INST Committee Report

We also wish to add here remarks underlining the necessity for the federal government to invest to revitalize the economy, while taking Quebec's prerogatives into account.

The Bloc Québécois believes that a balanced budgetary approach must allow for tax reductions, and these reductions must be targeted. But the federal Finance Minister’s tax reduction program does not correspond to this requirement.

The Bloc Québécois would have liked the Committee to urge the Finance Minister to acknowledge the harmful effects of the decisions he has made so far on reduction of the personal income tax burden. Let us recall that the Minister ordered cuts in income and other taxes that targeted very high income earners in particular. As a result of Mr Martin’s two most recent budgets, Canadians with incomes of more than $250,000 have enjoyed over $9,000 in income tax reductions, while families with incomes in the neighbourhood of $40,000 have seen their income tax go down by scarcely $300.

The large surpluses that have been built up in recent years could have been used to give immediate relief to families with incomes of $40,000 and less, particularly single-parent families with two dependent children. Such families should have been exempt from the obligation to pay a single penny of income tax to the federal government, if the federal government had allowed itself to be guided by a concern for ensuring a certain balance in society rather than by a desire to hand out tax cuts that were primarily a gift for the highest income earners.

In the view of the Bloc Québécois, budgetary prudence is absolutely necessary but transparency is even more necessary. But the trend that the budget process in Ottawa has perversely taken has been to transform transparency into a tool for camouflage for the government rather than for information for the people on the state of the federal public finances.

Since 1996, the federal government has accumulated budget surpluses worth on the order of $35 billion. While everyone should have been delighted to see the government committed to sound management of public finances, we had instead reason for concern, as we watched the federal government demonstrate its chronic, even deliberate, inability to present realistic and credible budget estimates. For almost 20 years, successive governments in Ottawa have exaggerated the extent of their anticipated deficits, by inflated them artificially, or underestimated the size of their surpluses as the present government is doing. The present government has thus deliberately excluded from any public debate almost $60 billion of manoeuvring room that the Bloc Québécois, even though we have fewer means at our disposal, has been able to estimate much more accurately. This situation has also helped to accentuate dramatically the current fiscal imbalance with the provinces.

While blurring the true portrait of Canada’s public finances in this way, the federal government has also withdrawn substantial financial resources that could otherwise have been allocated to priorities identified by the people, notably through transfer payments for health and education. In this era of surpluses, and because its accounting rules oblige it to do so after a certain time, the federal government must allocate all of its "unforeseen" surpluses to paying down the national debt, which is simply one priority among others.

It is thus vital that the budget process be made more transparent. Prudent management is of course required, with a view to a healthy and balanced budget, but prudence must not be exercised at the expense of the quality of information provided to the people, particularly if that prudence is based on deliberate blindness to reality. It is important to note that we are not opposed to a contingency reserve, but we believe in a budget process that would for example provide for the analysis of revenue and expenditure growth hypotheses by an independent committee.

The Bloc Québécois recognizes the importance of innovation. In its platform for the election of November 27, 2000, the Bloc placed great emphasis on the sector commonly known as the "new economy" —  in other words, an economic order built around development and the use of new technologies, especially the so-called information technologies. This new economic order is one in which education and training, technological innovation and research and development are increasingly coming to occupy a dominant position. Many people would agree that economic prosperity will from now on be closely linked to the development of the new economy.

However, we believe that federal investment in the sectors of science, innovation and research and development must respect the needs and priorities defined by the provinces, and by Quebec in particular. We therefore want to see funding transfers in these sectors that respect the innovation framework chosen by Quebeckers.

Lastly, we consider that federal investment in innovation must reflect Quebec's demographic weight, contrary to the usual situation in which Quebec is clearly disadvantaged. Federal investment in research and development, on in fixed assets and stocks is a case in point: in 1998, for fixes assets and stocks, for example, Quebec received only 17.7% of all federal investment, while it is home to almost 25% of the Canadian population.

Quebeckers consider that control of immigration is an essential tool to Quebec’s development and prosperity. We therefore feel that the Quebec government would not be contented to watch from the sidelines, and that it must be invited to participate actively in the negotiations with the United States about immigration procedures.

The Bloc Québécois would have liked the Committee to display more openness to possible federal government assistance for the sectors that were especially hard hit by the tragic events of September 11. Travel agencies and airlines, which are closely intertwined, have asked for help from Ottawa. The economic stabilization plan proposed by the Bloc Québécois in October included, among other provisions, a series of proposals aimed at supporting the airline industry and employment in sectors hit by the general uncertainty and gloom.

It is our contention, however, that businesses should be compensated for problems linked to the event of September 11 and not for pre-existing management or structural problems. Consequently, companies that would like to benefit from federal government support should be prepared to have the latter examine their financial statements and organizational structure. We further believe that assistance must be provided uniformly to all the members of the same industry that request it, and that this assistance, in the case of airlines, must take the form of loan guarantees rather than direct cash transfers.

The Bloc’s stabilization plan is both balanced and responsible. It takes into account the federal budget surpluses and the need to oxygenate and stimulate the economy.

MP for Verchères Les Patriotes and