Mr. Speaker, I am sure those who have been watching the debate thus far have been somewhat overwhelmed by the flurry of numbers that have been going back and forth in this debate. As you rightly point out, Mr. Speaker, this is an important issue to Canadians, but it is important that Canadians also have the facts in front of them in order to adequately assess this issue.
The debate springs from the motion of the hon. member for Joliette who says that the contribution by the federal government is inadequate. He sort of leaves that word inadequate hanging out there, and he gets to a point of inadequacy by apparently ignoring a lot of money.
I thought I would first start off with the issues around the so-called fiscal imbalance which underlies this debate. I would bring to the attention of the House that in the fiscal year 2002-03, which really is the only one for which the final numbers are available, the revenue of the federal government was about $177 billion. Interestingly, for the same year, the revenue for the provincial governments, as a collective, was about $166 billion.
Therefore, on the first question of fiscal imbalance of an $11 billion difference between the two levels of government, the national and the sub-national governments, that hardly strikes one as an imbalance, especially given the numerous own-source revenues of the provinces to tax their citizens as they see fit and to set tax rates as they see fit.
That so-called fiscal imbalance of $11 billion though gets somewhat redressed by federal transfers to the provinces. In that year the transfer amounted to about $34 billion. That has two effects on the so-called imbalance. It reduces the federal moneys available for its programs, its debt servicing and transfers to persons, et cetera, by that $34 billion. Therefore, what is available for the federal government's issues and needs is about $143 billion.
Not only do we take away that $34 billion from the federal revenues, we add $34 billion to the provincial revenues. Therefore, at the end of the day, after those transfers are done, the provinces have just a slight touch over $200 billion to address their needs, which we would even argue are legitimate needs, including health care, but the federal government only has $143 billion to address its jurisdictional areas. That is the first thing.
I would put it to the House that this does not look like much of a fiscal imbalance to me. When we add those two numbers up, the provinces have way more money than they are letting on to the rest of us. They would have us all believe that the needs are there and the money is here. The needs may well be there, but the needs are also here. The money is also there, but not as much money is here.
The second point is this. Over the course of several generations, the federal governments ran up quite a debt. Even after all the hard work that we put in to reducing the debt, we are still at $510 billion, give or take. The provinces do not run nearly the debt level that the federal government does. At one point we were up to $568 billion, and I think that is about as high as it got.
After a great deal of hard work, we are down to just over $500 billion after running seven years of surpluses, after running a very tight ship. So here we are, running a debt of about $500 billion, while the provinces, on the other hand, are running at quite substantially less dollars in terms of debt.
The federal government started out at about 28¢ out of every dollar going just toward the debt. Now we are down to 21¢ out of every dollar going just toward the debt. Meanwhile, the provinces only pay 11¢ out of their revenues to service their debt.
Where is the fiscal imbalance there? It seems to me that the fiscal imbalance is somewhat on the other side, is it not? Maybe a little light is going on over on the other side there: that maybe the fiscal imbalance is on the other side of the equation rather than on this side of the equation.
I know that the hon. member for Edmonton North is not particularly good with figures, but nevertheless, we have a government to run over here and we have to balance our books. We have done that for six years. I hope that we possibly might even do it for a seventh year. But we still have that enormous debt.
So where is the fiscal imbalance? I dare say that a fair-minded analysis might put the fiscal imbalance on the other side of the equation rather than on this side of the equation.
The second thing I want to talk about in terms of the exercise of fun with figures is the repeated insistence on the part of members opposite to ignore the tax points as part of money that apparently does not exist. Apparently $17 billion simply does not exist. The provinces say, “It is ours, it always has been ours, and we are not going to count it as ever having been the federal government's”.
That makes the federal government ask itself why it should create room in its tax system for the provinces to take money out of it in order to claim it as their own and simply ignore it as a contribution by the Government of Canada to the people of Canada. We have to ignore that.
We repeatedly hear the argument from members on the other side that the $10 billion in equalization money, which apparently is not real money, is somehow or other money that they should keep and ignore. Half of that goes to the hon. member's province. Members on the other side get into some really interesting arguments. One is that somehow or other not only should this money not count, but they object that it flows in a per capita way.
Let us think about that. The argument on the other side, then, is that money should go to where the people are not and money should not go to where the people are. Thus, we should ignore the 2001 census and send money to where there are no people and not send money to where there are people. So where the needs are, we do not send money. That is an interesting basis for formulating a government policy. I thought that was a particularly strange argument coming out of the equalization argument.
Of course the third argument they choose to ignore has to do with moneys that are directly spent by the federal government on health. Again, either this money exists or it does not. Either the health care needs of certain subsets of Canadians are being covered by the federal government or they are not being covered. To simply ignore this makes it very difficult to enter into forms of partnership and understanding.
I would hope that part of the meeting of the first ministers and the finance ministers would be some basis for understanding that the federal government actually does flow a great deal of money into the coffers of the provincial governments and that this so-called fiscal imbalance and these needs on the part of the federal government for debt servicing just simply cannot be ignored. Let us think about this. Every 21 cents that comes into the federal government's hands has to service the debt.
The good news part of the whole thing is that our debt to GDP ratio is actually declining from a fairly high figure of around 68% down to 44% and possibly, in terms of actual money that we pay out, to 38% of GDP. The federal government has made significant progress and I appreciate that we have worked very hard on that.
I wanted to address some of the other issues that came up in the course of the debate, if I may in the one minute that I have. I will point out that the 2003 budget confirmed $34.8 billion in increased funding to meet those goals. I wonder where members opposite were when that budget was passed. As a result, total cash transfers--and I am emphasizing cash, I am not even arguing tax points--to the provinces will rise from $19.1 billion in 2002-03 to something in the order of $28 billion in 2007-08. This is faster than the rise in the projected GDP. It is faster than the government's revenues will appreciate.
The Government of Canada has committed itself to cash transfers where it will have to sacrifice other priorities in order to meet those cash needs, which is a recognition, frankly, of the health care needs of Canadians that we actually heard about on our cross-country travels.