Public Service salaries, has averaged only 3.7 per cent per year as compared to an average inflation rate of 4 per cent per year. This translates into a net real decline of 2.6 per cent.
These achievements illustrate the government's commitment to increased efficiency through the rigorous control of expenditures as well as the implementation of many innovative management practices. This government has maintained and will continue to maintain careful stewardship over taxpayers' dollars. We are leaders in this area, as is demonstrated by our long record of success.
The year over year increase of .4 per cent in the main estimates is the outcome of an annual review of the requirements for all 137 programs delivered by 111 departments, agencies and Crown corporations appearing in the estimates. This increase can be divided into two broad categories: adjustments to statutory items, which amount to a net increase of $423 million or 74 per cent of the year over year growth, and changes to voted items, which amount to $149 million or 26 per cent of the year over year growth.
Statutory spending this year is $112.2 billion, or 70 per cent of the total estimates. Spending in this category includes such things as major federal transfers to Canadians in respect of old age security, guaranteed income supplement and unemployment insurance benefits; transfers to the provinces under equalization programs for health, education and social assistance; general Public Service programs; and public debt charges
Voted spending, approved annually by Parliament, amounts to $48.9 billion in these estimates. This reflects an increase of .3 per cent over last year. The major factor underlying the growth in the voted portion of the main estimates is the continuing requirements of items funded initially through the 1992-93 supplementary estimates.
Items approved through the 1992-93 supplementary estimates and included in the 1993-94 main estimates reflect the incorporation of new policy and workload increases announced or identified after tabling of the
1992-93 estimates. In addition, these Main Estimates include the additional costs of collective agreements as extended by the Public Sector Compensation Act.
On a consolidated basis the budgetary main estimates will increase by only .4 per cent for this upcoming year. Four main areas account for 82 per cent of the total allocated budgetary spending: public debt charges account for nearly 25 per cent; social programs for 38 per cent; fiscal arrangements for close to 12 per cent; and defence spending for 7.3 per cent.
Social programs are the largest component of over-all spending for 1993-94 with the federal government directing over $61 billion or, 38 per cent of its planned spending, in this area. The government will continue its efforts to ensure the health and well-being of all Canadians. Elelp is directed to those in greatest need through programs of assistance to the economically and
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socially disadvantaged including the jobless, unskilled persons with disabilities, seniors and immigrants as well as aboriginal people, veterans and children.
The Departments of Employment and Immigration, National Health and Welfare, Indian Affairs and Northern Development, Canada Mortgage and Housing Corporation and Veterans Affairs account for nearly 99 per cent of the spending in this sector. For 1993-94, program spending will amount to $120.9 billion with growth being kept at about a 1.7 per cent increase over last year.
This growth is due in large part to increased benefits being paid out under old age security, unemployment insurance, fiscal equalization and the Canada assistance programs. The remaining growth is the result of increased spending on aboriginal people and veterans, supplemental income support, payments to fishermen and plant workers in the northern cod fishery of Newfoundland and the investment in public infrastructure.
The spending programs for 1993 and 1994 are well within the limits set out in the spending control legislation that was approved by this House in 1992. The December economic and fiscal statement announced the government's intention to change the unemployment insurance program. As a result of the passage of Bill C-113, the government is expected to generate savings of $850 million in 1993-94 alone. However this bill was approved after the main estimates were tabled and therefore these savings are not reflected in the estimates of 1993-94.
The December statement also announced reduced funding for transportation subsidies, the Public Utilities Income lax Transfer Act and grants in lieu of taxes to municipalities. These measures are expected to generate significant savings, however they cannot be included in the estimates as the changes to the statutory authorities had not been approved at the time of the tabling of the main estimates.
The recent budget measures announced by my colleague, the Minister of Finance, will see significant changes to the way in which government does business. Streamlining will become necessary in many areas of
government and tough decisions will be made regarding the discontinuation of discretionary programs. We, as Canadians, can no longer afford some of these. Estimates tabled in the next few years will no doubt prove to be testimony to the positive impact resulting from this budget. We will be able to live within our means at that time.
Expenditure management has already forced departments and agencies to face increasing demands for their services with fewer available resources. Reductions in available moneys within the operations and maintenance budgets have been an element of the restraint measures announced in every budget since 1985. This has resulted in reductions to the purchasing power of operating and maintenance budgets of an ongoing program in the order of 30 per cent since 1985.
Canadians have expressed the desire for governments to spend less, spend smarter and be more efficient. Perhaps this feeling has never been stronger than at the present time. Tackling this country's deficit through spending cuts has become a number one priority of governments within Canada. Transfer payments continue to account for most of the growth in the main estimates. For this upcoming year transfer of payments will increase nearly $1.4 billion. Increasing costs in unemployment insurance, Established Program Financing, the Canada Assistance Plan, payments to provinces as well as transfers to seniors accounts account for nearly all the growth in this area.
In the 1993-94 estimates $42.6 billion, or 26 per cent of total budgetary expenditures is for transfers to persons. Of this $42.6 billion, unemployment insurance and transfers to seniors account for over $20 billion. The Minister of Finance announced a 10 per cent cut to transfer payments for selected programs in his December statement. Savings as a result of this initiative are expected to reach $779 million in 1993-94 with $644 million being reflected in these main estimates.
Cutbacks in government expenditures have not only originated from reducing transfer payments to individuals and provinces. The more severe reductions have been made in government operating expenditures.
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Between 1992-93 and 1993-94 transfers to persons and provinces increased by 1.7 per cent whereas total capital operating expenditures by government departments will decrease by 0.8 per cent.
Notwithstanding the extent of recent government cutbacks, the Government of Canada remains committed to the green plan. Although a 10 per cent reduction in green plan funding was announced in accordance with the December economic statement, green plan funding increased by $64.7 million over the planned 1992-93 levels. Other changes to green plan funding levels in the estimates stem from the February 1992 budget which saw the reallocation of moneys for future years.
Expenditure control initiatives are not limited solely to placing fiscal restraints on current operations. We are also restructuring. As a result of the February 1992 budget close to 40 agencies have been wound up, merged or consolidated. It is estimated that $56.6 million will be saved in 1993-94 due to this rationalization.
The concept of cost recovery and user fees is becoming increasingly popular as a means of collecting government revenues to pay for services that benefit only a small portion of the population. At the same time such an initiative removes the obligation from taxpayers to involuntarily pay for services they do not use. With the pressure on this country to reduce its deficit primarily through lowering the government expenditures and not through tax increases, the government is placing the emphasis on supporting higher priority programs that benefit all Canadians.
By adopting user fees and cost recovery, the government is attempting to provide an improved service it might not otherwise be able to afford and ensures the best use is made of scarce resources. This will also foster a more service oriented market-based sensitivity in government as it becomes more attentive to its clients needs.
To assist departments with the implementation of user fees, several pieces of legislation have been introduced and approved by Parliament over the past few years. With this renewed interest, the amount of money received annually through user fees has doubled to well over $3 billion in the last eight years. It is expected that this trend for revenue generation will continue.
The initiatives I have outlined are only a sampling of the many initiatives the government is currently promoting. It is committed to reforms that will continue to assure a high quality of service to Canadians at a reasonable cost.
Finally the 1993-94 main estimates now before the House are representative of a government serious about restraint and reform in order to benefit all Canadians. Given our success to date I know we are on the right track. I am confident Canadians will welcome the changes we are initiating and considering for the future in the areas of cost reduction and enhanced program delivery.
These initiatives will be pursued in a manner that will allow us to organize and operate government programs to ensure continued prosperity for all Canadians.
Topic: GOVERNMENT ORDERS
Subtopic: MAIN ESTIMATES 1993-94-VOTE 1