Debates of Dec. 11th, 1997

Committees Of The House

[The Acting Speaker (Ms. Thibeault)]

The hon. member for Kamloops, a very quick reply, please.

[Nelson Riis, NDP, Kamloops, BC]

Madam Speaker, a very quick reply does not seem very fair at all to me.

I will be brief and answer my friend's question directly. One reason that countries like Denmark and Norway, the two that I am most familiar with, are able to have a first class health care system and spend less money than we do in Canada on a GDP basis is because they have a whole set of other social programs that complement their system. They have a comprehensive child care which assists children from birth if the parents require it. They have a whole set of programs that we call pharmacare or elder care or assistance and support for seniors in that country.

You cannot take health care out of the equation when it is part of a comprehensive package. Perhaps the member will understand that by having a decent social system, you do not have to have poor children in Canada. Those other countries have demonstrated by appropriate policies there do not have to be any poor parents and, therefore, poor children.

[Lorne Nystrom, NDP, Qu'Appelle, SK]

Madam Speaker, judging by the atmosphere in the House, I wonder if we could have unanimous consent to allow this question and answer period to go on for another 20 or 30 minutes?

[The Acting Speaker (Ms. Thibeault)]

Does the hon. member have the unanimous consent of the House?

[An hon. member]

No.

[Yvon Charbonneau, Liberal, Anjou—Rivière-Des-Prairies, QC]

Madam Speaker, the festive spirit of the holiday season is upon us, even within and around this chamber. Nonetheless, we have an important issue to debate today. Let us try to do so calmly and seriously, as this is a very serious matter.

The purpose of this debate is to help prepare the next federal budget, which will define the rules of the game not only for the budget but also for the development of our country in the next year. Sometimes, policy choices made at budget time have long-lasting impact. So, this is a serious matter.

I do not sit on the Standing Committee on Finance. Many of those who spoke before me are members of this committee and, as such, have participated in the consultations held across the country.

However, anyone can read the committee's report, which is entitled Keeping the Balance: Security and Opportunity for Canadians . This is the report of the Standing Committee on Finance.

This is quite a substantial document, reflecting what was said at the many consultations sessions held across the country.

Like everyone here, while not all of us sit on the finance committee, I think that all have a say in determining what the main priorities should be for the coming year and next few years.

We have seen the vigorous action taken by the Liberal federal government in this last term as well as the action taken by the legislatures or parliaments of several provinces. I have witnessed some of the changes of direction the PQ government imposed on the people of Quebec these past few years.

As a result, today, we are at a point where balance has been restored or is about to be restored in federal public finances.

A few years ago, in 1992-93, we were saying that the public finances were in a crisis. Canada was regarded as a country on its way to becoming a third world country. The worst speculations were being made about the development of our country. At the time, Canada was trailing other industrialized countries as regards the state of its public finances. Now, four or five years later, it is said to be at head of the pack.

There was a major turnaround. We were on the verge of a disaster, but we have now set in place the conditions that will give our country a new impetus to tackle what lies ahead.

Thanks to the strategy implemented in recent years, the deficit dropped to its lowest level in 20 years, and it will continue to diminish. In fact, it will disappear. This strategy also brought interest rates to their lowest level in decades, while helping our economy pick up again and promoting job creation. These are all positive factors.

However, the debt, as a percentage of the gross domestic product, remains huge and, as pointed out by others, including the hon. member for Kamloops, who spoke just before me, some individuals, groups and organizations have shouldered the burden of this effort to put our fiscal house in order.

I listened to the hon. member for Kamloops, who has been here for close to 20 years. He spoke in a very eloquent and colourful way, and he gave many examples of the price paid by various segments of the population. We have to be very sensitive to the description he made of the situation, because what he said does not exist only in his riding, but everywhere in Canada. It exists in my riding of Anjou—Rivière-des-Prairies and in many ridings with a large number of middle or low income earners.

The hon. member did not mention it, but many small businesses also suffered a major shock in recent years and had to find new ways to organize themselves or had to restructure. Many jobs became precarious because of all these changes. It is a fact. Some sectors paid the price and shouldered the burden of that turnaround.

It is not enough to be eloquent, as the members opposite have been about what has gone on in recent years. Of course, those who were present can always criticize what the Conservatives did from 1985 to 1989 and from 1989 to 1993; they are perfectly entitled to do so.

They are perfectly entitled to criticize the Liberals for what they did from 1993 to 1997. There is nothing wrong with that in a parliamentary debate. But, apart from criticizing past events and describing the impact of the changes of recent years, what matters now is what action we take in response to the present situation. What should we do and what do we suggest? What are the points on which we are going to agree for the years ahead?

I do not think that reducing the deficit is the ultimate goal and I was very interested to see that this was also mentioned in the standing committee's report. With respect to reducing the deficit, it said, and I quote “Balanced budgets, and restrained spending are not the government's ultimate goals. The same is true of the price stability objective of the Bank of Canada. They are merely intermediate objectives, which enable and support the achievement of our ultimate ends: fostering job creation, economic growth and opportunity for all, while maintaining the qualities that characterize Canadian society, particularly a concern about equity and fairness. This is the balance that characterizes the government's approach and reflects the values of Canadian society. The difficult choices made in recent years tried to keep this balance in mind. The choices to be made in the future must do so as well”.

I think that all members should take note. The purpose of this debate is to get the House to take note of what in this report seems of interest to Canadians. I think it is a step in the right direction.

The pre-budget consultations of the past few weeks have led to the production of this report. What Canadians want, and what the Standing Committee on Finance wants, is to have the next budget keep the balance that has been focused on in recent years, and must be attained.

I feel it is important to specify what type of balance we want. Balance in inertia is not what we want, in my opinion. What the finance committee means is that a balance has been attained so we can lead our country in the right direction. That is, moreover, what it says in the foreword to the report of the Standing Committee on Finance. It says that Canadians want a balance between the security offered by debt reduction and the benefits of investing in people, technology and research and development.

I could go on and on, but I am splitting my time with the hon. member for Niagara Falls. As the representative of the riding of Anjou—Rivière-des-Prairies, I am greatly interested in the main thrust of this report we have before us, which consists of asking the government to reinvest in human resources, in education, in training, in health, in our young people, in a youth employment strategy, and also in developing our businesses.

I will add, of course, that it is also important to revise certain measures in our tax system with a view to ensuring greater equity, with particular thought to the most disadvantaged and the sector of the population hardest hit in recent years. This report contains a collection of proposals. Others can be added drawing on suggestions made during this debate. Some others could be considered as well. That is the purpose of this consultation within a parliamentary debate. Some other proposals could be taken into consideration as well, such as those from the Standing Committee on the Environment and Sustainable Development, which is calling for certain tax mechanisms to be redirected for the benefit of sustainable development.

I believe we must continue in the months to come to take a very serious approach to an exchange of views on these very important matters.

[Gary Pillitteri, Liberal, Niagara Falls, ON]

Madam Speaker, I am happy to be given the opportunity to participate in this debate and to speak on the prebudget consultation report.

I would like to express my support for the recommendations brought forward by the Standing Committee on Finance, of which I am a member.

I would also like to thank the constituents of Niagara Falls who responded so enthusiastically to my invitation to debate these issues. They provided valuable insight in the consultation process.

During the consultative process we heard from Canadians from all walks of life and all parts of the country. Canadians took the time from their busy lives to tell us how they thought the Canadian economy should progress and what direction it should take.

Canadians told us very openly and sincerely about their values and priorities and how the next federal budget should reflect them.

I support the report. However, one of the recommendations of the report about which I am concerned is increasing the 20% foreign investment rule, which will happen over the next five years. This is supposed to help Canadians achieve a higher return on their retirement savings and reduce exposure to risk.

I question this measure. I believe the Canadian economy is performing and will perform as well or better than foreign economies. In addition, I believe that a dollar invested in Canada creates employment in Canada. Even with the recovering economy, which seems to be booming in all sectors, Canada still needs to create more jobs.

In addition, the Canadian economy is the winner if funds are invested at home. In my opinion, those savings make it easier for domestic companies to raise the capital they need to stimulate economic growth. Growth is vitally important to future pensioners and workers. When all is said and done, it is the gross domestic product of the future which will inevitably have to support them.

People saving for their retirement forgo higher foreign investment returns and thus are making a sacrifice for the benefit of workers in the future.

During the budget consultations, in answer to a question on the subject of opening the door to investment outside Canada, the governor of the Bank of Canada, Gordon Thiessen, replied that at the moment the Canadian economy is undergoing a major restructuring. Canada needs many things, such as investment in new equipment and investment in plants, to make itself really competitive.

It is important for Canadian investors to be able to invest in the rest of the world and, indeed, in growing economies. However, Mr. Thiessen did not think this would occur in the immediate future.

I question foreign investment. Often we import the problems of the host country with the investment. A classic example would be Korea. It is now trying to withdraw its investments around the world, regardless of the problem of unemployment and dislocation that causes. It is often said that capital has no conscience. Certainly foreign capital is going to look at its own country before worrying about others.

In this day and age when there is much movement not only of goods and trade but also investment, it is a concern which we may have to live with. However, I strongly believe that we should watch it carefully. There is an old saying that whoever pays the piper calls the tune.

In the last 50 years important changes have taken place. Some are even reflected in the way the government does business.

One of these changes has to do with the way jobs are created today. Nowadays jobs are created not only by small, medium and big business but by the ideas, thoughts or concepts of people who are going after a niche in the market or are selling their ideas, plans or concepts. In other words, more often than not one of our big exports today is what is set up on a piece of paper or on a computer. This is unlike a few years ago when technology had not yet reached the level it is at today.

We have to bear in mind that the big income earners of the future are found in the minds of Canadians. They are found in the ability to be innovative and thus able to compete successfully within the global economy. Therefore it makes great sense that our resources and a great amount of care funds be directed to the development of the minds of Canadians. This naturally means education.

Education will start at a very young age at the preschool level and progress through post-secondary education. We must start educating our young minds. We have to start providing our youth and our parents with the help and tools necessary in developing their unique resources.

We also have to look very closely at our health care system because you cannot have a good mind without a healthy body. This is one of the oldest proverbs known to man. Therefore the recommendation in the report that calls for increased help for education and health care is to be taken very seriously. I concur fully with the report when it states in order to build a strong society we have to improve our health care system. I also agree with the recommendation that the government consider establishing new approaches to health care in full co-operation with the provinces and health care providers in local communities

As the fiscal dividends grow I am supporting the recommendations directed toward helping children who live in poverty. I support the creation of more opportunities for Canadian youth. It is vital that the federal government in co-operation with the provinces and territories be able to offer students a debt repayment schedule based on income.

As I said before, important changes have affected the way in which government has carried out its business in the last 50 years. Another important change has been in the field of planning. There are those in our society who say that we have gone too far and moved too fast toward an open market. We have learned one thing, that hiring a number of academics, sticking them into the civil service and telling them to plan our economy does not work. Therefore if we are to get any input or planning we must have hearings with the public. It is paramount that we consult with Canadians.

At least if a mistake is going to be made it will not be made by some ad hoc think tank dreamed up by the government and removed from the realities of everyday life. I think it was Chairman Mao who said let a thousand flowers bloom. This thought is the very essence of thinking and it is what we have discovered lately to be within our market economy.

Hundreds of thousands of people thinking and discussing new ideas are very likely to get as good idea to emerge. This is much better than having a few selected experts planning and finding solutions. We encountered all this during our consultations and indeed we find it in our report. The wisdom is out there. It is not in the bureaucracy as this report shows.

We have to remember that to have fertile and aggressive thinking minds we must also continue to support good health care and education systems. Those are the basics of a society.

[The Acting Speaker (Ms. Thibeault)]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Hochelaga—Maisonneuve, Immigration; the hon. member for Manicouagan, Rail Transportation.

[Angela Vautour, NDP, Beauséjour—Petitcodiac, NB]

Madam Speaker, I would like to ask the member across: With the cuts to the provinces and presumably the budget that will be coming up that is not going to have a whole lot in health care, I would like the member to explain to me how much—I am going to give him some calculations.

There is a gentleman in my riding who had a triple bypass about a year ago. He was sent home with medication and because his wife was making $6.25 an hour, he could not get the welfare card. This gentleman could not afford his medication and about two months ago he ended up back in the hospital and had a triple bypass and spent 45 days in the hospital.

Can the member explain to me how the Minister of Finance calculates the cost of having a person in the hospital for 45 days when the doctor said if this person could have had his medication, he would never have had a second triple bypass.

[Gary Pillitteri, Liberal, Niagara Falls, ON]

Madam Speaker, I thank the hon. member for her question concerning the medicare system. As a matter of fact, we have increased the bottom line from $11 billion to $12.5 billion starting this year, a year earlier than planned. I am not a mathematician, certainly not in answering the question on how someone is going to get a bypass, but let me say one thing. We have the best health care system in the world. We have.

By the increases that will be put in there, we certainly will continue to have the best health care system in the world. If we try to throw around facts and figures on how much it is going to cost, who would we compare it with? Would we compare it with south of the border to us where they are spending over 16% on health care and not getting the services that we are getting here in Canada as universal services? They have over 30 million Americans without the new services. We in Canada have a service which is accessible to all Canadians, slow as it might be sometimes, but we have a system which is enjoyed by all Canadians.

The hon. member also talked about cuts to the provinces. It is not necessarily the case that because we put in that $1.5 billion more in the social transfer, the provinces will be spending this money on the health care system. The health care system is a provincial jurisdiction. We do have the best—

[The Acting Speaker (Ms. Thibeault)]

May I remind the members to address their comments through the Chair, please.

[Angela Vautour, NDP, Beauséjour—Petitcodiac, NB]

Madam Speaker, my last comment the hon. member could reply to is that we are in a festive season. Most of us are going to have a very nice Christmas. I think we have to consider that there are a lot of poor families in this country today. We cannot say we are leaving this House very pleased because there are still too many children who will not have that gift under the Christmas tree and we have to say that this government is responsible for some of that.

[Gary Pillitteri, Liberal, Niagara Falls, ON]

Madam Speaker, the hon. member is exactly correct.

As long as there is one Canadian without a job, there is one too many. As long as there is one child going to sleep at night with hunger or waking up in the morning with hunger, there is one too many. Yes, we have to do much more. Yes, we are doing much more. This is the role of this government and the role on this side, to make sure that we care for those who least can afford it.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Madam Speaker, I spent one and a half weeks with the finance committee in October, travelling across Canada and listening to the concerns of ordinary Canadians. We visited the cities of Regina, Montreal, Halifax and Charlottetown when I was with the committee. Being new to this process and perhaps somewhat naive politically, I was initially impressed that Canadians seemed to have an impact on this very important legislative process.

During my time with the committee, many Canadians sat before the five government members and four opposition MPs and expressed their views on Canada's fiscal policy and the alternatives we now face as a nation. I was fundamentally disappointed that their concerns were not reflected wholly in this committee's report. For this government to engage in an ostensibly consultative process with Canadians without really taking their opinions seriously makes Canadians skeptical and indeed cynical.

As a political representative, I am even skeptical and cynical of this process that led up to the publication of this vacuous government self-serving document.

The Liberals take every opportunity in this House to blame the debt and deficit on the former Conservative government. However, in the 1998 forecast of the Economist magazine which came out recently, the Canadian section caught my interest in reference to fiscal policy and deficit reduction. I quote:

Much of the credit for deficit reduction goes to the passage of time and successful reforms earlier this decade. The fiscal drag has been offset by falling interest rates and record exports boosted by the undervalued Canadian dollar to a consistently prosperous America.

The Economist refers directly to free trade and NAFTA, the same agreements that the Liberals fought while in opposition, the same agreements that the Liberals fought against during an election, the same agreements that the former Liberal leader John Turner argued against just last night on the CBC news.

These are the Liberals who have allowed greater trade restrictions within Canada than we have internationally, that have allowed the insane situation to exist where there is more trade barriers between Ontario and Newfoundland than there are between Canada and Chile. Today the government's inaction on interprovincial trade barriers is costing Canadians hundreds of thousands of jobs. An increase in interprovincial trade by 10% would create 200,000 jobs.

The Economist article continued and said:

The imposition of a national sales tax in 1991 and the deregulation of financial services, transport and energy are now widely accepted as having contributed to deficit reduction.

Again, Conservative initiatives of which I am very proud.

The Liberals are not responsible for the passage of time. The Liberals are not responsible for interest rates or increased exports. We all know the Liberals are not responsible for free trade or deregulation or the GST, even though the Prime Minister recently took credit for introducing it internationally. The Liberals have no problem taking credit for the remarkable turn-around this economy has made due to the reforms by the previous Conservative government.

The Liberals would also like Canadians to believe that they are responding to the public by increasing the Canadian health and social transfer payments to the provinces. The report, in fact, applauds the government's decision to increase the CHST floor to $12.5 billion. In fact, the Liberal government is so excited about this exercise that it has announced it twice. The first announcement, I remember it distinctly, was in the opening days of the election in my home province of Nova Scotia. Unfortunately for the Liberals, the voting public of Nova Scotia was not taken in by this smoke and mirrors announcement or fiscal shell game.

Nova Scotians understood, and they still understand today, that the finance minister is not actually increasing the transfer payments as he would like them to believe. He is simply pledging not to cut transfers further, as he has done so dramatically and drastically in previous budgets.

I should probably thank the Minister of Finance for his generosity or lack thereof. It helped me and other colleagues from Atlantic Canada become elected to this House by Atlantic Canadians who had become cynical with this government.

The Minister of Finance made the same announcement this week prior to the premiers' meeting in hopes of softening the blow that the Liberals had given to the provincial governments over the past four years. The minister forgot to mention the $7 billion cut his government had made that had forced the provincial governments to inflict draconian cuts on their constituents across Canada.

In the same section of this finance committee report, the committee recommends a national home care system. Certainly in my riding of Kings—Hants the promise of a national home care system sounds very seductive. With the reduction in transfer payments, local hospitals in my riding have been forced to close or reduce the numbers of beds. The Hants Community Hospital has been reduced from 128 beds to approximately 30 beds. Western Kings Memorial Hospital and Eastern Kings Memorial Hospital have suffered cutbacks or have been closed. In some cases the responsibility of providing health care has been shifted to community based boards that now struggle just to keep viable medical services in this area.

The federal government now has the gall to reduce funding to the provinces, forcing bed closures in communities across Canada and then recommends this glistening generality of a policy initiative called a national home care program to make up the difference.

Perhaps the government intends to put the same amount of resources into the home care program that it has committed to national day care or to the pharmacare program that it has spoken of in the past, or will this national home care program simply go into the annals of political rhetoric which Canadians have come to expect from this government.

There is a feeding frenzy going on right now in the Liberal caucus, a feeding frenzy which is akin to that of sharks when they smell blood. There is nothing that incites conflict more in the Liberal caucus than the smell of hard currency around the snouts of Liberal backbenchers.

I remind the members of the Liberal caucus that this feeding frenzy is highly premature. If the finance minister was not using the $12 billion to $13 billion surplus in the employment insurance fund to offset the deficit numbers, the arrival of this fiscal dividend would occur much later than the date that he is projecting.

Our leader has made this point clear on a number of occasions. The fact is that the Minister of Finance is balancing the budget on the backs of working and unemployed Canadians.

I agree with the report's recommendation that the government establish clear goals for long term sustainable debt to GDP ratio in Canada. Our party ran on a platform that included just that. In our policy document we promised to set a target of 50% debt-GDP ratio by 2005. The current Liberal strategy is to wait until the economy grows and see how the ratio falls. This is in direct opposition to a study released last month by the OECD which recommended the ratio be put in a clear downward trend with clear targets.

Canadians know the simple fact that this government has yet to learn. By paying off the debt all taxpayers will have less interest to pay and will benefit by reinvestment in programs in the future. By paying off the debt government funds can be reinvested in these programs.

Even European countries previously not known for fiscal fortitude required debt to GDP ratios of 60% simply to comply with the Maastricht agreement.

Our country is floundering now with debt to GDP ratio of approximately 70%, the highest of all G-7 nations. This is a competitiveness issue. A low debt to GDP ratio increases Canada's global competitiveness, strengthens our economy and creates jobs for Canadians.

Liberals obviously feel that the status quo is acceptable. While dilly-dallying and dithering in caucus over how to spend the dividend, Canadians wear the heavy yoke of government inaction. Unfortunately, it is those same ordinary Canadians who suffer by that Liberal government inaction.

The PC Party believes that we need to couple debt reduction with tax relief and strategic social investment. No one action should dominate another. Instead, the three should be used to complement each other and to strengthen the economy. New strategic investment is needed in areas that will create real returns for Canadians with measurable outcomes in terms of quality of life and international competitiveness.

At this time strategic investment in education in particular is extremely important and addressing the post-secondary student debt issue is extremely important. I was pleased to see that there are some members in this House who agree with me and there has been a committee report to that effect.

In October I met with the Canadian Academic Round Table. They had their annual meeting in my riding.

I learned there had been a 280% growth in student debt in Canada since 1989 and a 110% growth in tuition costs. We should consider the impact on the future competitiveness of Canada of creating a huge impediment for young Canadians to pursue higher education. We should consider that we are in a global economy and the knowledge based industry is leaving most other sectors.

For the first time as a country, Canada has an opportunity to invest in our competitive advantage and to ensure that young Canadians have an opportunity to participate in prosperous growth by having access to higher education. The government has created huge impediments to higher education and irrevocable damage to the future competitiveness of Canada.

The third part of our plan for economic prosperity is tax relief. Current tax levels in Canada run counter to our culture. Our current tax system penalizes initiative. Wood Gundy reported this month that Canada's personal income taxes as a share of GDP are the highest of all G-7 countries. From 1989 to 1993 the Conservative government reduced the percentage of personal income tax as a per cent of GDP from 14% to 13%.

Since 1993 the Liberals have hiked the ratio to over 14%. Let us make it clear that the PC government reduced the personal income tax to GDP ratio and the Liberals hiked it up.

I like to think of tax relief in terms of a Canadian family that budgets its money every year. Canadians and Canadian families have a better idea of how to spend their own money than the government. The finance minister feels that once the economic crisis which is being dealt with on the backs of ordinary Canadians is under control, the government has the right to dictate to taxpayers how their money should be spent. The government is fundamentally wrong in its judgment.

Higher taxes reduce disposable income in two ways. The obvious is the reduction in the paycheques of taxpayers. The second is the long term reduction in economic growth which results from weaker incentives to work and to invest and the reduction in the international competitiveness of Canadians.

The tax gap between Canada and the United States, as well as that with our other trading partners, continues to increase. The OECD report warned that unless significant measures were taken in Canada we were risking a serious brain drain. That has already begun. Based on the numbers in the House today I would expect that it is occurring quite rapidly.

Young Canadians are the brightest light in our country. We cannot afford to lose them to other countries. I see no serious mention of tax relief in this report. These taxes create a competitive disadvantage for Canadians relative to our closest neighbour and greatest trading partner, the United States, leading to lost opportunities and lost jobs.

Tax burdens are also related to all levels of employment. The Liberals boast of job creation since taking office, but Canada's unemployment rate has been consistently greater than 9% for 86 straight months. Canada's high tax burden has been shifted to the bottom of the wage scale through the payroll taxes the Liberal government continues to support, most recently with the CPP amendments.

The report gives additional resources to helping poor children once the fiscal dividend grows. Everybody in the House feels that child poverty is an important issue which needs to be addressed, but the Liberals have no credibility when they pontificate about programs for impoverished children in Canada.

The children are not the root of the problem. Poor children exist because of poor parents, unemployed parents and parents who have had the Canadian budget balanced on their backs over the past four years. The Liberals simply want to throw money at this problem because it is politically expedient and does not require a great deal of vision to do so.

We must address the tax system in Canada. High payroll taxes in particular create the single biggest impediment to job growth that we face as a nation. As a small business person I recognize that when payroll taxes increase I am not able to hire the number of people I would like to hire. A number of small business people in our caucus helped lead us to the consensus and the understanding that high payroll taxes are in fact killing jobs across Canada.

The basic personal exemption should be raised to $10,000, as we promoted during the election. This would take two million low income Canadians off the tax roll and provide them with a fresh start.

We can draw on other examples when determining what to do in the future to guide Canada victoriously into the 21st century. We can look at the Netherlands. In 1983 it had an unemployment rate in excess of 13%. By reducing payroll, by reducing income taxes and by reducing regulations which hinder the development of small business, the Netherlands has been able to reduce its unemployment rate to sub 7% levels. That is what leadership can achieve.

The report tabled by the Liberal finance committee is a biased and unfair representation of what we have heard from Canadians. It is a direct slap in the face to the process of consultation and an offence to many Canadians who took time out of their schedules to create reports and to make meaningful interventions to the committee. At the end of the report is my party's dissenting opinion.

The government and its report continue to ignore what Canadians already know. Debt and tax reduction will lead to a stronger, more self-reliant and competitive Canadian economy. We can reduce Canada's 9% unemployment rate, but not until we have the vision and the intestinal fortitude to implement policies which create a growth environment to benefit all Canadians.

[Andy Mitchell, Liberal, Secretary of State (Parks)]

Madam Speaker, I listened with great interest to the member opposite. He suggested that the economic prosperity Canada was enjoying today was the result of Tory policies of the previous government.

Obviously the first question he might want to ask himself is why after the last election the Tory party returned as the fifth party in the House. If the viewers could see the full Chamber they would see the small section the Tories occupy.

More important, the member should want to ask some very specific questions. He expressed frustration in his speech about the consultative process. Maybe he would want to ask why the former Tory government had no consultative process when it came to formulating its budget. It never went out to consult with Canadians. The finance committee, under the Tory regime, never has a prebudget consultation. It was simply all done by Michael Wilson in some backroom when he came up with his budget.

How did it help Canada reach economic prosperity? When the Tory government took over there was about a $28 billion deficit, but when it left it was at $42 billion. It had increased by this massive amount.

The Tories are trying to say that we should look at them as being the genesis of our economic prosperity. The Liberal government has been in power for four years and the deficit disappeared. They were in power for nine years and it went from $28 billion to $42 billion.

The member talked about the fact that the debt to GDP was far too high, and it is. What he failed to point out was that when the Conservative Party took over it was in the 50% range and when it left it was over 70%. Again I have to ask the hon. member if that is an example of the type of Tory management which led to the great prosperity we see today.

They have talked about EI premiums. When the Tories were in power the UI premiums went up by over $1. When we came to power they were scheduled to go to $3.30. In reality today they are down to $2.70. Is this another example of how the Tory policy has led to the economic prosperity of today?

The member also talked about unemployment, a significant problem in Canada. It is a challenge for all of us to try to address. Was the fact that the unemployment rate had increased to 11.3% when the Tories left office and is now down to 9% today under a Liberal regime an example of their economic policies that have led to the prosperity we enjoy today?

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Madam Speaker, I thank the hon. member for his question. His depth of knowledge on economic issues is obviously only exceeded by his height.

The fact is that economic policy takes years to have meaningful impacts. I cannot explain an international phenomenon. For instance, the U.K. is enjoying one of the most unprecedented levels of economic growth as a direct result of Conservative policy. Unfortunately Conservatives simply try to help by providing sound economic policy but sometimes the benefit falls to a government that has failed to catch on to implementing sound economic policy. It takes years of vision to put in place the fundamentals for an economy to grow.

I was not referring to my own opinion about this issue. I was quoting The Economist , a pretty good magazine, which costs about $172 a year to subscribe. It is to be considered. If I felt the Conservative Party of Canada could influence the opinion of The Economist , that would be considerable for the fifth party, which would also bode well for where we will be in four years, which I suggest will be the side the hon. member is currently sitting on. The Economist magazine stated specifically that much of the credit for deficit reduction goes to the passage of time and to the successful reforms implemented earlier in the decade. It was not early in the decade in 1984. It was early in the decade of the 1990s.

The fiscal drag has been offset by falling interest rates and record exports boosted by an undervalued Canadian dollar to a consistently prosperous America. I would like to know where the hon. member stood at that pivotal time in Canadian history on such issues as free trade.

The government now talks glowingly about Liberalized trade. One day it signs an agreement with Chile. Another day it is one with Israel. However it still does not bring down interprovincial trade barriers within Canada.

When the members opposite speak about consultation, who benefits from consultation around the country, listening to Canadian taxpayers spending copious quantities of quid and then ultimately implementing policies completely opposite to those expressed by Canadians? Perhaps it would have been better not to have done that. Maybe we could have invested that money to pay off the debt or reduce taxes.

Don Blenkarn as finance committee chair actually consulted with and listened to Canadians. The Conservative government had enough vision to implement the views of Canadians and to ensure those views were reflected in policy which led to the more recent unprecedented growth of the Canadian economy.

Reference was made to payroll taxes. There are times when payroll taxes need to be increased, for instance during times of recession when the economy needed sufficient EI funds. There are times when it is required.

Liberals do not recognize it, but Keynes was actually right in terms of government spending during times of recession to bring a country out of a recession. If they listened to Keynes a little further—they probably did not get to that chapter—Keynes also advocated paying down the debt when the economy was growing. Now is the time to pay down the debt.

I may have introduced the member to some facts he was not previously introduced to when I told him the Conservative government reduced income taxes as a percentage of GDP from 14% to 13% between the years of 1989 to 1993, only to see them hiked under the Liberal government since 1993.

Let us be perfectly clear. We created the environment which led to a fiscal dividend. We are very proud of that contribution. We are looking forward in four years to adding further to Canadians competitiveness by being on the government side of the House.

[Ted McWhinney, Liberal, Parliamentary Secretary to Minister of Foreign Affairs]

Madam Speaker, I congratulate the hon. member on an eloquent, low key address.

I noticed with interest his remarks on higher education. Would he support what is called a functional interpretation of constitutional powers, where the need exists the power sensibly should flow? In other words, there is an increasing federal leadership role in setting national standards in education. That is a constitutional area that in the strict terms of the Constitution Act, 1867 was specified as being provincial.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Madam Speaker, in our platform we actually called for national testing as one way of ensuring that Canadian children across this great country received the same educational opportunities. Young Canadians going to school in Port-aux-Basques should be provided with the same level of education as children growing up in Toronto. Parents should be able to know where their children rank across Canada. That requires leadership to implement and Canadians will have to wait for four years for that kind of leadership.

[Andy Mitchell, Liberal, Secretary of State (Parks)]

Madam Speaker, I will be sharing my time with the Parliamentary Secretary to the Minister of Foreign Affairs.

To begin with I must say to the hon. member for Kings—Hants that I am proud on behalf of all vertically challenged Canadians to have an opportunity to stand in the House to speak in this prebudget debate.

This initiative was established by the Liberal government in the last mandate in 1993. It was to give parliamentarians an opportunity to gather in the House to debate the budget during its formulation process as opposed to the previous practice of having a budget debate after the tabling of the budget. I am pleased that we as members of Parliament have the opportunity to be here because of this Liberal initiative to have a prebudget debate.

I would like to congratulate all the members of the finance committee, particularly the chair. They did a fine job. They travelled across the country soliciting views from Canadians from coast to coast to coast. Members of the committee ensured that the perspectives of Canadians were brought forward and were part of the analysis in putting together the report.

During its first mandate over the last four years the Liberal government made significant progress. Some of the items I mentioned earlier in debate. When we began our mandate we inherited a $42 billion annual deficit. I was pleased, as I know all Canadians were, when the finance minister was able to make his report to Canadians and indicate that the deficit would be eliminated no later than the next fiscal year.

In reality, several hundred million dollars have already been paid on the debt. We will actually be in a surplus position very shortly. That is a significant accomplishment when we consider it has been a generation and a half since we have been in that position as a country.

I talked a bit about setting strong economic conditions, which we have established in Canada over the last four years. I would like to take a look at some of those achievements in terms of maintaining a low, sustained, constant level of inflation to allow for an economic environment where investment can occur.

Let us take a look at interest rates. If we go back to the beginning of this decade, in 1900 three month treasury bills were at 11%. Today they are at 3%. We were looking at a prime rate in 1990 of 14%. Today it is under 5%. Canadians can very much relate to the rate of interest they pay on their mortgage for their new home. In 1990 a five year rate was around 13.5%. Today it is just a little over 7%.

We have made some good progress. Because of that progress, because this Liberal government has managed the economy of Canada prudently, effectively and efficiently, we now as a nation, as a Parliament, as a government have some important choices to make about where we go from here.

During the election campaign many suggestions were put forward by many parties and many individuals. This government put forward the very straightforward proposal that once we get into a balanced position and we have a surplus, we will take a 50% portion of that surplus and apply it to debt and tax reduction. Over the period of our mandate we will use the other half to invest in the types of programs and priorities wanted by Canadians.

We have been having that discussion with Canadians in order to hear their perspective, to hear what they think about our proposals. Over the past couple of months I had the opportunity to hold two forums in my riding of Parry Sound—Muskoka. One was in the town of Huntsville which was attended by a large number of individuals from the Muskoka side of my riding. The other session was held this past week in the town of Parry Sound which was attended by a large number of people from the Parry Sound side.

We talked about those options, about debt reduction, tax reduction and expenditures. I will summarize what some of those individuals were saying. There was not only a belief but an insistence that we do not ever return to deficit financing in government, that we should bring to an end what had been going on in this country for a number of decades, the deficit financing where we basically use the assets of today for our use and burden our children and grandchildren with the cost of that. Canadians in my riding were very clear to say that must come to an end.

They said very clearly that they understood we were nearing the end of our battle with the deficit, that indeed the debt was too high and that we needed to devote some of our resources to paying down that debt. They talked about tax decreases, and yes they do believe we need to have tax decreases. But they made the point clearly that tax decreases must be made in a way that is the most beneficial to Canadians and most beneficial to our economy.

They are not interested in across the board tax cuts that give the largest financial gain to those Canadians who earn the most. They want targeted tax cuts. Tax cuts like what the Minister of Finance announced in his last budget where he talked about $850 million to low and middle income families with children, where he talked about the tax cuts of over $160-odd million to Canadians with disabilities, tax cuts that would help young people with their education and help the parents who support them. Those are the types of tax cuts Canadians want, focused tax cuts that will help those who are least advantaged in society.

They are not interested in large across the board tax cuts. They are not interested in a suggestion made in the Tory campaign platform, to reduce corporate taxes which would have seen our chartered banks receive reduced taxation. They want tax cuts targeted to those in Canada who are most in need.

They talked about the need for new investment. They talked about the need to protect our social programs in Canada. They talked about the need to support programs like medicare. They talked about the need to support things like post-secondary education. They talked about the need to try to stimulate economic activity so it could lead to job creation.

One of the important initiatives that I believe needs to be addressed in this budget is the whole concept and need to deal with the issues that involve rural Canada. I represent a riding that is rural in nature. We are about 30% of the Canadian population. I think we have accomplished and made the point over the last few years that the circumstances under which our constituents live in rural Canada are different than those in urban Canada.

The realities and the economic conditions we face are unique. Things like distances, geography, population density are all factors that need to be taken into account when we develop a budget.

I made this speech on a number of occasions in past debates when we talked about the budget. I would hope that as we formulate those policies, whether they have to do with tax reductions and the type of tax reductions we undertake, or the types of investments that we believe Canadians want and we should undertake, that they reflect the needs and concerns of rural Canadians and that they reflect the economy under which we operate and that we as a parliament make sure that the needs and concerns or rural Canadians are addressed.

I am pleased to have had the opportunity to have spoken on the prebudget issues. I am pleased to have had the opportunity to share some of these thoughts and concerns with my colleagues in the House. I look forward to next February when the finance minister tables his budget in the House and we see another important step on the way to the economic progress of Canada.

[Angela Vautour, NDP, Beauséjour—Petitcodiac, NB]

Mr. Speaker, the member opposite seems to know what is happening with the parks. He says that rural communities are important and that the budget should take them into account. I agree totally. My riding is highly rural.

I am nevertheless concerned and wonder about my Liberal colleague's opinion. Does he agree with the decisions to date to privatize our national parks, which bring us to ASD, which cut salaries and which complicate life even further? Often national parks are in rural settings, and the decisions made by this government department simply compound the economic problems of our communities. Could he explain to me his thoughts on his government's approach to parks?

[Andy Mitchell, Liberal, Parry Sound—Muskoka, ON]

Mr. Speaker, I will reiterate very briefly what I said in a speech when I introduced the Saguenay-St. Lawrence bill. We have not contemplated, are not contemplating now and will not be introducing into this House any measure that will privatize Parks Canada.

We as Liberals understand that the maintenance of our special places in this country is a public trust, a public trust that is exercised through a minister and overseen by this Parliament. That is the way Parks Canada operates and that is the way Parks Canada will continue to operate.

I would be pleased at any time to have a discussion with the member to clearly demonstrate that that is the way we operate.

[Murray Calder, Liberal, Dufferin—Peel—Wellington—Grey, ON]

Mr. Speaker, I listened with a lot of interest to the hon. member, especially when he talked about rural Canada. As a farmer that is very close to my heart.

Right now we are moving into the next millennium and we have heard the hon. member for Victoria—Haliburton talk many times about his rotary dial cell phone. Quite frankly we just do not have the services in rural Canada that we should have in order to be viable.

In the last budget there was extra money put into the Farm Credit Corporation. There was extra money put into the Business Development Bank of Canada. I would like the hon. member to enlighten us on what he foresees should go into these good institutions that are helping rural Canada meet those challenges.

[Andy Mitchell, Liberal, Parry Sound—Muskoka, ON]

Mr. Speaker, the hon. member makes a very good point. During the last budget there were measures which were directed at rural Canadians.

The community access program had an extra $30 million put into it so that rural Canadians could be hooked into the worldwide web. One of the difficulties is this. Although that type of technology is easily obtained in a large urban centre, it is just now that we are having an opportunity to place that infrastructure into rural Canada. Those types of things are important. I would like to see that type of initiative continued through the next year.

We talked about the investments we made in the Business Development Bank of Canada. That was an excellent example where we saw a targeted program aimed specifically at tourism operators operating in rural areas. That is the kind of initiatives that I talk about when I say we need to design our programming in a way that reflects the needs of rural Canadians.

It was the same thing when we saw the extra investment made in the Farm Credit Corporation, again recognizing the needs of rural Canadians, recognizing the need to develop programs that are in the best interest of rural Canadians.

[The Deputy Speaker]

The hon. member for Etobicoke—Lakeshore, on a point of order.

[Jean Augustine, Liberal, Etobicoke—Lakeshore, ON]

Mr. Speaker, I am asking for unanimous consent for a motion that has been agreed to by all parties in this House, seconded by the members for Ottawa Centre, Ottawa West, Edmonton North, Saint John, Winnipeg North Centre and Laval East. I move:

That, in the opinion of this House, the government should consider the request of the Famous Five Foundation to honour the memory of Emily Murphy, Nellie McClung, Irene Parlby, Louise McKinney, Henrietta Muir Edwards, the Famous Five, by allowing a statue commemorating them to be placed on Parliament Hill.