Mr. Speaker, I will be sharing my time with the hon. member for Cambridge.
I take this opportunity to compare the content of the 1999 budget with the results of my pre-budget consultations. In doing so I challenge the opposition's thesis that this is a budget which ignores the priorities of Canadians and does not address the concerns and issues facing Canadians today.
During August, September and October I held numerous meetings with various groups of constituents, including local business representatives, community activists, a local Rotary chapter, members of the Women Entrepreneurs of Canada and an arts focus group.
In addition, I solicited input for the budget from constituents through my summer householder and I received numerous calls and letters with additional suggestions.
At all of my consultations I distributed two budget charts. One chart clearly demonstrated that for the 1998-99 financial year the interest payment was estimated at $44 billion. Moreover, the chart also clearly indicated that an operating surplus of $47 billion existed prior to the interest payment.
Budget chart number two analyzed interest rate sensitivity and showed how significantly the interest expense increased with minor increases in interest rates. An increase from 7.2% to 7.5% triggered an additional charge of $1.7 billion.
I am pleased to report that my consultations produced the following results.
First, paying down the debt was the recommendation most often made. Virtually everyone thought that some form of action was necessary. Many constituents felt that paying down the debt was the best way of reducing future interest expenses. Constituents also noted that our current debt level leaves us vulnerable to a recession and rising interest rates.
Second and on the other hand, very few argue that debt reduction should be the government's singular priority. Most felt that we should be able to reduce debt and address one or more other needs. A close second to paying down the debt was restoring funding to health care with increased emphasis on preventive and home care approaches. The great majority called for the federal government to restore the health care component of the provincial transfers. Constituents specifically noted the reduction in the number of hospital beds, the waiting time for emergency treatment and that the waiting lists for surgery had become intolerable especially in the province of Ontario. Constituents also felt that the health care system needed more innovation and flexibility.
A week or so before the budget I met with a constituent of mine, Mr. Sam Dionofio, a member of the executive committee of the volunteer board of the Heart and Stroke Foundation. He encouraged me to support funding for the Canadian institutes of health research which in turn would greatly enhance cardiovascular and cerebrovascular health research. He advised me that the Canadian institutes of health research represents an opportunity to greatly expand Canada's health research efforts and Canadian productivity. It would ensure that our health research capacity is strengthened relative to the changing global environment and he urged me to note that health research represents an investment in our future and economic well-being. While debt repayment was also cited as a priority the previous year, this year health care priority and health care spending showed a marked increase as a concern by my constituents.
Third and interestingly enough, there was no widespread call for major tax cuts but a reduction of almost every tax was more or less mentioned once or twice. However, most constituents felt that if the government were to cut taxes, the greatest consensus was for general tax relief for low income people. Other tax changes included cutting employment insurance premiums. I was delighted to see that the top priorities of my constituents were also the top priorities of the government and that they were addressed in the 1999 budget.
The 1999 budget takes action on three fronts. First, it maintains sound economic and financial management. Second, it invests in key economic and social priorities. Third, it provides tax relief and improves tax fairness.
The budget acknowledges that strong economic growth and a reduced debt burden better enable the government to fight tax relief and thereby make key investments. This is why the 1999 budget confirms that the era of deficit financing is over and that the government will continue to deliver balanced budgets or better again this year, in 1999-2000 and 2000-2001. This will be only the third time since Confederation that the federal government has been deficit free for at least four consecutive years.
The budget goes even further. It acknowledges that another key issue for any nation is its national debt. Last year Canada's debt to GDP ratio saw its largest single yearly decline since 1956-57, from 70.3% to 66.9%. In the current fiscal year of 1998-99 it should still fall to about 65.3%. By 2000-01 the debt ratio should be down to just under 62%. This progress on debt reduction brings with it real bottom line benefits to Canadians.
In 1995-96 when the debt to GDP ratio was at its peak, 36 cents out of every federal revenue dollar went to paying interest on the debt. Last year with the debt ratio dropping, the portion of each revenue dollar servicing the debt fell to 27 cents. What does this mean to Canadians? It means that we are freeing up moneys to strengthen health care, access to knowledge, to provide needed tax relief, to fight child poverty and to invest in a more productive economy.
The government is committed to keeping the debt to GDP ratio on a downward path. A key element of this strategy is a debt repayment plan.
The government will continue to present a fiscal plan which will include a contingency reserve as a buffer against unexpected financial pressures. The current plan contains a contingency reserve of $3 billion each year. When that contingency reserve is not needed, such as last year, it will go directly to paying down the public debt.
Second, I wish to address the budget's investment in key economic and social priorities by investing in health care, research and innovation and other key areas to improve Canadians' ability to work and to improve their quality of life. Action to sustain and strengthen health care is a key priority of this government and a central initiative of the 1999 budget.
The budget announced that the provinces and territories will receive from the federal government an additional $11.5 billion over the next five years specifically for health care. This funding marks the largest investment this government has ever made. This investment is helping our provinces deal with Canadians' concerns about health care, waiting lists, crowded emergency rooms and diagnostic services.
However, the commitment to strengthening health care does not stop there. Among other things, the budget announced that the federal government will further invest in research and health problem prevention. Specifically, funding for health research and innovation was increased by $500 million. Of these moneys the budget set aside $240 million to support the Canadian institutes of health research, the innovative proposal developed to integrate health research relayed to me by my constituent, Mr. Dionofvio. The proposal was wholeheartedly supported by the Heart and Stroke Foundation.
Last but not least, the budget also invests $287 million to improve efforts to prevent health problems from occurring. One of these initiatives includes $75 million to the Canadian prenatal nutrition program to help high risk pregnant women to have healthy babies. In the past the Women's Health Centre and the Parkdale parents primary prevention program at St. Joseph's Hospital in my riding have been beneficiaries of this program which, in turn, has benefited new born babies ensuring that they have a healthier start in life.
I conclude by quoting a statement made by the Minister of Finance when he visited my riding in November: “We understand where our priorities lie. We will balance the books and we will pay down the debt, but we will do so much more. This great nation is more than a balance sheet”.
I believe that the 1999 budget not only attains the goals noted in the Minister of Finance's statement but it also embodies the spirit of that statement. We are building today for a better tomorrow.
