House of Commons Hansard #68 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was finance.

Topics

Forestry Industry Support
Private Members' Business

12:05 p.m.

Some hon. members

Nay.

Forestry Industry Support
Private Members' Business

12:05 p.m.

Conservative

The Acting Speaker Royal Galipeau

In my opinion, the yeas have it.

Forestry Industry Support
Private Members' Business

12:05 p.m.

An hon. member

On division.

Forestry Industry Support
Private Members' Business

12:05 p.m.

Conservative

The Acting Speaker Royal Galipeau

I declare the motion carried.

Opposition Motion—The Economy
Business of Supply
Government Orders

12:05 p.m.

Liberal

John McCallum Markham—Unionville, ON

moved:

That this House has confidence in the economic vitality of the province of Ontario and calls upon the Government of Canada to work cooperatively with the governments of all provinces and territories to assure that the prosperity and well-being of Canadians is maintained and enhanced.

Mr. Speaker, I rise today to speak to a motion that I never thought would have to be tabled in the House. It reaffirms that the House of Commons has confidence in the economic vitality of the province of Ontario and that the Government of Canada should work cooperatively with its provincial counterparts so as to build a stronger and more prosperous Canadian economy.

The reason we need such a motion is that the finance minister has recently taken it upon himself to try to convince the world that Ontario is not the place where business should invest its money.

I am a proud Ontarian and more than that, a proud Canadian. I was personally deeply offended when thefinance minister took it upon himself some weeks ago in Halifax to tell the world that anyone thinking of making a new business investment should avoid the province of Ontario.

The fact that he has continued his assault, to the point of even holding a press conference to lay out his budget demands just 24 hours before the Ontario government delivered its 2008 budget, shows that the finance minister has no respect for the vital role that Ontario has played in Confederation, nor any understanding of what powers of persuasion his words can have on investors. His actions have left many people scratching their heads.

The words used by most pundits since that time and throughout the finance minister's ensuing attacks on Ontario have been either unprecedented or stupid. For example, let me read from one editorial in the Saskatoon Star Phoenix:

It's stupid economic policy for the country's finance minister to so publicly bad-mouth its largest manufacturing province...it seems ugly partisanship has taken such firm hold among the federal Conservatives that they now are unable to see the damage it's doing to Canada and their own cause, or they no longer much care.

That was not the Toronto Star talking; it was the Saskatoon Star Phoenix.

Danny Williams, the Premier of Newfoundland and Labrador, was equally taken aback by these unprecedented attacks on Canada's manufacturing heartland. He had this to say just a few days ago:

If there was ever a time that Canada should step up and support Ontario—and Ontario has been the heart of Canada for a long time from an economic perspective—it's now. But they seem to be doing just the opposite.

I could go on with many more examples of Canadians from outside Ontario who are simply flabbergasted by the finance minister's recent attack. However, the thing that is most shocking about this ordeal is the rank hypocrisy of which it shows our finance minister is capable.

Jeffrey Simpson of the Globe and Mail pointed this out on March 24 when he wrote:

This inexcusable policy recklessness, combined with his own doleful legacy as provincial finance minister, disqualifies [the finance minister] from being taken seriously in lecturing Ontario.

Let us just take a quick peek at his record as the finance minister of Ontario in 2001. Interestingly, he did not bring in any massive corporate tax cuts when he had the chance. To be fair, in the one budget he did table at Queen's Park, he created a timeline for the corporate tax cuts that his predecessor had announced in the previous budget. More important, what the minister did do was cut social programs in order to find the money that would allow for those corporate tax cuts to go forward.

Where exactly did he find the money? He found it in the form of post-secondary education cuts to the tune of $309 million. He found it in the form of reduced hospital care for Ontarians by reducing that budget by over $600 million. He cut housing and social assistance by over $700 million.

As the finance minister is fond of pointing out in the House, I am also a fan of corporate tax cuts. They lower the cost of capital for profitable firms and lead to increased investment. However, I am also firmly of the view that corporate tax cuts need to be balanced with other priorities, including social spending, investments in infrastructure and education and training and running balanced budgets.

Unfortunately the government of Dalton McGuinty did not have the luxury of coming to power to find a $13 billion surplus like the federal finance minister did. When Mr. McGuinty came to power, he was faced with a $5.6 billion deficit left to him by the previous Conservative government of which Canada's finance minister had been an important member. Canada's environment minister was also an important member. On top of that, Mr. McGuinty was facing a dangerous underfunding of social programs due to cuts by the previous Tory administration.

Many of these funding cuts have been cited as contributing factors to tragic events like the Walkerton water crisis. Had that Conservative government, in which the finance minister was a central player, not cut 40% of the environment budget and laid off 900 of that ministry's 2,400 workers, perhaps something like Walkerton could have been avoided. This is the type of balance that legislators need to bear in mind when they consider the merits of corporate tax cuts and social spending. When they fail to make the right decision, ordinary Canadians pay the price.

It is definitely true that Jeffrey Simpson was correct. The finance minister's own doleful legacy as provincial finance minister should disqualify him from being taken seriously when he lectures Ontario. However, what makes the finance minister's attack even more hypocritical is how he behaved during the year after his tenure as Ontario's finance minister when Janet Ecker tabled budget 2002-03.

What did Ms. Ecker do with her first budget? According to the National Post, “She delayed personal and corporate income tax cuts. She postponed an increase in private school tuition tax credits. She turned her back on the legacy of Mike Harris, her one-time boss and some say, embarrassed her predecessor in the job”.

What sort of furious outburst did we hear from the finance minister when his corporate tax cuts were put off? There was not a peep. He went mute. Corporate income tax cuts suddenly were not so important any more. When he had his chance to get the corporate taxes down, he said nothing. Yet now he sits here in Ottawa casting stones from his glass house, telling Ontario to lower its corporate tax rates.

Speaking of which, just what has the finance minister done in terms of taxes since he arrived here just over two years ago? It is not as though he has won over many economists in terms of his tax cutting performance. Let us look at his much vaunted GST cuts.

Despite the fact that nearly everyone on the planet, or at least every economist on the planet, was telling him that income tax cuts were a better means of increasing productivity than a cut to the GST, the minister went ahead and cut the wrong tax. What he also did was raise income tax in his first budget from 15% to 15.5%.

Who exactly were these people telling him to cut income taxes instead? Just to name a few, the late Milton Friedman, a Nobel prize winning economist, told the National Post, “ If the choice were GST cut or income tax cut, the income tax cut would be better”.

The finance minister also received similar advice from his own department as well as from the Fraser Institute, the International Monetary Fund and the World Bank.

The only people who appear to have been in favour of the GST cut over income tax cuts were the Minister of Finance and the Prime Minister. This of course came not only with a catch, but a strong suggestion from both these men that the provinces should use the vacated tax room to levy their own taxes to meet their spending requirements.

The Prime Minister referred to it as an “open tax room” for the provinces to fill and the Minister of Finance went so far as to say in June 2006, “Provinces have the option to look at that vacated tax room and decide if they want to fill it”.

Less than two years ago the finance minister was encouraging provinces like Ontario to raise their taxes and fill the void left by the reduced GST in order to help them meet their spending priorities. Now he is telling them that their taxes are way to high.

However, the hypocrisy does not stop there. The finance minister has accused the government of Ontario of having a spending problem. If he is going to make such accusations, he should at least look in the mirror before criticizing others.

Through three budgets, the finance minister has managed to boost spending by an astounding $33 billion. John Williamson, the head of the Canadian Taxpayers Federation, had this to say about the minister's most recent budget:

Under [the finance minister], the size of the federal government has grown by an astounding 14.8 per cent. How is this fiscally conservative or even 'responsible'?

The quote that is my personal favourite comes from Andrew Coyne, hardly a Liberal, formerly of the National Post. After last year's budget, he had this to say about the finance minister:

With this budget, [he] officially becomes the biggest-spending finance minister in the history of Canada.

However, 2008 was going to be different. The finance minister spent the three months leading up to the budget convincing Canadians that this year, because of the slowing economy, he was going to be fiscally prudent and not table another big-spending budget.

What did Andrew Coyne--again, my favourite person to cite--now the national editor for Maclean's, have to say about this year's budget? This is what he said:

With growth forecasts cut in half, revenues actually in decline, and concerns about the U.S. economy overshadowing all, the Conservative pre-budget message was all about the need for restraint. Why, [the finance minister] even had himself photographed having his shoes re-soled, rather than pick up the traditional new pair.

Andrew Coyne stated further:

So you can imagine my shock, on opening the budget, to find that the new-look, skinflint minister plans to spend every bit as much as he forecast in last year's bacchanalia, plus a little more. Last year, he was “the biggest-spending finance minister in Canadian history.” This year, he still is.

To summarize, today we have a finance minister who has gone to the unprecedented step of trashing the business climate of Canada's largest province and telling a provincial premier what he should have in his own budget. This is the same minister who cut social programs deeply during his tenure as Ontario's provincial finance minister in order to fund corporate tax cuts, but when those tax cuts were delayed by his Conservative successor, he did not make a peep.

Now that he has arrived in Ottawa, he has spent $12 billion a year on what everyone else agrees is a less productive two point cut to the GST and, while he was at it, became the biggest-spending finance minister in the history of Canada by increasing spending by $33 billion. This is why I mentioned at the beginning of my speech that I would never have imagined that this speech would have to be given in the House of Commons.

I think all of my colleagues here should join with me in support of the motion and affirm that, despite the finance minister's insistence that Ontario is not a good place to invest, the rest of the House of Commons believes that Ontario is a great place to invest.

Opposition Motion—The Economy
Business of Supply
Government Orders

12:20 p.m.

Conservative

Dean Del Mastro Peterborough, ON

Mr. Speaker, the hon. member pointed out the fact that our finance minister discussed what he would like to see in the Ontario budget. That is true. We did have a wish list for the Ontario budget.

However, what the hon. member did not talk about are some things that people did not see, things that the Liberal government never allowed them to see in an Ontario provincial budget when the Liberals were the federal government. The Liberals presided over a time when the fiscal imbalance grew to some $22 billion and they never provided things like per capita transfers to the province of Ontario. Despite Ontario being 38% of the population and 41% of the GDP, it received only about 22% of the infrastructure dollars under the previous Liberal government.

However, the hon. member is different and I know he is different. He has gone on the record on many occasions with past comments which indicate that he firmly supports the Ontario Liberal government receiving equal per capita transfers, transfers that are fair from coast to coast.

I would like to ask the member if he does support equal per capita transfers for the province of Ontario and, for that matter, for all provinces.

Opposition Motion—The Economy
Business of Supply
Government Orders

12:20 p.m.

Liberal

John McCallum Markham—Unionville, ON

Indeed I do, Mr. Speaker. I support a strong equalization system so as to help the less advantaged provinces, but at the same time I support equal per capita major transfers to all provinces. As the member points out, I am on the record as having said that.

My only question to him is this: where is the cost-benefit study and careful analysis underlying the Peterborough-Toronto train, which appeared in the budget at the last moment?

Opposition Motion—The Economy
Business of Supply
Government Orders

12:20 p.m.

Conservative

John Baird Ottawa West—Nepean, ON

Here's what Bob Rae said about Paul Martin. I have it right here.

Opposition Motion—The Economy
Business of Supply
Government Orders

12:20 p.m.

Liberal

John McKay Scarborough—Guildwood, ON

Are you reading from Frank magazine again, John?

Opposition Motion—The Economy
Business of Supply
Government Orders

12:20 p.m.

Conservative

The Acting Speaker Royal Galipeau

I would like to advise hon. members that the Speaker is standing right now and is about to give the right to question to the hon. member for Sackville--Eastern Shore.

Opposition Motion—The Economy
Business of Supply
Government Orders

12:20 p.m.

NDP

Peter Stoffer Sackville—Eastern Shore, NS

Mr. Speaker, I listened to the hon. member discuss the feud between the federal Conservative Party and the Ontario Liberal Party. I must say that he is right about one thing. This fighting between the federal finance minister and the Ontario minister simply does not help anybody. We in Nova Scotia know exactly what happened with the Atlantic accord. We know what happened with Danny Williams in Newfoundland and Labrador. This type of fighting is simply not good.

I want to ask the hon. member a very simple question. He has had two weeks in his riding. I would like to know what his constituents have told him about the infighting that is happening at this level. What do the people of Ontario, especially those in his riding, think about this personal infighting?

Opposition Motion—The Economy
Business of Supply
Government Orders

12:20 p.m.

Liberal

John McCallum Markham—Unionville, ON

Mr. Speaker, the infighting is really quite amazing. One can think back to a couple of budgets ago, when the finance minister said that this “long, tiring, unproductive era” of federal-provincial bickering was at an end. The example of this virulent attack on the McGuinty government, plus the examples my hon. friend raised about Nova Scotia and Newfoundland and Labrador, suggest that the level of federal-provincial bickering or fighting or federal attacks is probably greater than at any time since at least the 1930s.

In answer to his direct question, yes, I have been in my riding for the last couple of weeks, and people are flabbergasted. They do not understand, particularly at a moment when manufacturing jobs are at risk and when people feel insecurity looking forward, why their governments are fighting like this rather than working together to do something positive and helpful for the people of Ontario.

My constituents are totally taken aback. They are totally opposed to this fighting spirit on the part of our finance minister, who does not seem to understand that investors actually listen to him and that this may cause investors not to come to Canada or Ontario.

Opposition Motion—The Economy
Business of Supply
Government Orders

12:25 p.m.

Liberal

John McKay Scarborough—Guildwood, ON

Mr. Speaker, I agree wholeheartedly with the sentiments expressed by my colleague. The simple facts are that the finance minister left Ontario with a $5.6 billion deficit, that he is the biggest-spending finance minister in the history of Canada, that he has ramped up spending by over 14%, and that we are facing some economic turmoil, largely generated from the south. What was a $14 billion surplus is now down to something less than $2 billion. In government terms, that is just simply a rounding error.

First, I want to ask the hon. member whether he is concerned about this near deficit that the finance minister has been able to get us to. Second, I would like him to comment on the budget speech in 2007, which stated, “The actions taken in Budget 2007 will restore fiscal balance through long-term, fair and predictable transfers”.

“The long, tiring, unproductive era of bickering between provincial and federal governments is over”: does the hon. member think that is true?

Opposition Motion—The Economy
Business of Supply
Government Orders

12:25 p.m.

Liberal

John McCallum Markham—Unionville, ON

What great questions by my colleague, Mr. Speaker.

As I said earlier in response to another member, far from this unproductive bickering being over, I would guess that it is at its highest level since the 1930s.

With respect to my colleague's first question, never in the history of Canada has a new government inherited such a huge surplus. Never in the history of Canada has a new government squandered such a surplus with such speed so as to bring this country to the edge of deficit.

We cleaned up the $42 billion Conservative deficit which Liberals inherited in 1993 and put that into surplus. We left the Conservatives a huge surplus. They squandered it in two short years.

But this is not terribly surprising. Let us ask ourselves this question. Before the current Prime Minister inherited these huge Liberal surpluses, when was the last time any Conservative prime minister of Canada actually balanced the books, even in one single year? I will give members a hint. It was not Brian Mulroney. It was not Kim Campbell. It was not John Diefenbaker. It was not even R.B. Bennett. No. We have to go back to 1912, the year the Titanic sank, when Sir Robert Borden was prime minister. That was the last time the Conservatives actually balanced the books.

Opposition Motion—The Economy
Business of Supply
Government Orders

12:25 p.m.

Conservative

Dean Del Mastro Peterborough, ON

Mr. Speaker, I was very interested in the comments by the previous Liberal member, who called $2 billion a rounding error. I thought that was really remarkable. I will be sure to use that in the next election campaign.

I do want to question the member. I am astounded by comments he made about how we have whittled down the surplus so that it is razor thin now. Why in the world is the Liberal Party against giving Canadians back their hard-earned tax dollars?

We have increased investment in health care. The Liberals have adequately pointed that out. We have increased investment in education. We have increased transfers to every single province. We have provided more support for families.

We have been there, but we have also reduced taxes, and we brought that surplus down. We have paid down record amounts of debt. There should not be a massive surplus in Canada because it is Canadians' money. It is not Liberal money. It is not Conservative money. It is not government money. It is the money of Canadians. A multi-billion dollar surplus is not needed. It is not good for families. It is not good for business. I do not know why the member does not understand that. Perhaps he could enlighten us.