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>      Established Programs Financing (education) 
>  
>      Advanced education and training are both areas of provincial 
>      jurisdiction. The Reform Party's reform to the education 
>      component of Established Programs Financing (EPF) is to transfer 
>      additional tax room to provincial governments in order to enhance 
>      their ability to administer their own education programs. 
>  
>      The current arrangement under EPF involves a mix of federal cash 
>      contributions and tax point transfers. Under the Reform Plan the 
>      federal government would move to permanently devolve 
>      responsibility for these areas to the provinces. In order to 
>      secure some savings, the Reform Party would reduce the remaining 
>      cash transfers by $0.2 billion over three years. This would not 
>      totally diminish the federal role, as some cash transfers would 
>      remain - albeit at a lower level than at present. Cash transfers 
>      would continue to fall to zero as provincial "tax point" revenues 
>      grew. 
>  
>      The net result is that, over the long term, provinces would have 
>      a permanently larger base from which to fund these programs. 
>      Under current arrangements, when existing cash transfers fall to 
>      zero, provinces would be left funding education with the tax room 
>      they currently possess. By ceding additional tax room to the 
>      provinces, as called for in the Reform Plan, the federal 
>      government could ensure that provinces have a larger and growing 
>      revenue stream from which to fund their own programs. 
>  
>      SAVING: $0.2 BILLION 
>  
>     ------------------------------------------------------------------------ 
>  
>      Chart 5 
>     ------------------------------------------------------------------------ 
>  
>  
>      Established Programs Financing (Health Care) 
>  
>      Like education and training, health care is an area of provincial 
>      jurisdiction. Under the Reform Plan, the federal government would 
>      move to decentralize these activities by ceding additional tax 
>      room to the provinces. In order to secure savings, the Reform 
>      Party would reduce the remaining cash transfers by $0.8 billion 
>      over three years. As in the area of education this would not 
>      totally eclipse the federal role, as some cash transfers would 
>      remain. 
>  
>      A caveat for health care is in order, however. Before a Reform 
>      government would grant the provinces additional tax room for 
>      health care, the provinces would be required to participate in 
>      annual, federal-provincial, health consultations. In addition, 
>      the provinces would be expected to agree upon a common level of 
>      basic or "core" health services offered everywhere in Canada (see 
>      Chart 6). A Reform government would take all steps necessary to 
>      achieve a consensus on a basic level of health service before it 
>      granted increased "at-source" revenues for health care to the 
>      provinces. 
>  
>      At the end of this process the provinces would possess the 
>      revenue levers and flexibility necessary to fund education and 
>      health care according to the demands of their electorate and 
>      their fiscal constraints. Decentralization of health care would 
>      ensure that services were delivered and funded by the level of 
>      government closest to the people. For its part, the federal 
>      government would facilitate interprovincial cooperation to 
>      establish national standards for "core" services which would be 
>      available to all Canadians regardless of ability to pay. 
>  
>      SAVING: $0.8 BILLION 
>  
>     ------------------------------------------------------------------------ 
>  
>      Chart 6 
>     ------------------------------------------------------------------------ 
>  
>  
>      Canada Assistance Plan (Welfare) 
>  
>      The Canada Assistance Plan (CAP) transfers federal monies to 
>      provinces to help fund welfare programs, which are a matter of 
>      constitutional, provincial jurisdiction. Under the Reform Plan, 
>      responsibility for both the administration and funding of welfare 
>      would be returned to the provinces. In order to ensure that 
>      provinces have adequate resources for provincial welfare 
>      programs, the federal government would vacate a certain amount of 
>      income tax room which the provinces would be free to occupy. 
>      These revenues would then become provincial revenues. 
>  
>      International comparisons and many studies reveal that the level 
>      of our welfare benefits contribute both to dependency and 
>      increased unemployment. Therefore, the amount of federal tax room 
>      abdicated by the federal government would be less than the 
>      current funding under CAP cash transfers. Under the Reform Plan 
>      the federal government would transfer tax points equaling $2.5 
>      billion less than current cash transfers.[27] This transfer of 
>      tax points would give the provinces a predictable, growing, and 
>      "at-source" revenue stream to fund their own welfare programs. 
>  
>      SAVING: $2.5 BILLION 
>  
>     ------------------------------------------------------------------------ 
>  
>  
>      Equalization (Fiscal Transfers to "Have-Not" Provinces) 
>  
>      While we outline a significant decentralization of health care, 
>      advanced education and welfare, the Reform Party recognizes that 
>      Canadians expect core services to be available to all, and they 
>      are willing to pay to make this possible. 
>  
>      Under the Reform Plan, the equalization would guarantee that the 
>      poorest provinces would have additional revenues to deliver core 
>      services to Canadians. This renewed equalization plan would have 
>      the following elements: 
>  
>           First, equalization would become a kind of "Negative Income 
>           Tax for the Provinces," and would be similar to the system 
>           currently in existence with one major difference: instead of 
>           equalizing all provinces up to a certain standard, the 
>           program would equalize up to a percentage of the 
>           all-province standard [28] 
>           Second, a ceiling would be placed on the total level of 
>           expenditures under the program and funds would be reduced 
>           over three years to meet this level. After three years, the 
>           ceiling would be increased at the rate of inflation. Cash 
>           transfers from the equalization fund would be used to 
>           equalize provincial revenues to a level as close to the 
>           all-province average as possible, given the limits of the 
>           fund. 
>  
>      Reforms to Canada's equalization program would achieve two 
>      things. First, only the least well-off provinces would receive 
>      equalization payments. Second, a predictable spending pattern 
>      would be permanently be established. 
>  
>      SAVING: $3.0 BILLION 
>  
>     ------------------------------------------------------------------------ 
>  
>  
>      Additional Social Savings 
>  
>      As outlined above, savings in social spending amount to $14 
>      billion. Additional savings of $1 billion would result from 
>      phasing out federal departments and supplementary programs in the 
>      areas of health, education and welfare. Many programs in the 
>      Department of Human Resources Development relating to provincial 
>      areas of jurisdiction such as training and manpower, for example, 
>      would be closed or transferred to provincial governments. 
>      Activities in the Department of Health would also be phased out 
>      as provinces assume their constitutionally-mandated 
>      responsibility for health care. 
>  
>      SAVING: $1.1 BILLION 
>  
>     ------------------------------------------------------------------------ 
>  
>  
>      TOTAL SAVINGS*: $15 BILLION 
>  
>      *Achieved at the end of the third fiscal year. 
>  
>     ------------------------------------------------------------------------ 
>  
>  
> Summary 
>  
> Table 2 summarizes the 1994-95 federal expenditures on social security 
> programs and the reductions proposed by the Taxpayers' Budget. 
>  
> At present, Canada's federal and provincial governments are spending 
> about $155 billion on an inefficient and crumbling social safety net. 
> [29] 
>  
> Under the Taxpayers' Budget, Canada's federal and provincial 
> governments would spend about $140 billion on social services annually 
> or about $5,000 for every man, woman and child in Canada. 
>  
> But because of the way these dollars would be spent under the 
> Taxpayers' Budget - with greater focus on those in need, with more 
> dollars in the hands of individuals, families and governments closest 
> to the people - we are convinced that more Canadians will receive more 
> social security for dollars spent than under the current system. 
>  
>     ------------------------------------------------------------------------ 
>  
> (SIDEBAR - Tax Point Funding: A Predictable and Growing Resource) 
>     ------------------------------------------------------------------------ 
>  
> Table 2 
>     ------------------------------------------------------------------------ 
>  
>  
> EMPOWERMENT MEASURES 
>  
> Our vision of the future centres on proposals for a wide range of 
> empowerment measures which would allow all Canadians to take more 
> control over their own social security needs. Some of these measures 
> could be implemented quickly, while others would have to be phased in 
> over time. All, however, are aimed at restoring the proper balance 
> between government and the Canadian people, and at ensuring that the 
> security concerns of Canadians are better met in the future than they 
> have ever been before. Table 3 highlights a number of the empowerment 
> measures currently under consideration by the Reform Party. 
>  
> Proposals for a Taxpayer Protection Act 
>  
> The current deficit and debt problem and the wrenching need for 
> changes to cherished government programs suggest the need for a device 
> to prevent the repetition of such conditions. In our consultations 
> with Canadians we frequently heard the demand for limits to the 
> ability of majority governments to run spending deficits and raise 
> taxes. Such demands have also been heard in the Canadian media and 
> from taxpayers' associations. Reformers draw on a large body of 
> academic literature and the experience of U.S. and European 
> jurisdictions to meet the demands of many Canadians for what we call a 
> Taxpayer Protection Act which would contain the following five 
> elements: 
>  
>   1. Government spending and taxes would have to be balanced over the 
>      business cycle. During business downturns the government could 
>      run deficits. However, these would have to be matched by 
>      surpluses during economic prosperity. This objective can be 
>      achieved in practice by the establishment of an emergency account 
>      that must be kept in surplus at all times. The government would 
>      be prohibited from forcing this account into a deficit 
>  
>   2. Total government taxes and spending could not exceed a constant 
>      proportion of national income and could only be increased by 
>      extraordinary, legislative means 
>  
>   3. The mandated normal level of taxes and spending could be violated 
>      during periods of emergency. These exemptions would require 
>      approval by extraordinary, legislative measures. Guidance in 
>      designing the details of such measures should come from the 
>      people. 
>  
>      A recent poll conducted by The Financial Post indicates that a 
>      clear majority of Canadians believe that Ottawa should not be 
>      permitted to increase spending, taxes, or deficits except when 
>      authorized by means of a referendum or a parliamentary 
>      supermajority [31] 
>  
>   4. To prevent the shifting of expenditures and revenue between 
>      accounting periods, the movement of spending "off bu