That, in relation to Bill C-76, An Act to implement certain provisions of the budget tabled in Parliament on February 27, 1995, not more than one further sitting day shall be allotted to the consideration of second reading stage of the Bill; and
That, fifteen minutes before the expiry of the time provided for Government Business on the allotted day of the second reading consideration of the said Bill, any proceedings before the House shall be interrupted, if required, for the purpose of this Order and, in turn, every question necessary for the disposal of the second reading stage of the Bill shall be put forthwith and successively, without further debate or amendment.[English]
The Acting Speaker (Mrs. Maheu): Is it the pleasure of the House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mrs. Maheu): All those in favour of the motion will please say yea.
Some hon. members: Yea.
The Acting Speaker (Mrs. Maheu): All those opposed will please say nay.
Some hon. members: Nay.
The Acting Speaker (Mrs. Maheu): In my opinion the yeas have it.
And more than five members having risen:
The Acting Speaker (Mrs. Maheu): Call in the members.
(The House divided on the motion, which was agreed to on the following division:)
The Acting Speaker (Mrs. Maheu): I declare the motion carried.
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The House resumed from April 6 consideration of the motion that Bill C-76, an act to implement certain provisions of the budget tabled in Parliament on February 27, 1995, be read the second time and referred to a committee.
Mr. Peter Milliken (Parliamentary Secretary to Leader of the Government in the House of Commons, Lib.): Madam Speaker, I am rising to participate in the debate today, in part
because of the importance of the bill. I want to put some views in respect of the bill on the record.
Also I want to anticipate what I know members opposite are going to say in the course of their remarks. I expect that you, Madam Speaker, and members of the House will be treated to a lot of bleating and whining and shrieking this afternoon about the evils of time allocation.
I want to speak briefly about the virtues of time allocation, at least in respect to the bill today. I certainly have had cause to criticize its use in the past. I want to point out today some relevant facts about the use of time allocation in the debate on this bill.
[Translation]
We have been debating this bill for four days. We debated it on March 30, March 31, April 3 and April 6. And there had been almost 16 hours of debate until today.
[English]
I turn to the experience we endured in respect of Bill C-93 during the debates in 1992 and 1993. That was another budget implementation bill. It implemented a budget much worse than the one to which Canadians have been subjected by the Minister of Finance. He has had to take very difficult steps in the budget, in part because of the dreadful budgets we endured during the Tory years. Members on this side of the House will remember.
An hon. member: Yes.
Mr. Milliken: I do not think anyone except the hon. member for Beaver River from the other side and some of the New Democrats will remember that.
Mr. Boudria: The Leader of the Opposition.
Mr. Milliken: Oh, yes, the Leader of the Opposition. He helped to bring in these budgets. I forgot about that. I am glad the chief government whip reminded me of it.
In any event, in 1992 and 1993 when we were debating Bill C-93, time allocation was used after eight hours and nineteen minutes of debate. We have already had almost double the debate before time allocation was used on this bill.
I know the hon. member for Beaver River was here and I suspect she may have even spoken. Let me just check the list. No, I do not see her name. She did not get to speak on that occasion. I am sorry she did not because I am sure she would have denounced the Conservative budget too.
She should be praising this one because it is doing all the things she used to say the Tories did wrong. We have corrected the Tory errors. We are trying to make up for their blunders. She used to denounce them for failing to do things that we are now doing. I am sure that in her heart of hearts she supports this budget and would like to be able to vote for it today.
An hon. member: She does. She does.
Mr. Milliken: Except that her leader has told her she cannot, so she is stuck.
An hon. member: No free vote.
Mr. Milliken: I will leave her out of it for the time being.
I want to point out that we have moved time allocation in respect of the bill because we have had 15 hours and 40 minutes of debate before today. We will have the rest of today on the bill, all of the time allotted for Government Orders.
I am sorry we could not get any arrangement to extend the time beyond that. Had we been able to get agreement pursuant to the rules to limit debate to a certain time, the government House leader in his beneficence would have given the time. We were prepared to do that. However there was no willingness on the part of the opposition to indicate when they would terminate debate so the government has taken the step of bringing in time allocation.
An hon. member: Shame.
Mr. Milliken: It is a reasonable and fair use of the rule. The hon. member from the New Democratic Party is yelling shame, but he is smiling at the same time. In fact he knows we are letting the opposition off the hook by using this because they were running out of people who could make any intelligent remarks on this bill. Virtually everyone had spoken. The well was running dry. By using time allocation today we are in fact helping the opposition.
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Let us turn to their criticisms of the budget. We are getting it on both sides. It is worth the opposition parties hearing this. We have the Bloc Quebecois on the one hand saying our cuts are too draconian, and we have the Reform Party on the other hand saying the cuts do not go far enough.
Mr. Harper (Simcoe Centre): We are right and they are wrong.
Mr. Milliken: There we have it. We hear it from the hon. member for Simcoe Centre. He says that they are right and the Bloc is wrong. The thing is they are both wrong. It is the government that has it right.
Mr. McCormick: It shows in the polls.
Mr. Milliken: It shows in the polls, as my friend from Hastings-Frontenac-Lennox and Addington has indicated. It shows in the polls and it shows in the hearts of Canadians. They realize the government had to take tough measures. The govern-
ment took tough measures and Canadians support their government in the tough measures.
The hon. member for Simcoe Centre wags his head and says that somehow they are not tough enough. The hon. member for Bellechasse wags his head and says that they are too strong. I will not choose between the two extremes. We have chosen a reasonable path, a tough path but a fair path. That is what the Minister of Finance did in his budget.
It is important, in looking at what he did, to bear in mind the fact that he was trying to achieve equity, fairness and a balanced budget. That was important.
Mr. Harper (Simcoe Centre): And he failed.
Mr. Milliken: The hon. member says that he failed. I point out some facts that indicate it did not fail. It was a very significant budget. It will be a great success.
It takes action to reduce government spending and refocus activities of government on priorities and needs. The goal of the strategy is clear, concrete and compelling. It is to restore national fiscal health to Canada. In so doing it will reshape the role of government to build a stronger and more dynamic Canadian economy.
The budget will provide sustained growth for Canada and confidence in Canada's future. New jobs will be created as a result of the budget in spite of the ones that are lost, which we all regret. It will also allow the Canadian government to preserve its ability to help those in need. Major cuts in the social programs of the country are not contained in the budget.
To meet the goal, the budget delivers on the commitment to cut the deficit to 3 per cent of the economy in two years. That was a red book commitment. Hon. members opposite do not like to hear about the red book because it upsets them. It was a success. It worked and it is still working.
An hon. member: We will probably exceed it.
Mr. Milliken: The hon. member says: ``We will probably exceed it''. I agree with him. I intend to refer to that later in my remarks. If the economic performance is stronger than the very prudent forecast of the minister in his budget, the deficit should fall even more.
The fiscal actions taken in the budget will total $29 billion over the next three years, more than any budget since World War II. In two years program spending will be $10.4 billion lower than it is today.
Just as important, the budget also changes the structure of how the government operates. The changes will ensure that spending will be restrained beyond the two-year target period so that the deficit will continue to fall, much to the dismay of Reformers, and will reflect the government's commitment to eliminate the deficit entirely.
To achieve these results the budget takes fundamental action across government programs and operations. It implements the results of program review, a comprehensive examination of departmental spending. The government will focus on what is essential and the government will do it better. The budgets of some government departments, as hon. members know, have been cut in half.
The budget also acts on the new vision of the federal government's role in the economy, one that includes substantial reductions in business subsidies. These will drop from $3.8 billion this year to $1.5 billion by 1997-98. They are very substantial cuts.
The budget reforms major transfers to the provinces, modernizing the federal-provincial fiscal regime and making it more effective, flexible and affordable. These wide ranging reforms will mean a smaller public service. Some 45,000 jobs will be eliminated as we have heard in the budget speech, but we will manage this difficult process with as much fairness as we can manage including the use of early departure and retirement incentives, some of which have already been announced by the involved ministers of the crown.
It is also essential to be fair to the taxpayer, and the budget is fair to Canadian taxpayers. The tax changes are modest. They affect only the most wealthy. The cuts are $7 to every $1 of increase in tax. It is a fair budget; it is a good budget. The hon. members opposite should be voting for the bill.
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The Acting Speaker (Mrs. Maheu): I remind hon. members that debate is now 10 minutes maximum with no questions and comments.
Mr. Ted White (North Vancouver, Ref.): Madam Speaker, the hon. member for Kingston and the Islands did a desperate job of defending the restrictions on debate this afternoon, but there really is no excuse for restricting debate on such an important topic. It is not because the media do not think it is a hot topic any more but because people out there are aware of the budget and the problems it could produce.
At the various public meetings I am attending people keep asking me: ``What did you think of that budget?'' It is almost as if there is this background awareness that the budget, which was a major anticlimax, might just come back to haunt us.
Several weeks ago when the finance minister had his short meeting with Moody's bond rating service it was clear that Moody's went away dissatisfied with the explanation from the finance minister. The Financial Post predicted the same day that Canada's debt rating would be downgraded within a few days. As we see that is exactly what happened.
Even when Moody's announced the downgrade the markets had already anticipated the news and there was very little reaction out there. As the lack of substance in the budget becomes more and more apparent, it is quite likely we will continue to incur ever higher interest rates to finance our borrowings.
We have been lulled into a false sense of security lately by a dollar that seems to have risen a little in value. I even heard the business reporter on CTV this morning saying that our dollar was holding up very well. However, when we look at our currency against a basket of major world currencies instead of simply comparing it with the U.S. dollar, we find that our currency has continued to drop against the basket of major currencies.
In an international sense we are actually losing ground quite rapidly. This means that price inflation is just around the corner. Significant price jumps have started to occur already in some consumer products. In my office we recently purchased a second laser printer. The price had jumped more than 8 per cent in six months. Can anyone remember when the price of electronic goods actually went up? Prices have been dropping for years now, and all of a sudden we have price increases on things like cameras, VCRs, vegetables, garden tools, paint and cars, almost everything. It is starting to look like standard Liberal economic policy: allow the dollar to drop and inflation comes roaring back in.
The dollar dropped in the late seventies and early eighties from $1 to 85 cents. Inflation rose. The export sector boomed. It all looked very rosy. We had the appearance of prosperity while our deficit and debt were ballooning dramatically. Unfortunately the strategy is not going to work this time. We are a little too close to the debt wall for it to be effective.
Because of my business background I have quite a number of friends who are small business people. I have taken the time to ask them in the last few weeks about their sales and price levels over the past six months. In a group that includes one of the most productive realtors in the country, a hardware and garden tools importer, a car dealer and a furniture sales company, all have experienced dramatic drops in sales over the past two months at the same time as they have experienced huge price increases from suppliers because of the low dollar.
Stacey's, a large furniture manufacturer in Vancouver, revealed on a radio talk show last week that bankruptcies in the furniture industry were imminent because sales had suddenly dropped to levels lower than they were in the last recession. On the same radio talk show, bankruptcies of car dealers were being predicted as well.
The hardware importer I know has had two price increases exceeding 15 per cent, in some cases since January, and reports that some retail clients have declared bankruptcy in the past month. Sales in this sector have dropped sharply at the same time as the price increases that they are trying to pass on because of low profit margins.
Except for the export sector, the good news is not being passed on to other parts of the business sector. In the meantime there are those sneaky budget tax increases in place taking a bite out of everyone's spending power.
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The Liberals and the NDP must be the only people in the country who think that the penalty tax on banks announced in the budget will not lead to higher bank service charges or loan charges for the average Canadian.
Liberals and the NDP must be the only people in the country who think that a 1 per cent increase in corporate taxes and a change that forces corporations to report their income at the end of a calendar year will not lead to an increase in the price of goods.
Liberals and the NDP must be the only people in the country who think that a 1.5 cent increase per litre on gasoline will not lead to an increase in the price of gasoline. Actually the new gas tax also increases the GST because GST is added on after the other taxes on the price of gasoline.
Incidentally the Deputy Prime Minister said during the election campaign that if the GST had not gone within a year of the election she would resign. She has not done that yet.
As I have said before, despite the tax increases and the token spending cuts, the ship of state is still going down a little bit slower with a smaller crew on board. That is all. In three years the increase in interest payments on our growing debt will consume every cent of savings the minister made in his budget. He did not go nearly far enough and he is not going fast enough.
I mention New Zealand all the time in my speeches. It has shown us the way by making some pretty massive cuts in government spending at the same time as it lowered taxes. New Zealand is now expecting a budget surplus in excess of $3 billion. It forecast $2 billion and is getting in excess of a $3 billion surplus. It has increased spending on social programs. Its unemployment rate is down to 5.6 per cent.
I cannot use props in the House but I have a full page advertisement from a New Zealand newspaper wherein Roger Douglas, the architect of a lot of New Zealand's restructuring, has now proposed that by the year 2000 New Zealand could have zero income tax.
I am not suggesting we could follow the procedure here because New Zealand is going to run on a 15 per cent GST. That is easy to do with a consumption tax when there are no bordering countries. Perhaps by the year 2000 New Zealand could be income tax free and running on just a consumption tax. Imagine zero per cent income taxes. That is pretty good.
I repeat what I have said before. The best way to put more money in the hands of the poor, of families, of business, of everyone, is to cut spending and to cut taxes. Tax cuts and spending cuts make it easier for people to buy homes and improve their standard of living. Things work better when people make their own spending decisions instead of having big brother government make the decisions for them.
High taxes punish those who are the most productive in our society. High taxes are a symptom of a government's failure, incompetence and inability to see the damage taxes are doing to society.
The finance minister gave it his best shot and was overruled by what might be a socialist cabinet. I congratulate him for trying but I castigate him for not doing what he knew had to be done. He stands responsible for the massive loss of net worth that is now occurring for Canadians across the country who do not have offshore shipping companies and a multimillion dollar worth.
Shame on the government. Shame on the MPs who failed their constituents by avoiding the truth that we cannot buy our way out of poverty. We have not even begun to address other very real problems with government programs that lead to waste and cheating.
For example, I have a copy of an advertisement that appeared in the Vancouver Sun on March 4, 1995. It was sent to me by a constituent, Mr. George Brooks. The advertisement reads:
UIC top-up positions: two festival production jobs available mid-April with performing arts association. Outgoing individuals with festive or event experience sought. Must have minimum of 21 weeks UI benefits.My constituent asks since when has UIC been a prerequisite for employment in Canada. Here we have blatant abuse of a program that is supposed to help people get retrained. Mr. Brooks has asked quite a good question.
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Special interest groups know how to milk our system. Nothing was done about it in the budget.
Look at Bombardier. The hon. member mentioned government grants to business. Bombardier, a tremendously profitable corporation, is receiving grants from the federal government. These grants go directly to the bottom line because it is a profitable company. We have no business giving grants to a company like Bombardier.
I urge members to vote against the implementation of the 1995 budget on the basis that it has failed to address government spending and brings us one step closer to a debt and currency crisis.
Mr. Don Boudria (Glengarry-Prescott-Russell, Lib.): Madam Speaker, I have to wonder what the hon. member who has just spoken has been reading, where he gets his information and why he is referring to what he believes to be a currency crisis or something like that. It is that kind of irresponsible talk on the part of hon. members which could do damage to the economy of this country.
Luckily for all of us, and I will put it as kindly as I can, very few people, if any, would believe what the hon. member has just said. That is why it likely will not do any damage. I could put it a bit less kindly but I will not.
[Translation]
The budget tabled in this House on February 27 by the hon. Minister of Finance provides for the most stringent measures ever adopted by any government in the last 50 years. During the last election campaign, we promised the Canadian people in the red book that we would reduce the deficit to 3 per cent of GDP by 1996-97. That is what we are going to do. Not only that, but we will probably do more: we will reduce the deficit even more vigorously than we announced.
Second, as you know, the deficit will be down to 1.7 per cent of GDP the following year and, who knows, Canada may even have a balanced budget one or two years later.
We in the Liberal Party have managed to do in a few years what the Tory government was never able to do during its nine years in office. During those nine years, Tory ministers made annual fiscal projections about Canada's deficit. Not once did the Tory government ever meet its objectives.
We have brought down two budgets. After the first budget, we not only met our objective, we exceeded it. Of course, the second budget was tabled only a few weeks ago, on February 27 to be exact, and we are still putting in place the measures needed to meet requirements.
Total savings over the next three years will be $29 billion: $5 billion in 1995-96, $10.6 billion in 1996-97 and $13.3 billion in 1997-98. Reform members just told us that no money would be saved. That could not be further from the truth.
Take a good look at some of the cuts that were made. We will have reductions, in departmental budgets for example, totalling $3.9 billion in 1995-96, $5.9 billion in 1996-97 and $7.2 billion in 1997-98. The public service will be reduced by some 45,000 positions. Of course, as a member of the party elected in the National Capital Region, I am not thrilled to see some of my constituents lose their jobs. But if we had not taken these harsh measures, that will work and have indeed worked so far, we would be much worse off in the future.
Subsidies to business will be reduced by some 60 per cent. That is a major reduction.
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Only major banks are hit with tax hikes. Other businesses were almost all spared, except, of course, for the fuel tax, which increased by 1.5 cents per litre. That is the only new tax that will affect most of my constituents, generally speaking.
[English]
Some Bloc Quebecois members say that this budget is way too severe or something to that effect. Members of the Reform Party say it is not severe enough. Could it be that these two groups are at one extreme and the other? Could it be that the middle ground is what is reasonable? Could it be that the middle ground is the belief of Canadians and also the program on which we were elected? I say it is so and it is not just me. Let me read what some other Canadians have said.
Here is what Jayson Myers of the Canadian Manufacturers' Association said: ``I am impressed. I applaud the minister for what he has done''. That is a quote from this business leader. Reform Party members pretend they know what is good for business. Let us listen to another one.
[Translation]
``This is a good budget'', said Ghislain Dufour, president of the Conseil du patronat du Québec. Again, this is from someone who ought to know what he is talking about.
[English]
This statement is by Fred Ketchen, chairman of the board of the Toronto Stock Exchange, probably not a bleeding heart socialist. He says: ``A responsible, a fair, a realistic and even a humane budget''.
Mr. Pension: Any grants?
Mr. Boudria: I say to members across the way that grants to businesses have been cut by 60 per cent. Of course they probably were not listening, they never do.
Here is another quote: ``It is a good budget on several fronts''. This was stated by Peter Wolford of the Retail Council of Canada. The Retail Council of Canada sure does not get any grants. Let us listen to another one.
[Translation]
Michel Audet, president of the Province of Quebec Chamber of Commerce said: ``This is a real budget based on concrete measures''. Now listen to this: an economist with Nesbitt Burns-since the members opposite want to hear from the financial sector-said: ``This is a great budget and not just a smoke screen''. That person added that this was a realistic budget.
[English]
This is what Lloyd Atkinson of MT Associates said: ``This is one of the few budgets I have seen in a very long time where the promise was matched by the reality''. That is us. We made commitments to the people of Canada in the red book and we are going to live up to those commitments. Whether those commitments are for gun control, for restoring the financial integrity of this country, or for good government and sound and frugal management, all of those things will be delivered because that is what we said we would do. In fact, that is what we are delivering to the people of Canada.
Mr. Penson: What about the GST?
Mr. Boudria: Some members are asking us about the GST. We are well on our way to correcting all of the things we want to. We were only elected 18 months ago. Our program is for a five year mandate and we will deliver. In our second mandate we will have another red book and we will deliver again. In our third mandate we will do the same thing, and so on. We intend to provide good government in the short, medium and long term for the people of Canada. The people of Canada know this and will recognize this in the next election campaign in 1998 or whenever it occurs.
While we are talking about election campaigns, Bobby Rae in our own province of Ontario is probably going to call an election within a few days. His mandate has completely expired. He tried to launch an attack against the budget until he realized that most, if not all, Canadians agreed with the budget except for him. Of course, he was unable to use the budget to launch his campaign. His left wing agenda is not going anywhere because that is not what the people want.
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Neither will the common nonsense revolution of Mike Harris in Ontario. I am sorry, the common sense revolution as he calls it is not going to fly anywhere because again there are the two extremes like we see across the way.
The people of Ontario will also do the right thing. They will elect Lyn McLeod and a very good government for the province of Ontario, such as we are delivering to the people of Canada.
[Translation]
Mr. Maurice Godin (Châteauguay, BQ): Madam Speaker, the Bloc Quebecois decided to fight Bill C-76 tooth and nail. Basic reasons motivate us to keep this promise, for example, fairness. All too often, the budget hits the middle class and the needy instead of addressing inequities within the tax system.
The government has refused to review the tax system, despite the Bloc Quebecois' repeated requests over the past year and a half. In addition, the current budget cuts do not target unnecessary or extravagant spending, such as the purchase of furniture for the fisheries minister's office. No, they hit the neediest.
Another example is the army. The Bloc Quebecois recommended cutting the Minister of National Defence's budget, but only targeted unnecessary spending or spending in non-essential areas. For example, Operation William Tell, $7 million; the lavish fishing trips to the tune of $1.2 million; the number of generals, their assistants and retinues of support staff; mansions for high-ranking officers; the Reserves, which cost us some $532 million but have no specific mission, according to several generals.
Instead, with Bill C-76, the government hits the neediest, widows, orphans, and veterans, whose average age is 73 years.
Bill C-76 hits three acts which are administered by Veterans Affairs. The seven clauses of the bill which affect these three acts all cut benefits and allowances.
Clause 42 will have the effect of gradually phasing out education assistance benefits for the children of deceased veterans. In fact, clause 42 amends the Children of Deceased Veterans Education Assistance Act. This amendment initiates the gradual phasing out of a veterans benefit that provides the children of deceased veterans with the assistance they need to continue their education. With a few exceptions, the 85 students now receiving these benefits are the children of deceased military personnel who participated in Canadian peacekeeping missions. Students who were receiving the benefit on the day the budget was tabled will continue to receive it under this legislation but the department will not accept new applications.
Clauses 68 to 72, inclusive, amend the War Veterans Allowance Act by terminating the payment of allowances to allied veterans of resistance groups. As of September 1, 1995 or within two months after Bill C-76 receives royal assent, whichever comes later. The same provision will also initiate the gradual phasing out of allowances payable to allied veterans in uniform who immigrated to Canada at the end of their service and resided in Canada for at least 10 years before applying for veterans allowance.
Bill C-76 will terminate payment of allowances to about 3,000 veterans. Payments will also be terminated in the case of 1,000 veterans of resistance groups whose old age security and Canada Pension Plan benefits raise their incomes just above the threshold below which they would be entitled to certain health care benefits. The provinces will inherit this new set of clients, two thirds of whom are Quebecers.
Clause 73(a) would terminate compensation for loss of income in the case of veterans who are required to appear before a review board.
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Clause 73(b) would also do away with compensation for income loss and includes other restrictions on travel and living expenses occasioned by a medical examination required by the minister. We oppose this loss of benefits for veterans. Society's disadvantaged-seniors, widows and children-are being attacked.
Let us look at a specific example: a woman in Montreal, a widow, who has just received a notice in the mail. The director general of veterans' benefits at Veterans Affairs Canada, Doris Boulet, is advising her that she will lose all the assistance she has been receiving for a number of years. Under the provisions proposed in Bill C-76, this woman will lose on a number of counts. First, she will lose her allowance. Second, she will no longer enjoy the related benefits she received from Veterans Affairs Canada, including her Blue Cross identity card. Third, she will no longer have access to veterans' independence programs, nor, fourth, to Veterans Affairs Canada contributions to long term health care. In short, she is being abandoned.
The letter tells her to act quickly to find other sources of financial and health care assistance. It reminds her of existing programs: federal government programs, such as old age security and the guaranteed income supplement, and provincial government programs, such as social assistance and health care plans. She is advised that these are her options to help her replace the financial assistance and the other benefits she will no longer enjoy following adoption of Bill C-76.
In fact, the need of that woman is recognized, but she is simply referred to other federal and provincial public services. This is a good example of duplication. That woman is told that she can get help from both the federal and provincial levels. Yet, as I recall, veterans affairs come under federal jurisdiction.
Here is another example. The hon. member for Saint-Hyacinthe-Bagot learned from Branch No. 2 of the Royal Canadian Legion that the Sainte-Anne-de-Bellevue hospital is increasing the monthly rate for its rooms from $547 to $704. This increase of 28 per cent brings to 198 per cent the total increase for these veterans since 1990. Veterans are offended, hurt and humiliated by such off-hand treatment on the part of a country they paid to protect. Why penalize these veterans by offloading onto them the financial burden related to the treatment of injuries which they suffered while defending our country? There are many other places cuts could have been made.
If I had suggested that the responsibility of the Department of Veterans Affairs should be decentralized and delegated to the provinces to ensure greater efficiency, federalists would immediately have objected, on the grounds that this is an exclusive federal jurisdiction. Bill C-76 leads us to one conclusion: the federal is no longer able to meet its responsibilities. Why not decentralize by delegating to the provinces responsibilities as well as tax points?
The federal system is obsolete. We need autonomous provinces which would give to the federal government, or to another economic and political union, a mandate and a budget to manage certain joint responsibilities. In short, the Bloc is opposed to the
loss of these benefits for veterans. The poor, the elderly, widows and children are too often the ones who are targeted.
[English]
The Acting Speaker (Mrs. Maheu): It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Ottawa West-Public service of Canada.
Mr. John O'Reilly (Victoria-Haliburton, Lib.): Madam Speaker, it is a pleasure to rise to bring some reality to the fact that the Canadian public is in tune with and in favour of the recent budget.
At a recent meeting in Haliburton I had the pleasure of speaking to a group from the chambers of commerce from Haliburton to the Quebec border. Most of them are managers, some operate chambers of commerce, are CEOs and so forth. They agreed that for the first time since the 1940s there was actually a budget cut, that it was not just a freeze, it was not something that would be taken off at the next election, it was not something that was going to change. It was actually an alternate course the government has decided to embark on. They applauded that.
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In researching the budget in order to speak to the chamber of commerce and find something to talk about that I thought would be of interest to them, I did look at the reduction of business subsidies. These are dear to most of our hearts. We all believe that businesses should not be financed by federal governments. We have talked about that many times.
A key principle of the 1995 budget, as the Minister of Finance said, was to redesign the role of government in the economy to fit the size of the pocketbook and the priorities of our people. The decision dramatically reduces subsidies to businesses and shows how that principle is at work.
The simple fact is that subsidies often did more harm to businesses than help. It is a problem business leaders themselves have often pointed to. This was confirmed in the 1994 OECD job studies, which said that subsidies tend to operate in exactly the opposite way from what is needed: they slow rather than stimulate adjustment, they discourage rather than encourage innovation, and they tend to become permanent.
That is why the budget cuts business subsidies by 60 per cent, from $3.8 billion last year to $1.5 billion by 1997-98. Areas where subsidies will drop sharply include agriculture and transportation. Again, we can no longer afford subsidies that were designed decades ago and that today are actually undercutting adaptation, diversification, and competitiveness.
Western Grain Transportation Act subsidies are being eliminated, for a savings of $2.6 billion over five years. But because of the scope of this change there will be transition measures. For example, we will make a one-time payment of $1.6 billion to prairie farmer landowners and invest a further $300 million to help establish a more efficient grain handling and transportation system.
As well, in line with the recent decision of federal and provincial agriculture ministers, we will develop a core national whole farm package. This shared cost program will replace current programs based on individual commodities. This will encourage innovation and diversification while producing a 30 per cent reduction in federal contributions to agricultural safety nets.
The Atlantic freight subsidies will also be eliminated, for five-year savings of $500 million. This again will be balanced by a five-year transition program, including helping to modernize the highway system in Atlantic Canada and eastern Quebec.
Of course our cuts to subsidies extend far beyond agriculture and transportation. At Industry Canada subsidies will fall by half, from $525 million in 1994-95 to $264 million in three years. Remaining spending will focus on initiatives in high growth sectors and in partnerships with the private sector.
A new role for the regional development agencies will see them focusing on small and medium sized enterprises. This assistance will rely on loans and repayable contributions rather than direct subsidies. As a result, subsidies from these agencies, the western diversification, the Federal Office of Regional Development for Quebec, the Atlantic Canada Opportunities Agency, will drop from $700 million to $234 million.
Subsidies to cultural industries are also being reduced. This includes an eight per cent reduction in the postal subsidy, which reduces mailing costs for certain books and magazines.
As well, we are eliminating the Public Utilities Income Tax Transfer Act, which returns to provinces the taxes paid by privately owned utilities. As a result, major energy subsidies will virtually disappear, dropping from $410 million now to $8 million.
These subsidy cuts are vital components in restoring Canada's fiscal health. We also recognize that there are times and places where governments can and should assist the private sector in today's fast changing global environment. For example, the government will continue to play an appropriate role in supporting exports for companies in sectors facing intense international competition.
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The government will be working with Canada's banks between now and the fall to elaborate meaningful benchmarks regarding small business lending.
A survey in my riding provided overwhelming support for the budget. In fact most would have gone further. Eighty per cent approved the cuts made and are looking for Canada to live within the fiscal constraints of the reality of our income.
The results of my survey include to this date 1,167 people as of yesterday. One of the questions was: Do you agree with the government department spending cuts announced in the 1995 budget? That was a very simple question. The response was no, 18 per cent; yes, 73.6 per cent.
Do you believe the government spending cuts went too far? Yes, 8.7 per cent; no, 83.9 per cent. Do you believe that the government's spending cuts did not go far enough? Yes, 70 per cent; no, 19.6 per cent. Do you support the proposed changes to MPs' pensions? The survey indicated what those changes were. Yes, 90.9 per cent.
An hon. member: Is that not interesting?
Mr. Harper (Simcoe Centre): I wonder about that.
Mr. O'Reilly: Is that not interesting? They support them. No, 6.8 per cent.
The other one I really liked: Do you believe that your member of Parliament should opt out of the pension program provided for members of Parliament? Yes, 28 per cent; no, 82 per cent.
What are the people of Canada saying about the budget? They are saying that they support it. What are they saying about members' pension plans? They are saying that they support those cuts.
So the doom and gloom from across the way is just that, doom and gloom. I am not sorry we have taken the Reform agenda away from them. It does not bother me at all.
There are 205 rookies in Parliament who came here to make a difference. This budget made a difference. The Liberal Party made a difference, and we will continue to provide good government for Canadian people, which is what they asked for and what they elected us for and what we are doing.
Mr. Ed Harper (Simcoe Centre, Ref.): Madam Speaker, it gives me pleasure to rise today to speak against Bill C-76, the budget implementation act.
I would like to make a couple of comments before I get into my presentation. I just cannot help but do this.
I was interested when the government whip in his presentation was making all those quotes about what people said about this magnificent government budget. One quote that he apparently forgot was the very important quote from Moody's. The quote from Moody's of course was: "This budget is too little, too late, and unrealistic." It is going to cost all Canadian taxpayers millions if not billions of dollars because Moody's did give that verdict on the budget.
I was also interested in the survey results just quoted by the member for Victoria-Haliburton, where his constituents said that they supported the budget, that they supported the cuts. They want cuts. The very next question was that the cuts did not go far enough. That is what his people responded to, and that is what the Canadian people are saying in responding to the budget. It made some cuts. They were not deep enough. They did not go far enough.
I guess it is appropriate to be talking about the budget today because today marks a milestone. The debt passed $550 billion today, not a milestone we can be very proud of. In fact we should all be ashamed of it.
The word guts is not a word I use, but it was used by the Prime Minister the other day in responding to a question in this House. I am going to use it today in suggesting that this budget lacked guts. It did not do the things that have to be done. The courage was not there to do it. What is more, the budget lacked vision.
We have wasted a year and a half. We had our first budget and now we have come up with the second stage of a two-part budget that does nothing to address the most serious problem we have in this country. In that wasted year and a half, what has happened to the debt? The debt has gone from $490 billion to just over $550 billion. Is that an accomplishment? I do not think so.
The message a year ago in the budget was don't worry, be happy. Because of that, we are $60 billion deeper in debt. Think about that first budget. It did not help the situation; it aggravated it. It brought out the much heralded infrastructure program: $6 billion to buy your way to prosperity. It is the old shell game. Two for one. What a deal. ``We will give you one, and you get two for one''. The same taxpayer is being bribed with his own money.
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Mr. Calder: Why did the member say it was a good program?
Mr. Harper (Simcoe Centre): The government realized the infrastructure program was not good. It has now been extended supposedly because the municipalities have been asking for it, but that was not stated in the budget.
Unbelievably we reduced tobacco taxes that first year. Here we are with our backs to the wall, in debt up to our eyeballs and we gave away what was admitted at the time to be about $300 million. The government did not understand the seriousness of the problem. We gave away $300 million. That does not even begin to touch the health costs implicit in encouraging people to start smoking again by reducing the taxes.
However it was not $300 million. It cost the Canadian taxpayers $850 million in an attempt to drive the bad guys away. ``We are only going to do this until the bad guys disappear, then we are going to put the tax back''. The Liberals were dreaming in technicolour at a time when they should not have been dreaming, they should have been facing reality.
The last thing we were involved in thanks to this government was the Pearson mess. We are still debating whether it is a Liberal scandal or a Tory scandal. While we are doing that the airport is deteriorating. The jobs that could have been created there have not been created. In the long term it will cost jobs across Canada. That is all because of the government failing to face reality and take action.
The other comment I wanted to address at the beginning was: ``We did not do this; we just took over. It was the Conservatives that started all this. They did not address the deficit''. The present government was in opposition. I cannot recall a great deal of emphasis from them in those years to cut spending. As a matter of fact, I detected the exact opposite. Whenever the Conservative government, realizing the magnitude of the problem, tried to do something about it like revising the UI program, the howls of indignation from the Liberals were unbelievable.
It is a little hypocritical to sit over there and say: "It is not us. We did not cause the deficit." They sure did not help by supporting the cuts the Tories were trying to make. Not to mention the government was in place when we started this slide down the debt hole. When the Liberals were defeated in 1984 the debt at that point was just under $200 billion and all Conservative efforts to reduce it failed miserably because they were not getting the support they needed from the opposition.
Now we come to the budget. A year ago it was: ``Don't worry, be happy''. Now Canadians are being told: ``It is a serious situation. It is life threatening. We have to do something about it. We have to cut spending''. They blew it big time. The one thing the Liberals had to do was show leadership by example. They had to address our gold plated MP pension plan and they did not do it. They blew big time any credibility they had with the Canadian people in that budget.
It is interesting the MP pension cuts were not in the budget. I am sure the finance minister looked at that program and said: ``Forget it. It would be a disaster in my budget''.
Mr. Penson: You have got to pay the price.
Mr. Harper (Simcoe Centre): You have to pay the price. You have to show leadership by example. It was not there, so the budget started off on a very bad note. They just blew all credibility.
Let us talk about the budget. In 1997 the debt will be $650 billion. That is the bottom line. That is an accomplishment? That is reality. That is a fact. Interest rates on it amount to $55 billion to $60 billion. That is reality. That is a fact. We will still be overspending by $25 billion. That is reality. That is an accomplishment? It is a disaster we are going to have to face and deal with.
The IMF brought out a study this week on growth and the world economy. It showed Canada's growth at 4.3 per cent in 1995 and 2.6 per cent in 1996. Bad news is coming. Are we prepared for it? I suggest not. Just below the growth in the world economy is how Canada's debt stacks up. It is compared to our other trading partners. Canada is the absolute worst and worsening.
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Canada has the distinction of being the world's largest offshore debtor. That debt has increased. During the last year the offshore debt has gone from $319 billion to $341 billion. Twenty-eight billion dollars in interest payments flow out of Canada to those countries that have been supporting our lavish lifestyle. It does not do a thing for the economy. We are not in control of our own destiny. That control is in the hands of the people who have been supporting that lavish lifestyle we have been enjoying while we lived beyond our means.
What will be the future costs of the Moody's downgrade? As I suggested at the beginning, it is going to be in the area of millions if not billions of dollars. We cannot say we were not warned. We got a warning shot before the budget. Moody's said: ``Your 3 per cent target is far too low and we want you to give us a date when you are going to get to zero''. Rolling two-year targets are laughable.
I can see myself going to my bank manager and saying: ``I know I am in debt, but will you keep lending me money if I give you a rolling two-year target?'' He would throw me out of his office after he had a fit of hysterics.
Several clouds are on the horizon that are not faced in the budget and of course there is what can happen in the United States.
I will close by saying that the situation prompts me to recall buying my first home. The neighbour next door had all the trappings, lovely furnishings. I thought he must be making a lot of money. Reality was the creditors moving in and closing him down because he was doing it with his credit card. That is what we are doing and it could hurt our future generations.
The Acting Speaker (Mrs. Maheu): I remind the next member that we have only eight minutes left.
Mr. Murray Calder (Wellington-Grey-Dufferin-Simcoe, Lib.): Madam Speaker, I would like to speak to Bill C-76.
I just read something in Quorum: ``A new fever for frugality''. That is what we are talking about today. Among other things I have learned in my last 18 months as a politician are three words: imbalance, fluctuation and disturbance. These are three words that politicians hate to hear. They are also the basis for innovative and creative thinking. That is what the budget is showing right now.
The 1994-95 estimates show the first reduction in budgetary requirements in 20 years. In the next fiscal year spending here will drop by 6 per cent, and 3 per cent each year after. Senior employees on the House staff have been cut by 15 per cent. MPs remuneration, salaries, as an example, have been frozen and will remain frozen.
Mr. Harper (Simcoe Centre): Tell us about the pension plan.
Mr. Calder: The pension plan has been cut back also. I get a kick out of how cynical the member for Simcoe Centre can be at times. The member and I had the opportunity a couple of weeks ago to tour base Borden. This will give members a rough idea of the innovation I am talking about.
With the cuts that have been made to the Department of National Defence, base Borden at the present time is working in conjunction with Georgian College. The member knows this because we saw it. Base Borden is conducting welding classes as a way of utilizing the facilities. It is holding catering courses and courses for firefighting and for paramedical training. The member knows this.
This is all part of budget cuts and innovative thinking. This is what I am talking about if the member would just listen. We wanted to make sure the budget was fair to the taxpayer.
Mr. Penson: Did you run your farm like that?
Mr. Calder: I went through this with my farm.
The Acting Speaker (Mrs. Maheu): Order. I would ask members to address their remarks to the Chair.
Mr. Calder: Madam Speaker, I apologize. The member asked if that was the way I ran my farm. In 1984 I was a pig farmer. The draconian cuts he and his party are talking about would be the same as me saying that I am not going to pay the taxes on my farm, or my hydro bill or buy any clothes this year.
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What they are talking about are targets that cannot be made. One of the things laid out in the budget is the fact that we are keeping our targets. In fact, we have set targets that are based on very pessimistic growth. Even the business community said that we were being pessimistic. Our targets are capped.
If the target is too low, by the time we get to 3 per cent of the GDP by 1996-97, which is what we promised in the red book and from our own pessimistic outlook, then if we go by what is happening in the business community and what they have been projecting, we will exceed 3 per cent. Is that not what it is all about, having a government that the voters know is a credible government if it comes forward with a budget, sets targets and achieves those targets?
For the last nine years voters have watched governments making promises in different budgets. Those promises were not kept. We were at the point where they were becoming cynical and saying that this was just another promise which was not credible.
That is not what this government is all about. We are where we are in the polls today because we are credible. We are making promises that we can keep.
Mr. Harper (Simcoe Centre): What about the GST?
Mr. Calder: The GST will be worked out later this year. It is in process right now. The member can laugh. I love the way the member for Simcoe Centre tries to work this around. He stood up and chastised the infrastructure program. In fact, a few months ago he made a statement in the House questioning the minister responsible. However, at the same time, I found some correspondence he had written the mayor of Barrie praising the program. It is cynicism like that which gives politicians a bad name.
Mr. Harper (Simcoe Centre): Tell the whole story, do not just give little quotes.
Mr. Calder: I am ashamed of the member.
The budget has a number of advantages. We have pledged that in 1995-96 the debt will not exceed $32.7 billion. We want that reduced to 3 per cent of the GDP or $24.3 billion for 1996-97. This is something that was laid down in the Maastricht treaty. We recognize that a large percentage of our money is borrowed from the international market and it is our responsibility to make that figure.
That is one of the reasons why the Canadian dollar today is strong, interest rates within the country are stable and why we are the leader in the G-7 nations in exporting. We are an exporting nation. If we are going to keep our standard of living we have to export. Thirty million people within this country without exports just does not cut it. Therefore, we have to be an efficient exporting nation. We have to be ISO 9000 effective. We have to take every advantage. We have to be innovative and creative which is exactly what the budget is.
I hope that the member across the way will see the light and vote for Bill C-76.
The Acting Speaker (Mrs. Maheu): It being 5.15 p.m., pursuant to an order made earlier today, in accordance with the provisions of Standing Order 78(3), it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the second reading stage of the bill now before the House.
Is it the pleasure of the House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mrs. Maheu): All those in favour of the motion will please say yea.
Some hon. members: Yea.
The Acting Speaker (Mrs. Maheu): All those opposed will please say nay.
Some hon. members: Nay.
The Acting Speaker (Mrs. Maheu): In my opinion the yeas have it.
And more than five members having risen:
The Acting Speaker (Mrs. Maheu): Call in the members.
(The House divided on the motion, which was agreed to on the following division:)
Minna
Mitchell
Murray
Nault
Nunziata
O'Reilly
Pagtakhan
Paradis
Parrish
Patry
Peric
Peters
Peterson
Pickard (Essex-Kent)
Pillitteri
Proud
Reed
Regan
Richardson
Rideout
Robillard
Rompkey
Scott (Fredericton-York-Sunbury)
Serré
Shepherd
Simmons
Skoke
Speller
St. Denis
Steckle
Stewart (Brant)
Stewart (Northumberland)
Szabo
Telegdi
Terrana
Thalheimer
Torsney
Ur
Valeri
Vanclief
Volpe
Walker
Wappel
Wells
Whelan
Wood
Young
Zed-132
The Acting Speaker (Mrs. Maheu): I declare the motion carried.
(Bill read the second time and referred to a committee.)
Mrs. Payne: Madam Speaker, I was not in my seat at the time the vote was taken but I would like the record to show that had I been I would have voted with the government.
The Acting Speaker (Mrs. Maheu): It being 5.43 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.