Bill C-18 – Second Reading

Thursday, March 22, 2001

Mr. Bill Blaikie (Winnipeg—Transcona, NDP): Mr. Speaker, I would have been tempted to ask a question of the member for Elk Island but I was not sure whether or not I had the floor. As I do, perhaps I will respond briefly to some of what the member had to say, because it seems to me there was a thread throughout some of what he had to say which was critical of the equalization payment scheme we have in this country.

I would remind the member of two things. Equalization is part of the Constitution of Canada. This was constitutionalized in 1982. It is a critical element of Canadian social and economic policy that all citizens, no matter where they live, be served by provincial governments that, because of equalization payments, are able to provide comparable levels of services to all citizens.

The fact that Canadian citizens who live in so-called have provinces have to contribute to that through the federal transfer payments is not something that I think the member would want to be seen criticizing, because I know that his party has been in trouble in the past for sounding like it would like to do away with equalization.

I would caution the hon. member that unless he wants to revive that debate he should be careful as to what he says, because it sure sounded to me as though there was an undercurrent of opposition to equalization payments.

It always strikes me as odd when we hear that coming from a province that is doing as well as the province of Alberta is doing. We do not want to have a situation in the country where the gap between rich and poor provinces grows any greater than it already is. That is the situation that we find ourselves on the edge of now, given some of the economic circumstances that prevail.

We in the NDP rise to speak against this particular bill because of the fact that even though it lifts the ceiling or the cap on equalization payments for one year, it then goes on to restore that ceiling or that cap in a way that we find objectionable. It seems to me that equalization is not just a constitutional principle. It is a moral principle that there should be this kind of comparable equality among all Canadians. However, if it is a constitutional principle, this is something that should not be capped. There should not be a ceiling put on this particular constitutional principle.

I wonder if the members of the Alliance Party could have their meeting outside the House. That is what the curtains are here for. Mr. Speaker, I am talking to you. I wonder whether those members could have their meeting outside the House so that—

The Speaker: I am having no trouble hearing the hon. member. That is why I had not intervened. The hon. member does have a strong voice. Although he is a long way away, I was still hearing him quite well. The meeting was not as disturbing to me as it apparently was to him, in the sense that I guess the sound was going that way.

I am certainly happy to intervene on behalf of the hon. member and urge hon. members to show proper restraint in controlling their conversations in the House.

Mr. Bill Blaikie: Mr. Speaker, I was saying that if this is a constitutional principle and one grounded as a certain normative or moral view of what constitutes Canadian society and the relationship that all Canadians have with each other through their federal government so that Canadians, no matter where they live, can have a comparable level of public services, then this is not something that there should be a cap on.

What we have seen too often in this last decade or so is the federal government moving to cap, to limit, its commitment to certain social programs. It is not just equalization. I think of a former program called the Canada assistance program, which was sometimes called CAP for short, which itself was capped by a Conservative government. It was sometimes called the cap on CAP. To compound matters, the Liberal government did away with CAP altogether and brought in the Canada health and social transfer, sometimes called the CHST.

The federal government wonders why there is not the strong sense of country that it would sometimes like to see. No wonder, when we have federal governments that have been progressively withdrawing from its commitments to social and economic equality in the country, starting with the Conservatives with the cap on CAP, or actually starting with the Liberals back in the early 1980s when they were responsible for the first unilateral reduction in federal transfer payments to the provinces.

Over the course of a long time, the federal government has been withdrawing from fiscal commitments it made to the provinces in the course of designing specific national social programs and in the course of living up to specific national arrangements like equalization. We in the NDP say here today that a cap on equalization is wrong and that it should be lifted entirely. However, if it cannot be lifted entirely, then at the very least, when the ceiling is put back, as this bill also does, it should be put back at a base that is higher than where the ceiling was before it was lifted for this one particular year.

My understanding is that that was the understanding the provinces had. They understood that when the ceiling was lifted and the equalization payments rose as a result, that new level would become the new base. Instead, what this bill does is return the base to a lower figure and put many provinces, particularly my home province of Manitoba, in a position in which they are not as well off as a result of the CHST increases as the federal government would like to make out. They lose, through equalization and the restoration of the ceiling next year at this lower base, what they gained through the increase in the Canada health and social transfer.

What happens is, despite all the smoke and mirrors and despite the Liberal campaign promises and the Liberal spin around the great increase in federal funding to the provinces for health care that came with the increase in the CHST with the so-called health accord, provinces like Manitoba are in effect no better off because they are losing on equalization through the equalization cap what they gained on CHST. The only provinces that actually come out of this better are the have provinces because they do not lose through equalization. They just gain through CHST.

Where in the heck is the logic of that? Is this what the government intended, that after all was said and done it would be the have provinces that have more and the have not provinces that have less, because that is the result? I do not know if that was the intended result. I do not know if the government is just stupid or vicious when it comes to this sort of thing. We can take our pick. In any event, this is the result of what the government has done, and what it is doing through this particular bill.

We say two things. First, lift the cap on equalization. Get rid of that ceiling that will cost some of the have not provinces more and more as the years go by, depending on economic circumstances. Certainly current projections would indicate that the cap will cost Manitoba for instance something like 0 million. That is a lot of money in Manitoba. It may not seem like much to a federal government that is projecting a surplus of billion or whatever. However, 0 million can buy a lot of public services, health care and post-secondary education in a province like Manitoba.

What we are seeing is a further downloading on the part of the federal government. The federal government is building up its surplus and fighting its deficit on the backs of the provinces, which in many cases have to deliver those very important services that Canadians really care about in terms of health care and education, for instance. The provinces have to take the heat for the lack of MRIs, or the lack of other diagnostic services, or crowded classrooms or whatever the case may be.

What we see is a very disturbing trend. The federal government over the course of many years now, accelerated in a remarkable way by the Liberals since they came to power in 1993, has been withdrawing from all these commitments. I think it is part of the national unity crisis to the extent that there is one. Liberals spend their time scratching their heads and wondering why Canadians do not have a stronger attachment to their country, and how they can get more federal visibility?

Who has done more to destroy federal visibility and participation than the Liberal Party since it came to power in 1993. It did this through the systematic sell off and privatization of many of our national institutions and infrastructure, eliminating post offices, getting rid of our publicly owned national railway and privatizing Air Canada. The list goes on of ways in which the federal government has taken the federal presence, both symbolically and practically, out of the lives of Canadians. Then the Liberals wonder why Canadians do not have a strong sense of being Canadian. One does not have to be a rocket scientist to figure it out. On top of that it withdraws its fiscal commitment from so many of these programs and leaves the provinces to pick up the slack. There is a lot of slack because most of the areas that the federal government is withdrawing from are growing areas of expenditure, not diminishing areas of expenditure.

We see the Minister of Finance piling up his surplus, taking credit for his fiscal management of the country, and yet in many respects this has been done on the backs of the provinces or the unemployed through the use of the EI surplus.

What is going to happen if worse comes to worse, we do have a recession and we have all these ceilings? Is it not nice for the federal government? It does not have to worry. Recession can come. All the ways in which it will deal with the social consequences of a recession are all capped. It does not matter how bad it gets, the government's commitment is capped: capped on equalization, capped on CHST at a level that is still lower than what it was in 1993 when the Liberals became the government, capped here, capped there, capped everywhere.

It is the provinces that will have to fight the recession, if there is one, all by themselves. They will have to pick up the people who do not qualify for EI anymore and go on provincial welfare. They will have to pick up the increased use of the health care system as people are stressed out by economic conditions et cetera. They will have to do that with declining revenues because the recession itself will affect their revenues.

Meanwhile the federal government will sit back and say, “Oh, we signed a health accord in August 2000 which solved everything, even though it didn't put back what we took out in 1995. We've got an equalization scheme. It's even in our constitution. It's a great Canadian principle”. However it only goes so far. It does not go far enough to address the needs of the have not provinces. It only goes as far as we like it to go without endangering the federal government's fiscal health.

There are a lot of reasons to be concerned about the bill. I know most people I think probably regarded this as a bit of care taking legislation and probably in the end it will not receive the kind of debate in the House that it deserves. However I would implore other members of parliament and opposition parties to take a good look at the bill and take a good look at the principles and the values that underline it and the way in which the bill is a repudiation of our constitution. It is a repudiation of the principle of equalization which is enshrined in our constitution. It is a danger to the long term health of have not provinces which are continually and increasingly being put at a disadvantage in respect of wealthier provinces.

Again I use my own province as an example. However, I certainly know members from the maritimes have similar concerns about equalization and have asked for special arrangements whereby some of the revenues that accrue to those provinces through oil and gas revenues might not receive such a serious clawback as they do now in the equalization formula. This is one of the ways in which this might be addressed, although I do not think there is unanimity among the provinces with respect to that because not all provinces that have all oil and gas revenues are asking for that.

Clearly we need to do something either by way of increasing equalization for all provinces that require it or coming to some special arrangements with certain provinces with respect to certain kinds of revenue. Whatever the case may be, the system that is put in place by this particular bill is inadequate and creates a situation in which more and more have not provinces have their treasuries and ministers of finance put in a position where they do not know really what to do.

In order to maintain services, in the face of the lack of the kind of money they feel they should be getting from the federal government, they have to maintain a certain tax base. If there is a province next door, or two or three over, that does not have to maintain that kind of tax base because it is a have province and it has the revenues, then we have a growing gap between the so-called tax competitiveness of various provinces.

We get a situation in which provincial governments have no policy room to manoeuvre. They basically have to imitate some of the richest provinces. When they do that, they not only lose their ability to make their own decisions, they are sometimes forced into making bad or regrettable decisions. That is not what people had in mind when they came up with the idea of equalization. That is not what we had in mind in this chamber. I was here when we constitutionalized the equalization principle.

I would ask the government members to consider whether they want this to be their legacy. When they had an opportunity to do something about equalization, when they had a surplus, when they could have done something to strengthen this constitutional principle, they did not. Do they want that to be their legacy or do they want it to be said of them that the Liberals were the party who finally brought equalization back up to where it should have been and created the kind of equality in the country that they like to talk about, but which this bill in its details and in its principles betrays?