Mr. Speaker, I will be sharing my time with the Parliamentary Secretary to the Prime Minister.
It is a great pleasure for me too to speak on the budget speech itself. Obviously, many things included in this budget have not been emphasized by the opposition, because that is not how the game is played. Its role is not to make the government look good.
I want in particular to stress, with regard to the financial management of Canada, certain essential points that ensure that Canada is now and will be able in the future to position itself and fulfill its obligations to Canadians as well as its international responsibilities.
In the period between 1980 and 1990, there was an average annual deficit of $30 billion. In fact, we only calculated ten times $30 billion, for an accumulated deficit of $300 billion. For those listening, each year a government tables its budget and says that, this year, the deficit is $50 billion or $40 billion, this means that this amount has to be borrowed on the market and added to a growing debt. It is as if someone buys a car on credit for $20,000 and also buys other things on credit. That person's debt increases accordingly and will have to be repaid on an annual basis.
When the government's financial structure was reorganized, after the Liberal Party came to power in 1993, the Conservatives had left an operating deficit of $42 billion in addition to the debt. So, the accumulated debt that had to be repaid was nearly $600 billion. This debt was further increased by an amount borrowed annually to ensure a balanced budget.
In the space of six years, the $554 billion debt has been reduced by $52 billion. That is nothing to be sneezed at. Are hon. members aware that, in the recently tabled budget for this year, $35 billion out of $187 billion is earmarked specifically for the debt, the debt charges? That is $35 billion out of $187 billion.
By reducing the debt by $52 billion over the past six years, the Government of Canada has been able to save $3 billion annually in interest it is no longer paying. The objective of this budget is to further reduce the debt so as not to leave that financial burden for those future generations. If we are to guarantee pension funds for Canadians, we must be absolutely sure to have a sound financial foundation, one that is clean and clear, meaning that it will not be necessary to make payments and borrow every year.
In this case, Canada has been able to reduce its debt by $52 billion, which makes for a ratio to GDP that is something of a record. Moreover, the IMF recently described Canada as the country with the best financial management of all G-7 countries in the past 10 years. Those are not our words but the worlds of international bodies which analyze the situation in various countries and hold Canada up as a model.
Among the G-7 countries currently experiencing budget structuring problems, we need look no further than France, which is a member of the European Union. It has to make adjustments in order to meet the criteria for EU membership. Last year's budget was a deficit budget, which leaves it with a larger deficit than the criteria for European membership stipulate.
All of the G-7 countries have been looking at deficits. The only one currently with a balanced budget for the past six years, and about to add a seventh is Canada. So, we are a model to look to.
However, here we navel gaze and we try to analyze the performance of a government by comparing it to that of another government. Of course, we could mention all sorts of things. However, when it comes to the budget, if we make comparisons with all the other countries, I think we are a model for the world. This is what we call to show fiscal prudence with taxpayers' money.
What has been the impact of balancing budgets and reducing the debt over the past seven years? What has been the impact of saving about $3 billion in interests annually by paying off the debt? These measures have allowed us to keep interest rates very low.
I remember that, in 1970, when I bought my first property, I got a 5.25% rate. Now, in 2004, 34 years later, the rates are the same. The bank lowered its rate again in recent weeks. This means that a young person who wants to buy a house now will pay an interest rate that is basically the same as in the seventies. In fact, in real terms, the rate is now lower, because the dollar was worth more in 1970 than now.
So, managing public finances very prudently, gradually paying off the national debt and tabling balanced budgets have ensured that we can now maintain interest rates at a fairly constant level. This benefits Canadians and it allows investors to come and settle here, thus helping our economy grow. Such savings help create wealth, and also allow us to invest in the health and social systems that our fellow citizens truly need.
There is one thing that went unnoticed in the budget. We saw that, according to the New Democratic Party, the Conservative Party and all the opposition parties, the biggest loser is the public. Oddly enough, there is something that the opposition failed to mention about the budget. It is a measure that may not necessarily be included in this budget, because it was announced a while ago, to be implemented over a five year period beginning on January 1, 2001. In other words, this measure is still in effect this year.
The finance minister at the time had announced a $100 billion tax reduction plan over 5 years. Is the House aware how much that represents for that year as a tax decrease for everyone in Canada? It is a decrease of $32.3 billion that the people will be entitled to. That is a tax decrease for this year, 2004-2005, of $22.3 billion for the citizens. That is not mentioned. When they say that the people did not get a tax reduction, it just shows that political memory is very short-term. Something like three or four months.
In 2000-2001, the finance minister—who is now the Prime Minister—announced a plan to reduce taxes by $100 billion over 5 years. This year the same formula applies. Canada will enjoy a tax reduction of $31.1 billion, of which $22.3 billion goes to individual citizens and $4.4 billion to businesses.
It also puts more money in the taxpayers' pockets. It makes it possible for Canadians to get into the market and invest.
A while ago, I mentioned interest rates remaining very low, but I also want to talk about the more than $30 billion decrease in taxes that is going into people's pockets. When we do the math, what does it mean? It enables people to spend.
In recent years, particularly in 2002 and 2003, these measures have led to a construction boom across Canada. So, construction materials were purchased, companies had to manufacture these materials and expanded their operations. This resulted in jobs being created.
All these measures by the Liberal government have ensured that today nearly all sectors are receiving investments to consolidate the Canadian economy and ensure it improves each year.
After September 11, as everyone remembers, there was a major economic slowdown in the United States.
Everyone thought that this would seriously affect Canada. As a result of the budgetary measures adopted at the time by the federal Liberal government, Canada weathered the economic ups and downs affecting North America. Canada's economy stayed on course.
The proof is that our unemployment rate is one of the lowest around. Unemployment is approximately 7%. This is incredible. Canada has created the most jobs per capita of all the western countries. Nonetheless, measures were implemented to ensure that today Canada's economy has a solid foundation. Furthermore, this gives all Canadians hope for the future.
In order to guarantee pensions for future generations fifty years down the road, we need to plan today. In my opinion, this budget is extremely progressive and will ensure that Canadians have a strong economy in the coming years.
