Debates of Dec. 16th, 1999

Standing Committee On Finance

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I believe that having $500 million is a good initiative but I am concerned as well.

We have seen this government increase the number of initiatives, of structures and, ultimately, the amounts that should be used to provide services to people were spent on buildings and public servants.

Five hundred million dollars, that is good news, but it is not enough. Most witnesses appearing before the Standing Committee on Finance asked that 1% of the Canadian GDP be invested in social housing and that homelessness be considered part of a wider issue called social housing.

Since 1990, I was able to see, by looking at the numbers my distinguished colleague gave us, that the number of households that were putting more than 50% of their income into housing—these households are virtually living in poverty—has increased by 41%. The needs are great. The amount needed is $1.3 billion.

I am also concerned to see that the prerogatives and jurisdictions of the Quebec government are respected. Through the Société d'hypothèques du Québec, the Quebec government would be able to administer a real program that would help the homeless and people who are in need of social housing. We will work hard to have these amounts increased and to ensure they can be used effectively to get people off the street, to help and support them during the transition.

[Dennis Gruending, NDP, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, I will be sharing my time today with the hon. member for Regina—Qu'Appelle. It is an honour to speak in the House for the first time. There is no higher calling than public service and no higher place to serve than in the House of Commons.

I begin by expressing my heartfelt gratitude to the people of Saskatoon—Rosetown—Biggar who elected me in the byelection on November 15. It is a privilege to have the opportunity to serve them. I will do so with all my energy and to the best of my ability.

I find it humbling to follow in the footsteps of the great parliamentarians who have preceded me in this vast prairie constituency. The list includes honourable social democrats such as M. J. Coldwell, Woodrow Lloyd, Alf Gleave and Chris Axworthy. It includes as well the Right Honourable Ray Hnatyshyn, a former Progressive Conservative cabinet minister who later became our governor general.

Mr. Coldwell represented this riding in parliament from 1935 to 1958. He led the CCF in the 1940s and 1950s. He worked tirelessly to bring about many of the great social advances that have shaped our country. These include hospital and auto insurance, pensions, family allowances, labour and welfare reforms.

Woodrow Lloyd served Biggar in the Saskatchewan legislature for 20 years, from 1944 to 1964. In 1961 he succeeded Tommy Douglas as premier. With great patience and great courage, Mr. Lloyd prevailed over the tumultuous strike by Saskatchewan's doctors the following year. Our cherished national medicare system is at least in part Mr. Lloyd's gift to Canada.

M. J. Coldwell had an abiding commitment to social justice. Woodrow Lloyd had a clear and ringing view of social democratic philosophy. “Ours is not just a gimme or a gouge the rich philosophy,” Woodrow Lloyd said. “It matches claims with obligations, imposing on each of us a greater individual responsibility than is imposed by other political parties”.

I am also guided by the legacy of Alf Gleave who represented the Saskatoon-Biggar area in parliament from 1968 to 1974, and who earlier was one of the pioneers of medicare. When Alf died last summer, journalist Barry Wilson in his eulogy quoted Alf's own words, summing up his life as a family man, a farmer and an elected representative. “At the beginning of the century,” Alf wrote, “the people who came to the prairies and those who followed them, the next generation such as myself, made a more secure and bountiful life here by working together, by sharing the load”.

This need to balance claims and obligations, to work together and to share the load has never been more relevant than it is today, as the 20th century comes to an end and a new century and a new millennium are about to dawn.

Nowhere is this need to work together more evident today than in the farm crisis that now engulfs western Canada, a crisis that tears at the heart of so many of the families I represent in Saskatoon—Rosetown—Biggar. What my NDP colleagues have said so often in the House is tragically true. That is that western farmers are gripped by the worst crisis since the 1930s, and in some respects, a crisis that is greater than that of the great depression.

The pain and misery are unprecedented economically and emotionally. Farm stress has reached epidemic proportions. Families are disintegrating. Bankruptcy is driving people from their homes and from their way of life.

An astonishing 46% of western farmers are now seriously considering leaving the land. What this means, should it come to pass, is a mass exodus of as many as 16,000 farmers across Saskatchewan and Manitoba within the next short period of time. The impact of this calamity would be unimaginable.

Why is this crisis occurring? It is happening because our national government, in its cult-like adherence to the ideology of free trade, has cut support for grain farmers by 60% over the last eight years. The government has accepted the free market mantra of the Business Council on National Issues and embraced the global gospel of the World Trade Organization.

The Liberal government has played a destructive game giving away much more in trade negotiations than it has gained in return. Western farmers have been ambushed on the free market road. Consider that European farmers receive 56 cents in support for each dollar of wheat that is sold. American farmers get 38 cents. Canadian farmers today get a paltry 9 cents.

This is happening at a time of unprecedented federal wealth. Our government, as we have heard here today, is projecting almost $100 billion in surpluses over the next five years. If he wanted to, the Prime Minister could deal with the farm crisis and he would scarcely notice the amount of money that it would take. But he refuses. He is caught like a deer in the headlights on the free market road.

I join with my NDP colleagues in pleading for a change of heart. I urge the Prime Minister to return at least $1 billion of the money that his government has scooped out of the Saskatchewan economy in recent years. This is just 1% of his forecasted five year surpluses. Farmers need help desperately and they need it now.

This is an immediate measure. In the medium term the government must re-examine the AIDA program to see if it can be fixed. In the longer term, a combination of supports and cost cutting measures and diversification will have to be adopted if western agriculture is going to survive.

Unfortunately the deafening silence of the government in response to the plea of farmers also extends in many cases to society as a whole. We see this only too clearly in the majority report of the Standing Committee on Finance with its empty rationale recommending $46 billion in tax cuts for mainly high income earners over the next few years. This is wrong as my colleague the member for Regina—Qu'Appelle pointed out in his minority report.

The finance committee report continues the bogus philosophy of trickle down economics preached for the last 20 years by leaders such as Ronald Reagan, Margaret Thatcher, George Bush and Brian Mulroney. This dreary message is always the same. It goes something like this: give the horse enough oats and the sparrows will eventually be fed. This has never been true and we will only make matters worse if we repeat the same mistakes again and again.

Tax cuts that benefit mainly the rich will widen the unacceptable gap that already exists between the wealthy and the poor in our society. This gap has gone from embarrassing to offensive to downright obscene.

New Democrats advocate a fair and sane approach, one that will work, if only the government will adopt it and implement it. We believe that the surpluses projected over the next few years give Canadians a rare opportunity to return to the philosophy of redistributing income to those who need it most. We can undo the damage that successive waves of government cutbacks have inflicted on families, on public services and on living standards in the 1990s.

There is only one real test of any economy that matters and that is, does it serve its people? New Democrats believe that the debate over surpluses must focus on improving the quality of life for all Canadians. We can deal with the farm crisis, child poverty and homelessness. We can give our children the best possible start in life. We can preserve public health and expand it to home care and pharmacare as the Liberals had promised to do in 1993. We can foster world class education and training. We can invest in roads and public transit. We can provide tax relief by making an initial 1% cut in the GST. We can, as Canada's churches have asked, have our country forgive the debt owing to us by some of the world's poorest countries.

I commit myself, as my social democratic predecessors have done before me, to work tirelessly to achieve these just and time honoured goals. I will not rest and my predecessors will not rest in peace until we have built Jerusalem in this green and pleasant land.

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

Mr. Speaker, it is a privilege to ask the hon. member his first question as a member of the House. I congratulate him on his discourse today.

My question for the hon. member is quite a simple one. He has referred to the heritage of the social democrat movement. In keeping with that, I would like him to reflect on the current realities incumbent in that movement and what is happening in both the U.K. and Germany with governments committed to corporate tax reform and reduction.

The chancellor of the exchequer in the U.K. has moved to lower corporate tax rates and capital gains taxes. The finance minister in Germany reduced corporate taxes in the last budget. Does the hon. member join his social democrat friends in other countries?

In fact the economist for the Canadian Labour Congress who recently spoke to the finance committee acknowledged that the greatest level of economic growth of any type of tax reform would come from reducing corporate taxes.

Does the hon. member agree with his social democrat friends that Canada needs to reduce its corporate tax burden?

[Dennis Gruending, NDP, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, I thank the hon. member for his question. I would refer him to a very fine piece of literature, a document prepared for our national convention last summer which talked about fiscal responsibility. I am sure he might enjoy taking it home, reading it over Christmas and having it at his bedside at all times.

In that document we talked about targeted tax cuts for middle income and poorer Canadians. As I have just mentioned, we talked about starting by reducing the GST.

[An hon. member]

The Tory tax.

[Dennis Gruending, NDP, Saskatoon—Rosetown—Biggar, SK]

Yes, the Tory tax.

We believe that middle class and lower income Canadians need some tax relief. We would not extend that blindly as the previous Conservative and current Liberal governments have done to tax relief for big corporations.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, on the question of the GST, the hon. member will know that the GST collected about $24 billion in the last fiscal period. That means for each percentage point we are talking about just over $3.5 billion.

Given the magnitude of the impact on reduced revenues of the government and utilization of the surplus that would otherwise exist, what exactly would the hon. member suggest we do in terms of either forgoing debt repayment or forgoing increases to health spending to be able to fund that significant tax reduction?

[Dennis Gruending, NDP, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, I thank the hon. member for his question. I would respond to it briefly by making two points.

First, I would refer to the surplus of almost $100 billion which the Liberal government is proudly crowing about at the moment. Second, I would remind him that it was his own party prior to 1993 which promised to get rid of the GST.

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

Mr. Speaker, my second question for the newly minted member for Saskatoon—Rosetown—Biggar is a very simple one.

One thing I do respect about the New Democrats is their consistency and sense of values and commitment to those values over a period of time. That stands in stark contrast to the Liberals.

The hon. member was quite right in pointing out that while he is opposed to the GST and would like to reduce the GST, so were the Liberals of similar persuasion before 1993. Let me suggest that a potential replacement for those revenues may be gained from a hypocrisy tax. If we were to have a hypocrisy tax that would be levied on politicians who break red book promises, perhaps that would be one way to help replace revenue from the GST.

I would appreciate his erudite views on my proposal for a hypocrisy tax which would serve two functions. First it would force Liberals to keep their promises for a change. Second, it would raise those revenues to reduce the GST, as the hon. member feels is important.

[Dennis Gruending, NDP, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, I thank the hon. member again for his question. I am sure that if our finance critic had had his advice in hand, he would have included that tax in his minority report.

While we are talking about a hypocrisy tax, I have just recommended some literature to the hon. member for over the Christmas holidays. I would refer him to a biography I wrote of Allan Blakeney, a fellow Nova Scotian, called Promises to Keep . Perhaps we would like to put that into the minority report as well.

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

Mr. Speaker, I congratulate the member for Saskatoon—Rosetown—Biggar on his maiden speech in the House of Commons. He follows in the great tradition of prairie social democrats such M. J. Coldwell, the second leader of the CCF in Canada; Alf Gleave, a former national president of the Farmers Union and member of the House of Commons for six years; and the honourable Chris Axworthy, attorney general and justice minister of the province of Saskatchewan, his immediate predecessor. I welcome him to the House of Commons.

I was quite struck by the majority report of the finance committee. I see my Liberal friends are probably even astonishing you, Mr. Speaker, because they are recommending that $46 billion or about half of the $95 billion surplus should go to tax cuts.

My good red Tory friend from Nova Scotia talked about hypocrisy tax in the red book promises. Perhaps that is why you are in the chair today, Mr. Speaker, because you can remain neutral on the breaking of a great Liberal principle of balance. Half of it was to go into program spending and half into deficit reduction and tax cuts. Now, afraid of the Leader of the Opposition, the Liberal Party has become a very right wing Conservative Party and is advocating putting half the surplus into tax cuts primarily for wealthy people.

Who in the country has paid for the fight on the debt and the deficit? Is it the Conrad Blacks of the world? Is it the wealthy people of the world? Is it the wealthier banks or the big firms in Canada? No. It is the ordinary people of the country who have paid for the fight on the deficit through cutbacks in health care, through cutbacks in education, through cutbacks in our social programs, and through cutbacks imposed on farmers. That is who has paid for the fight on the deficit. That is who has paid for the debt. Now that we have a surplus it seems to me the people who paid the price should reap the reward of a fiscal surplus, the ordinary people of Canada.

The Liberal Party is afraid of the Reform Party and the Leader of the Opposition and the tax cut agenda. I see across the way the member for Renfrew—Nipissing—Pembroke who is shaking in his chair in fear of the Reform Party. It is the same with the Minister of Finance who is implementing the Reform Party policy in terms of massive cutbacks in social programs like we never saw from any Conservative Party in the history of Canada including Brian Mulroney's.

That is exactly what has happened and there is no better example of that than the 60% cutback in support to farmers by the Liberal government across the way when their competitors in Europe and the United States have not been cutting back but indeed have been increasing support and subsidies to their farmers.

As the member for Saskatoon—Rosetown—Biggar said, 56 cents of a dollar in Europe will come from the treasury in Brussels and in the United States 38 cents will come from the treasury in Washington to support farmers. What is it in our country? It is 9 cents on the dollar.

The Reform Party has called for the end of all farm subsidies. Now it is the Liberal Party that is implementing the Reform policy to get rid of subsidies and support prices for our farmers. Farmers are leaving the land. Farmers are going bankrupt. We have heard time and time again that on the prairies we need $1.3 billion of immediate aid, a trade equalization payment to farmers to allow them to survive which would not even bring us up to the American levels or the European levels. What has the Liberal Party done? This message has fallen on deaf ears.

We had in parliament in Ottawa a few weeks ago the premiers of Manitoba and Saskatchewan, supported by all three political parties in Manitoba, three political parties in Saskatchewan, the farm organizations, the chambers of commerce and the trade unions, with a joint position of solidarity in support of $1.3 billion for farmers in Saskatchewan and Manitoba. What did the Liberal government say? It said nothing in terms of extra assistance to farmers. No wonder the Liberals are hanging their heads in shame.

There was a throne speech back in October. I looked at it very carefully and there was absolutely nothing in it, not even a reference to the farm crisis. Where do these people live? They do not know the real poor people who are facing problems.

Then a month later we got this media show by the Minister of Finance. He flew to London, Ontario, to make a media statement. Again many of the Liberal members are wondering why all this money was spent for him to fly to London. A big schedule was worked out for the Minister of Finance and he made a statement on national television. In a 45 minute speech there was not one reference to the farm crisis despite the suffering, the pain, the demonstrations, the protests, the writings and the calls by the united front across Saskatchewan and Manitoba for extra assistance.

The Minister of Finance and the parliamentary committee on finance are more Conservative than anything I saw with Brian Mulroney or Conservative governments in the past. It is not just the farm crisis. Let us look at what they have done to health care. It is enough to tear our hair out. We have had the biggest cutbacks in health care in the history of the country. The cutback in federal funding to the provinces for health care is causing problems today in hospitals and emergency rooms from one part of the country to another. The closings of hospitals and the lineups for surgery are because of the cutbacks by the Minister of Finance.

Why is there silence on the backbench? The minister from the Northwest Territories never gets up to defend health care. I have never seen her get up to say that the Minister of Finance should put more money into health care. She should be ashamed of herself. She represents ordinary people and knows that people are in lineups because of cutbacks in health care by the federal government.

We have the farm crisis and the health care problem. Where are the recommendations in this report for money for health care? We have a $100 billion surplus, and what has been recommended for health care? Nothing. Even the Canadian Medical Association is saying that we need an extra $1.5 billion per year in health care.

[Some hon. members]

Oh, oh.

[The Deputy Speaker]

Order, please. It is very difficult for the Chair to hear the debate. I know the hon. member for Regina—Qu'Appelle, in his most bombastic style, is being perhaps a little provocative and is causing some uproar in the House, but the Speaker has to be able to hear the remarks of the hon. member who has the floor.

[Ethel Blondin-Andrew, Liberal, Western Arctic, NT]

Mr. Speaker, I rise on a question of privilege. I am deeply offended by the references made to me in a personal way. If my mandate and duties are being called into question in a professional way, that is one thing, but to be slandered by the member who has done nothing for native people but use them for their votes is unacceptable.

[The Deputy Speaker]

I have not heard anything here about a question of privilege. I suggest we move on.

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

Mr. Speaker, I did not even mention native people. I am not sure where that came from. I was saying that the member across the way like other Liberal members is not rising in the House of Commons and calling on the Minister of Finance to put more money into health care. The record speaks for itself.

The Liberal Party is implementing policies of the Leader of the Opposition and the Reform Party which call for massive cutbacks and a reduction of the role of government. That is exactly what it is doing. They are setting the agenda and that party across the way has implemented that agenda and knows it. That is why its members are so sensitive.

It is not just health care and the farm crisis. Let us look at what happened in terms of the cutbacks to education. The government is not investing in education like it should be. That is why we are falling behind in public support of education almost every state in United States. That is what is happening in Canada. If we had more federal moneys going to the provinces for education we would have better training for our people. We would have a more competitive and productive economy. That is not happening because of the cutbacks and the priorities of the government across the way.

The important point about the finance committee report is that it is supposed to be a framework and a vision for the next five years. What will the government do? It will continue the same right wing reactionary policies of the Reform Party in terms of handing out more and more money to wealthy people. In fact, the member for Calgary Southwest said at one time in the House that Conrad Black deserved a tax cut. The Reform Party is not implementing it but it is the Liberal Party across the way.

This is why we need a public debate in the country about our real priorities. The priorities should be to invest in people, to create more equality in people, to invest in the health care system, to come to the assistance of prairie farmers and to invest in the education system. Those should be our priorities and they are not the priorities today.

We hear all this stuff about tax cuts. I remember the Liberals in opposition, Mr. Speaker, and so do you. The member from the Northwest Territories was there. I remember when Brian Mulroney brought in the GST. I remember the Liberal Party saying in the House that if Canadians elected the Liberal Party, and it is in the red book, it would abolish the GST. Does everyone remember that?

The only member who had some honour in that regard was the former Deputy Prime Minister who resigned her seat and went to her people in a byelection. The Liberals made that promise on the GST. They promised to get rid of NAFTA, the free trade agreement. They promised many other things that were in the red book, and they broke those promises.

With that, Mr. Speaker, I hope you agree with me that what we are seeing is a right wing agenda by the Minister of Finance implementing the policies of the Reform Party of Canada.

[Leon Benoit, Reform, Lakeland, AB]

Mr. Speaker, I rise on a point of order. In the member's presentation he indicated that the Liberal government is implementing what Reform would like to have implemented. I am deeply offended by that presentation.

[The Deputy Speaker]

The hon. member may be, but I do not think that constitutes a point of order.

[Odina Desrochers, Bloc, Lotbinière, QC]

Mr. Speaker, I listened carefully to the speech made by my hon. colleague from the NDP, who made a sad assessment of the current Liberal government's record.

I would like him to say more on the social transfer. Quebec is having a lot of trouble. The minister, Pauline Marois, is trying in every way possible to find the money needed to provide adequate health care to the people.

I would like to know if the member from the NDP believes that these problems are in large part due to the Liberal government's mismanagement since 1993.

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

Mr. Speaker, this is a good question. In 1995, the current Minister of Finance cut more than $6 billion from Canada's national health program. This is in sync with the policy being put forward by the Reform Party.

The Minister of Finance, who is not a member of the Reform Party, made the worst cuts ever to health care, at the national level.

I remember very well when the national health program was introduced under Mr. Pearson. The CCF with Woodrow Lloyd and Tommy Douglas, from my province of Saskatchewan, were the first ones to come up with the idea. It was created at the national level by Mr. Pearson, a true Liberal. A true small “l” liberal, not a capital “L” Liberal like the ones we have today. At the time, the provinces and the federal government came to an agreement whereby the federal government would pay one half of the costs of the national health program, and the provinces, the other half.

Where do we stand today? The federal government only pays 12% or 13% of the costs. There is no national unity. Our country has no great vision. Where are the old Liberals? Where is the old Liberal Party of Pierre Trudeau, of Mr. Pearson, of Laurier and King? Where is that Liberal Party?

That Liberal Party has vanished completely. There is not a lot of difference now between the Liberal Party and the Mr. Manning's Reform Party. They are just about the same. We are stuck here with a government that is more conservative than Brian Mulroney's government was. Brian Mulroney never did such a thing. The government of the current Prime Minister is the only one to blame here.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member as well as the member for Saskatoon—Rosetown—Biggar referred to a surplus approaching some $100 billion. The members will well know that is a projected surplus over the next five fiscal periods assuming no negative economic changes.

The economic and fiscal update shows that the surplus for the last fiscal year reported on was $2.9 billion. It is estimated to be $2 billion for the next fiscal year and $5.5 billion for the year starting April 1, 2000 to March 31, 2001.

Given that we are talking about the upcoming budget and projecting for that year a $5.5 billion surplus, I would like to ask the member about the recommendation to reduce the GST by 1% which would cost almost $3.5 billion based on current revenue production. That means of the $5.5 billion, $3.5 billion is going to tax relief.

How does the member square that with his demands that there should be relief for prairie farmers, for health care, for post-secondary education and for children? The member cannot have it all ways. Is he suggesting that the government should be imprudent and go back into deficit financing?

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

Mr. Speaker, I am surprised my good friend across the way who is an accountant interprets the numbers in the way he does.

He knows that the projected surplus will be around $10 billion in the next fiscal year. If we take into consideration the contingency that the government is setting aside, if we take into consideration the prudence that it is setting aside and if we look at the history of the Minister of Finance, it might be even more than $10 billion. The Minister of Finance consistently underestimates the revenues of the Government of Canada, so there may be more than $10 billion.

The member across the way knows that. He is an accountant. He is a good member of the finance committee. Unfortunately he has become very, very conservative in terms of the tax cut agenda for wealthy people.

The GST cutback by one point will cost around $3 billion. That is about 30% of the surplus. That is a good amount to put in tax relief at the federal level at this time. Let us put most of the rest of the money into programs that are needed by the people of this country: health care, education, the farm crisis, the homeless situation and a children's agenda. That is what the people want.

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

Mr. Speaker, it is with pleasure that I rise in the House to speak on the prebudget consultation report.

Today is December 16, 1999. There are 14 days left in this century, a century that was to have belonged to Canada. It is important at this time that we reflect on what is occurring not just within our borders but around the world.

The rate of global change facing Canadians is unprecedented. The challenges facing Canadians and the potential opportunities available to Canadians have never been greater. How are we doing in this environment? The Liberals say that the fundamentals are strong. The ex-patriot Canadian economist John Kenneth Galbraith once said that one should beware of governments who claim that the fundamentals are strong. That is an important bit of advice to heed at this time.

In this new globally competitive, interconnected environment the fundamentals are not simply esoteric statistics or unimportant numbers. These are not distant trivia that we can afford to ignore. We cannot afford to ignore what other countries are doing to create environments for economic growth.

Let us look at those fundamentals the government boasts about. We have an unemployment rate that is 70% higher than that of the U.S. We have the highest personal income tax rates of any country in the G-7. We have the second highest corporate tax rates in the OECD, of those 31 countries. Last year we were third highest but we are now second highest. Germany, a social democratic country of the same brethren as the New Democratic Party in this country, saw fit to reduce its corporate tax burden and create federal levels of economic growth and opportunity in Germany.

For the first time in the history of our country, our level of personal debt on average in Canada is $43,200. For the first time that is surpassing the average disposable income of Canadians. In fact, we have the fastest growing levels of personal debt of any country in the G-7. While the government boasts about being in the black, Canadians are in the red to a greater extent than they have ever been in the past.

Personal disposable income in Canada has dropped by 8% since 1990. During the same period of time Americans have enjoyed a 10% increase. There has been a widening of the gap by about 10% in terms of personal disposable income between ourselves and our neighbours to the south.

The fastest growing economic engine is in the U.S. We have an opportunity being a country that borders the U.S. to benefit from that growth, but not if we continually focus on the policies of the past and ignore the opportunities to build policies based on the realities of the future.

Let us look at some other fundamental areas. Productivity growth rates in Canada have been lagging behind those of the U.S. In Canada the equities markets on the Toronto Stock Exchange have had a relatively anemic growth compared to the robust growth in the U.S. During the same period of time the TSE was required to grow by 100%, the Dow Jones Index in New York grew by 300%. As Americans are getting richer, Canadians are getting poorer.

Under this government since 1993 there has been a 10 cent drop in the Canadian dollar relative to the U.S. dollar. The Prime Minister's response was typically erudite, that it would be good for tourism. The logical corollary of his argument would be that if we were to reduce the dollar to zero, we could become the greatest exporting nation in the world. That logic simply does not work. Most Canadians realize it is impossible to devalue our way to prosperity.

The brain drain issue is a very important fundamental. It involves the choices being made by some of the best and brightest young people in Canada. According to the report by the Conference Board of Canada last summer, the number of people leaving Canada and seeking opportunities in the U.S. has grown from 16,000 people per year a few years ago to 96,000 people per year.

We see a very disturbing trend, the devouring of corporate Canada. At the end of the 20th century, which was a century that was supposed to belong to Canada, it is important to pause and think about some of these things. It is sad that at the end of the 20th century Canada no longer really belongs to us. That is largely due to the fact that the government fails to accept some of the market driven realities of a globally competitive environment.

I will give the House an idea of the impact of the devouring of corporate Canada. Back in 1994 the value of U.S. acquisitions of Canadian companies was $5.6 billion. In 1998 the Canadian corporate value purchased by Americans had grown to $16.1 billion. This year it is $25.6 billion. That is no accident. It has a lot to do with the reduction in the value of the Canadian dollar.

Let us look at some of the causes of the reduction in the Canadian dollar, that 10 cent precipitous drop and decline in the take home pay of Canadians since 1993. A lot of that has to do with tax issues.

Back in the 1970s and 1980s Canada was able to maintain approximately the same level of economic growth as the U.S. During the same period of time we had a positive yield in that our interest rates were marginally higher than those of the U.S. yet we were able to maintain that similar level of economic growth and prosperity.

However in the 1990s and particularly since the election of this government, we have seen a gap between the currency values of the two countries and for the first time in a long time Canada has a negative yield. We have lower interest rates in Canada. We are using monetary policy to compensate for some of the weak fiscal policies of this country.

Part of the reason the Bank of Canada needs to do that is that for the first time ever as a percentage of GDP in Canada, we are at 38% of our GDP in taxes. Compare that to the U.S. which is at 28% of GDP in tax revenues. It is not sustainable. Effectively we are heading toward a government that simply will not be able to continue the devaluation of the Canadian dollar. The Bank of Canada will not be able to continually use that mechanism. We need strong fiscal mechanisms and levers to be implemented now.

Some of the victims of this devouring of corporate Canada include the Canadian icon MacMillan Bloedel, Poco Petroleums Limited, MetroNet Communications, JDS Fitel, Club Monaco, Noma Industries, Newcourt Credit, Midland Walwyn, Peoples Jewellers and Shoppers Drug Mart. Shoppers Drug Mart, Canada's drug store, is now owned by KKR, Kohlbert Kravis and Roberts out of New York. This is not a good trend for Canada.

It is very easy for us to do what the Liberals typically do in this kind of situation and that is to try to demonize America, to try to demonize the free market system and to try to somehow create a bogeyman in the people who are logically taking advantage of the situation that exists here. The fact is that in a globally competitive environment, the responsibilities lie with each government to create the levels of economic growth and opportunity for their companies and individuals to succeed and compete globally.

In that kind of environment the government is clearly failing. It is exposing the nape of Canadian investors, Canadian business people and Canadian individuals to the ferocity of global competition without providing the economic growth levers and productivity enhancement initiatives that they need.

This is in stark contrast to the previous government that had the courage and vision to implement a free trade agreement that this government has embraced and accepted as being good policy in retrospect. The previous government not only had the courage to eliminate the manufacturers' sales tax which was impeding growth and impeding the ability for Canadian enterprises to compete and succeed globally and replace it with the GST, it also deregulated financial services, transportation and energy. All of these are policies that this government embraces. All of them are policies that have been credited by economists as having been largely responsible for the ability for this government to eliminate the deficit.

If we look at what the achievements of the government have been, the only thing the finance minister can point to is the elimination of the deficit. If we accept, as most economists accept, that the elimination of the deficit was largely due to the structural changes made to the Canadian economy by the previous government—

[The Deputy Speaker]

I hesitate to interrupt the hon. member, but given the time, I think he would want to save half of his time for after question period. He will have 10 minutes remaining in his remarks following question period today.

We will now proceed to Statements by Members.

Arts Education

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, the Canadian Conference of the Arts and the University of Ottawa recently announced their collaboration in co-hosting the fourth national symposium on arts education entitled “Sharing the Vision” which will take place in Ottawa in July 2000.

This annual symposium gathers artists, educators and students to discuss how best to ensure that the arts are a fundamental and sustained part of the Canadian school system for all students in all schools. They know that children and young adults who study music and the arts are creative, imaginative, possess strong problem solving skills and actually score higher on a scholastic admission test than students who are not exposed to the arts.

The government is committed to ensuring a higher quality of life for our children. Our children learning in, through and about the arts is of vital importance for their future. We must continue to play a role in guaranteeing quality arts education for all Canadian children in the new millennium.