moved:
That this House take note of ideas and suggestions expressed in the House, at pre-Budget regional conferences and elsewhere with regard to the forthcoming Budget, especially with respect to increased economic growth, the creation of jobs and the reduction of the deficit.
Mr. Speaker, the purpose of today's debate is to give members of this House the opportunity to express their opinion on the Budget.
This is an historic day. This debate is the first of its kind. In the past members of Parliament were not part of the budget making process. Budgets were tabled here. They were debated upon here and they were voted upon here, but there was little opportunity for members of Parliament to influence the content of those budgets. On all sides of the House the focus was on scoring points for the party, not for the country.
We believe that process was deeply flawed. Wisdom-and I know this will come as a great surprise to the House-is not confined to finance ministers. The issue before us is clear. How can we expect Canadians to understand or to accept hard choices if they are not part of the process of choice?
How can we in the House as parliamentarians expect Canadians to trust us if we do not trust ourselves? The people of Canada deserve to be brought into the budget making process and the Parliament of Canada must begin to play a larger role.
Unfortunately, there was not enough time to have the House Standing Committee on Finance take part in this year's budget preparation. Things will be different next year when House committees will have a central role and very real influence.
Today's debate, the first of its kind in Canadian history, is proof of the government's intentions. It follows a process started in last November, at the University of Montreal. Since then, we have held a public meeting with 38 of Canada's most distinguished economists. Critics for the Bloc and the Reform Party were present, I may add.
We have published several new documents informing Canadians on this country's economic state. Four independent research institutes organized conferences in Halifax, Montreal, Toronto and Calgary where representatives from all sectors of society studied the issues to which we, as members of this House, will be confronted in this year's and next year's budgets. The public process will be broadened for the 1995 budget preparation.
There are several conclusions that we can draw on from the consultation process this country has begun. First, one has to have been heartened by the degree to which Canadians were willing to put self-interest aside and discuss issues together to look for practical, real solutions to the challenges we face.
Second, it is clear that the priorities of Canadians are jobs and economic growth, that they want the deficit brought down but not as an end in itself. They believe that as long as deficits are too high unemployment will remain too high.
Third, there is a profound sense that the status quo simply will not do and that if we continue on our current path then that would be a road to nowhere.
Fourth, there is a desire on the part of Canadians for a budget that embodies a game plan, a strategic outlook in which the various budgetary measures that are to be taken can be judged as to their effectiveness.
Fifth, there is a clear sense that the choice we face as a country is not between jobs or the deficit but that there is an urgent need to focus on both. There is a belief that we will never solve the deficit until we develop sustained and strong growth. At the same time Canadians understand that the growing debt itself is an impediment to that growth. To attack the deficit without encouraging growth would be foolish. To attempt to spur growth and jobs as if the debt and deficit did not matter would simply be futile.
Mr. Speaker, the stakes are much higher than mere details of the budget. We aim not only to trim government but to rethink its entire role. Today, we have a golden opportunity to change our way of doing things, not for financial reasons but for reasons of common sense.
As a government we have already begun a variety of processes designed to bring deep and dramatic reform to government, to the way we operate, and to our policies and programs in a wide range of areas. The actions that were taken by the whip in terms of cutting down the costs of this place are a beginning and simply a kernel in the approach we want to take to the frugality of the way in which we generate taxpayers' money.
Yesterday in the House the minister of human resources laid before the people of Canada the beginnings of deep-seated reform in areas within his jurisdiction. If today was an historic day then surely yesterday was one as well. I congratulate my colleague because he really does bespeak for modern liberalism.
There will be more initiatives in the weeks and months ahead. That is why we have made it clear from the very beginning that the 1994 budget should be seen as a first step, the first stage in a two-stage process culminating in the 1995 budget.
Unfortunately the deficit outlook for 1993-94 remains as was set out in my November speech, that is to say in the $44 billion to $46 billion range. A view exists in some quarters that the deficit for the following year, that is the year for which we are budgeting, 1994-95, could fall below $40 billion by itself without any direct fiscal action. That view unfortunately is not valid.
It is true that part of the increase in the deficit for this year is due to one-time influences.
However, according to a number of factors, it is also clear that the reduction of the deficit will evidently be limited in 1994-95 if no direct fiscal measures are taken.
First, in 1994, the growth of the economy will probably come in large part from better corporate profits. There is little chance however of this growth translating into an equivalent growth of federal revenues.
The low earnings registered by corporations during the last few years have allowed them to accumulate considerable losses which they will be able to apply to their income tax payable this year.
Secondly, the erosion of some tax bases is continuing, especially in the area of tobacco for example.
Third, the growth in personal income taxes for this year is likely to be weak. This is due to the unacceptably high level of unemployment and slow income growth.
Fourth, the effect of disinflation on the government's revenues is substantial.
Fifth, many of the savings assumed in the 1993 April budget were never secured through legislation.
Finally many cost pressures must be faced, such as the support for the east coast fisheries, that were never provided for in the last Conservative budget. This is very important because the fisheries is only one example. Not only were the revenue projections in that April budget wrong, but the expenditure projections which any government must have a handle on were unrealistic as well.
For members on this side of the House-and I know members on the other side of the House feel the same way because I heard the leader of the Reform Party and the leader of the Bloc Quebecois talk about it-it is crucial if as parliamentarians we are to regain the confidence of the Canadian people that, whether we are in government or in opposition, we not be afraid to lay in front of the Canadian people the facts and be judged by them. The days of phoney accounting, of illusion, must be over. I know it is something all members on this side of the House support.
I will be clear. Without further action the deficit for 1994-95 will be significantly above $40 billion. To get the deficit on track so that it will drop to a level of 3 per cent of GDP by 1996-97 immediate action is necessary. That action must not consist of overly optimistic growth projections or accounting sleight of hand as was done too many times in the past.
For the purposes of forecasting, we will follow the advice of our main economic experts. We will be conservative in our estimates and will not indulge in wishful thinking.
We have clear priorities: to create jobs, to increase economic growth, and to help those who are truly in need. The debt and deficit problems of our country present severe difficulties and severe obstacles in the way of meeting these priorities. They keep interest rates too high. They drain off our country's income to foreigners and they force us to keep our tax rates up.
The question is: How do we get the deficit down? Let me frame the challenge. There are those who blame the public service. They are wrong. We could let every public servant go. We could discharge every soldier. We could board up every government building. We could shut the whole show down and we would still have a deficit.
There are those who blame the poor. They are wrong. We could abandon all the major programs we have in place to help the elderly, to help those who are unemployed, to help those who are in need, and the deficit would still be with us.
I would hope no one in the House today would argue that the deficit should be brought down on the backs of those who are most in need. If they did I would simply point out, as my colleague the Minister of Human Resources Development pointed out yesterday, that not only is slash and burn morally wrong economically it will not work.
What this country needs is something that it has been deprived of for too long. We need a long term solid growth strategy to bring the deficit down, to put Canadians back to work, to restructure our industrial base so that we can face the competition that lies outside our borders. What we need is a growth strategy that is creative, compassionate and constructive. As a government that is what we intend to put in place.
The budget this year will have real cuts but it will also set in train important processes to reform the most fundamental programs of the federal government. That takes time and requires consultation but make no mistake, that reform will take place.
I am sure all members of this House agree with our objectives of economic growth, job creation, compassion and deficit reduction. What we need today is an in-depth debate to help us determine the manner in which, together, we can attain these goals.
In the debate today the easiest priority for any one of us on either side of the House to put forward is one's own. The most obvious area in which to ask for more spending is one's own. The most obvious area to ask for cuts is in somebody else's backyard.
This debate is about a national budget, not a personal budget. It is about tradeoffs and the balance that we need as a nation. If today there are ideas for more spending then we need to hear today where that money is going to come from. If there are proposals for cuts then we need to know the effect of those on jobs and on Canadians most in need.
If there are those who argue against changes in taxation then we need to know from them if they feel that the existing list of tax exemptions is fair. We have asked Canadians across the land to consider the tradeoffs. It is now up to this House to do that very thing as well.
This country needs a budget that speaks to the needs of all Canadians. This government intends to provide that and I know that the debate we are about to have in this House will contribute a great deal to that effort.
