House of Commons Hansard #143 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was surplus.

Topics

Business of the House
Oral Questions

3:30 p.m.

The Speaker

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

Business of the House
Oral Questions

3:30 p.m.

Some hon. members

Agreed.

(Motion agreed to)

The House resumed consideration of the motion that Bill C-67, an act respecting the allocation of unanticipated surpluses and to amend the Income Tax Act, be read the second time and referred to a committee.

Unanticipated Surpluses Act
Government Orders

October 27th, 2005 / 3:35 p.m.

Bloc

Guy Côté Portneuf, QC

Mr. Speaker, we have heard the government's rhetoric during this debate on Bill C-67. We have heard the government present a series of half truths. It even tried to push its propaganda on us.

Now let's talk about the real things regarding Bill C-67. Since 1998, $130 billion of new federal initiatives were not included in the budget at the start. This represents close to $75 billion in surplus since 1998, $40 billion of which were unanticipated. That is the problem. It is quite simple. This government estimates have no credibility whatsoever.

I have talked about the government's half truths. Let us be clear. Bill C-67 does not deal with surpluses. It deals with the unanticipated surpluses in the various budgets. That is the problem.

In Bill C-67, the government is proposing a three part formula. Paying down part of the debt is very nice. But it should be considered as a budget item instead of having $3 billion set aside in an annual contingency reserve. If the government really wants to apply $3 billion to the reduction of the debt, it should provide for it in the budget.

That may seem like rhetoric, but it really is not. Since 1998 we have seen a series of last minute measures at the end of the year, more or less electorally motivated, to make the surplus as small as possible. The last financial year is a prime example, in which the projected surpluses changed from $1.9 billion to $9.1 billion and back to $3 billion. At some point, taxpayers have a hard time understanding what is going on, and I can certainly understand why.

The existence, year after year, not just of surpluses but unanticipated surpluses—according to them—is a perfect illustration of the fiscal imbalance. Why? Because the government taxes too much in comparison with its needs. Not only does it tax too much, it does not redistribute enough money to the provinces and Quebec for them to fulfil their responsibilities very well.

It is rather ironic that Bill C-67 is the perfect illustration of a phenomenon that the government totally denies, namely the fiscal imbalance. Bill C-67 should respond to the financial requests of Quebec and the provinces for the funds they need to provide services and fulfil the responsibilities they have under their jurisdictions.

The Prime Minister often talks about education, early childhood, health and the needs of municipalities. He should run for a provincial legislature or in Quebec. If these are the issues that concern him, he is in the wrong legislature.

The governments of Quebec and the provinces often have to meet the direct needs of citizens, but unfortunately Ottawa again ignores the demands of Quebec and the provinces. The federal government should, first, have increased the transfers, especially for post-secondary education and social programs. That would have been very important.

Since 1995, we have seen deep cuts—there has been a slight increase recently I must admit—to the transfers to the provinces. This is one of the ways in which the government financed the paying down of its debt. This was one of the methods, these deep cuts in the transfers to the provinces.

Therefore, rather than institutionalizing these unanticipated surpluses through Bill C-67, the government should reinvest massively in the transfers to Quebec and the provinces. That would be a first step toward trying to correct the fiscal imbalance, at least partially, so that Quebec and the provinces can fulfil their responsibilities.

For example, the second step would be real reform of equalization.

There are ten provinces and two territories in Canada. Equalization is calculated on the basis of five provinces. When there are ten and you want to work out the average, it seems to me that you base your calculations on ten and not on five. However, I understand that the government sometimes has a little difficulty with relatively simple mathematics.

I was saying earlier that the government has too much revenue for its responsibilities. We have what we feel is an excellent suggestion to relieve it of this burden, remove the temptation to spend left and right, and encourage it to regain control of its expenditures. This solution was actually tried already in 1964 and other times and it could still be done today. It involves transferring either tax points or tax fields—such as the GST—to Quebec and the provinces.

In our view, the government's current tax reduction measures are more an electoral gimmick intended to curry short-term favour with the taxpayers and make them forget the fiscal profligacy, poor management and all the scandals tainting this Liberal government.

We proposed to the government many solutions that are not only feasible, but also realistic. If only the government acted in good faith.

The Minister of Finance often says that he consults the best forecasters in the private sector. Why does the government not create a real independent forecasting office which could truly assume the critical responsibility of advising the Minister of Finance in the development of his budget policies, while also, to a certain degree, acting as a watchdog and perhaps telling the minister, from time to time, that he is off the mark in his forecasts?

I said a number of times in this House that, when it comes to budget forecasts, the government has no credibility at all. It always comes up with surprises. Year after year, since 1998, with a simple calculator and a few documents, the hon. member for Saint-Hyacinthe—Bagot arrives at figures that are very close to the actual numbers at the end of a fiscal year.

By contrast, the government, despite all the resources available at the Department of Finance, is off the mark by billions of dollars. Let us get serious. Unfortunately, as we know, thoroughness is not a trademark of this government.

Bill C-67 institutionalizes unanticipated surpluses. How? This bill proposes a new scheme of this government. If our surpluses exceed the $3 billion expected in the budget, which is a reserve for contingencies—$3 billion would already be used to reduce the debt—the government would apply, in equal proportions, one third to the reduction of the debt, another third—a second time—to the tax relief, while the last third would be applied to the funding of priority socio-economic expenditures.

It is important to keep a number of things in mind. This morning, the hon. member for Saint-Hyacinthe—Bagot made a very telling presentation on the tax relief. We are talking about an amount of $129 annually. I did the calculation and found out that this amounts to 35¢ per day. In other words, I could not even ask for the repayment of a pack of chewing gum, because I would need three days' worth of credits to be able to buy it.

But there is worse, and this is an old habit of this government. At the end of a fiscal year, the government might be tempted to present new budget measures to meet its priorities, as opposed to those of the provinces and citizens, and the government's priorities have to do with an election.

They refer to a period of a year. These are not recurring measures. For once, the government has been clear about this.

What is going to happen? Once again, the federal government is going to create a program, try to meet a need, one that may sometimes not be a priority for the provincial legislatures or for Quebec, and then after a year pull out its funding, leaving it up to the provinces and Quebec to fund these new initiatives. This is an eloquent and undeniable example of fiscal imbalance and of the federal government's all too frequent attempts to interfere in areas under provincial and Quebec jurisdiction. Unfortunately, when it pulls out, for all manner of reasons, MLAs and MNAs are stuck with trying to take over the burden, when they can. They are forced to take over the new program and administer it.

Given the financial capacity of Quebec and the provinces—with the exception of Alberta—at this time, and the visible nature of these services most of the time, the provinces are stuck having to explain to their population why the government has to terminate a program.

With Bill C-67, the federal government obviously prefers to invest its resources in direct spending programs it is in a position to control and thereby improve its image in the eyes of the public. That is understandable, and it needs any improvement it can get. It does this, however, even though this spending is not within areas under its jurisdiction. What is more, the proposed measures close the door to any sharing of the tax base with Quebec and the provinces.

This bill will not stop the federal government from once again cooking the books so that the budget surplus looks smaller than it is. There is nothing that can stop them from doing that. As well, there is nothing stopping them from stepping up their spending in order to avoid having to disclose a huge surplus.

Everyone in this House will clearly recall the national spectacle we were treated to last June when, over a 21-day period, the Prime Minister announced $21 billion worth of initiatives. That spending spree and flood of announcements was nothing short of scandalous.

As I said, there are about 15.5 million taxpayers in Canada. Assuming that the redistribution of the surplus going to tax cuts were based on the figure of a $9 billion surplus, $2 billion of which would go to pay down the debt, that would work out to about $129 per taxpayer, or 35¢ a day.

A little earlier, a colleague from the Bloc Québécois also said that these surpluses include those in the employment insurance fund. Of course, if you ask a member of the government party, he will assure you that there is no problem with this fund. He will tell you that its completely natural that more than half of the people who file claims cannot obtain benefits, and that only 38% of the youth, women and people filing a first claim qualify.

Now they have found one way, among others, to eliminate the surpluses in the employment insurance fund, which is to reduce the premium rate. The problem at present is not the premium rate, but the level of accessibility. Some people find themselves in black holes. They are forced to go on welfare because they cannot collect employment insurance at the hard times in their life.

But if we listen to our friends in the government, everything is just fine. No need for concern: they are taking care of it. We know they are taking care of our money. We see it every day in the House of Commons, and citizens feel it every day in their pocketbook.

The federal government has to address the source of the problem and stop generating indecent unexpected surpluses. The solution is to transfer tax points or the GST, so that the provinces and Quebec can obtain autonomous revenue that can be spent where and how it will best meet the needs of our fellow citizens.

Too often the government reduces this question to a very political dimension, and says: “You know very well, you in the Bloc Québécois.” The Conference Board has estimated these surpluses. I do not believe that the Conference Board of Canada is a sovereignist, separatist agency. If they are, they should call me, I’d like to know. The Conference Board estimates the recurring surpluses at over $10 billion for the current fiscal year, with more than $7 billion tucked away in the foundations established by the present Prime Minister.

You will not convince me that the federal government does not have the resources to correct the fiscal imbalance right now. As I was saying earlier, there will be no surplus; they will barely get to $3 billion in the contingency reserve.

The federal government had the means to do more with this bill to help Quebec and the provinces emerge from the budgetary impasse it has put them in by making deep cuts to transfers since 1995. The recurring surpluses, meagre transfers and increasingly inequitable equalization, far from resolving the fiscal imbalance, have aggravated it. This is a huge problem.

Instead of tackling real problems with Bill C-67, the government is introducing a cosmetic bill to try and improve its image with the population. This is very disappointing. We might have expected better from our elected officials. The past is an indication of what the future holds in store, and unfortunately, Bill C-67 is before us and we have to consider it today.

In the last decade, we have witnessed a constant growth in the Canadian and Quebec economies and a large operation to put public finances back in order in Quebec. In this province, difficult choices had to be made, with financing deadlocks leaving very little leeway because of all the severe cuts made since 1995. Quebec and other provinces did not have much choice.

Today, Quebec is forced to make negative choices and unfortunately to raise taxes, reduce services and add to its debt load. There is almost no flexibility in Quebec as in many other provinces. At the same time, the federal government is generating recurrent budgetary surpluses that are apparently unanticipated. They are really playing with the numbers. This government has become an expert at it. It increases its expenditures and its intrusions into areas of Quebec's and other provinces' jurisdiction. It is trying to impose its will and its political objectives on them.

The federal government's superior financial situation compared to Quebec and other provinces is the backdrop that we, in the Bloc Quebecois, have been trying to correct for a number of years. As I said a little earlier, the federal surplus has shrunk in 2004-2005 to a mere $1.6 billion. However, the Fiscal Monitor for February 2005, which came out in June, was still predicting a $9.7 billion surplus. I cannot understand that lack of reaction by the members of the government in the face of this kind of manipulation of figures that allowed last minute expenses to drastically reduce those unanticipated surpluses, only to invest them in pre-election projects and in this budgetary sham.

In conclusion, I would say once again that Bill C-67 is completely unacceptable because it imposes procedures that will prevent any correction of the fiscal imbalance. The enormous surpluses that the federal government has run over the last few years show that there is a fiscal imbalance. The government must agree, first and foremost, to correct this imbalance so that Quebec and the provinces have the necessary resources of their own to meet the needs of their people. How? By substantially increasing the transfer payments for post-secondary education and social programs, correcting equalization, and negotiating an agreement with Quebec and the provinces for a new division of the tax fields. This would enable them to have the increased revenues of their own that they need to fulfil their responsibilities in their own jurisdictions. Rather than engaging in budgetary smoke and mirrors, the government should deal with the real problems.

Unanticipated Surpluses Act
Government Orders

3:55 p.m.

Scarborough—Guildwood
Ontario

Liberal

John McKay Parliamentary Secretary to the Minister of Finance

Mr. Speaker, the interesting thing about spending time in this place is we tend to hear the same speech over and over, particularly from members of the Bloc Québécois. They first complain about fiscal imbalance. Then they complain about the predicting of the surplus. Once the surplus is established, they complain about the allocation of the surplus. That speech gets repeated over and over.

The facts are somewhat less supportive of their position as to fiscal imbalance. I remind all listeners that all governments, both federal and subnational, such as Quebec, have access to exactly the same revenues and revenue sources. If they choose to tax those revenue sources, then that is entirely within the discretion of the subnational government.

The easiest thing for premiers to do is not tax at their levels of the jurisdiction, complain loud and long, come to Ottawa, get the money and not pay a political price. There is no accountability.

For instance, Alberta has an incredible surplus these days. I suppose there is a fiscal imbalance there of some kind or another. It certainly is a fiscal imbalance among the provinces. B.C. is sometimes in surplus, sometimes out of surplus. I think Saskatchewan has run about 13 years of balanced if not surplus governments. Quebec even occasionally gets into surplus except when a separatist government is running the province.

As to the predictability of the surplus, we do engage the best available advice. The member prefers us to take on the kind of a pin the tail on the donkey approach that his colleague from Saint-Hyacinthe chooses to use. Then he complains about the allocation.

Frankly, it is within the prerogative of government to allocate the surplus as it sees fit in accordance with the needs of the time. On the last occasion, the Atlantic accords were anticipated in the budget to be booked over eight to ten years. When the final deal was struck after the budget, the Auditor General insisted that it be allocated in one year.

Given his shakey premises of fiscal imbalance and his preferred pin the tail on the donkey exercise in predicting surplus, what really does he object to in accountability and transparency in this legislation?

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3:55 p.m.

Bloc

Guy Côté Portneuf, QC

Mr. Speaker, first I will excuse the parliamentary secretary who is perhaps not terribly familiar with the various governments in Quebec over the last 20 or 30 years. I would just like to inform him that the governing party that put Quebec back on track to a balanced budget was the Parti Québécois. I just wanted to point that out. It is important to correct him on this.

The problem is very simple and does not reside in the fact that a government has surpluses so long as they are properly budgeted for and are part of a budgetary framework for expenditures in particular sectors. If the budget calls for paying down the debt by—just as an example—$3 billion, that is fine.

But that is not what we have here. We have a system in which, year after year, this government's fiscal forecasts are nowhere close to the real numbers. It is a system that this government instituted in order to underestimate government revenues year after year. In this way, it can present itself as the great saviour with these unexpected surpluses. And if it thinks that it would be politically advantageous to spend money in a certain area, it can do so.

We say that it is unacceptable for this underestimation of surpluses, which we have seen for seven years, to become structural. That is where the problem lies.

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4 p.m.

Conservative

David Tilson Dufferin—Caledon, ON

Mr. Speaker, every year we hear the government boasting about its surpluses. The government says, as was said by the parliamentary secretary, that it is doing the best it can on the best advice that it has.

I would think the government would get better advice if that is going to happen every year. People will be overtaxed, the government will spend money on non-budgeted items, items that we will not even debate in the House, and then it will give some of the rest of it back.

My question probably should be for the government and not the Bloc member. However, he may have philosophized on it somewhat. To send this money back, the government will have to get bureaucrats to figure out how much is to go back to individuals. Some people will receive a benefit, others will not. There will be a cost to stuff the envelopes and to make the cheques out. There will be a cost to mail them. The government will say that it does not cost anything. It does cost the taxpayers something. These are unknown hours by the bureaucracy to give the money to them.

Has the Bloc member philosophized at all as to what this will cost taxpayers to send back their own money?

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4 p.m.

Bloc

Guy Côté Portneuf, QC

Mr. Speaker, it is very simple: the government has so much money right now that it does not know what to do with it. It has completely lost control of its operating expenditures.

I do not have the exact numbers to give a complete answer to the hon. member. It would necessitate more calculations. However, I can say that between 1998 and 2003, the operating expenses of the federal government increased by 39%. That is not negligible. A good part of that increase can be explained by the surge in payroll expenditures in the last few years. They increased by 55.6% between 1998 and 2005 for an annual growth rate of 6.5%. I do not have the exact numbers but I can assure the hon. member that it will not be cheap for taxpayers, that is for sure.

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4 p.m.

Bloc

Gilles-A. Perron Rivière-des-Mille-Îles, QC

Mr. Speaker, I want to congratulate my colleague for Portneuf—Jacques-Cartier for his excellent speech.

I would like his opinion on a concern I have. Is the objective of the bill, and maybe the sole objective of that bill, to definitively bury the fiscal imbalance issue?

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4 p.m.

Bloc

Guy Côté Portneuf, QC

Mr. Speaker, I thank the hon. member for his question. Of course, a Liberal would answer that question by saying that there is no fiscal imbalance.

The bill is indeed the perfect illustration of the existence of a fiscal imbalance. With it, the federal government try to bury the issue so each and every year it can announce new electioneering measures to divert attention from all the scandals that besmirch it.

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4 p.m.

Liberal

Lloyd St. Amand Brant, ON

Mr. Speaker, I have the pleasure to speak to Bill C-67, an act respecting allocation of unanticipated surpluses and to amend the Income Tax Act.

I would like to take this opportunity to describe the key benefits of the legislation, how it strengthens the accountability, transparency and balance of the government's fiscal policies.

I will start by outlining the reasons for introducing a bill that specifies how to allocate unexpected surpluses over the next five years.

The story actually begins more than 10 years ago, when the Government of Canada realized its fiscal course of deficit financing and ballooning debt loads was simply unsustainable. Drastic action was required and drastic action was taken. The government and all Canadians took the often painful steps needed to put this nation's fiscal house in order.

A few years later, our current Prime Minister, then minister of finance, presented the first fruits of these labours, a balanced budget. That budget eight years ago was the start of a string of eight balanced budgets, a record never before achieved in the history of Canada. We have since benefited in countless ways.

For example, some $3 billion in interest savings has been freed up for investment in Canadian priorities like health care and education. In 2004 and 2005, the government spent just over 17¢ of every revenue dollar on interest on the public debt. This is down considerably from the peak of approximately 39¢ in 1990-91 and is the lowest this ratio has been since the late 1970s.

In addition, our debt load has fallen $63 billion since the government balanced the nations books and is now below $500 billion for the first time in over a decade. These balanced budgets have earned Canada international bragging rights as our net debt burden for the total government sector is now the lowest in the G-7. As recently as the mid-1990s, it was the second highest.

Finally, these balanced budgets have earned us the highest possible ratings by all credit agencies for federal debt, a spillover reward that benefits all Canadian borrowers and debt issuers in the process. This is in great part due to Canada reducing federal debt as a percentage of the economy from its peak of 68.4% in 1995-96 to its current level of less than 39% today.

These are impressive achievements, and it is a rare one since, unlike Canada, many countries today are in no position to contemplate what they should do with any surplus, expected or unexpected. Thanks to this long term, prudent fiscal planning, Canada is the only G-7 country to reduce its debt burden and record a surplus this year, and the only one expected to do so next year and the year after that.

At a time when most industrialized countries must prepare for the fiscal demands of an aging population, Canada is one of the very few currently reducing its debt load before those predicted extra costs become a reality.

We have now reached a point in Canadian history where Canadians expect nothing less than balanced budgets or better from their federal government. The result is that our commitment to achieving balanced budgets has, more often than not in recent years, resulted in surpluses being larger than anticipated in our budget forecasts. It is a problem most countries would surely envy, yet the consequences of our unwavering commitment to balanced budgets are often large budget surpluses with one destination: debt reduction.

Under current legislation, any unanticipated surplus must be applied exclusively to the debt. This prevents our government from using these unanticipated resources for any other purpose.

By no means am I implying that debt reduction is not a productive use of budget surplus; quite the contrary. We now benefit as a country from a debt load which is $63 billion lighter than it was when we first balanced our books. Debt reduction will continue to be essential to eliminating a financial burden that would otherwise weigh down future generations of Canadians and to ensuring that money will always be available to help cope with the unexpected.

However, amidst all of the rewards of higher than anticipated surpluses, we were still missing a key fiscal tool, choice. Regardless of the priorities of parliamentarians and Canadians following a budget surplus, we were severely limited in how we could use it.

It was in part this lack of options which led the government to ask Mr. Tim O'Neill, former chief economist and executive vice-president of the BMO Financial Group to review the Government of Canada's fiscal forecasting process. In the key recommendation of his June report, he concluded that if the government wished to retain its no deficit rule, it should adopt a more formal and structured process for dealing with fiscal surprises.

For the reasons I have already described, the government has no intention of abandoning a balanced budget commitment that has served Canadians so well. As the legislation in front of us today clearly indicates, we have listened to Mr. O'Neill's advice. We are responding with a sound approach to unanticipated surpluses that is very similar to what Canadians have told us time and time again are their priorities.

As the Minister of Finance stated on October 7, Canadians have consistently made it clear that they want us to pursue a balanced and fair approach to how we manage tax dollars by allocating resources among tax relief, social and economic spending and debt reduction. This legislation does exactly that. It extends that approach to future unanticipated surpluses starting with the current fiscal year 2005-06.

The bill would grant authority for the government to allocate any unanticipated increase in the surpluses over the $3 billion contingency reserve among tax relief, priority spending and debt reduction. The contingency fund of course would continue to be diverted toward debt reduction if not needed for emergencies during the fiscal year. The legislation also takes into account the spending priorities set out earlier this year in Bill C-48, an act to authorize the Minister of Finance to make certain payments.

Bill C-67's unanticipated surplus allocation would only be triggered once the surplus is higher than the $3 billion contingency reserve and once spending on Bill C-48 initiatives are included. The legislation would be effective for the next five fiscal years and the precise allocation could change in any given year depending on the size of funds available and government priorities.

On the tax side Bill C-67 specifies how one-third of higher than expected government revenues would translate automatically into a bottom line benefit for taxpayers starting with the 2006 tax year. Tax relief provided under the legislation would be delivered to taxpayers through a one time tax credit when Canadians receive their tax assessment. Under the new legislation the tax relief may not end there, but become an ongoing reduction for Canadian taxpayers.

Bill C-67 would allow the government to make the tax relief permanent subject to the Minister of Finance's assessment that the fiscal impact in following years would not affect the government's ability to prudently manage resources and continue to meet the country's spending priorities.

How would the tax relief provided under the legislation work? Allow me to demonstrate using the current fiscal year 2005-06 as an example. Any unanticipated surplus would be determined in September 2006 with the release of the final surplus figure in the annual financial report. At that time the tax relief set out in Bill C-67 would be announced.

This tax relief would be included on every Canadian taxpayer's notice of tax assessment, which in this case would be delivered early in 2007. Those who paid less federal income tax than the maximum benefit in the preceding year would receive a credit offsetting this previous amount. All other taxpayers would receive the maximum benefit under the bill on their notice of tax assessment.

The Minister of Finance would confirm if individual taxes would be permanently cut, starting in the 2007 tax year, by the same amount as the tax relief. This would be done by adjusting a taxpayer's basic personal amount; that is, the amount of income all Canadians can earn without paying federal income tax. Deductions would automatically be reduced on Canadians' pay cheques or government income payments in order to reflect the permanent increase in the basic personal amount and corresponding changes to the spouse or common-law partner amounts. This would represent tangible, ongoing tax relief benefiting all Canadians. It would build on the $100 billion tax cut plan of 2000, which continues to benefit all Canadians today.

Let me state emphatically that this bill does not by any means signal the end of the government's commitment to tax relief for Canadians. Rather, this legislation would be above and beyond any tax reduction plan the government may come forward with in the future. In fact, the legislation has the potential to accelerate previously announced tax reforms by accelerating the increase in the basic personal amount to $10,000 by 2009, which was announced in budget 2005. Increasing the basic personal amount to $10,000 would remove approximately 860,000 low income taxpayers from the tax rolls, including nearly 250,000 seniors. Thanks to Bill C-67, we could well reach that worthwhile objective much sooner.

On the spending side, Bill C-67 would specify how end-of-year spending, again starting with the current fiscal year, could go directly toward clearly defined priorities identified at the time of that year's budget and resulting budget legislation. The extent to which one-third of the unanticipated surplus is allocated to spending in every year would depend on the spending priorities identified by the government.

That would ensure appropriate parliamentary review, debate and approval, and would further strengthen transparency in how government spending priorities are determined. It would allow Canadians and this Parliament a vital opportunity to debate the allocation of unanticipated surplus revenue; in other words, to have a direct say in investments for the future health of this country based on the most up-to-date information on the financial resources then available.

All spending obligations would be taken into account before determining the surplus for a specific fiscal year in accordance with accounting standards. The amount available for additional spending initiatives would therefore be determined after taking into account year-end adjustments.

Let me also state that this legislation would in no way hinder us from dealing with the spending priorities set out in Bill C-48 earlier this year. The government is committed to funding the initiatives set out in Bill C-48. We will continue to move forward on these priorities, affordable housing, post-secondary education and foreign aid, to name just a few, wherever possible.

Finally, on the debt reduction side, both this legislation and the $3 billion contingency reserve would continue the government's disciplined approach to debt reduction.

Let me stress that the introduction of this new legislation is by no means a sign that the government is wavering in its determination to reduce the federal debt. In fact, the contingency reserve would continue to be set aside so that, in the absence of unexpected economic shocks, it would be there to reduce the debt burden of future generations.

Combined with a further debt reduction afforded by one-third of unexpected surpluses the ongoing erosion of the federal debt load should continue each and every year.

The Government of Canada continues to stand behind its stated principle of reaching a federal debt to GDP ratio of 25% by the year 2014-15. At the same time however the transparency and accountability of this legislation will give Canadians and we as parliamentarians a greater say in the best uses of unanticipated surpluses, an objective our recent fiscal review recommended and one that Canadians demand.

I have endeavoured to explain how the legislation works. Let me close by stressing what the legislation will mean to Canadians and their families.

Through its commitment to tax relief, Bill C-67 will mean more money for all Canadian taxpayers through an approach which benefits lower and middle income Canadians most of all. It will mean spending priorities that are set well in advance and will allow everyone the opportunity to participate in the debate and contribute to the decisions on how unexpected financial resources will best enrich the country.

It will undoubtedly mean new chapters in the government's debt reduction success story as we continue our world leading approach of ensuring that our current obligations will never stand in the way of our future goals. Greater transparency, accountability, fairness, balance, in the end that is what Bill C-67 is all about.

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4:20 p.m.

Conservative

David Tilson Dufferin—Caledon, ON

Mr. Speaker, when we look at the summary of the bill, it puts forward a number of exceptions. The first thing that must happen is that the surplus will have to exceed the $3 billion contingency amount. The second thing that must happen is that it has to fulfill the multimillion dollar New Democrat budget amount that was added before the surplus is paid. The years that are mentioned are 2005, 2006 and 2007.

If taxpayers get a rebate, and there is no guarantee in the bill that they are going to get a nickel, is the government saying that taxpayers will not get anything until 2007? Is that what it means?

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4:20 p.m.

Liberal

Lloyd St. Amand Brant, ON

Mr. Speaker, the initiatives contained in Bill C-48 can actually be accomplished this year. With respect to some of the conditions that the member opposite mentioned, this is taxpayers' money. The government wants to ensure that taxpayers' money is spent in a fiscally prudent fashion. That is what the bill is all about.

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4:20 p.m.

Liberal

Marc Godbout Ottawa—Orléans, ON

Mr. Speaker, I would like to congratulate the member of Parliament for Brant for a very comprehensive overview of Bill C-67. I have been getting positive initial reactions from my constituents on Bill C-67, specifically on the reduction of debt and what is proposed in the legislation. I wonder if the member for Brant could tell us what initial reaction he has had from his constituents, the business community, the community leaders and the residents of his riding of Brant.

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4:20 p.m.

Liberal

Lloyd St. Amand Brant, ON

Mr. Speaker, the reaction from the good constituents of Brant has been similar to the reaction that the member has described coming from his constituency. Simply put, the reaction has been extremely positive.