FINA Committee Report

DISSENTING OPINION BY THE BLOC QUÉBÉCOIS

Report of the Standing Committee on Finance on the Pre-Budget Consultations

The Bloc Québécois accuses the Minister of Finance

When the Minister of Finance brought down his most recent budget in February 1997, the Bloc Québécois predicted that by the end of the 1996-97 fiscal year, the federal government's deficit would be in the neighbourhood of $10 billion. The Minister of Finance laughed at this assertion, claiming loudly that the Bloc's calculations were unrealistic. But this October's Economic and Fiscal Update shows that the Bloc was right.

The Bloc Québécois is strongly critical of the Minister of Finance because his $8.9 billion deficit has been achieved at the expense of the provinces and the unemployed. If the Minister has obtained a positive financial outcome, he has done so because the provinces contributed 54 cents for every dollar in spending slashed by the federal government between 1994 and 1998. Equally, the unemployed, workers and employers will this year alone have contributed $7 billion to the fight against the deficit, in the form of money taken from the Employment Insurance Fund surplus. All the Minister of Finance had to do was reap the fruits of the drastic measures he imposed on Quebeckers and Canadians, plus the revenues generated by economic growth and increased by the non-indexation of the tax tables.

The Bloc Québécois also accuses the Minister of having deliberately hidden information from the taxpayers about the true state of Canada's public finances, so that he could continue his draconian cuts while avoiding a public debate on the use of the surpluses. How could the Minister and the bureaucrats at Finance Canada have made a forecasting mistake on the order of 53% between last February's budget and October's Economic Statement? What could it have been but deliberate?

Our demands for the next Budget

Backed by many stakeholders in a wide variety of spheres of activity in Quebec, the Bloc Québécois demands that the Minister of Finance adopt seven specific measures in his next Budget. The measures echo consensus opinions that emerged from our pre-budget consultations with Quebec stakeholders:

1. The federal government must stop interfering in areas of provincial jurisdiction such as health, education, social security, etc. It must not create new programs in areas of jurisdiction where it would only be multiplying bureaucratic structures and above all increasing costs to the taxpayer. The Minister of Finance must instead use some of the margin of manoeuvre that will be opening out in the next few years to partly reimburse what he has appropriated from the provinces for post-secondary education, health and social assistance.

2. The federal government must reform the current employment insurance system to put an end to the inequities the system creates and provide better protection to the workers of Quebec and Canada, especially seasonal workers. The Bloc Québécois demands that the Minister of Finance proceed with a substantial reduction in employment insurance premiums, conditional on the private sector's performance in creating jobs. This reduction in premiums could represent 40 cents per hundred dollars of insurable payroll. The Minister of Finance must also set up an employment insurance fund that is separate from the Consolidated Revenue Fund (as proposed by the Auditor General of Canada), so that the money of workers and employers is no longer used to reduce the deficit artificially.

3. The federal government must stimulate job creation and wage war on poverty. The Bloc Québécois, and many stakeholders in Quebec, demand an in-depth reform of the personal and corporate income tax system, which could prove to be an invaluable tool in achieving job creation and fighting poverty while at the same time making possible a targeted reduction in income and other taxes paid by individuals and small and medium-sized businesses.

4. The federal government must restore indexed tax tables. The absence of this indexing constitutes a disguised increase in personal income tax.

5. The Minister of Finance must bring in anti-deficit legislation, resembling that passed by Quebec's National Assembly.

6. With regard to the GST, the Minister of Finance must accept the Bloc Québécois' arbitration proposal in order to settle the question; if necessary, he must pay the Quebec government the $2 billion it is claiming for harmonization with the Quebec sales tax.

7. The Minister of Finance must restore the moneys taken from foreign aid. Since 1993, when the Liberals took power, the amounts destined for foreign aid have been slashed, in defiance of Canada's humanitarian tradition.

One country, two peoples, two diametrically opposed visions

The recent consultations have enabled us to confirm that, more than ever, there are two completely opposite visions of what the federal government's role should be. While Quebec is calling for greater powers for the provinces and greater autonomy, the nine other provinces are calling for Ottawa to get more involved in their areas of jurisdiction! This is true of health, education and anti-poverty measures.

In Quebec, federal intrusion in areas that properly belong to the Quebec government has been widely criticized, and the federal government has been told to give back the money it appropriated for this purpose; in the rest of Canada, people are calling for pan-Canadian programs and national standards applicable from sea to sea. These two visions are irreconcilable, and augur not only jurisdictional conflicts in the future but also futile and costly friction between Quebec and the other provinces.

The only solution: sovereignty for Quebec

In light of these two irreconcilable visions of the roles of Ottawa and Quebec City, there are only two possible conclusions: either the Quebec government must agree to let itself be crushed by the federal steam roller, or it must repatriate all powers from the federal government by achieving sovereignty following a referendum. There is no middle ground between these two options: to remain in the federal system commits Quebec to a path encumbered with expensive and pointless squabbles that will not put bread on the table.

It is high time to ask which parliament is in the better position to offer services to the people of Quebec: the one in Ottawa, where Quebec holds 25% of the seats, or the one in Quebec City that is 100% elected by Quebeckers? Which government is better placed to speak for the people of Quebec on the international stage, to pass laws that affect Quebeckers, to administer their taxes and to promote their economic and social development? We are convinced that the answer is Quebec's National Assembly, acting with the full powers of a sovereign state.