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C-52: Budget Implementation Bill, 2007

Honourable senators, although I have not prepared a speech, I would like to speak today because, having attended this week's hearings as a member of the Standing Senate Committee on National Finance, I have many questions.

Many questions arise from this bill as it was introduced and studied by the Standing Senate Committee on National Finance. Let me start by saying that our first witness was Minister Flaherty. I want to quote Minister Flaherty as saying the following: "All provinces will be better off in this new system."

He was referring to the equalization system.

I have to say that, prior to hearing witnesses at our committee, I called our research people at the Library of Parliament to ask them to get the numbers from the Department of Finance with regard to the future years — that is, the forecast — of the new equalization program that was proposed in Bill C-52. A few hours after my call to the Library of Parliament, I was told by my research people that the Department of Finance officials were refusing to provide numbers because there were different scenarios.

When they came before us at our committee, I asked them again: Why are you refusing to provide us with numbers? We are the Standing Senate Committee on National Finance. It is our job and our obligation to look at these numbers before we either approve or disapprove a bill. It is our job.

That is with regard to equalization.

I then asked them for the numbers for the social transfer and post-secondary education. They had no numbers to give us.

I then asked them this: If you cannot give me numbers, please tell me at least that, as advisers to the minister, you have provided the minister with an analysis of what will happen with such a decision and such a change.

Honourable senators, I had to ask four times to get this answer because they were trying to fudge and evade the question.

The final answer was this: "No, we made no cost analysis with regard to the social and post-secondary education transfer."

They made no analysis. They made no recommendation to the minister. Therefore, this new program is totally founded on a political decision alone — a political decision alone.

How can you make a fundamental change to this program after 30 years? It has existed for 30 years because, in 1982, when we repatriated the Constitution, we gave the provinces certain guarantees.

I also asked the officials of the Department of Finance on what grounds they were making this change to a per capita fixed amount for every citizen. They said three times to me that there is no need to measure fiscal capacity.

Honourable senators, I would like to bring you to the Constitution of Canada which contains the guarantees that were given to the provinces and the citizens of Canada.

Section 36 (1) is a commitment to promote equal opportunities. It states:

Without altering the legislative authority of Parliament or of the provincial legislatures, or the rights of any of them with respect to the exercise of their legislative authority, Parliament and the legislatures, together with the government of Canada and the provincial governments, are committed to.

(a) promoting equal opportunities for the well-being of Canadians;

(b) furthering economic development to reduce disparity in opportunities; and.

(c) providing essential public services of reasonable quality to all Canadians.

That is in direct contradiction to what is being done to the Atlantic accord. It is removing opportunities.

Section 36(2) is also in direct contradiction to the proposed changes to the social and post-secondary education transfer. Section 36(2) reads as follows:

Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

"Reasonably comparable levels of taxation" is a measure of fiscal capacity. Honourable senators, Bill C-52, with the changes to equalization, to the social and post-secondary education transfers, and to health completely denies and removes the constitutional right of the provinces and every citizen of this country to have equal service for equal taxation. That is what Bill C-52 does.

There are some good items in the budget but we, as senators, represent the population of our regions and, as a whole, the population of Canada. It is our duty to uphold the fundamental law of this land, the Constitution. How can we be expected to approve a budget that is fundamentally contrary to the law of this land?

I am not talking about politics. If they want to talk politics in the House of Commons, that is one thing; if they want to talk politics in the media, that is another thing. I am here speaking for the citizens of New Brunswick and for the citizens of at least eight of the Canadian provinces that are being hurt by these two measures, and that includes Quebec, honourable senators.

This is at least the second piece of legislation that has been introduced in this chamber in the last year that does not comply with the Constitution of Canada.

I will go on to other issues. My honourable colleague Senator Mercer said accurately that Nova Scotia, with regard to the equalization program alone, will lose $1.4 billion in the next 10 years. That does not count the changes to the per capita system. Under that system, Nova Scotia will be losing much more than that.

Under the old per capita program, if you include the tax points, the associated balancing of the tax points and the cash transfer for social and post-secondary education transfers, the federal government transfers $500 per citizen. Under the new program, which removes the associated equalization of tax points, it provides only $289 per citizen.

New Brunswick will lose $1.1 billion on equalization and more in the social and post-secondary education transfers.

One of my colleagues said that it costs much more in Ontario to provide those services than anywhere else. I did some research. I found a study done by the Caledon Institute, an Ontario-based think tank, in October 2004 for the years 2002 to 2025, in regard to health care spending between New Brunswick and the Canadian average. They average cost for health care in New Brunswick of 4.92 per cent. However, they found:

When we replace the New Brunswick age structure with that of Canada, the growth rate is reduced to 4.41 percent.

To my honourable colleague who thinks that the health care costs are heavier in Ontario than in the smaller provinces with a smaller population distributed over a greater geographic area, I would say that he is definitely wrong.

The other witnesses that we heard talked about the income trusts. They are not happy, and I can understand that. When you are planning to retire and you look at what is available in regard to investment in the open market and you see an opportunity, you invest.

Initially, the witnesses told us that in the Halloween massacre, as they described it, they had lost $62 billion in the market value of their assets overnight. They did admit that some of the $62 billion that they lost was due to other causes, but at least $25 billion was due to the specific government measure that was taken.

Prior to the witnesses appearing before our committee, I asked if they had any kind of proof that these were creating a major fiscal situation for the federal government. It seemed they asked the same question in the House of Commons. Honourable senators, under the Access to Information Act, this is the document that they received. There is a lot of information that is blacked out here. They have blank pages to justify the decision of the Minister of Finance.

The third issue that struck me was when Canada's Association for the 50 Plus, CARP, told us that they were looking at bringing a class action suit against the Government of Canada. What else can you expect when you have a Prime Minister of Canada who goes onto the steps of Parliament and cries out an open invitation, "Sue me. Sue me. Come on, sue me."

We have a provincial government, Saskatchewan, that is looking at suing the federal government. We have a group of citizens from Quebec and I think Northern Ontario who is suing the government in regard to BST. We now have another group of people that is looking at suing the government.

Honourable colleagues, even though we were not given the time to have the constitutional experts appear before our committee to ask about the ramifications of this bill in regard to sections 36(1) and (2) of the of the Constitution, I am sure they would have told us that these two new measures were unconstitutional.

Do not worry. As my colleague Senator Murray has very eloquently said, these two new measures will blow up in their faces.

For the sake of upholding the Constitution of Canada and for the sake of upholding the 30-year deal that has been made with the Constitution and its repatriation to all provinces and to all our Canadian citizens, I hope that honourable senators will support the amendments of Senator Moore and Senator Baker. Honourable senators, please consider every citizen that you meet. The seniors and the young people are the ones who will be most affected by these measures.