Mr. Speaker, the 1996 budget has and continues to meet the government's commitment to sustain deficit reduction on the way to a future balanced budget, but a balanced budget alone must never be the only goal of our wonderful country, Canada.
Our government is fundamentally responsible for setting a stage, one which provides a model for the Canadian people. Our government is here to establish a neutral framework within which all Canadians can work and prosper. This framework is represented by the 1996 budget in its current implementation. There is no question it is difficult to establish a framework which is fair, equal, democratic and neutral and which at the same time ensures that all Canadians will see the framework in the same light.
Our government has successfully created a plan which will encompass job creation and progressive changes to old age security, to Canada student loans and the Canada health and social transfer. Today I will focus on the CHST and the progressive changes it marks for Canadians, demonstrating the fundamental responsibility of this government to establish a fair and equitable framework for all Canadians to grow, to prosper and to work together.
Fiscal progress should always be a means to greater public ends, to lower interest rates, to more jobs and to a more prosperous and secure future for Canada. Canadians must be allowed to move forward on issues that are important to them instead of being held back by fundamental requirements needed to maintain the basic standard of living. Canadians want to be successful both on the domestic home front and the international stage.
In order to establish this level of financial success while maintaining public prosperity, it is necessary to follow the established plans for economic recovery. Those plans are included in the 1994, 1995 and 1996 budgets. They are tailored to result in the domestic comfort and confidence levels necessary to build a foundation for continued export and international growth.
Clearly, one of the highest priorities for the Canadian government, needed to fulfil domestic prosperity, is to preserve Canada's network of social programs. These programs have helped to establish Canada as one of the most envied nations in the world. To ensure their continued success, the Prime Minister has promised to provide for health and social programs long term funding arrangements that are growing, stable, predictable and sustainable. The 1996 budget advances this promise in a new five year arrangement for the CHST.
This arrangement dictates that there will be no cuts in entitlements to the provinces. In fact, the entitlements will increase in a few years. The CHST will be stabilized at the 1998-99 levels for another two years and then will begin to grow. There will be no cuts in the CHST beyond those announced in last year's budget. By providing predictable funding, the government is demonstrating its commitment to safeguarding health care and other social programs.
When the CHST begins to grow in 2000-01, federal transfers will then increase for the first time since the mid-1980s. Over the years 1998-99 to 2002-03 the federal government will transfer nearly $130 billion to the provinces.
We established the CHST in last year's budget to fund health, post-secondary education and social assistance. It is true that we cut the transfer payments in that budget. Overall transfers to the provinces were cut by an average of 4.4 per cent in 1996-97. That was much lower however than the average of 7.3 per cent in cuts we made to our own federal programs. We had no choice but to cut transfers after inheriting a huge deficit and debt from the previous administration.
Cash transfers alone represented well over 20 per cent of all federal program spending. They had to be included in our deficit reduction plan. At the same time, we have given the provinces the increased flexibility they were asking for in order to design programs that meet their own needs. It is important to note that the federal equalization payments to less affluent provinces which also support social programs will continue to grow.
It is also important to note the four key objectives of the CHST arrangement: to safeguard medicare and social programs; to return to growth in transfers and stabilize the cash component of the transfers; to restore stability and predictability for provincial governments; and to provide the provinces with a more comparable funding support program.
Transfers to the provinces make up nearly one-quarter of federal program spending. In no way could the CHST be exempt from expenditure restraint. Over all, reductions will amount to less than
3 per cent of provincial revenues. The provinces will be able to absorb the impact as most have or are near balanced budgets.
New Brunswick for example is a province strong and successful in its financial position, with the riding of Carleton-Charlotte contributing significantly to the overall success prevalent in New Brunswick. My riding of Carleton-Charlotte is vast in geography, rural in nature but extremely industrially progressive.
Carleton-Charlotte is a riding which stood tall during the tough economic times that were witnessed in recent years. It has managed not only to maintain its industry but has also managed to expand in many areas. There are also many successful industries in Carleton-Charlotte and I would not attempt to start naming them. However, I do believe this riding certainly deserves to be commended on a job well done.
Carleton-Charlotte is a community, a riding that could easily provide a framework model for the success that can be achieved by people when they work together to maintain domestic stability and then expand outward. This domestic stability, providing a foundation for international recognition and expansion is what all Canadians can work toward together as one large community.
The model or framework the 1996 budget presents is simply a larger model of what has been accomplished in Carleton-Charlotte and exemplifies the role of what a government should aim to accomplish.
This government has not placed exploitation or suppression in the hierarchy. Instead it has supplied Canadians with a neutral model to expand and prosper.
I commend this government for maintaining its focus on domestic prosperity and for providing a greater means to public ends through the new and revised plan for the Canada health and social transfer and through the confidence that has been building in Carleton-Charlotte and across Canada. This confidence has resulted from this budget and the past two budgets of this government in addition to the measures taken to get our financial House in order for the first time in many, many years.
This is why I am pleased and proud today to support Bill C-31, the budget implementation act, 1996.