House of Commons Hansard #146 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was budget.

Topics

The Budget
Government Orders

11:35 a.m.

Bloc

Richard Bélisle La Prairie, QC

Madam Speaker, I listened to the speech by the member across the way, and I would like to ask him two questions.

Does the member agree that the finance minister is giving himself room to manoeuvre by hiding up his sleeve, according to Bloc Quebecois estimates, $8 billion this year and $14 billion next year?

Would the member agree that these sums of $8 billion and $14 billion should be used to restore the levels of transfer payments to the provinces? And this is particularly important since the member comes from a maritime province which greatly needs its transfer payments, which were cut by the finance minister. Moreover, instead of keeping these large amounts as a reserve, the minister could reinject them into the economy in order to help unemployment insurance claimants recover their former benefits.

Is the member ready to support the Bloc Quebecois in its efforts to have the reserves hidden by the minister used to restore transfer payments that have been cut from the provinces, and the money taken from the unemployed, since it is their money after all?

The Budget
Government Orders

11:35 a.m.

Liberal

Roger Simmons Burin—St. George's, NL

Madam Speaker, I thank my friend from La Prairie for his question. However, I must have missed the preamble to his question because I did not fully understand what the conspiracy was. He said that the Minister of Finance is hiding some $8 billion. Could he be a little more specific. I will attempt a response.

The Budget
Government Orders

11:35 a.m.

Bloc

Richard Bélisle La Prairie, QC

Madam Speaker, I will rephrase my question. According to the calculations made by the Bloc Quebecois, the minister could have lowered the deficit a lot more this year. It is said to be around $17 billion, but according to the latest trends, the real figure, which will be known in the next few weeks, could very well be around $10 or $12 billion. In the next few years, probably by 1999 or by 2000 at the latest, the Canadian deficit will have been eliminated.

The Bloc Quebecois calculated that, by announcing a $17 billion deficit for this year, the Minister of Finance has kept $8 billion up his sleeve for this year and probably $14 billion for next year.

Could all the billions the minister is keeping in his pocket be given back to the unemployed who have been robbed by the

government's employment insurance scheme? Instead of hiding all those billions to bring the deficit down to zero as fast as possible, would it not be better for the government to give back the$4.5 billion cut in transfer payments to the provinces?

The Budget
Government Orders

11:40 a.m.

Liberal

Roger Simmons Burin—St. George's, NL

Madam Speaker, one of the things we whisper on our side is that the Minister of Finance is really a closet conservative. Certainly on fiscal matters it is well known that he is a conservative. If we look at his record of budget making over the last three or four years, we will notice that on the matter of projections about employment levels, deficit levels and so on, he has always been a bit cautious.

What my friend from La Prairie characterizes as hiding I would put in another context altogether. I would submit that the Minister of Finance is being true to form here in that while he has projected a deficit of $17 billion, I am sure, as the member suggests, that the Minister of Finance is hopeful it will come in below $17 billion. I would not subscribe to the suggestion that somehow he has been duplicitous and is somehow hiding a lot of money. He is just being himself and is being a bit conservative.

Let us hope the member for La Prairie is right that the deficit is even lower than the $17 billion projected so conservatively by my friend.

The Budget
Government Orders

11:40 a.m.

Reform

Ed Harper Simcoe Centre, ON

Madam Speaker, I will be sharing my time with the member for Fraser Valley East.

It is with some disappointment that I get up today to speak on this fourth Liberal budget. It is a good time to reflect on the fact that it is the fourth budget. In my view it is the second really do nothing budget of the four. I say that because the first budget introduced by the finance minister was a stand pat, do nothing budget. It was not until his second budget that the government acknowledged the seriousness of this country's deficit and debt. He did start to make some moves to deal with that serious problem. But in the second and third budgets he did too little. It was too little, too late. Of course, this fourth budget is an election budget. It is stand pat, status quo which has serious consequences on the country as a whole.

This fourth budget gives absolutely no hope to those who are unemployed. Despite the election promise of jobs, jobs, jobs, the same number of Canadians are now looking for work as when the government was elected. There are about 1.4 million Canadians who are still looking for jobs. There are about two million to three million underemployed Canadians. About one in four Canadians is employed but is worried about their ability to hold on to their job. There is tragedy among our young people with a youth unemployment rate of 16 per cent. This is an extremely serious issue which the government has failed to address in its budget. We have had 76 months of straight unemployment in excess of 9 per cent. That is the worst record since the depression.

There was no hope in this budget for the crushing tax burden that is faced by all Canadians, be they consumers or part of the business community. It is unbelievable that after four budgets we still have no commitment to a balanced budget. The finance minister says that we are heading in that direction but there is no firm commitment, no timeframe, no date set to indicate when we will have the books in balance.

The budget says to a lot of Canadians that they are reluctant to slay the monster they created. They want to keep that avenue open. There are those in government who are saying the era of cuts is over and they can now start spending again when we are approaching $620 billion of debt.

In the budget tax revenues will be up $4 billion. They will be $24 billion higher than when the government took office in 1993. When the finance minister talks about his war on the deficit and we take a look at how he has achieved the reductions in the deficit, 71 per cent of those reductions have been accomplished through increased revenues and only 29 per cent have been achieved by expenditure reductions. There is much more that could be done and much more that should be done.

Those expenditure reductions have been mainly reductions to the provinces in transfer payments. There has been $7 billion in cuts to health care and education in our social programs by a government that gets up day after day and talks about being the defenders of health care.

Since the government was elected in 1993 it has introduced 35 tax increases. Just before the budget was presented the 36th increase was introduced. It is indeed a killer. It is a $10 billion tax grab under the increases in the CPP.

The finance minister argues that it is not payroll tax, that it is an investment. However when it is compulsory out of payroll, from the taxpayers' pockets to the government's pocket, that is a tax. When the government sets the rate that is a tax. I would like to see anyone in government defend what the finance minister is saying to young Canadians, that this is an investment. Young Canadians are struggling to make ends meet. They are not looking for an investment. They are looking for some tax relief so they can keep their heads above the water and pay the debts that are mounting.

Earlier finance minister acknowledged that payroll taxes were a cancer on job creation. Apparently he has changed his mind on that, but members on this side have not changed their minds. Payroll taxes are a cancer on job creation. As a matter of fact the finance department issued a report recently on the number of jobs that were lost on the modest increases in CPP between 1986 and 1993. About half of what is being proposed this time cost Canadians 26,000

jobs. This will create a loss of jobs but the government has yet to acknowledge how many.

The debt will be about $620 billion by the end of 1997-98. That is our collective shame and our challenge. The government says we are acknowledged as the number one country by the United Nations. We are the number one country in the world. I will not dispute that but I will take exception to the fact that we have more mortgaged our children's future to achieve that number one status. We have not paid our way. That should be our shame.

Since the government was elected it added $111 billion to the debt. The finance minister has gone on about reducing the deficit from 5 per cent to 4 per cent and 3 per cent of GDP. He has not mentioned the fact that we have seen the debt go from $500 billion to over $600 billion. The additional $111 billion the Liberals have added represents about $8 billion in additional interest servicing costs, approaching a total federal interest bill of $49 billion or35 per cent of revenue. That is more than the government is spending on pensions, employment insurance, health education and social programs.

When dealing with those kinds of numbers a 1 per cent increase in interest rates could add potentially $4 billion to our debt servicing costs. Yet I hear the government cheer the fact that the finance minister is talking about only overspending by no greater than $19 billion. I find that no cause for cheering. We are still living beyond our means. Our debt to GDP ratio is the second highest in the G-7.

European countries that want to join in the common currency must be below the 60 per cent target of debt to GDP. Ours is currently much higher than that at about 74 per cent.

What is lacking in the budget and in government's thinking is vision. There is no plan. I read in the paper the Prime Minister has now realized how important vision is. It is encouraging that he is to start getting a vision for the country. There has to be a better way than 76 months of straight unemployment over 9 per cent.

All we have heard from the government-and we heard it today and we will continue to hear it-is that its only jobs strategy is lower interest rates. This will create employment. Lower interest rates are something the government does not have full control over. They are very volatile.

The government encourages borrowing when it should be doing just the opposite. It should be encouraging Canadians to save and to pay their way.

Let us look at the climate for lower interest rates in Canada today. On Saturday the Globe and Mail published an article about record consumer bankruptcies.

I wanted to get into the better way, the Reform way, but I see my time is up.

The Budget
Government Orders

11:50 a.m.

Liberal

Paul Szabo Mississauga South, ON

Madam Speaker, in his statement the member challenged anybody to convince him otherwise that the CPP increases were not a tax or that Canada pension plan premiums were not a tax.

Let me put on the table a couple of facts on the record for the member. He will know that today's pensioners, those people collecting CPP today who have contributed the maximum throughout their careers, are receiving $8 for every $1 for they contributed. That amount tends to indicate that it is not a sustainable situation. When there are five working Canadians for every one retiree it is sustainable, but when the ratio decreases to three to one something has to be done. That is why the changes were made.

As an aside, the member will know that the increases proposed by the government are 9.9 per cent whereas his party is recommending something like 13.5 per cent. If it is a tax in the member's view, why is it that the collection of Canada pension plan premiums does not go into government revenue and therefore reduce the deficit?

When employers pay a little more CPP they have a higher deduction, lower income and thus pay lower corporate tax. The corporations have to pay the additional amount. All other things remaining equal their corporate taxes are going down. In fact the deficit will increase further.

When individuals have to pay additional CPP premiums from their paycheques it reduces the amount of income tax they pay and government revenue goes down further. No matter how we look at it government revenue is going down and the deficit is increasing as a result of the increase in the Canada pension plan.

Does the member not agree that the increase in Canada pension plan premiums increases the deficit of the Government of Canada?

The Budget
Government Orders

March 18th, 1997 / 11:50 a.m.

Reform

Ed Harper Simcoe Centre, ON

Madam Speaker, I thank the member for his question. I do not know from where he got the statement that revenues were going down. When I looked the budget over that escaped me completely. Government revenues have gone up. It is right there and it is indisputable.

The Budget
Government Orders

11:50 a.m.

Liberal

Paul Szabo Mississauga South, ON

CPP does not increase revenues.

The Budget
Government Orders

11:50 a.m.

Reform

Ed Harper Simcoe Centre, ON

I know that. It is outside the budget but it is a payroll tax. The member said that it was not a tax. When the government takes out of employees' pockets and it is compulsory, I challenge any member to debate with working Canadians that it is an investment and not a tax. They are not looking for an investment. They are looking for a tax reduction. It

is a payroll tax. The finance department has said it is a payroll tax. The member's play on words will not fool Canadians. Regardless of how it tries to fudge the issue it is a reduction in the take home pay of Canadians.

The corporations are telling the government to reduce payroll taxes to help them create jobs. The government is talking to the corporations but is not listening to them. They are asking the government to do exactly opposite to what it is doing if it is serious about creating jobs in Canada.

The Budget
Government Orders

11:55 a.m.

Liberal

Dennis Mills Broadview—Greenwood, ON

Madam Speaker, I listened carefully to the remarks of the member for Simcoe Centre. The notion of comprehensive tax reform is an area on which the House should be engaged in full debate in a very active way.

I am totally opposed to the member's obsession with deficit and debt. We took a position in the House of Commons four years ago that we would get the fiscal framework of the country in order and that if we did so private sector industry would pick up the slack. We would create an environment so that all these people could somehow create jobs. The fact of the matter is that industry has not done that. It has not come to the party.

What does the member believe we have to do in the House to get industry active in the game of job creation?

The Budget
Government Orders

11:55 a.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

I will allow about 30 seconds for the hon. member to answer.

The Budget
Government Orders

11:55 a.m.

Reform

Ed Harper Simcoe Centre, ON

Madam Speaker, 30 seconds. It will be a short response from a short member.

The Budget
Government Orders

11:55 a.m.

Reform

Ted White North Vancouver, BC

I am the short member in this place.

The Budget
Government Orders

11:55 a.m.

Reform

Ed Harper Simcoe Centre, ON

Industry is not reacting because industry is looking for the government to get its fiscal house in order. Industry is looking for the government to make a commitment to a balanced budget and the government has not done it.

The Budget
Government Orders

11:55 a.m.

Reform

Chuck Strahl Fraser Valley East, BC

Madam Speaker, it is a pleasure to speak on the budget somewhat after the fact. The budget has kind of come and gone like the proverbial wind in a barnyard, but it is still with us today in debate. It will be with us in the upcoming election whether it is this spring or next fall.

It is good to talk about budgetary items since budgetary items will affect every department and all Canadians because they are footing the bill for the budgetary priorities of the government.

In the wake of the budget many people are asking why they do not feel so good if this is a feel good budget. Where are the benefits? What will the government do to address that we now have over 9 per cent unemployment for 77 consecutive months? The 1.5 million unemployed that shocked the Liberals when they were in opposition is the same 1.5 million unemployed of today. Many people do not see the benefits.

People are also saying they are not sure the government's priorities on spending are where they should be. When I talk to people they say the government's priorities should be a good health care system and a pension system that is supportable and gives the benefits needed. They see the federal government has cut health care and education funding to the provinces by 39 per cent since it came into power. They see hospitals closing. They do not see a lot of benefit for them.

They also see the government raising CPP premiums by 73 per cent. Private contractors will pay $3,270 per year in CPP contributions if they are their own boss. They must pay their entire working lives almost $3,300 per year all for less than a $9,000 per year pension. This is quite a contrast to the MP pension plan that the government has schemed to maintain. It will pay the equivalent of millions of dollars to some members of Parliament for a relatively few years of work.

There is no plan for tax relief in the budget. That is a shame for individuals who have seen their net income drop by some $3,000 a year since the government took office.

It is also a shame because private industry does not see why or how it is going to be able to afford to hire more people. Payroll taxes continue to go up. The general taxation level is staying too high and the federal government does not seem to be listening to businesses.

Provincial governments, for example the Alberta government, have asked the federal government to have a look to see what lower tax rates and the lowest tax rates in the country mean the most job creation. It is a direct correlation. Why does the federal government not see that?

All this comes in the context of the Liberals now doing their spinning as much as possible to try to create the impression that the Prime Minister is a man with vision, that he can see into the future, that he is able to see what we need and where we are going.

I do not know whether Canadians believe that. Certainly none of what the federal government has done to date budget-wise was visionary, especially its own red book promises. It is now rather waffling in the area of, do I borrow more money, or do I spend a little more on some programming, should I reduce the deficit, is tax relief a good idea or not?

A little while ago the Prime Minister said that tax relief was un-Canadian. Now we hear the finance minister saying that tax relief would be good some time, he just does not know when.

The national debt will exceed $600 million next year, some$111 billion more than when the Liberals took office. Deficit reduction is due mainly to higher revenue and not to reduced spending. The deficit remains some $19 billion, which proves that the country does not have a revenue problem. Revenues are up. We seem to have a spending problem but the government will not address that.

Since the Liberals took office, tax revenues have increased$30.4 billion. The Liberal vision seems to be that it is okay that the average taxpayer sends some $10,200 to the federal government each and every year, $3,400 a year to service the debt alone.

If that is the vision, then it is no wonder that so many Canadians are working two jobs, that they are moonlighting, that many of them are working on the underground economy and that people are saying they have to do what it takes because if they play by the rules this government is setting, they cannot even feed their families. That is where lack of vision from the Liberals is hurting the average Canadian family.

There are 7.3 million Canadians earning less than $30,000 a year. The Liberal vision seems to be that that is somehow okay. In other words, the chronic problem of the working poor is somehow okay.

Again I mention that by 1998 the Liberals will have cut health and education payments to the provinces by $7.5 billion while cutting its own spending only that much as well. In other words, a lot of the deficit reduction which it has been able to achieve is on the backs of the provinces with the reduced health and education transfers.

I would like to talk specifically about a budgetary item in my own constituency. The Liberals in the last budget, not this one, closed CFB Chilliwack. Now that we have the access to information documents before us, some of the retiring generals and so on have said that this move was a poor move at the time, that it was not a budgetary move but a political move.

In addition, it has been done without consultation with the local communities. That is in contrast to what it said in its February budget when it stated: "where warranted, the federal government is prepared to work with community leaders and other levels of government to assist in the development and implementation of community adjustment plans".

We have tried to do that. We met with Treasury Board in Ottawa on April 17, 1996. We were told that there was no money, no compensation, no second thought and that it was just there to determine the process by which the lands could be disposed of. The lands now, according to the Minister of Transport, may sit idle for as long as seven years, stuck in aboriginal land claims which are benefiting neither the aboriginal people nor the community at large.

There has to be something, I would argue, given the words of the federal government both in opposition and since its members have been in government, to mitigate this problem in our community. A $105 million impact on our community cannot be just shrugged off without consultation and without a plan B, a plan that will help the community to make that adjustment.

I have asked in the past and I am asking again today for the federal government to consider transferring E division headquarters of the RCMP to Chilliwack, to the lands at that site. It would be a good use of that land. I have written a letter again to the minister today asking him to do that. It would inject spending into the local economy.

It would be good for the RCMP. They could come into a federal facility where they would have new buildings. It is a lower cost for the RCMP to be in Chilliwack as opposed to where they are located now. It makes sense economically. It makes sense to the members of the RCMP who could enjoy a lower cost of living in Chilliwack. It would be fair because it allows the federal government to do something, as it promised, to make the adjustment from shutting down CFB Chilliwack lands to another use of those lands. It would also let the process begin about the uncertainty of what is going to happen to our lands.

Since the government has pushed ahead with this, the land at CFB Chilliwack has to be divvied up quickly in a way that will allow both the aboriginal people and the community at large to benefit. If E division headquarters were to come to Chilliwack we could make some use of some of the newer buildings and some of the new facilities.

We could then start the process of rezoning that land where applicable. The aboriginal people could get part of it, the community at large could have access to it, developers and home builders and so on could have access to that land. It would be a good budgetary procedure as well if the government could only do that.

I do not have time to get into all the Reform proposals, things like increasing personal deductions, some of our tax proposals and so on, but I am interested in doing that in questions and answers if anyone would be keen to get into that subject.