Scott Brison

[Supply, February 5th, 1998]

Mr. Speaker, I appreciate the comments of the member for Medicine Hat.

On government by polls, I do not pay a lot of attention to polls. My party and I determine economic policy which will best lead Canadians into the 21st century. His party had polled that my riding would go Reform last election. I would not be here if those polls had been correct. Therefore I tend to focus on sound economic policy.

When I refer to the Conservative government as having been extraordinarily important in laying the structural changes necessary to eliminate the deficit, those were not completely my own words. Those came from the Economist in its preview of the world 1998, which said specifically that much of the credit for deficit reduction in Canada belongs to the Conservative government of the early 1990s which introduced free trade, GST and deregulation of the financial services industry, transportation and the petroleum industry. I suggest that perhaps there are more people than simply I who credit the Conservative Party for what it achieved in the early 1990s.

When talking about trusting politicians and doing one thing and saying another, I think Brian Mulroney was, for instance, portrayed by the leader of the Reform Party as being a fake. Brian Mulroney did not dye his hair. Brian Mulroney did not have his teeth done. Brian Mulroney did not have his eyes operated on, and yet they refer to Brian Mulroney as a fake. Let us give credit where credit is due.

[Supply, February 5th, 1998]

Mr. Speaker, sound economic policy requires courage, diligence and, very important, consistency.

Last year the Reform Party wanted to cut spending by $12 billion. Now it wants to put a cap on current spending. Its policy has changed somewhat on that.

Last year the Reform Party was focused on tax reduction and now its current strategy is to focus on attacking the debt largely due to recent polls of Canadians.

We are all waiting with bated breath for the next position de jour of the Reform Party on these important fiscal issues. It is an interesting spectacle to watch the party of prairie populism evolve into the party of prairie poll mongering.

The Progressive Conservative Party stands firm on our campaign commitment to reduce taxes and increase economic activity to benefit all Canadians. The leader of the Reform Party acknowledged earlier today, in speaking about the fiscal dividend, that it has taken 15 years to eliminate this deficit monster.

We appreciate that the leader of the Reform Party recognizes that the steps necessary to reduce and eliminate the deficit began 15 years ago under the PC government of Brian Mulroney who was responsible for introducing the structural changes in the Canadian economy which were largely responsible for putting in place fundamental changes such as the free trade policy, which the Liberals fought vociferously, the GST, which the Liberals fought vociferously and now claim to have invented, the deregulation of the financial services industry, transportation and energy.

It took nine years of Conservative government to undo many of the counterproductive, interventionist policies of Liberal governments which had effectively rendered the Canadian economy incapable of moving forward.

I am very proud of the role that the PC government made, especially in the early 1990s, in courageously moving forward with these policies which laid the groundwork for the elimination of this country's deficit.

Ordinary Canadians have yet to benefit from this current jobless recovery and ordinary Canadians deserve a piece of the pie. The PC party's growth agenda will provide each Canadian with a bigger slice of what will be a significantly bigger pie. The PC party has been extraordinarily clear on this policy and we have not shifted to acknowledge any change in poll numbers like others.

For instance, the leader of the Reform Party said earlier, after a meeting with pollsters, he was told that Canadians feel this government is weak. We did not have to consult with pollsters to realize that this Liberal government is extraordinarily weak. We were able to probably save a significant amount of money in drawing that conclusion on our own.

The Reform Party's policy strategy changes are somewhat like the weather and one can only assume that El Nino has influenced its current position. There seems to be an ongoing competition between them Reform Party and El Nino in terms of which one can blow the most hot air from the west.

We continue to believe—and we are resolute in this—that broad based tax reductions to help put money back into the pockets of ordinary Canadians cannot wait until later. They are needed now.

High taxes kill jobs. It is critical to recognize that between 1989 and 1993 the Progressive Conservative government reduced taxes as a per cent of GDP from 14% to 13% from 1989 to 1993. The Liberals have since increased personal income taxes as a percentage of GDP from 13% to 14%.

High taxes reduce disposable income in two ways: reduction in the paycheques of Canadians and reduction in the amount of money they have to pursue their dreams and to attain the goals they set for themselves.

The long term reduction in economic growth that results from a reduction in lower incentive to work and invest is another toll that high taxes put on the Canadian economy.

The Industry Canada report “Keeping up with the Joneses” cites an increasing gap in the standard of living between Americans and Canadians. The take home pay of Canadians has been reduced remarkably compared with that of our U.S. counterparts.

The question could be what are the Americans doing that we are not doing in Canada. The question really should be what they are not doing. They are not taxing the population to death in the U.S. That is what we are doing in Canada and we have to stop.

High payroll taxes are one of the most detrimental impediments to job creation in Canada. We must move to reduce EI premiums. High income taxes and high payroll taxes continue to damage the Canadian economy.

We could look at the impact that has occurred with the brain drain. Young Canadians graduating from university and in order to pay the egregiously high level of student debt they are carrying are having to go to the U.S. to receive higher pay and to pay less taxes. They do not want to go to the U.S., but they are forced to by a Canadian Liberal government that is not acknowledging the need for change in form of tax reform now.

I quote the industry minister in a November 8 article in the Toronto Sun . He said “Taxpayers who have more money in their pockets would have more money to spend. Tax cuts increase domestic consumption”.

The industry minister should talk more often with the finance minister. Tax cuts would put more money in the hands of ordinary Canadians and empower Canadians to determine their own financial futures.

The Liberals boast of creating a surplus but the Minister of Finance will not even give the finance committee the updated projection figures from last October.

The next federal budget must send a clear signal that at least one-third of the fiscal dividend will be used to reduce the tax burden on Canadians.

The government should commit to further reducing excessive EI premiums to offset the proposed CPP premium increases. We also have to consider an appropriate framework for the setting of public policy.

This is not a question merely of the size of government, albeit government is far too large in Canada by about 16% of our GDP. Nine per cent of our GDP is going toward paying interest. It is a question of definition of government and the role of government.

What things should government be doing that it is currently not doing? What things is government doing now that it could do differently or could cease doing? What things could government pursue? What new initiatives could government pursue which would result in investment in the future of young Canadians in particular.

Between 1993 and today the Liberal government cut indiscriminately. It cut not just fat but bones, tissue and marrow. It cut the hearts out of many Canadians, especially in Atlantic Canada where the impact of those cuts has been extremely devastating.

After having cut indiscriminately it is preparing to spend indiscriminately. Nothing incites a feeding frenzy in the Liberal caucus faster than the smell of hard currency around the snouts of hungry Liberal backbenchers.

It will be interesting to see, as the weeks unfold, how the Liberal government and the finance minister slash leadership candidate response to the demands of his own caucus on new spending initiatives.

Any new spending initiatives on the part of the government must be based on strategic investment criteria that will improve Canada's comparative advantage internationally, especially in a global society. We need to ensure a set of criteria is applied to every new spending initiative. This would provide for Canadians an improved comparative advantage in the future and would not simply be another pork barrel policy of government waste.

Let us consider the example of medical research. Canada is the only G-7 country that has decreased its investment in medical research and development funding over the past several years. Canada spends $8 per capita on medical research compared with the U.S. which spends $60 per capita. Under the Liberal government MRC funding has been cut to 1987 levels in constant dollars. During the past five years the U.S. has increased funding to its sister councils by 80%.

In a global context, our largest trading partner is investing heavily in research and development. It is making a commitment to strategic investment and creating a centre of excellence for medical technology in the U.S. It frightens me to recognize the impact of our failure to respond to this investment and our failure to invest similarly in Canada in the long term competitiveness of Canadians.

Post-secondary education is another area that has a direct affect on Canadian competitiveness as we enter the 21st century. Student debt has risen by 280% in recent years. Tuition costs have increased by 110%. It is interesting to note that a four year university program in Canada will saddle the average student with about $25,000 worth of debt. Similarly a four year program in the U.S. will leave an American with about $18,000 worth of student debt in Canadian currency.

We are making higher education in Canada not less but more expensive. The burden on our young people as they carry this into the workplace is significant. It will impact considerably on their ability to produce as citizens of Canada and to produce within a global arena.

A recent study by the Maritime Provinces Higher Education Commission found that 82% of grade 12 students in Atlantic Canada were interested in higher education. However, 55% of these students say that they will not be able to achieve higher education for financial reasons.

In 1993, when the Liberals gained power, only eight students in Atlantic Canada carried a student debt greater than $30,000. That number has grown over the past five years to the point that today there are over 900 students in Atlantic Canada with a student debt greater than $30,000 upon graduation. The figure has gone from eight students to nine hundred in five years.

Atlantic Canada has been particularly hard hit, as have all Canadians, by the Liberal government's attack on higher education. I am proud of Nova Scotia's strong heritage as a cradle of higher education in Canada. The decimation of opportunities in higher education by the Liberal government and its slash and burn policies have inflicted irrevocable damage on the future competitiveness of young Canadians. It is a sad legacy of the government.

The Reform Party said this week that debt should be Canada's number one priority in order to reduce the debt to GDP ratio. There is another way to reduce debt to GDP ratio. We certainly acknowledge that the debt must be reduced. The other way is to actually grow the GDP. Spending initiatives based on the right criteria, including the criterion of competitiveness, will actually bolster the competitiveness of young Canadians. It is possible that certain strategic spending initiatives can improve the GDP ratio and grow the economy faster.

If we focus on cutting the debt and refuse to acknowledge the issues of student debt, consumer debt or personal bankruptcy, all of which have been growing remarkably over the past several years in Canada, we fail Canadians.

The national debt is one debt, but the social debt that is being paid by ordinary Canadians in the balancing of the budget over the past few years has been similarly damaging.

Investing in our young people is a worthy objective. Our party believes that we need to couple strategic investment with debt reduction and tax relief. The Reform Party may over the next several weeks change its policy or emphasis again, but ours will remain constant. Our belief is that Canadians will succeed with a lower debt. Canadians will succeed when provided with lower taxation. Canadians will succeed with a government which is able to redefine its role relative to the Canadian people and to make strategic investments in the areas which will truly impact positively on the future of Canadians.

By cutting transfers the Liberals have effectively shifted debt and financial responsibility to the provinces. Similarly the provinces have shifted responsibility to municipalities. Municipalities have shifted responsibility to ordinary Canadians. The growth in personal debt and the growth in bankruptcies, all such issues, have come from initial decisions.

The Liberals really did not cut the expensive, wasteful, bureaucratic and redundant spending that they could have cut. Instead they tackled the debt by dealing with cuts to the provinces. We can offload a lot of things to the provinces. One thing we should not offload as a government and one thing this government has done is effectively to offload leadership.

We need to reduce taxes. We need to invest in Canadians. We need to ensure that all Canadians have an opportunity to invest in their own futures. Young Canadians need a future where the Canadian economy is healthy and individuals can function competitively in a knowledge based society, without the impediments of fat, ineffective or interventionist governments.

With the PC agenda for growth, Canadians will receive tax relief, debt reduction and strategic investment, thereby enabling them to strengthen Canadians' competitive advantages as individual Canadians. Our plan will work for Canadians and our plan will help put Canada back to work.

[Income Tax Act, February 4th, 1998]

Mr. Speaker, it is with great pleasure that I address the House today on Bill C-223.

The Progressive Conservative Party feels strongly about encouraging the opportunities for Canadians to purchase their homes. Our party introduced a home buyers plan where Canadians could borrow up to $20,000 from their RRSPs for their first home and first home loan insurance program through CMHC.

These initiatives have successfully assisted thousands of Canadian families to buy their first homes. Thus the PC Party has demonstrated unequivocally its commitment through action to allowing ordinary Canadians to reach the goal of purchasing their first home.

In 1998 we continue to believe that home ownership should be an attainable goal for Canadians. The Liberal government policies have made home ownership less attainable than it has ever been before.

Excessively invasive government policies such as high income tax rates, the highest in the G-7; payroll taxes which prevent the growth of employment and frankly represent the single greatest impediment to the growth of employment in Canada; and interprovincial trade barriers, excessive regulations, have contributed to a 6% drop in personal disposable income in recent years. It is certainly an abysmal performance relative to that of the United States.

High unemployment and lack of job security are the scourges that affect the Canadian public at this time. Interest rates are of little importance if there is little job security or if jobs cannot be found when one is determining whether or not to purchase a home. The biggest obstacle that stands between Canadians and the attainment of their goals is the Liberal government.

Clearly the best way to assist Canadians to achieve their goals is for government to provide a plan for growth. We need to reduce payroll taxes. We need to reduce income taxes. Our party is calling for a broadly based income tax reduction which will benefit all Canadians.

We trust Canadians. We believe putting more money in their pockets will help them attain and achieve their goals. Lower tax rates will contribute to higher job growth. Working Canadians with higher disposable incomes will have more money to purchase items they want to purchase such as homes and to pay for the education of their children. This will better their lives and the lives of future generations of their families.

Our plan for growth will work for Canadians and will put more Canadians back to work. We need meaningful tax reform and we need a holistic approach to tax reform. Taxes are designed to pay for services provided by government. Effective tax policy should be neutral. It should be non-directional. It should be basically focused on the initial goal of raising funds for the operation of government.

Why do people in Canada need to hire accountants or lawyers to deal with their own government? It is fundamentally wrong. Governments have overtaxed Canadians and then have manipulated Canadians through egregious and excessive loopholes. These are what I refer to as people control mechanisms which the government utilizes to push people in a particular direction. Its Pavlovian, paternalistic tax policy tries to control Canadians and their behaviour.

The tax code is meant to raise revenue. It is not meant to be directional in terms of affecting the spending habits of Canadians.

Yesterday I listened at length to Reform members pontificate about Bill C-28. I believe that they too espoused a simpler, flatter tax code.

Yesterday the member for Prince George—Bulkley Valley said that the Liberals, instead of wanting to fix the tax code, were simply making changes to make it more confusing for Canadians. The member for St. Albert said:

Is it any wonder that Canadians are losing faith with their tax system and the complexity of the Income Tax Act?

What a difference a day makes. I guess hypocrisy is only half a mortal sin. It strikes me that Bill C-223 provides a subsidy for a particular activity and to a considerable extent complicates further a tax code that is already far too complex.

Will Reform table the costing of the bill? When Canadians need a simpler tax code the Reform Party wants a more complex one. Tax changes have to be holistic and are not developed in a vacuum or in isolation. We cannot forget the most fundamental rule of public policy, that is unintended consequences of public policy, especially when considering tax policy. We have to be very careful.

Targeted subsidies are a slippery slope. I thought the Reform Party was opposed to subsidies. This is in effect a subsidy for a particular group of Canadians and serves in some ways to discriminate against many Canadians, the poorest of Canadians who may not be in a position to buy a home but who would benefit from broadly based tax cuts and from an increase in personal deductions to about $10,000, which is part of our platform.

The Reform Party would like us to endorse bigger and more invasive government. The Reform Party has suddenly decided to side with the government. It is on the side of fiscal interventionists. Why not provide a tax break to all Canadians?

The PC Party dropped taxes as a percentage of GDP from 14% to 13% from 1989 to 1993. That is what we did with personal income tax. The Liberals have increased it since by 1% back up to 14%.

Reformers like to talk about a flat tax but while they talk the talk of flat tax they walk the walk of fiscal interventionists.

Let us face it. A targeted tax break is better than no tax relief at all. Let us take a serious look at the effectiveness of mortgage interest deductibility and the risks, for instance, in the U.S. example. I realize the Reform Party imports wholesale a significant part of its platform from the U.S. Republicans, but it would be better off to listen to Jack Kemp than Jesse Helms on many of its policies.

The fact is that people like Jack Kemp and other advocates for flatter tax codes would like to see the removal of things like the mortgage deductibility of interest, which is essentially diametrically opposed to the whole concept of flatter tax. I assumed Reformers were flat tax people based on their platform but that they may have changed as of late. Some of their other policies have evolved as well. We can only hope their members join in these policies.

If we compare ownership rates, Canada and Japan with no interest deductibility have essentially the same ownership rate as the U.S. with interest deductibility. The question is has it affected the purchasing patterns of Americans significantly. France and the Netherlands have lower ownership rates than Canada with interest deductibility.

I will reiterate that a tax break in absence of an overall holistic tax reform is better than no tax break at all. We cannot argue with the intention of the bill to allow more Canadians to purchase their first home. That is a very positive goal for any legislation. However, we must not forget that the most important goal for the House should be to simplify Canada's tax code and reduce the tax burden for all Canadians.

In closing, we cannot forget the first law of public policy is the law of unintended consequences. As many economists predict, we are about to enter a level of unprecedented deflation. In a deflationary environment, if we create government policy incentives for individual Canadians to assume larger debt than they would otherwise assume, potentially we might create a situation that would actually punish many Canadians for wanting to do the right thing.

A tax break is better than no tax reform at all, but let us keep our eye on the ball and focused on what Canadians really need: broad based tax reductions, tax reform and tax simplification.

[Income Tax Amendments Act, 1997, February 3rd, 1998]

Madam Speaker, when I hear some of the members of the Reform caucus describe Canada and the mess we are in, they never really seem to acknowledge the achievements we have made in this great country of ours. I think it is very important not to simply be sensationalist opposition members. I think sometimes we have to take time to speak positively about our country. If the hon. members want to always be the nattering nabobs of negativism, that is their own choice, but I think that will forever relegate them to being the armchair quarterbacks for Canadian politics. That is indeed unfortunate because among them there really is some talent.

Periodically I hear some. The member for Peace River had some good comments that I appreciated, especially relative to trade policy and the types of activist interventionist government policy that are doing more to hurt Canadian trade and exports—

[Income Tax Amendments Act, 1997, February 2nd, 1998]

Mr. Speaker, the economic revisionism that pervades this House sometimes is really astounding. The fact is that between 1989 and 1993 it was the Conservatives that started a trend of reduction in income taxes as a per cent of GDP from 14% of GDP to 13% of GDP by the time our party was asked politely to leave in 1993. However between 1993 and now, the Liberal Party has increased taxes as a per cent of GDP from 13% back up to 14% and the trend is aiming higher. It is very important that we recognize the trend toward tax reduction and income tax reduction was started under a Conservative government and in four years it will be continued under a Conservative government.

[Income Tax Amendments Act, 1997, February 2nd, 1998]

Mr. Speaker, I listened to the hon. member's speech. I welcomed the defence of former Prime Minister Brian Mulroney. It has certainly been a long time coming. At some point it is at least good to see that people give credit where credit is due.

When he spoke of a heart condition I cannot understand his firsthand experience because I do not think there are a lot of them in that caucus, hearts I mean. He talked about needing a lobotomy to join the New Democratic Party. Perhaps if he had a heart transplant he could become a Conservative again.

A lot of economic revisionism goes on in the House.

[Income Tax Amendments Act, 1997, February 2nd, 1998]

Mr. Speaker, the issue of transfers to the provinces and the transition to tax points was addressed in our recent platform. The fact that decisions should be made at the provincial level and that the provinces should have the ability to chart their own course on some of these issues as long as national standards are met is very clear. There have to be national standards but the provinces should have control over the funding.

What we tried to establish in the platform is that the CHST level needs to be established at a provincial and not a national floor level because many provinces will continue to be bludgeoned by the changes in Bill C-28.

In fact, they are talking about establishing a cash floor in my province of Nova Scotia. We are well below the floor. We are down in the basement. We are subterranean because of the cuts. Nova Scotia and other have not provinces have been bludgeoned by this type of change. It should be reversed now and this bill does not reverse it.

[Income Tax Amendments Act, 1997, February 2nd, 1998]

Mr. Speaker, the parliamentary secretary in his duties should take some time to read a little of what the international economists are saying about the Canadian economy. It is not simply what

The Economist said a few months ago. They quote selectively from what some publications say. If they read the 1998 preview of The Economist

, it said that the current fiscal situation in Canada is largely due to the structural changes made by a Conservative government in the early 1990s.

That was free trade, the GST and deregulation of the financial services and transportation industries. I and other Canadians know where his party stood on those issues. They were opposed to free trade. They were opposed to the GST. Now they say they invented it.

It takes years for sound economic policy to have an impact. It takes a visionary government to implement this type of policy. Unfortunately sometimes the next government can take advantage of that sound policy. That is exactly what has happened. The Conservatives made the tough decisions. They made the visionary changes and the Liberals have taken advantage of it.

We will continue on this side of the House to bring forward innovative policy, much to the chagrin of members opposite. In four years we will have the opportunity implement it.

[Income Tax Amendments Act, 1997, February 2nd, 1998]

Mr. Speaker, I would like to thank the hon. member for what I assume must have been his maiden speech because he certainly went on for a long time and said very little. We talk about debt to GDP ratio, but if we were to talk about substance to rhetoric ratios, he would certainly have a very low ratio in that case.

He speaks about the provincial situation in Ontario, about tax cuts in Ontario, about what he feels are clearly the fault of the provincial government and about the impact of Ontario policy on people in Ontario. What about the impact of federal government cuts across the board? What about the 35% decrease in CHST since 1993 and its impact on provinces like Nova Scotia? This is the same government.

He talks about cuts to health care. Three hospitals were virtually closed in my riding because of this federal government, a government of which he was a member. It is absolutely unconscionable for him to speak about what a provincial government is doing when they have not addressed the issue, when he was part of the party that made draconian cuts in transfers to the provinces, when they allowed the type of health care destruction that occurred in provinces across Canada.

The hon. member should realize that leadership is one thing that cannot be off loaded to the provinces. That is exactly what has been done. He cannot pass the buck in this House to what has been done in the provincial house in Queen's Park. The burden lies with the hon. member and with the members of his caucus who have allowed this to occur, who have allowed these cuts to occur and who have allowed ordinary Canadians to be hurt by these cuts. The fact is that with tax relief ordinary Canadians can make decisions for themselves that will be far better than the decisions made by the members opposite.

[Income Tax Amendments Act, 1997, February 2nd, 1998]

Mr. Speaker, the issue we are now facing as a country is the fiscal dividend, the potential of a surplus. The PC Party takes great pride in this moment that our country has reached. The structural changes which were made in the Canadian economy by the Conservative government in the early 1990s have allowed Canada to seize the opportunity as we are poised to move into the 21st century of a fiscal surplus.

These structural changes included the deregulation of the financial services industry, deregulation of the transportation industry, free trade and the GST. Members opposite fought vociferously against free trade and the GST. They have now become free traders. The prime minister now claims to have invented the GST, which has enabled the government to reduce the deficit.

The Liberal Party now wants free trade with everybody. It will sign a deal one day with Chile and the next with Israel. However it is still reluctant to remove interprovincial trade barriers which continue to burden the Canadian economy. It denies the domestic economy the comparative advantage of free trade.

If we are to seize this opportunity Canadians need tax cuts now. They do not need tinkering. An hon. member referred to Bill C-28 as tinkering. That is a reasonable description of the bill.

If we are talking about a vehicle to get an individual from place to place, for instance a car, to a certain extent legislation offers that type of potential to a country. We have a very old car. The Canadian economy needs too much tinkering. Perhaps we need a new vehicle. I propose that vehicle would be the policies being brought forward by the PC Party.

Instead of fixing the Canadian tax code on an ad hoc basis, looking at individual issues and dealing with individual sectors, we should be looking at it from a holistic perspective. We need proposals to bring forward new and innovative tax policy and tax reduction for all Canadians. That will enable them to participate in the same economic growth enjoyed south of the border for some time. Canadians have had to deal with a 6% reduction in their standard of living over the past several years.

High taxes kill jobs. Our high debt to GDP ratio continues to hinder the Canadian economy and the ability of Canadians to participate in the global environment. We need to pay our debt and we need to reduce taxes now if we are to move forward into the 21st century.

In our background work we found the pervasive philosophy of Liberal government was obvious in Bill C-28. It is a philosophy of government by knee-jerk reaction, crisis management and economic tinkering. This is a government that does not plan to fail but it is clearly a government that fails to plan.

Look at the CHST issue. The same Liberals who cut indiscriminately after 1993 now propose to spend indiscriminately. I heard the analogy of the Reform Party as a party of surgeons with scalpels. I would use the same analogy potentially to describe the Liberal Party. The Liberals cut and the cuts they made after 1993 did not merely remove tumours. They cut bone and sinew. It was not fat that they cut. They cut bone and sinew in the health care and education systems at a time when we are in a global environment as we enter the 21st century, when our young people need all the advantages to compete internationally.

In a knowledge based economy our government has cut and has reduced its commitment to higher education to the extent that post-secondary students are now faced with an average debt of $25,000 after a four year program. Twenty years ago a student who graduated from high school would have about the same opportunities in the workforce as a student who now graduates from a four year university program. Twenty years ago that student did not have a $25,000 debt upon entering the workforce.

There is Liberal non-strategy in implementing some of the changes that were introduced first in budgets of 1994 and 1997. The country waits in anticipation to see what is going to happen in the 1998 budget. We are starting to get around to making the 1997 and the 1994 budgets law through this bill. One of the Liberal promises of 1993 from its brochure “Restoring Parliamentary Democracy” was to reduce the implementation time of tax policy changes promised in budgets.

This is another example of what has become a Liberal tradition, promise the voters one thing during an election and then flip-flop once elected. This tradition has been evident since 1974 when the Liberals flip-flopped on wage and price control. More recent examples would be their flip-flop in 1981 on the gas tax, and nobody has forgotten their promises to scrap the GST, to renegotiate the NAFTA treaty, to scrap the Pearson airport redevelopment, and of course they wrote a cheque for zero helicopters.

It is unfortunate that I was not surprised to find another example of a Liberal broken promise in this bill. As Tories we bear the heavy yoke of honest policy. Liberals are indeed fortunate to be able to glide through this parliamentary world and to operate without such political impedimenta.

With the notable exception of bank tax exemption, most of the tax measures introduced in this bill are either revenue neutral or simply give targeted tax relief to specific groups. Keep in mind that targeted tax relief simply serves to complicate the Canadian tax code.

I served as an associate member of the finance committee that listened to Canadians who came forward to express their views on the economy and what we should do now that we have a fiscal surplus. I did not hear one Canadian say that our tax code needs to be made more complex. Many Canadians came forth, especially small business people, the area I come from. They said that our tax code is much too complex. Yet this government's answer to economic policy is to come forward with measures like Bill C-28 that will complicate the tax code.

We should not be surprised that our finance minister/leadership candidate has targeted the banks as the only tax increase in the bill. Canadians should expect more boldfaced opportunism in the months to come as Merger Martin becomes Populist Paul.

For all intents and purposes, the capital's tax surplus on banks which is extended in this bill has become a permanent tax. Now, in Bill C-28, the minister continues to tinker with the economy and punish one sector over another.

If we look at the four targeted education tax measures, the first one talks about the education tax credit. Students will now be able to claim a tax credit of $150 per month in 1997, $200 per month this year up from $100 per month in 1996.

Again this is a stop-gap, band-aid approach to a huge problem. We are talking $100 here in a situation where students are graduating with $25,000 worth of debt. I would be curious to know what type of student debt the friends of the pages in this House are going to have to endure when they graduate or if indeed they are going to be faced with this egregious level of burden as they enter the workforce.

It is not fair to young Canadians and it is not fair to all Canadians who need a competitive group of young Canadians going forward and capitalizing on the global economy.

Again, when this government talks about education reform, it is talking about these types of stop-gap adjustments to the RESP, the changes in the allowable deductions for students. It is a cobbled-up approach and it is not acceptable.

National leadership is required at all levels to ensure that young Canadians receive the best education in the world, such that they are able to compete and get the best jobs in the world right here in Canada.

The Minister of Finance has now begun talking about education. We all wait with bated breath for budget night to see what will actually be done relative to education. We expect more rhetoric. We do not really expect a lot of action.

The fact is we cannot deal with this situation effectively. We cannot deal with education as an individual issue unless we are willing to deal with tax relief. What good is it to provide an excellent education to our young people who, upon graduation, are forced by better paying jobs and a lower tax burden to go to the U.S.?

The student demonstrations last week typify the drastic situation that exists among students in this country. Once these students graduate and once our brightest and best have left Canada and have gone elsewhere where they will be paying less in taxes and essentially making more money, that is when we see that the financial inaction of this government to address the pressing issues of the Canadian economy are sapping the lifeblood out of the future of this country.

I went through Bill C-28. I felt that some of the changes deserve far less hoopla than I heard from the member opposite today. We are dealing with a situation where we have youth unemployment rates of over 17% in Canada, realistically significantly higher.

Highly educated and motivated Canadians are being forced to leave this country. The recent report from Industry Canada, keeping up with the Jones, describes this trend and the issue that is before Canadians now.

When a highly skilled American labourer earns $10,000 a year more than his or her Canadian counterpart, clearly Canadian wage earners deserve to make as much as their counterparts south of the border. The answer is not in terms of how much they make but what they take home. The fact is that the government is taking far too much from them and providing far too little in services going back to them.

We need bold action from the Minister of Finance to reverse this exodus. The Liberal policy of maintaining high payroll taxes well in excess of what they need to be continues to punish Canadian workers and deny Canadian entrepreneurs the ability to hire more workers. The fact is international payroll taxes have been demonstrated unequivocally as being deterrents to job creation.

Further to this bill, I look at all these selected groups that are targeted with specific tax reductions and the further complexity of the Canadian tax code. I think of the state of the union address last week in the U.S. under President Clinton and Trent Lott's response. The U.S. tax code is actually far simpler than our tax code. There is a ground swell of support in the U.S. for changes to the tax code such that people do not have to hire a lawyer or an accountant to deal with their own governments. In Canada the situation is more dire. Here we cannot basically deal with our own government without professional representation. This is clearly wrong.

We are in an environment where disposable income has dropped by almost 6% since 1990. The minister speaks of lower interest rates and other positive economic indicators. However, this minister has about as much to do with the low interest rate situation we find ourselves in in Canada as he does with the fact that the sun rose this morning. To take credit for structural changes that occurred in the early 1990s under this government is indicative of the lack of depth these individuals have about economic issues.

Canada's GDP slipped by .3% in November. This was its third slip this year. Meanwhile the U.S. GDP has risen by 4% in the last quarter.

Some people may be asking what is the U.S. doing that we are not doing in Canada. That is not the right question. The question that should be asked is what is it not doing. Americans are not taxing their people to death in the U.S. They are not creating barriers to employment with a tax policy that is archaic. The cumulative effect of all this negative tax policy is an increasing gap in the standard of living between Canadians and Americans.

The film industry is dealt with in this bill. Coming from Nova Scotia where we have a fledgling and growing film industry, I am pleased to see that there are some positive incentives for investment in the film industry. I do however maintain that the best tax policy to benefit all sectors is one that puts more money in the pockets of Canadians and allows them to make their own decisions as to where they invest and where they invest in the future of Canada. It may be in the film industry or in another area but the fact is this government, by taking from Canadians through general taxes and income taxes and then providing these loopholes is further complicating the issue.

This government has cut the CHST by 35% since 1993. At the same time, it reduced program spending by only around 13%. Now it is making great hay about establishing a cash floor of $12.5 billion. In fact, it introduced it in Nova Scotia during the election. Nova Scotians are a fairly shrewd bunch of people. When they looked at this they recognized that it was another shell game or magic show of smoke and mirrors from the Liberal Party and did not buy into it. On election day they flushed the Liberal MPs out like the tide running out of the Minas Basin. That exodus was certainly not a brain drain.

Bill C-28 proposes that the cash floor be raised to $12.5 billion. This simply means that the cuts are going to stop. The Liberals are going to stop offloading the fiscal responsibility from Canada off to the provinces. This formula continues to move toward a per capita calculation. Nobody has touched on this yet but there are seven provinces that will receive less money year after year due to these changes. These seven provinces, including Nova Scotia, will lose a further $384 million by the year 2002 due to these changes.

Our platform called for a provincial cash floor level which would truly establish long term stability for social investment in Canada instead of the Liberal plan which pits the interest of some provinces against those of another. We need a plan that ensures equity for all Canadians. This plan for the CHST is clearly not that plan.

The initial round of cuts has already had a dramatic effect on my own riding of Kings—Hants. Three major hospitals have either closed or have drastically reduced services, including closures at the East Kings memorial hospital, the West Kings memorial hospital and the reduction to 32 beds in my home community hospital, the Hants community hospital.

When one considers the impact on health care in provinces like Nova Scotia, we do not have the tax base at the local level to pick up the slack when these types of draconian cuts are made by a federal government.

The impact on the future of young Nova Scotians and on the elderly population of Nova Scotia who need a quality health care system is it has created irrevocable damage. The Minister of Finance would like Canadians to believe as he said in a press release recently that the government is about choices, priorities and values. Our choice is clear.

Health care should be a priority for this government. We do not need to hear more rhetoric about this. We need to stop the rhetoric and start stabilizing health care funding and not with a CHST with a national floor. We need provincially based floors to ensure that all Canadians are treated equitably through the CHST funding.

We need to invest in medical sciences, research and development. We need to explore new health care alternatives and vehicles such as palliative care for Canadians.

The Progressive Conservative Party believes that the federal government must play a leadership role in redefining the role of government and not simply the size of government that is discussed by the Reform Party. We need to redefine the role of government. We need to evaluate what investments and roles are appropriate for government. What is government doing now that it should not be doing? What is it not doing that perhaps it should be? How can we best unburden Canadians to allow them to make the decisions that can propel them successfully into the 21st century.

We need the government and the Liberal Party to become more visionary, to innovatively lead Canadians toward a brighter and more productive future. What we do not need is more legislation like Bill C-28 which creates a stop-gap, one-off approach to fiscal policy which clearly does not serve the long interests of Canadians.