Jim Jones

[Supply, February 18th, 1998]

Madam Speaker, if we compare the tax rate between Canada and the U.S., in Canada we max out at the top tax rate at $55,000 to $60,000. That is 54% in Ontario, I guess a little less now with the cuts the Harris government has done for the provincial level.

In the U.S. people max out at 36%, at $250,000. With the difference between the 20%, a lot of health care can be bought, child tax benefits, education. There is a lot more disposable income and just as good an education system.

[Supply, February 18th, 1998]

Madam Speaker, I would like to thank the member for Kings—Hants and the member for St. John's East for bringing this important motion to the House.

The Minister of Finance was warned by university leaders months ago that a brain drain is drawing the intellectual life out of Canada. A prescription to remedy this problem is an infusion of dollars for research and training to increase participation.

It is time this government realizes that Canada is not an island on its own. We need to retain our human capital and convince Canadians to stay here in a country that has full potential to prosper internationally at an exceptional level. Right now is the time for this to happen.

Many of our country's most promising young researchers and academics are leaving for more enticing grounds, mainly to the United States. They are leaving because they cannot get the resources they need to thrive in Canada, namely research dollars, decent salaries and lower taxes.

Consequently this trend will ultimately damage our economy. Canada stands to lose domestic talent to our southern neighbour. Less homegrown research and development means fewer resources available to support our Canadian businesses. These same businesses are struggling to find well trained workers who will help them compete internationally.

The facts are clear. Canada is losing talent to the United States because American companies are offering Canadians higher salaries and the U.S. government can offer lower taxes.

High taxes in this country are also scaring away businesses to low tax U.S. and other destinations around the world. The tax rate for corporations ranges from 38% to 46% in Canada. In the U.S. it is considerably lower. If corporations are feeling the pinch, let us now consider young people and understand what drives them south of the border.

Studies indicate that as of late we are losing young talent and ambition. Our leaders are the future. A student graduating from university is faced with a high debt burden from years of student loans. When offered a high paying job, they obviously take it in anticipation of ridding themselves of debt and saving for the future. Paying off a debt of $25,000 to $30,000 when entering the workforce is unbearable. How are our young people ever to get ahead when they are suffocated with huge student loan payments monthly?

Debt repayment incentives are driving our teachers to Columbia, Mexico, Egypt and the United States. High debtloads are driving our engineers and computer scientists to the United States and many private school grads are deciding to work elsewhere to cover their debtloads.

I urge this government to seriously consider the implications it is imposing on our young graduates. Student debt burdens are a serious problem in Canada. The Minister of Finance must introduce measures in the upcoming budget that will repair the damage he has done to our young people.

The only way to ensure that the Canadian economy continues to grow is to empower the consumer. To do this requires an increase in the disposable income of Canadians. Unlike in the United States, disposable income has fallen in Canada. In fact, it has fallen or been flat for two years running. The unemployment rate in the United States has been considerably higher. Canada's unemployment rate, on the other hand, has consistently been higher than that of our southern partner.

The Liberal government has continued to cut, cut, cut. Now its eyes are finally opening, a little late I might add. Dramatic cuts in post-secondary education by this government have caused the average student debt to almost triple this decade from an average of $8,700 in 1990 to $20,000 this year and forecast to $25,000 in 1998.

I believe in the Liberal budget next week they will be coming out with the millennium fund of $1 billion. They have caused this student debt by tripling tuition fees in the 1990s. Maybe they should be giving the money back to the universities so that tuition fees can be reduced.

These disheartening figures point to another issue that is surfacing. The fear of enormous debt is driving qualified students away from the universities. How will this country compete internationally if talent is not encouraged to flourish? If this trend continues, what future does this country have?

We know that the personal income tax gap has widened between Canada and the United States.

This is due to many reasons. One which can be fixed in this upcoming budget is bracket creep. By indexing bracket creep we can realize almost a billion dollars returned to the hands of Canadians. It is time that we let Canadians spend their money instead of government.

A document compiled by the industry department raises serious concerns about whether Canada has much to brag about or not. This report is entitled “Keeping up with the Jones”, no relation I can guarantee. It reveals the true picture, not the rosy one this government keeps referring to.

Let me share with this House some of the findings since the Liberal government so quickly swept it under the carpet with embarrassment.

The national income gap between Canada and the United States is getting worse. Americans are now 25% richer than Canadians. The U.S. economy is getting richer and it is paying its workers better. The salary gap is especially pronounced in occupations requiring high skills. Engineers, computer scientists and architects are earning an average of $11,000 to $13,000 more than their Canadian counterparts.

The combination of lower taxes and higher income in the United States means working Americans have more money to spend. An example is a couple with $80,000 in taxable income and two children living in California will take home $7,000 more than a similar Canadian family.

Canadians pay about one-third more in taxes. Top corporate tax rates are significantly higher in Canada than in the United States.

Many state governments offer very generous tax and investment incentives to businesses for the purpose of attracting investment and innovation activities. Canada's ability to attract and retain knowledge workers is seriously undermined by its personal income tax structure.

Canadian workers hand over significantly larger portions of their earnings to the tax man than Americans. The top marginal personal income tax is 20% higher in Canada than in the United States.

The continual shortage of knowledge workers such as software engineers in this country poses a huge problem as Canadian business struggles daily with the year 2000 problem. It is estimated that there are 300,000 Canadians in California working in Silicone Valley.

It is time this government admits to these mistakes. It must undo the damage it has done. Cuts in transfers to the province have cost this government the credibility as an effective government and are costing Canada our talent.

The Liberal government must put a stop to this brain drain. Unless this government wakes up and starts now, we stand to lose more and more of our talent to the United States.

[Committees Of The House, December 11th, 1997]

Mr. Speaker, between 1974 and 1984 the debt was multiplied by 10 by the governments that were in power during that time. Between 1984 and 1993 the debt was multiplied by two. We inherited high interest rates and the debt. We also inherited budgets that were being constructed that were not even covering the programs.

Shortly into the programs the cuts were made. The governments covered their programs and started eating into the debt or the servicing cost of the deficit. They recognized this and put in other things to create growth in the economy such as the free trade agreement and the GST. They removed the manufacturers sales tax and brought in the GST, one tax that allowed us to be competitive from a free trade standpoint. Goods now leaving the country no longer have the 14% additional tax on them and because of the low dollar we are seeing benefits today.

[Committees Of The House, December 11th, 1997]

Mr. Speaker, I was not part of what happened then. There were certain circumstances going on, not only in the country but around the world at that point in time. The culture quite frankly was not there. We were not the only government in the world that was spending more than it took in. It was characteristic of a lot of the governments around the world.

Somehow some type of cultural shock happened in the late eighties or early nineties when people and governments started to wake up and say “We cannot continually spend more money than we have taken in”.

Many of the things that happened in the 1984 to 1993 timeframe set the pins in place to get the fiscal dividends or rewards we are getting today. I remember the opposition at the time, which is now the government, was totally opposed to free trade, figuring that it would destroy Canada. It has been the greatest bonanza or dividend the country has ever received.

Our future will be in free trade. Whatever happened in the past will never happen again. We have to put in place balanced budget legislation and firm debt reduction legislation to make sure that governments manage the economy and the assets given to them by the people and not just dole out money and create programs.

[Committees Of The House, December 11th, 1997]

Mr. Speaker, I recall the Liberal government in the 1993 election campaign promised to rip up the free trade agreement and to eliminate the GST. Two of those items are probably the fundamental reasons the country is doing so well. Tax revenues increased substantially over the last four years. Most of that is because growth has come from free trade and not from growth within the economy.

Back in the late eighties there was a worldwide recession and high interest rates. It was not just applicable to Canada. It was applicable to a lot of the countries around the world. Many governments, organizations and corporations have now cleaned up their act. They realize they cannot spend more money than they have. That is why we are seeing the growth we are seeing now.

It has nothing to do necessarily with some of the cuts that have been made. I commend the government for being the first government in 27 years to balance the budget. That is a novel idea. Now we must focus our attention on the debt. We must also focus our attention on getting Canadians back to work.

We must recognize that the neighbour to the south of us is a great opportunity for us. We have to get our country more in line with the neighbour to the south of us if we want to create the jobs and be competitive. Some 80 per cent of all our trade is going to the neighbour to the south.

[Committees Of The House, December 11th, 1997]

Mr. Speaker, it is an honour to speak on this very important topic. Over the next two or three months there will be much debate. The directions we take will likely be debated frequently over the next couple of years.

The results of the finance committee hearings show this Titanic government has decided to chart a course that steers every Canadian right into the iceberg. The short sighting of the tip of the iceberg that resembles the deficit completely misses the massive danger of the submerged problem of the debt that is just waiting to sink the economy. As history sometimes ends up repeating itself, everyone will go down with the sinking ship. What is worse is that shuffling the chairs on the deck will not buy Canadians any more time.

This government does not understand that high taxes kill jobs. This government does not understand that “high taxes equal high revenue” is just recycled money that is borrowed and is not new. This government does not understand that everyone knows the bloated employment insurance premium is a tax on the backs of the working class.

This government does not understand that we are losing the battle with the U.S. regarding the brain drain. This government does not understand that Canada should not only end interprovincial trade barriers but that the Canada-U.S. economy is actually one big market made up of 330 million people. This government does not understand that Canada must be a global leader as we enter the next millennium.

This government does not understand that small business drives the economy and still faces unbearable payroll taxes and extreme bankruptcy statistics. This government does not understand the impact that part of the consultation process means actually listening to Canadians and rightfully respecting their interests and their recommendations. The captain of this government does not show any desire to scope the dangers of this massive debt, the ticking time bomb of the economy.

Rather, the finance minister is too involved scoping the Prime Minister's job. Let us face it, working families have been crippled with the burden of creating such a so-called fiscal dividend. They have been taxed, taxed and overtaxed. In the event of the upcoming surplus, this government should feel obligated to return what is rightfully theirs. This means cutting taxes. All Canadians have paid long enough for the misconduct of the EI fund.

Canadians are no longer prepared to sit back and let this government set strategies without seriously implementing the suggestions provided during consultation. Canadians shared their frustrations and proposed solutions. This government did not listen. Why did we travel across Canada and hear from over 400 witnesses if we are not going to put their ideas to work?

The suggestion is clear. This government is not serious about creating the environment to reduce employment. It is not serious about cutting taxes. It is not serious about facilitating growth. This government did not listen. The report from the finance committee does not represent Canada's interests. It is merely a supporting document of the Minister of Finance.

Canadians are being held hostage by Liberal Party politics. The deathwatch on the Prime Minister has begun and the captain is the Minister of Finance. He is not willing to give anything of substance to Canadians until he is running for or is Prime Minister. It is a sad but true fact. One only has to look at his own cabinet colleagues to know this is what is happening. In the meantime working Canadians get poorer, unemployment remains a national tragedy and Canadians become less competitive.

In Jeff Rubin's 1997 Monthly Indicator named the “The Federal Fiscal Dividend: Who gets to spend it?”, Mr. Rubin discussed how personal income taxes as a share of GDP rank Canada the highest among the G-7 countries. Not only is Canada's personal income tax rate not internationally competitive but it has now saddled households with the largest tax burden in Canadian history.

Even a $13 billion personal income tax cut over the next four years would leave the income tax to GDP ratio well above its 1989 level. After some seven years of declining after tax real income per capita in Canada, a personal tax decrease could at least begin the process of restoring domestic purchasing power in the economy.

The Canadian Federation of Independent Business told us that “One very important priority which is the cornerstone to building a better life for Canadians is meaningful job creation”. The CFIB said it and we have said it too.

Priorities should be placed on debt and tax reduction, not on new program spending. A recent survey revealed that 85% of small business favours restrained spending. The plan to allocate 50% of the so-called fiscal dividend to new spending and the other 50% to debt and tax reduction is wrong. It is the wrong blend. This mix will only create fiscal problems in the future.

Small business has called for the emphasis to be on strategies that lead to private sector job creation which will provide a solid foundation for the future of the Canadian economy, debt reduction, which will decrease the servicing costs of the debt, and reduced taxes.

We support these initiatives for the good of Canadian small business. No longer can we let the government make the wrong decisions for Canadians. Who suffers? Canadians.

We have a government collecting higher employment insurance premiums than necessary to fund the account for a rainy day. We know, of course, that the EI surplus is being used as a deficit reduction tax. Seventy-four per cent of small businesses polled said that the EI fund should be managed separately. The CP fund was privatized; why not the EI fund too?

Small business and the PC Party believe that a top priority is to substantially lower EI premiums for 1998. That will make a difference in the pockets of Canadians. Canadians have over-contributed in good faith to this fund.

It is time for this to stop. Working Canadians deserve to have their hard earned money back. The CFIB calls for a refund to Canadians and so do we. The increase set for 1998 of 66¢ per $100 in CPP premiums must be offset by at least this amount, if not more, in EI premiums. This is an achievable objective. After all, the EI fund has a surplus of close to $12 billion.

Canadians are rightfully upset about taxes, whether they are caused by too much government debt or spending. It is time Canadians had a say in their economic future. We are going to fight to give Canadians that freedom.

Clearly one of the greatest problems facing this country is the high level of unemployment. Is there really any doubt that high taxation in this country is the number one cause of this horrific problem? I think not.

For example, as we know, the province with the lowest tax rate, Alberta, has the lowest unemployment rate. Clearly the Alberta government has committed to a strategy and stuck to it. Why can the federal government not do this?

The U.S. unemployment rate is the lowest it has been for 50 years. This is not luck. It is the result of lower taxes, which means more money in the hands of the people.

We believe the debate on what to do with any surplus has focused too much on the traditional idea of “What should government do now?” This is an unacceptable starting point. Yet again we witness a responsive, knee-jerk reaction to a critical upcoming opportunity. What this government should be focusing on is the question of “What can Canadians do now?”

After all, it is income taken from working families which has led to the fiscal dividend. Canadians have caught on. No longer will we stand by and let unfairness happen. We demand that the government act responsibly with our money. Let us make the decisions on how to spend our money.

The projected fiscal dividend is an opportunity for government to redefine itself, its size and its role to the Canadian people. Canadians have earned the right to spend their own money. They have endured long enough. They have sacrificed to help eliminate the deficit. They have earned the right to spend their own money.

Any tax increase is wrong. Taxes must be cut. Again and again we hear the cry from working families and small businesses. Recent increases in CPP premiums were not offset by substantial reductions in other areas.

In Ontario, our provincial government has kept its promise. Personal income taxes have been cut and government revenues have grown substantially. In the last eight months Ontario has created 216,000 jobs in the private sector, which is roughly 70% of all the jobs which have been created in the country. Clearly there is a lesson to be learned here: high taxes cost jobs.

The federal government cut the CHST payments to the provinces by $6.8 billion in the mid-nineties. The message we have heard from provincial finance ministers and the public is clear. Extra dollars must be transferred back to the provinces so they can restore health, education and social programs.

The suffering has gone on long enough. These transfer cuts meant hospital lineups in the emergency rooms, hospital closings, lack of resources in schools, inadequate home care for the elderly and the mentally ill face closed community homes.

We are losing our future to the United States. Every day Canadian talent is drained to our southern neighbours, all because of high taxation levels and a lack of employment prospects in Canada. We are not willing to sit idle on this. In Canada we face a chronic unemployment problem at 9% unemployment compared to 4.5% in the U.S. This is totally unacceptable.

We know that taxes are also lower in the U.S. Employment opportunities in the U.S. are attracting our people south because of the jobs that they are creating. That is what it is all about. Canadians want to work. Young people want to put their skills and education to use. If this government does not facilitate the setting for job creation now, our talents will continue to turn elsewhere.

Just how do we expect to be competitive with the U.S. when our tax rates are so much higher? Think about it. In the U.S. if you make over $250,000, the tax rate is 36%. In Canada, if you only make $55,000 to $60,000 or over that, you are quickly at the top level of 54%. It does not take a rocket scientist to see where you would get the most money for your salary.

I have a real problem with this government overtaxing Canadians for the purpose of claiming a so-called fiscal dividend. I think it is important to note that the fiscal dividend is by no means a forgone conclusion. If we did not have the $7 billion surplus in the employment insurance fund, the arrival of the dividend would be much later claimed by the Minister of Finance.

Let's get one thing straight. The Minister has factored the EI surplus into the fiscal dividend, a purpose for which EI contributions were never intended. In my opinion, this is totally unethical. We urgently need an amendment to the Employment Insurance Act to outlaw this kind of misuse of the EI surplus.

Just recently this government took $2.5 billion from the employee pension fund to service the deficit. This practice must stop. We must stop the government from continuing to treat this fund as a cash cow. Recently we privatized the CPP fund. Why not consider creating a separate fund for employee pension fund moneys?

We know Canadians want to reduce the debt, yet this government is planning to spend without a clear agenda. A return to uncontrolled spending is another fundamental problem and counter to Canadian culture. The failure to deliver on fiscal reductions promised in the past is becoming a recurring theme of this government. The spending reductions that the government promised in 1995 for the current fiscal year missed the target by roughly 43%, or $5 billion. The government's much vaunted program review exercise lost its effectiveness. It seems to have not followed through with this plan and lost sight of the long term gains this initiative holds.

There are risks that can derail this government from achieving a surplus. They include uncontrolled government spending, failure to deliver on fiscal reduction promises in the past and the dependence of recovering on low interest rates and a low dollar. These are the items that demand immediate attention. Ignorance of these issues will only set our economy back further.

With respect to this upcoming surplus, we have an immediate need for a balanced budget legislation. Committing to balanced budget legislation not only proves to Canadians that this government is serious about its role, but fosters growth in investment for the future. Clear and defined debt reduction targets and debt reduction legislation must be put in place. This would prove that this government is serious about its commitments to reduce the size of the debt.

The government's 50-50 formula is so loose it is almost meaningless, especially if it starts spending it and never has a dividend to split 50-50.

This government must stop acting paternalistically. Canadians have earned the right to choose. The Progressive Conservative Party comes at this debate differently. Our view is simple and effective. Lower taxes means lower government spending. Lower government spending means greater freedom for people to solve problems in the manner they see fit. This means working families are taking responsibility for their spending, their savings, their investments in the future. Informed, autonomous, independent Canadians foster a responsible society. We know what we would do.

This government has to create an environment so that jobs can be created for Canadians, lower their personal taxes and allow our talent to be competitive with the U.S. The government has refused to establish clear and measurable targets for debt reduction and debt-to-GDP ratio.

This is a weak kneed and short sighted response that ignores the calls the committee heard for urgent action on the debt. It also flies directly in the face of public opinion.

Recently the Angus Reid poll found that 84% of Canadians want the federal government to focus on reducing the accumulated debt and high taxes. We believe that one-third of the surplus should be devoted to debt reduction and that action to reduce the debt should start now. The government must reduce our debt to GDP ratio to 60% by the end of this mandate and to 50% by the year 2005.

Taxation levels in Canada remain too high. They penalize initiative. They depress investment that creates jobs. They force investment elsewhere. They encourage highly skilled entrepreneurial Canadians to seek their futures in more hospitable countries.

Despite the many calls for tax cuts heard by the committee, it is clear the government has no intention of responding to this need in the near future. We believe that tax cuts cannot wait until later in the government's current mandate. The next federal budget must send a clear signal that one-third of the fiscal dividend will be used to reduce the tax burden on Canadians.

The role of government must change. Before any decisions are made about the fiscal dividend, the federal government needs to answer some questions that are much more fundamental. What things should the federal government not be doing any longer? What things should the federal government be doing completely differently? What things should the federal government be doing that it is not doing now?

The severity of these issues will not go away. The government has not proven itself in its pre-budget document. We will continue to push for lower taxes, balanced budget legislation and debt reduction targets to be included in the February budget and see if we can get it right then.

[Privilege, December 1st, 1997]

Mr. Speaker, I rise on a question of privilege concerning several matters which arise from the report which was just forwarded from the Standing Committee on Finance.

By an order of this House I am a member of the standing committee. The committee, in obedience with Standing Order 83(10), undertook consideration of proposals regarding the budgetary policy of government. The staff from the Library of Parliament assisting the whole committee prepared a draft document which was to be considered in the formulation of our report.

It is well known that there have been media accounts of the contents of this committee report. I want to express my regret that our report was not first given to all members of the House. That part of the draft report started to find its way into the media before the opposition members of the committee had access to the draft material. We were not given access to the draft material until 10 a.m. last Friday and we were required to prepare a report for today. We had less than three hours to consider that material. Obviously some other members had earlier access.

The premature disclosure of a report or the disclosure of confidential committee documents is a long established ground for contempt proceedings by the House. I was unsuccessful in having this matter reported to the House by the committee so that actions could be taken by the House. I am aware that you are therefore restricted in the actions you can take.

However, I was further obstructed in the discharge of my obligations to this House. On several occasions I requested access to the document which was to form the basis of our draft report. I made my request known to the chairman of the committee and was repeatedly told that I could not have access to these papers which were prepared for the entire committee by staff. This included descriptions of the hearings, summaries of the testimony of witnesses, history of past government policies and so forth.

I was then informed that my opinion about our hearings or the government's budgetary policies could be included in a section of dissenting opinions. In other words, no matter what I may have wanted to propose, I would not be given a chance to have my opinions considered by my colleagues on the committee for inclusion in the report proper.

Opposition views would not find their way into the committee report. I would not have a chance to see a draft report within a reasonable timeframe nor to debate its accuracy and merits and any views which I might have. Whether or not I agreed with the draft report would be relegated to the status of dissent opinions.

Mr. Speaker, this contempt for the maintenance of a legitimate process is troubling to me. These hearings cost Canadian taxpayers over $400,000. Are they to be nothing but a public relations show for the Minister of Finance? Did they go through this exercise just to save the minister the time of having to meet with the groups that addressed the committee while he met with the select groups of his choosing?

Certainly there will be a division of opinion about which budgetary policy the government should follow. However, the one-sided nature of this process is a mockery of this House. The Liberal attitude was that there was no need for debate, no need to defend their position, no need to do anything other than to tell the Minister of Finance what he wanted to hear.

The only people on the committee who could offer opinions for inclusion in the main body of the report were the Liberal members of this committee. All other members were denied access to the draft material and their views were held to be not worthy of debate. They were told their opinions would be slapped into the report as dissenting views. Dissenting from what? We committee members were never to know. Nor were the Liberals to consider our views and debate them in committee. We on this side of the House, we are not to be participants. By virtue of where we sit, we are labelled as dissidents from the revealed truth of the Liberals.

The old Liberal arrogance is back. Stop opposition members from participating in discussions, deny them access to draft reports. “They couldn't possibly agree with us so don't waste time letting them in the door”. The finance committee of the House of Commons is nothing more than an organ of the Minister of Finance and the Liberal caucus. Certainly this was the view of several witnesses after their experiences before the committee.

Mr. Speaker, I ask you to consider whether or not the denial of my access to committee draft papers available to other members of the committee constitutes an obstruction of a member and therefore constitutes a prima facie question of privilege.

[Government Spending, December 1st, 1997]

Mr. Speaker, over the last four years the Liberal government has been cutting indiscriminately, all this without considering the impact of cuts and the future competitiveness of young Canadians. Now that there is some evidence of a surplus, it appears that the government is ready to spend indiscriminately. There is a feeding frenzy going on. The ministers are fighting for their share of the surplus pot. The government is planning to spend carelessly and quickly.

Will the Minister of Finance inform the House of the criteria that new initiatives will undergo?

[Canada Pension Plan, November 24th, 1997]

Mr. Speaker, if I understood him, the Minister of Finance indicated the CPP investment board would choose its own auditors. The minister said that someone from the outside may have more expertise. An auditor's job is not to protect the board of directors but to protect the shareholders, Canadians.

Why is the auditor general not given access through the legislation to the information that will allow him to ensure Canadians are protected?

[The Economy, November 6th, 1997]

Mr. Speaker, last Friday the Older Adults in Action group in my constituency of Markham shared their grave concerns with me regarding the level of the national debt. This group with over 700 members indicated that their number one priority is the paying down of the debt to lessen the burden their children and grandchildren face.

I urge the Liberal government to apply the suggestions received from Canadians. Let us eliminate this debt now by applying the surplus to the debt, stimulating job growth and implementing tax reductions.

An Angus Reid poll released last Saturday indicated that when asked what we should do with budget surpluses, 84% of Canadians favoured either paying down the debt or implementing a tax reduction. The government must commit to balance the budget and stimulate financial growth. This means giving Canadians tax breaks in the form of lower EI deductions to offset proposed hikes in CPP premiums.

We must commit to securing our financial future so that generations are left unburdened.