Mr. Speaker, since I have only seven or eight minutes left, I will try to be brief.
I welcome the opportunity to speak the opposition motion for two reasons.
First, the issue of healthy and prosperous municipalities is in my view of real national importance and can benefit from this House's insight and ideas. There is no question that Canada's cities and communities face significant challenges in providing the level of service and support that their citizens deserve, as has been mentioned several times in the House. Perhaps working in partnership with provinces and territories a share of the federal gas tax might offer an avenue to provide some of the additional resources that the cities are looking for and require. It is certainly, in my view, worth considering.
This leads me to the second reason I welcome the opportunity to participate in today's debate. I believe it would be both timely and useful to provide the House with an important element of context about our government's fiscal and tax performance, a context that unfortunately has not been provided by members of the opposition. It is a context that should frame any discussion that touches on federal taxation.
As you know, since we first took office in 1993, healthy financial management and the fairness of the income tax system have been two of our highest priorities as a government. The two are closely linked. We understood right from the start that we could never lighten the overall tax burden of Canadians if we continued to accumulate deficits that eat away 36 cents in interest charges from every dollar of taxpayers' money.
Accumulating deficits by borrowing is nothing but a twisted way to bring in more income tax by adding interest charges. That is why, in the early years of our mandate, although we introduced targeted tax relief—for families with children, for example—we put our efforts into the difficult task of regaining control over federal spending. We have achieved this goal—I think even the opposition cannot deny that—and in 1997-98 produced the first federal budget surplus in Canada, after 28 consecutive years of deficits.
Some might ask what this has to do with federal taxation. I would argue that the answer should be obvious. It was only after we had put the country's books in order that we could then begin to bring down the tax burden for all Canadians, and bring it down we did.
Very quickly here are a couple of initiatives that the government has taken to bring down the tax burden for all Canadians.
In the 2000 budget we launched a five year, $100 billion tax reduction plan, the largest in Canadian history. The benefits of this plan are already clear and concrete. It provided tax relief of $17 billion in 2001 and $20 billion in 2002. This will continue to grow, providing further tax relief of $24 billion this year and rising to more than $30 billion in 2004.
We also restored full inflation indexation of the personal tax system as of January 1, 2000. This means that inflation no longer represents an automatic and hidden tax increase. As well, as of January 1, 2001, personal income tax rates for all taxpayers were lowered. The 17% tax rate was lowered to 16%. The middle rate, which had been 26% in 1999, was lowered to 22% and the top rate was reduced from 29% to 26% on income between $60,000 and $100,000.
That means, for individual Canadians and families, by 2004-2005 we will have reduced federal personal income taxes by 21%. That is one-fifth on average. Families with children will benefit even more with an average tax saving of 27%. However that is not all.
We have also reduced the general corporate income tax rate from 28% to 23% and have drafted legislation to reduce it to 21% next year.
To support small businesses and entrepreneurs, we also included an increase in the small business deduction limit from $200,000 to $300,000 over four years, resulting in an annual savings of up to $9,000 for many local Canadian companies.
I cannot go through all of it, but we have done much in order to reduce the tax burden on Canadians and to ensure that we can continue to fulfill our electoral promises, including on the--