Bill C-43 (Historical)

Budget Implementation Act, 2005

An Act to implement certain provisions of the budget tabled in Parliament on February 23, 2005

Part 1 amends the Income Tax Act and the Income Tax Application Rules to
(a) increase the amount that Canadians can earn tax free;
(b) increase the annual limits on contributions to tax-deferred retirement savings plans;
(c) eliminate the foreign property limitations on tax-deferred retirement savings plans;
(d) increase the Child Disability Benefit supplement to the Canada Child Tax Benefit;
(e) allow for a longer period for the existence of and contributions to a Registered Education Savings Plan in certain circumstances where the plan beneficiary is eligible for the disability tax credit;
(f) increase the maximum refundable medical expense supplement;
(g) exclude emergency medical services vehicles from the standby charge;
(h) extend to January 11, 2005 the date for charitable giving in respect of the 2004 taxation year for the tsunami relief effort;
(i) eliminate the corporate surtax; and
(j) extend the SR&ED tax incentives to SR&ED performed in Canada’s exclusive economic zone.
Part 2 amends the Air Travellers Security Charge Act to reduce the air travellers security charge for domestic air travel to $5 for one-way travel and to $10 for round-trip travel, for transborder air travel to $8.50 and for other international air travel to $17, applicable to air travel purchased on or after March 1, 2005.
Part 3 amends Part IX of the Excise Tax Act to extend the application of the 83 per cent rebate of the goods and services tax (GST) and the federal component of the harmonized sales tax (HST) to eligible charities and non-profit organizations in respect of the tax they pay on their purchases to provide exempt health care supplies similar to those traditionally provided in hospitals. It also amends that Act to provide that a director of a corporation may, under certain conditions, be held liable not only for unremitted net GST/HST amounts, but also for GST/HST net tax refund amounts to which the corporation is not entitled. Finally, it amends that Act to allow, under strict conditions, the creation of a Web-based GST/HST registry to facilitate the verification of a supplier’s registration by a registrant for the purposes of claiming input tax credits.
Part 4 amends Schedule I to the Excise Tax Act to phase out the excise tax on jewellery through a series of rate reductions over the next four years.
Part 5 amends the Federal-Provincial Fiscal Arrangements Act to authorize the Minister of Finance to pay funds to a trust established to provide the provinces with funding for the purpose of early learning and child care.
Part 6 authorizes the Minister of Finance to pay funds to a trust established to provide the Territories with funding for the purpose of assisting them to achieve the goals of the Northern Strategy.
Part 7 amends the Auditor General Act to permit the Auditor General to conduct inquiries into and report on the affairs of certain corporations that have received at least $100,000,000 in funding from Her Majesty in right of Canada. This Part also amends the Financial Administration Act to extend the application of financial management and control provisions in that Act to wholly-owned subsidiaries of parent Crown corporations and certain parent Crown corporations.
Part 8 authorizes the payment of funds to various foundations, including the Federation of Canadian Municipalities for the purpose of providing funding to the Green Municipal Fund.
Part 9 amends the Asia-Pacific Foundation of Canada Act to focus the mandate of the Foundation, to modify its governance structure, to establish qualifications for the appointment of the directors and the President, to impose a duty of care on the directors and the President and to require that the Foundation offer its services in both official languages. It also amends the Act to specify the type of funds the Foundation may receive and the appropriate use of those funds and to require that those funds be invested in accordance with policies, standards and procedures established by the board. In addition, the provisions of the Act respecting auditing, annual reports and winding-up have been expanded.
Part 10 amends Part 1 of the Budget Implementation Act, 1998 to broaden the category of persons to whom the Canada Millennium Scholarship Foundation may grant scholarships and bursaries to include not only persons who are Canadian citizens or permanent residents of Canada within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act but also persons who are protected persons within the meaning of subsection 95(2) of that Act, for example, Convention refugees.
Part 11 authorizes the Minister of State (Infrastructure and Communities), pursuant to the initiative commonly known as “A New Deal for Cities and Communities”, to make payments for the purpose of providing funding, in the fiscal year 2005-2006, to cities and communities for environmentally sustainable infrastructure initiatives, in accordance with agreements to be negotiated with provinces, territories and first nations.
Part 12 enacts the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act. The legislation will implement the arrangements of February 14, 2005 reached with Newfoundland and Labrador and Nova Scotia on offshore revenues. To do this, the legislation will
(a) authorize the payment of equalization offset payments to Newfoundland and Labrador and Nova Scotia for 2004-05 to 2011-12, set out the conditions under which payments will be extended to any of fiscal years 2012-13 to 2019-20, and authorize payments for that period should those conditions be met;
(b) set out the manner in which the offset payments are to be calculated;
(c) authorize the making of a cash pre-payment in the amount of $2 billion in respect of the agreement with Newfoundland and Labrador and a cash pre-payment in the amount of $830 million in respect of the agreement with Nova Scotia; and
(d) implement all other aspects of the agreements.
Consequential amendments to the Budget Implementation Act, 2004 respecting offset payments to Nova Scotia will also be required to ensure that 100 per cent offset is being provided for in fiscal years 2004-05 and 2005-06.
Part 13 establishes an Agency, to be called the Canada Emission Reduction Incentives Agency, to acquire greenhouse emission reduction and removal credits on behalf of the Government of Canada.
Part 14 enacts the Greenhouse Gas Technology Investment Fund Act. That Act establishes an account in the accounts of Canada called the Greenhouse Gas Technology Investment Fund to which are to be charged amounts paid by the Minister of Natural Resources for the purpose of
(a) research into, or the development or demonstration of, technologies or processes intended to reduce emissions of greenhouse gases from industrial sources or to remove greenhouse gases from the atmosphere in the course of an industrial operation; or
(b) creating elements of the infrastructure that are necessary to support research into, or the development or demonstration of, those technologies or processes.
The Act also provides for the creation of technology investment units in respect of amounts that are contributed to Her Majesty for those purposes.
Part 15 amends the Canada Deposit Insurance Corporation Act to
(a) increase the deposit insurance coverage limit for insurable deposits from $60,000 to $100,000;
(b) repeal the authority of the Corporation to make by-laws respecting standards of sound business and financial practices for member institutions; and
(c) provide that the deposits of a federal institution shall automatically be insured.
Part 16 amends the Canada Student Financial Assistance Act to provide for the termination of the obligations of certain borrowers in respect of student loans in the event of their death or if, as a result of their permanent disability, they are unable to repay their loan without exceptional hardship, taking into account their family income.
Part 17 amends the Currency Act with respect to the Exchange Fund Account and the management of Canada’s foreign exchange reserves. These amendments include authorizing the Minister of Finance to establish a policy concerning the investment of assets held in that Account and to advance funds to that Account on terms and conditions that the Minister considers appropriate.
Part 18 amends the Department of Public Works and Government Services Act to provide the Minister of Public Works and Government Services with responsibility for the procurement of goods and services for the federal government, and to authorize the Minister to negotiate and enter into contracts on behalf of the Government of Canada and to make commitments to a minimum volume of purchases on its behalf.
Part 19 amends the Employment Insurance Act and the Department of Human Resources Development Act to allow the Canada Employment Insurance Commission to set the premium rate under a new rate-setting mechanism. In setting the rate, the Commission will take into account the principle that the premium rate should generate just enough premium revenue to cover payments to be made for that year, as well as the report from the employment insurance chief actuary and any public input. On an as-needed basis, the Commission may also contract for the services of persons with specialized knowledge in rate-setting matters. If it is in the public interest to do so, the Governor in Council may substitute a different premium rate. In any given year, the rate cannot change by more than 0.15% ($0.15 per $100) from the previous year’s rate, and for the years 2006 and 2007 must not exceed 1.95% ($1.95 per $100).
Part 20 amends the Employment Insurance Act, for the purpose of the implementation of a premium reduction agreement between the Government of Canada and a province, to allow for a regulatory scheme to make the necessary adjustments and modifications to that Act as required to harmonize it with a provincial law that has the effect of reducing or eliminating the special benefits payable under that Act. A consequential change is also made to the parental benefits provisions.
Part 21 amends the Financial Administration Act to provide the authority for the President of the Treasury Board to create a shared-governance corporate entity for the purpose of administering group insurance or other benefit programs. In addition, the amendments provide the authority for the Treasury Board to establish or modify those programs not just for employees of the public service but for other persons or classes of persons as well.
Part 22 amends the Old Age Security Act to increase the guaranteed income supplement by $18 a month for single pensioners and by $14.50 a month for each pensioner in a couple, effective January 2006. Also, the amendments increase the allowance by $14.50 a month and the allowance for the survivor by $18 a month, effective January 2006. In addition, the amendments provide for identical increases to the guaranteed income supplement, the allowance and the allowance for the survivor in January 2007.
Part 23 authorizes the Minister of Finance to pay funds directly to the provinces of Quebec, British Columbia and Saskatchewan and to each of the three Territories.

An Act to Authorize the Minister of Finance to Make Certain Payments

[John McKay, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I was more amused by the revisionist statements of the hon. member than the actual content of his speech. He seems to have a peculiar recollection of facts.

As I recollect the facts, the opposition leader was virtually out the door about five minutes after the finance minister delivered the budget to say that he would not defeat the government on this particular point.

Then the opposition leader apparently had an on the road to Damascus experience and thought that maybe that was not quite the best thing he had ever done in his political life. He reversed himself and said no, this government had to be put out of its misery.

We then had a difficult situation. Would we effectively collapse and show the Canadian electorate, which clearly said it did not want an election, that Parliament cannot work in a minority situation? That was not an acceptable choice, so as a consequence we entered into this particular configuration, which, I would point out to the hon. member, is a 1% change in the contingent spending profile but consistent with the fundamentals, objectives and goals of the budget.

I put it to the hon. member that his recollection of the facts on which we got here is deficient, and that the basic reason we are even debating the bill has to do with the withdrawal of the Conservatives' support prematurely of Bill C-43.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Madam Speaker, the original budget, Bill C-43, did contemplate corporate tax reductions in roughly that amount. My recollection of the number is $4.7 billion. As part of the arrangement with the implementation of Bill C-48, that legislation will come in on a separate track and restore those tax measures.

The hon. member needs to bear in mind that Bill C-48 and the restoration of tax relief and tax competitiveness are delinked. The bill proposes that in the event there are moneys in surplus in excess of $2 billion, then this will be the direction in which the government spends money: affordable housing, foreign affairs, environment and post-secondary education. All those items are perfectly consistent with previous spending initiatives that the government initiated in previous budgets and indeed, in budget 2005.

[John McKay, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, your having to read all of the motions was a completely unnecessary exercise, but I guess it reflects the fact that we are off to a wonderful start on the bill. I know that hon. members opposite are absolutely thrilled with the opportunity to delay government legislation.

This is actually an interesting bill. It is legislation which deals with an unplanned surplus. I am not sure that any such bill has ever been introduced in the House before, because by virtue of the fact that the government has run surpluses over the last number of years, we have had some rather happy surprises. I know members opposite prefer the opposite kind of surprise. They would prefer deficits, but it appears that the government over the last eight years has been able to run surpluses, some of which have led to a reduction in the national debt in the order of about $60 billion. That has left us in a relatively good situation.

Going forward, the budget anticipates that there will be a further five years of surpluses. In anticipation that there will be further surpluses, and given the commitments to running a balanced budget and given the commitment that we have made in the budget and in this bill to at least a debt reduction of $2 billion on an annual basis, the question which arises is what we would do if we had any additional moneys beyond the threshold moneys of $2 billion. This bill attempts to address that.

The bill is novel in the sense that we as a government are indicating the areas in which we would spend money in the event that we had money beyond $2 billion on an annual basis. It leaves quite a bit of discretion to the government as to how to time those moneys.

First of all we have to meet the threshold of meeting the $2 billion. It could all be spent in one year, or it could all be spent in the second year, or it could all be spent in a combination of either year. Additionally we could spend the money in a fashion which mixes all of the above. There is a fair bit of flexibility.

The Conservative Party tried to introduce its own version of legislation on an unplanned surplus by directing all moneys beyond the $2 billion or $3 billion threshold to tax relief. While that may be an attractive alternative to a certain ideological set who think that by giving tax relief we can somehow or another attain nirvana here on earth, there are other priorities. Those other priorities are being spoken to by the government in this bill.

Canada's social foundations are key to our identity. There are areas in which we would have liked to have spent some additional moneys, such as affordable housing, post-secondary education, the environment and foreign aid. All of those are coherent with the original budget as presented in Bill C-43 and the preceding budgets 2004, 2003, 2002, et cetera.

Far from being as opposition members allege a deal cooked up on the back of a napkin in a motel room or in the back of a Chevy Nova--and I frankly have never understood what those hon. members have against Chevy Novas--this bill, which was entered into after negotiations with the NDP, reflects the priorities of Canadians. One example is affordable housing. I do not quite understand why members opposite have a problem with additional expenditures in affordable housing. Can they give a coherent reason as to why they would be opposed to spending on post-secondary education, or the environment, or foreign aid? Apparently they do not appreciate that Canadians have aspirations other than merely tax relief or debt reduction.

The Government of Canada over the past number of budgets has put significant sums of money into affordable housing. The significance of this $1.6 billion that is going into affordable housing is that it is not attached to a matching funds regime and it also includes aboriginal housing. Previous funding has been somewhat contingent upon matching funding generally from the provinces or other entities, but in this particular case, the investment of $1.6 billion is not contingent upon matching funding from the provinces.

This builds upon the $2 billion that has already been put toward homelessness and affordable housing over the last number of years. For instance, in 1999 we launched a three year national homelessness initiative, otherwise known as SCPI. That constituted about $305 million. That was to address a specific number of problems.

Madam Speaker, you and I share somewhat parallel demographic profiles in our respective ridings. Certain sections of the ridings are quite affluent and other parts of the ridings though are somewhat less than affluent.

In my riding there is what is called the strip. My riding is the easternmost riding in Toronto. Before highway 401 was built, it was the gateway to the eastern section of Toronto along highway 2. As a consequence there were a number of motels along that section of the highway. Over time they have fallen into something less than an ideal state. The consequence of that was they were available for shelters for homeless people and refugee claimants.

This was supposed to be a temporary measure, but after 10 years of temporary measures it was perfectly obvious to anyone who did an objective study on the area that it was not an acceptable way in which to house homeless people. At one point there were about 1,400 people in the riding each and every night who were either refugee claimants or homeless from other parts of Canada. We felt that something had to be done.

Madam Speaker, I know that you and other members of the caucus approached the GTA political minister at the time, the hon. David Collenette, and others to address the issue. The result was a significant infusion in cash. The hon. minister of labour took over the administration of the supporting communities partnership initiative, otherwise known as SCPI. She poured her heart and soul into that initiative, the result of which I am happy to say in my riding has been a reduction from about 1,400 people a night down to 75 people a night.

I look to that as one of the initiatives taken by the government that has been very successful on the ground. It has addressed real and meaningful needs on the part of Canadians.

Budget 2003 provided a three year extension of the SCPI initiative at $135 million per year which is welcome money in the community. Madam Speaker, I know that you and I and certainly members on this side of the House appreciate the efforts of the Government of Canada to address the social scourge of homelessness in our respective ridings.

In budget 2001 simultaneous with the announcement of the $305 million was the announcement of a further $680 million over five years for affordable housing. I just want to mention to those who might be listening, as I do not anticipate that members opposite might be listening, but at least other people might be listening, that this builds on $1.9 billion that is already there in support for housing by the Government of Canada.

In addition, the bill proposes $1.5 billion to increase accessibility to post-secondary education, building on a whole other set of initiatives that have been in place.

As well, the budget proposes a further $900 million investment in public transit and energy refit, building again on a whole host of initiatives, particularly in budget 2005, for clean air, which was reflected in Bill C-43.

Finally, the bill contemplates the additional investment of $500 million in international assistance, which I know, Madam Speaker, you are very keen on seeing.

I hope hon. members will support the bill and that it will be a reflection of trying to make this Parliament work.

Budget Implementation Act, 2005

[Peter Goldring, Conservative, Edmonton East, AB]

Mr. Speaker, I want to thank my colleague for his speech and to comment on Bill C-43, which of course we acknowledge that we do support, but there was one notable absence in Bill C-43. It was the absence of funding for affordable housing and there were reasons for it.

I want to refer my colleague to another promise made and promise broken. It was a Liberal red book promise in the year 2000. That red book promise was for $680 million which was to create up to 120,000 units of affordable housing by the year 2005. Budget 2003 added another $320 million. That $1 billion should have proportionately created, according to the Liberals' figures, possibly up to 200,000 units, but guess how many units it created. It was not 200,000 units, not 120,000 units, but less than 25,000 units out of the $1 billion that was allocated across Canada. Those are the numbers.

Small wonder that there was no new money in Bill C-43, because even the Liberals recognized that it was a wasteful expenditure, but guess where it did show up. It is in the NDP bill, Bill C-48. Here comes another promise for building more affordable housing, only this time the minister will not tell people how many houses they expect to build, because quite frankly, he does not know and past history certainly indicates that it is correct that he does not know.

By putting another $1.6 billion into an already unworkable plan on top of a broken promise that was made on committed money before, another promise made another promise broken, is there not a pattern here? I would like my colleague to comment on promises made, promises broken.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Mr. Speaker, I would like to start by saying that I do appreciate the opportunity to speak on this legislation. I understand that I may be the last speaker tonight.

It has certainly been interesting to listen to the remarkable man from Red Deer, for example, our hon. colleague who is the environment critic for the Conservative Party. It has been remarkable to listen to him and hear his plans for the environment of this country. We know there is hope for improvement in the environment under the guidance of this gentleman. When he becomes the environment minister in a Conservative government led by our leader, the hon. member for Calgary Southwest, I know that the environment will be on its way to improvement. The member is a remarkable man and a remarkable environmentalist. It is something to look forward to.

We are here tonight speaking on Bill C-43, the Liberal budget bill. This is the bill that was put forth by the Liberal finance minister. We are not speaking tonight about Bill C-48. Bill C-48 is the bill that was put forth by the New Democrat finance minister.

The leader of the New Democratic Party somehow now has become a finance minister, the second finance minister for the Liberal government. The Liberals and the NDP have presented Bill C-48, which is the bill that the Conservative Party will not support. We will not support that legislation. There are billions and billions of dollars, somewhere over $4 billion, in the New Democrat budget, which, sadly, is supported by the Liberals just so they do not have to face an election. The Liberals will do anything to avoid an election. Bill C-48 is not the bill we are debating tonight. That is the budget bill we will be dealing with tomorrow, as I understand it.

We do support Bill C-43, not that it is a great budget, because it certainly is not, but on balance when we went through it we recognized a lot of things that we have been proposing for some time. When I say “recognize” I do not say that lightly, because there is a resemblance. In some areas, the Liberals are headed in the same direction that we have proposed, but of course it is a half measure. They have gone only part of the way and it is certainly not the way the Conservative Party will do it. Bill C-43 was moving in the right direction on issues that we feel are important. Therefore, we are supporting the bill.

When we look at tonight's debate and the debate on this bill and other legislation over the past several days, there is something that we cannot help but note. We have Liberal members of Parliament who stand up day after day, speech after speech, and say, “We have done this. We will do this”. It sounds so good. It just sounds good. The Liberals truly are masters of saying things that appeal to people across the country. They say those things, but what they say is so different from reality. This is something that we cannot help note.

We can look at any of the major issues that Canadians feel are important. Health care is an example. I heard Liberal members say today, “We are going to fix health care. We can still fix it”. As for the Supreme Court decision which will now allow private delivery, the Liberals say they can fix it so that we do not need it. They say, “We have put $21 billion into health care”. That is what they say, but of course the reality is that they cut $25 billion from health care when the current Prime Minister was finance minister. The Liberals cut $25 billion in transfers to the provinces over about a five year period. Of course they do not mention that.

More disturbing than that, because the amount of money that is put into health care really is not going to determine the success of the program, is the reality is that after 12 years of this Liberal government, health care is worse today than it was when the Liberals started. So why would Canadians believe them when they say suddenly today that they are going to change things to make it better?

The reality is that our health care is so bad in this country now that the Supreme Court of Canada ruled last week it cannot be counted on to deliver a reasonable level of health care to Canadians. Therefore, the court said, we must allow private delivery. That is the reality. The Liberals say how wonderfully they have done, but the reality is that it is so bad we have to allow private delivery. The Supreme Court has ruled that.

On the foreign affairs agenda, the Liberals stand in the House and say again and again that Canada is the greatest country in the world, that it has stature in the world, that it is a real player. Of course, we are all proud to be Canadian. This is the greatest country in the world, but sadly, the fact is that Canada has lost its stature on the world stage.

There is something that demonstrates that better than anything else. I am a member of the Canadian NATO Parliamentary Association. I travel about three times a year to meetings of the NATO parliamentarians. Every February we go to NATO headquarters in Brussels and I have continued on as a Canadian representative to the OECD in Paris.

We receive economic forecasts from the OECD. In the past these economic forecasts have talked about the G-8, when we thought Russia was becoming a player. Russia was dropped from that list because Russia has not been able to control its organized crime and really does not belong on the list of recognized economic states, so it is the G-7 that the OECD has talked about over the past several years.

A sad demonstration of what has happened to our country under the Liberal government is that this year the economic forecasts were for the G-6, not the G-7, but the G-6, and Canada was not even on the list of countries referred to in the economic forecasts. The G-6 was referred to, not the G-7. That is a sad commentary on what the government has done to our wonderful country. A respected world body like the OECD no longer considers Canada worthy of being in the top group of countries. It is a sad commentary.

On the agenda of taxes, how many times has the government said it was going to lower taxes? The most notable example was in the year 2000 when the Prime Minister, who was the finance minister at the time, said he was going to reduce taxes by over $100 billion. That was in 2000.

I encourage people to look at their paycheques from 1999 and compare them to the ones from 2001. I invite them to say that their taxes have gone down. Of course, they are not going to say that because taxes have not gone down. I invite them to look at their payroll deductions for 2005 and compare them to the ones for 1999. They will see the sad reality that the $1 billion tax cut the finance minister said was put in place does not exist. It does not exist. If people compare their 1999 and 2005 pay stubs, that $100 billion has somehow disappeared. That is a sad commentary.

The Liberals say things that sound so good. It makes many Canadians want to vote for them, but the reality is something entirely different. In health care that is the case. In foreign affairs that is the case. In taxes that is the case.

I do not have to talk about the environment because the environment critic made the point very well. From what government members say about the environment, it sounds as if they are great environmentalists. It almost makes people want to vote for them on the environment. However, when they talk about the reality of what is happening in our country with the environment, it is entirely different. The reality is entirely different from what the government says.

In my constituency, agriculture is an extremely important industry. The agriculture minister and other Liberal members stand in the House and say over and over again that the government is doing so much for agriculture, that agriculture is in great shape in this country. The fact is that after 12 years of Liberal government, the farmers of this country are having more problems and are in worse shape than they have ever been.

The government says how good things are in agriculture and what a great job it has done, but the reality is entirely the opposite. All one has to do is talk to the farmers to find out the truth. What Liberals say is one thing, but the reality is something entirely different.

I could go on and on but my time has expired. The Conservatives will support Bill C-43 because it is at least a step in the right direction, but the NDP budget bill, which we will be talking about tomorrow, is another situation entirely. We will not support it. We will do everything we can to defeat that budget bill.

[Bob Mills, Conservative, Red Deer, AB]

Mr. Speaker, it is my pleasure to join the debate on Bill C-43.

I will be splitting my time with the member for Vegreville--Wainwright.

We should start from the beginning of why most of us came to Ottawa. We came here because we were extremely concerned about the debt which was being built up in the country.

If we go back in history to 1969, there was no debt. By 1972, we had about $18 billion of debt. By 1984, we had about $180 billion of debt. By 1993, we were up over $400 billion. Today we are now $530 billion in debt. A lot of that is because of the way government is run, the way budgets are done and the way money is spent in this place. When we came here, the budget was about $140 billion. Now we are close to $200 billion. Obviously, the government is out of control.

However, what I really want to concentrate on are the environmental aspects of this budget and what they include.

First, regarding the record of the government, we are now 28th out of 29 OECD countries in 25 areas of evaluating the environment. We still have three cities dumping raw sewage into the ocean. We have over 300 boil water warnings. We have Toronto with a record 20 smog days, which is the highest it has ever had, and this is only June. We have brownfields in every municipality across the country. We have identified some 50,000 contaminated sites.

I do not think I need to go on. The environment commissioner probably sums it up best. In her sixth report she said that the government had a lot of talk. In every budget it talked a lot about the environment, but it has accomplished nothing. As a result, we are 28th out of 29. That is why we have the dismal record.

What about this budget? In this budget there are three main areas that are covered under the guise of climate change and the famous Kyoto accord that the government signed onto. Let me look at those three sections specifically because I do not have a lot of time. I would like to show members how the government plans its environmental agenda.

First, let us look at section 13 which is the climate fund. The government will put $10 million into a climate fund this year. Next year it will be $50 million. By 2008-09, it will be $300 million. By 2009-10, it will be $340 million. After five years, there will be $1 billion in this fund.

The government will then establish a bureaucracy and that bureaucracy will then buy credits. Ideally, it makes reference to domestic credits, but any expert in this area will tell us that we will end up having to buy foreign credits. We should really look at what that means.

We have a lot of bragging going on. The government will buy credits on only green projects. It will fix the Ukrainian pipeline so it will not leak and that will save so many problems. It will go to Zimbabwe and set up some environmental projects because it will be cheaper to buy credits from there.

In reality we are going to have the government off buying foreign credits with no real monitoring and with no ability to tell whether it is a green project or what is involved. We will be giving money to companies that will end up competing with our Canadian companies and our government will be funding that. We will build layers of bureaucracy and they will have to be good Liberals. We then have the basis for another sponsorship scandal, Shawinigate, whatever we want to call it, for which the Liberals are so famous.

There will be costs to our corporations and to taxpayers that others will not have. Our major competitors, the U.S. and China, will not have those costs. That will be a problem.

When buying hot air, it is fine to ask what good that will do but it is also fine to ask what it would do. Those are questions that quite often get asked so I will give a couple of examples.

Let us suppose we give tax credits to corporations that do a good job on an environmental innovative technology made in Canada. What would that mean?

Let us talk about clean coal technology. Do members know that in China 81% of its electricity is from coal; in India 79% comes from coal; in the U.S. 57% comes from coal; in Alberta 70% comes from coal; and, in Ontario 25% comes from coal?

If we became world leaders in clean coal technology and we gave tax credits for corporations that developed that technology and then we transferred that technology to the Indias, to the Chinas, to the U.S., I am sure members can imagine what that would do for the environment if we were to deal with the CO

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problem. That would be a made in Canada solution. We would do it through credits as opposed to the method of shipping money off.

I have often said that instead of buying these foreign credits, we should just get the numbers for these Swiss bank accounts for these green projects and send it directly to the Swiss bank.

I could talk about CO

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sequestering. Obviously it is being done. If we sequester CO

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in a place like Fort McMurray, we would eliminate 60% of the CO

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being released in Canada.

Now, if we gasify it and put it in the pipeline, put it down an oil well, we increase our recovery by 30%. They are doing it in Weyburn, Saskatchewan. They are doing it in Germany and they are doing it in eight states in the U.S. If we lead in that technology, think of what we could do for the environment when we transfer that CO

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sequestration around the world. We would fix the environment and we would give tax credits to those companies that develop it. It is made in Canada and we become world leaders.

I think members get the point of the sorts of ideas that we would implement as opposed to this shipping money off to the Swiss bank accounts.

Let us look at section 14, the greenhouse gas technology investment fund. This basically is where large final heavy emitters can buy credits and put them into this tech fund and in exchange they would get emission credits. That all sounds really good and so our large final heavy emitters will buy those credits from the government.

Let us think about this. This would be administered through a 12 member board. We know what the credentials for the board will be: “What have you done for the Liberal Party lately? How many times have you run for the party? What ridings will receive this tech fund? What companies will get it?” We know it will not be places where some of us come from because obviously that would not help get any vote, so let us not try and hide this.

We are telling corporations that they can buy credits and contribute to the tech fund or we will fine them. We will set up a carbon tax and we will fine them.

What we tried to do and what our finance committee did was to move amendments to this section, and we were pretty successful in getting some of those amendments. What kind of amendments were we looking for? We wanted accountability and transparency. Is that not a unique concept? My goodness, they would now have to open up their books.

We wanted to get the $15 cap extended beyond 2012 because obviously long term planning is what companies need.

We wanted to get input from the environment committee. What a unique concept that would be, getting input from the people working in that area . We wanted the reports of the advisory board made public. We also wanted the LFEs to be able to transfer credits.

Finally, in the third section, using CEPA. What is CEPA? CEPA is the Canadian Environmental Protection Act. What is that all about? Well CEPA handles arsenic and those kinds of toxic substances. CO

2

is plant food, juice for photosynthesis. The government wanted to use the regulations under CEPA to put a carbon tax on companies releasing carbon. Mark my words, the government will bring that back.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I would like to thank the hon. member for noting the budget improvements.

The official opposition members had their own strategy and they were entitled to it. They were working at that time with the Bloc to bring down the government. We tried to make a better budget. I thank him for the notation that 19 of us were able to secure some improvements to education, the environment and pensions. We believe those are important issues for Canadians.

Maybe he could reflect upon this. The difference is we did this as a collective to secure resources and to secure an investment back to all Canadians. His party had individual members leaving for positions. I would like him to comment on that situation where they decided to negotiate advancement for themselves go to the Liberals. They also decided to tape meetings.

Maybe the member could enlighten us about whether his leader was complicit in part of this. The reality is there seemed to be some type of negotiations or vote buying, which reflects poorly on the minister involved, the Prime Minister's staff and the Conservative member. Now we have the Ethics Commission investigating it. I would like to ask him about that because it has clouded this entire budgetary process.

I think Canadians are looking at that element of Parliament and scratching their heads. It does not matter who was going to make the offer. Was it the Conservative member who was trying to get something or was it the government?

That is entirely different than trying to amend a budget to make it more reflective. That is what we tried to do and we were successful at it. We amended the budget by removing $4.6 billion from a set of priorities with which we did not agree. That is why we voted against Bill C-43. Had the Conservatives at that time chosen to vote against Bill C-43, we would have had an election. They did not and that is fine. They had their own reasons and I do not why. They changed their minds during that time period.

It is important to note that we were able to get money to invest in the environment, health care and education.

I would like the member to comment about the fact that he has individual members who seem to be involved in taping and crossing the floor instead, for the benefit of themselves and not for others.

[Stockwell Day, Conservative, Okanagan—Coquihalla, BC]

Mr. Speaker, I want to congratulate the members for Peace River, Edmonton—Spruce Grove and others who have in their usual cogent and analytical way broken down the budgetary process and shown clearly how the government would have been of benefit to Canadians if it had followed the advice which we had given.

We support Bill C-43 because we have concentrated on the budget and we have, with the skill of our members and by the force and persuasion of their arguments, and by Canadians backing us up, caused the Liberal government to see that improvements were necessary to Bill C-43. It was seriously flawed. It would have left our country and Canadians at a severe disadvantage in a number of key areas.

We are pleased that we did get the government to abandon its critically socialistic bent at thinking that the best way to advance and generate revenues into the treasury was to tax people and tax businesses as much as possible. By bleeding tax dollars out of Canadians and making them work harder to take care of an increasing tax load is not how the economy is invigorated. That has been proven wrong in every jurisdiction that has tried that particular process.

It is a matter of economic fact that when the tax load is reduced, yes, in the first year there may be some foregone revenue, it initiates a virtuous cycle. In fact, there will be more people working, whether it is because investment taxes are reduced and people do not mind investing in business, or because people think that they can keep more of their hard earned dollars to themselves. When that virtuous circle of more innovation is started with more creativity and more hard work, because people or businesses are paying a lower rate overall, we actually bring more revenue into the treasury for important social programs, such as health care and other programs.

The economic history books are filled with examples of how that works. It absolutely refutes the failed god of socialism that is embraced by the Liberals and the NDP. It refutes the vicious cycle that people such as John Maynard Keynes advanced for years. He said that if a person ever gets into trouble economically, all that person has to do is get into deficit financing. We would plunge the country into debt and deficit, borrow dollars, shoot that into the economy and everything would get invigorated and everyone would be happy. There is one problem with that. It is a two word problem called compound interest.

The government proved this, tragically, and especially through the Trudeau years when we saw the most radical increase in the deficit and debt in the history of our country. It was a vicious circle; it was not a virtuous circle. The Liberals just do not get it. Their idea is to always tax working people more. Tax them harder and tax businesses more and somehow it will create more. It simply does not happen that way.

On a provincial level, we can look at the Alberta tax cuts of the 1990s when the economy was turning down, the price of oil was down, and commodity wars were going on around the world. In fact, in that period of time Alberta lowered taxes and it increased revenue. It was an amazing thing. Predictable, but it still amazed people.

The same thing happened with the Reagan tax cuts. The people over there do not like to hear that. That started the same virtuous cycle of increased revenue. Of course there was also increased spending related to military spending. However, in terms of the revenue side of the ledger, revenues increased because more people worked, worked harder, and became more innovative because they were not being excessively punished for being hardworking, innovative and creative.

The Kennedy tax cuts of 1962 were, in terms of following and tracking that trend, the single most significant and deepest personal tax cuts of the century. They actually triggered a virtuous cycle that carried on for seven years. Then of course they were dampened by the democrat President Lyndon Johnson and his war on poverty, and the war that he launched in Vietnam. Thankfully, it took a republican to get the Americans out of there.

The members of the NDP and Liberal alliance just do not understand it. I am so thankful that our hardworking members were able to impress upon them and bring pressure to bear to recognize that the cycle of excessive taxation and excessive deficit is a vicious cycle.

They do not like to hear this either, but John Maynard Keynes was asked a question when the charts were put before him. It was pointed out to him that if we were to keep on that cycle of deficit financing and then have to deal with it through compound interest, even in the productive years, we would not beat compound interest. He was asked whether he though that the economy would eventually collapse in the long run? Do hon. members know what he said, which was what these people do not realize? He said “Do you know what? In the long run we will all be dead”. That is an absolutely irresponsible approach. That is John Maynard Keynes, the father of the failed socialist god that the Liberals and the NDP continue to worship over there.

We were able to correct that in Bill C-43 somewhat. The member for Peace River has shown how Canada is still disadvantaged. We were also able to ensure that the Atlantic accord came to be. It was Conservative members, especially from Atlantic Canada, who promoted the necessity for the Atlantic provinces to receive back a little bit of the promise of Confederation which drew them into Confederation in the first place. It was something that they had not been receiving under the Liberals. It was the hard work of our members that got that in place. We can support that in this particular budget.

We saw the environmental path the government was taking, especially with the NDP-Liberal alliance. After years of talking about Kyoto and after years of saying the government had this figured out, Canadian taxpayers' dollars are going to be used to pay polluters in other parts of the world, like China which is not even buying into Kyoto, to continue to pollute so that we could have credits here to help certain businesses continue to pollute. If that is not a bizarre approach to dealing with environmental problems, I do not know what is. I am thankful that with the hard work of our members here, we were able to correct that.

In terms of the gas tax provisions, we are finally giving some of those federal gas tax dollars back to the municipalities. That again goes all the way back to October 2003 when we proposed it. All of us have constituencies that have needs. There are development needs in the city of Penticton. This is desperately needed infrastructure money. There are needs in the water systems in Naramata. There are growth needs from Summerland to Peachland and Westbank. I am talking about Westbank, British Columbia, not the Middle East, and the demands on infrastructure are incredible.

It is not all about big cities. These smaller jurisdictions desperately need these dollars as well. They are growing too. The city of Merritt is growing at an incredible rate and needs those dollars. Near Merritt there is the city of Logan Lake. It does not sound like a large urban centre, but that city needs a firewall. It is located in a forested area and needs to protect itself from the devastations that we saw two years ago.

These are the kinds of areas where those federal gas tax dollars need to go. They need to go back to cash starved municipalities. We are pleased that members of our caucus were able to initiative the idea and then ensured that the Liberals carried through with it.

We still have some concerns. There will be some nose holding in terms of Bill C-43 because a number of areas have not been addressed that the Auditor General wanted to be addressed.

In the area of government waste, which we identified in the last election, there is some $6 billion still not being attended to. Three auditors general in a row used the same phrase. They kept asking, who is minding the store? That is a tremendous indictment against the government. The billions of dollars of government waste is not being addressed. It is tragic and it puts an unnecessary burden on Canadian taxpayers. That must be addressed.

The fact is that there are still large funds that are off-book, as the Auditor General calls it. The government has said that it does not want anybody looking at how these giant funds are audited. We are actually not allowed to see it. If the sponsorship fund is an example of what goes on in funds that the Liberals do not want anybody to see, it is all the more reason to look at those funds.

If my colleagues will forgive me, I will give a word of credit to the NDP members for doing what they did. It cost $4.6 billion to buy 19 votes. We should do the math. That is about a quarter of a billion dollars per person. The money that went into the sponsorship fund was about $250 million. There are about four million or so taxpayers in Quebec. That means the people in Quebec are only worth $60 apiece. The Liberal-NDP extorted a quarter of a billion dollars apiece. I give them some credit for that even though the things they want to spend the money on is a real concern.

I congratulate the hard-working members of our caucus who were able to bring to bear and improve the budget enough that we can support it. There are things in it that we have initiated and they will be good for Canadians.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to speak to Bill C-43.

We certainly do not have any western alienation in the House of Commons tonight. We are having a great debate about British Columbia and the different politics there, but I would like to continue the debate on Bill C-43. I want to talk about its importance with regard to moving this country forward in this fiscal year, and also some of the changes that we can make to address some of the significant problems that we face as a country.

Earlier in tonight's debate, I missed the fact that the member for Beaches—East York actually voted in favour of my private member's bill, Bill C-274. I would like to thank her for that. She was one of the few members opposite who joined with us on that very important bill. We are talking about the health care reform issues that are so important.

We are talking about the budget bill right now. The first ministers agreement regarding health care is coming late in the day and there are many problems with it. Hopefully, it will at least provide an avenue to address some of the health care problems. The Supreme Court of Canada has ruled that private insurance coverage can be purchased in the province of Quebec.

My Bill C-274, which the member for Beaches—East York voted for, actually addressed one of the issues, the issue of evergreening. That is one of the regulatory issues that has to be changed.

This budget has significant investments in health care, something that has been well noted. Health care is an important backstop in terms of Canadian culture. The fact is that Tommy Douglas, the greatest Canadian, helped to found this great nation's health care system. Health care has also been a tremendous source of economic investment and prosperity for the country.

General Motors in the United States is undergoing significant layoffs, around 25,000 people, because of some of the problems that GM has. The most notable is the cost of health care for GM's workers. In fact, the cost to General Motors in the United States is about $1,500 per vehicle. The private insurance scheme in the United States has failed miserably. That is why U.S. legislatures have started to address the issue of evergreening. My bill did as well, but it was defeated in the last session of Parliament unfortunately.

There is a need to rein in and control the incredible cost of drugs in the pharmaceutical industry. The costs are spiralling out of control because of patent issues related to evergreening. That is where there is an automatic injunction so that after 20 years, when a generic company is entitled to produce that drug for the Canadian public, the drug company can automatically say that others are infringing upon its patent without any proof whatsoever.

Imagine that. In any court anywhere in this country without any shred of evidence or proof, the company will automatically get a two year extension to its patent. No other industry has that privilege. We are the only country left in the world that has that provision. Even the United States under George Bush changed this policy. It is unbelievable. It is a scandal in itself.

With Bill C-43 and the NDP improvements in Bill C-48, we are putting significant revenues into health care. We want to make sure that we maintain the Canadian identity and cultural tradition of medicare for all people in Canada. We are investing in it significantly, but at the same time we are allowing ourselves to be fleeced. On top of that, when drug companies received the patent extension deal from the Liberals to extend it to 20 years, they were supposed to put 10% back into research and development which had to be done in Canada. They negotiated a deal where it was not compulsory. It was voluntary. Voluntary agreements with the pharmaceutical industry have not worked. They have never met that 10%, even when they include packaging as part of that research and development, and I do not see how packaging and research and development go together. Nonetheless, the companies do not even meet that 10% commitment.

That is why when we are talking about a budget, we are talking about investing in Canadians. It cannot just be about spending money. It is also about regulatory changes.

We did not like the corporate tax cut that was in the budget Bill C-43. We said that from day one. We said it was not acceptable. I did not mind the tax cuts for small and medium size businesses, but the large corporations have had record profits. A Report on Business survey once again had corporate profits surging 21% in the first quarter.

We have heard a number of different people in the corporate sector say that the sky is falling. They are trying to create hysteria that this minuscule amount of money for corporate tax cuts taken out of the system is going to collapse the Canadian economy. We have heard from them on a regular basis how disastrous this is going to be. Despite the $100 billion in total tax cuts over the last 10 years, they say that this little piece of the pie, an insignificant increase in spending at 1.15% of total spending which is what Bill C-48 is going to add, is going to collapse the Canadian economy. They say we are going to lose jobs.

Ironically, what they said after they criticized the NDP amendment was that we need to put the corporate tax cut in. What they are saying is that they need choices. We do not accept their choices, especially when there is a 21% increase in their profits. That is fine. It is okay for profits to be good, but there has to be a balance. Right now in the corporate sector, let us look at the banks and insurance companies and the premiums that Canadians are paying. I do not know many people in my constituency who are calling me to say that the banks are not making enough money and that if we give them a little more of a break they will cut back their service fees, increase staffing and open more branches. That is not happening. That is not what is going on. All I know is that I am constantly meeting with branches that are closing in my community. All I know is that consumers in my constituency are paying record prices for insurance.

I do not believe it is balanced by giving the corporations a break right now. I do not understand the notion that if they are going to get an additional profit it is going to feed the economy automatically. It does not work that way. It has not worked that way for the auto industry. Despite all the tax cuts that we have had, we have had to have government intervention on sectoral strategies and targeted investments. That is what they have asked for in infrastructure improvements in order to procure the few plants that we have over the last 10 years.

It is unfortunate that we are still fighting for an auto policy. We need to get some specifics on the table, so people can see greater accountability. When we invest in an auto facility there should be greater scrutiny in the way it is developed and the way the funding is applied. There is no problem with that, but the corporate tax cuts have not brought the plants here. They have been going to Mississippi, Alabama, Mexico, Brazil and China. It does not matter if we give them another percentile or two, it is not going to make them build another plant here. The companies are going to say that they want some training and infrastructure programs.

It comes back to what we are investing in in this budget, health care. They want health care. General Motors has $1,500 per vehicle added into the actual production costs in the United States. In Canada, it is around $400 for health care costs. That is about a $1,100 savings. It is amazing.

Mr. Speaker, I know I have to wrap up my speech, but I do want to say that working together in Parliament can happen. I was pleased to be part of getting a change made to the last budget. Corporations were able to deduct penalties for pollution and crimes at the end of the taxation year. After being caught polluting our air and water, they would be fined through a criminal process. They were actually able to get some of that money back. The Liberals did not live up to their agreement to fix that. I moved a motion at committee, which was supported by the Conservatives and the Bloc, that installed another amendment to get them to fix that.

We do work together in Parliament at times and we can actually achieve results for Canadians.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Mr. Speaker, I always find it laughable when New Democrats, especially those from British Columbia, come to this House and preach about fiscal responsibility. Now, as a lifelong British Columbian, that is laughable. The $400 million that the NDP threw away on the fast ferry project could have gone to save lives, to help in waiting rooms and to help students, and yet this member has the gall to stand in this House and say that they stand for fiscal responsibility. What a joke. It is no wonder that that party was reduced to two seats in that campaign and it is no wonder that its leader left to go across the floor to the Liberal Party.

I cannot believe the member would actually get up in this place and start talking about how members of Parliament come to this place and do not do their jobs.

We recognized that the Canadian public wanted to make sure that Bill C-43 was thoroughly debated, and we did that. It is the Conservative Party that passed amendments at committee. The New Democrats did not pass a single amendment at that committee. We in the Conservative Party did our due diligence.

As for the issue of voting in this House, the most comprehensive and difficult social policy that this House has seen probably in a generation, the definition of marriage, our party had a free vote on that issue. I stood and I had the ability to freely vote and disagree with my leader on that issue. I had the capacity to vote and to speak freely on that issue because I happen to believe and support Bill C-38.

What did the New Democrats do? They told the member for Churchill to sit in her place, shut up, do not vote and do not represent her values. That is the New Democratic Party of the year 2005 and that is why that party is going nowhere.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I believe democracy is a fundamental component of Canada. Democracy, to my mind, means as elected representatives we come to this House and we vote and we make those choices because we have the responsibility as elected representatives.

I was as shocked and appalled as anyone else in this House when Bill C-43 originally came up in this House. Elected representatives, people who were elected to do a job from across this country, including at that time 99 Conservative members of Parliament, refused to do their job. They did not show up to work. They sat at those desks and refused to vote.

Now they may have said that Bill C-43 was a good budget, and I certainly would have disagreed with them, but they had the right to stand and vote and exercise the democratic mandate that they were given by their constituents or they could have joined with us and said no to those corporate tax cuts and voted against. They did neither. They sat in silence in this room and refused to exercise the democratic mandate accorded to them by their constituents. It is shocking and appalling. It is unprecedented that elected representatives, receiving a generous salary and all the generous benefits from Canadians, would refuse to stand and vote, would refuse to exercise the mandate given to them by their constituents.

I come from British Columbia. We have a proud democratic tradition. Yet the majority of British Columbia MPs refused to vote on Bill C-43. That should be a source of shame to every member of the Conservative Party that is left. I know some of them have already left, or whatever, but those who are left in this House should be ashamed of themselves for not having exercised that democratic mandate that was accorded to them by their constituents. I am sure if any one of them had said during the election campaign, “Elect me and I won't show up to work”, I do not think they would be sitting in this House now.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I would like to mention that I will be sharing my time with the member for Windsor West.

I am very pleased to speak to Bill C-43 tonight, not because of what the budget originally contained when we began discussions on Bill C-43 but because of what the NDP has brought forward to help make this budget a better balanced budget.

I will begin by talking a little about the history of budget making in this country. In the most recent history, in the 1980s under the Mulroney Conservatives, we saw the largest deficits in Canadian history. This was systematic when the Conservatives were in power. Year after year they had the most bloated budgets and the largest deficits in Canadian history throughout the period of the 1980s and the early 1990s.

I will come back to that in a moment because it is important to note the fiscal irresponsibility of the Conservative Party when it was in power.

We then replaced the Conservatives with the Liberals. The Liberals managed to balance the budget, fiscally and financially, but, as it was with the Conservatives, it was a very wrong-headed approach to budget making. We saw that while the Liberals managed to balance the budget, they were gutting employment insurance, which was unemployment insurance at that time, and misusing those funds for their own purposes. At the same time they were gutting health care. We certainly saw the impact of that last week with the Supreme Court decision. They were also gutting housing and poverty programs, and gutting post-secondary education, which I will speak to a little later on. We also saw the net impact on jobs.

While the Mulroney Conservatives certainly made Canadians pay through their irresponsible approach to budget making, we saw under the Liberals, in the 1990s through to today, an equally irresponsible approach to budget making where everything was and is carried on the backs of Canadians. While they managed to balance the books, which was a rare occurrence in the Liberal Party's record, they did it on the backs of Canadians across the country.

It is interesting to note that after a study was done last year of all the fiscal returns, not the budget documents, of all of the political parties in Canada over a 20 year period, from 1981 to 2000, the Parti Québécois, the Social Credit Party, the Conservative Party, the Liberal Party and the NDP in both provincial and federal governments, the study found that the worst record in balancing the books actually belonged to the Liberal Party which were in a deficit 85% of the time. The second worst record belonged to the Conservatives who were in deficit two-thirds of the time. Of course I am counting those outrageous bloated deficits of the Mulroney Conservative years. The best record, the party that actually balanced the books in the actual fiscal period returns more often than any other party was the New Democratic Party.

This is a situation that is actually based on cold hard facts, not the kind of baloney that we often get from the Conservatives and the Liberals. Based on cold hard facts, we see that the NDP has the best balanced approach to budget making. It is very interesting that the NDP carries not only the best record in social programs, not only the best record in approaching post-secondary education and health care, but it also balances its books more often than any other Canadian political party.

This certainly does not mean that we are perfect but we do it better than the other two parties in the House.

Therefore we had with Bill C-43, in the original version, this other Conservative-Liberal approach to budget making, which is basically to make Canadians pay and do it on the backs of Canadians. What the Liberals wanted to bring in, which the Conservatives supported and the Liberals were pushing it forward, were bloated corporate tax cuts. It was again just shovelling money off the back of a truck for the corporate sector. This is the corporate sector that is experiencing record levels of profit.

It is important to note that this is something to which the other parties often pay lip service. When we talk about competitiveness, we are actually talking about how Canadian cities and Canadian regions compete with others in North America. The most competitive areas in North America are actually in Canada.

The Price-Waterhouse study that was done last fall clearly showed that Canadian cities are more competitive for the corporate sector. Why? It is because we have a public health care system. Because of that, those companies and those corporations that are based in Canada actually get a competitive advantage out of a public subsidy that we provide to health care. Yet that same corporate sector, those same corporate boardrooms, do not want to pay their fair share of taxes to pay for, thanks to what the Canadian public provides through our health care system, a major competitive advantage.

It is interesting that we started off with Bill C-43, the bill that was to shovel money off the back of the truck for the corporate sector, and thankfully the NDP caucus stood up. The NDP caucus actually fought in this corner of the House to turn that bad budget into a better balanced budget to address a number of areas, such as housing, homelessness and poverty.

We have an increasing number of poor children and homelessness. In my province of British Columbia, homelessness has tripled. A better balanced budget actually addresses that through Bill C-48 and makes Bill C-43 a much more tolerable initiative.

In terms of the environment, because we have seen greenhouse gases actually increase by 20% when they were supposed to decline under Liberal inaction, we are addressing that through our better balanced budget.

Post-secondary education is a crisis that the federal government has done nothing about . Through the NDP's better balanced budget, we are finally addressing that.

A lot of people like to talk about international stability. International stability comes with a better balance and addressing the gap between the wealthy and the poor around the globe. The NDP's better balanced budget addresses that need for international stability through supporting poor people around the world and supporting development that brings everyone up to a tolerable standard of living.

It is true.There are a couple of areas on which we will continue to fight. One is the issue of jobs, because we have seen a decline. Most jobs that are created now in this country are part time or temporary in nature. The average Canadian worker has suffered a significant drop in real income. We will be continuing to fight in this corner of the House for that.

The other issue I would like to briefly address is the issue of health care. The Liberals are starting to address that issue, thanks to NDP pressure and pushing hard to finally addressing these issues around health care. This is an extremely important issue. We saw with the Supreme Court judgment that came forth that the issue of longer waiting lists needs to be addressed. We also need to have a more effective approach to health care costs.

As I mentioned earlier, given that the NDP is the most fiscally and financially responsible party in this country, as shown in a rigorous study of the actual fiscal period returns across the country from 1981 to 2001, we also want to address health care. We founded and built the health care system. Tommy Douglas, the greatest Canadian ever, as voted by Canadians, put in place a health care system that we know today.

Despite Liberal and Conservative irresponsibility when it comes to the health care system, we will continue to fight to reduce health care costs in two key areas: first, the evergreening that takes place with pharmaceutical products, the fastest growing and most profitable component of our health care costs.

My colleague in Windsor West has been pushing very steadily to ensure we start to reduce. Rather than paying our health care costs to the multinationals, we should have a much more effective pharmaceutical program in place.

The second key area is home care. We know that when we support people with health issues in their homes rather than taking them to hospital, we actually save almost two-thirds of the cost of taking care of that patient. Yet the Liberals have done absolutely nothing for home care. These are two areas where we can save money and divert more resources to getting those waiting lists down.

In this corner of the House, we have made a bad budget into a better balanced budget. We are fighting this tendency of the Conservatives and the Liberals to just throw money away and hurl it off the back of the truck at the corporate sector whenever they get a chance. We are going to continue to fight for better health care and for better quality jobs in this country.

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

Mr. Speaker, I want to thank my colleague from Central Nova for sharing his time with me. I am sure my remarks will be much less exciting than his.

It is a pleasure to rise and speak to the budget today in its final stage. The budget has been without a doubt one of the most watched pieces of legislation in Parliament.

I would like to spend some time today speaking about how the budget relates to my critic portfolio, intergovernmental affairs, and how I think it could have better reflected the priorities of Canadians.

The provinces, which are part of this great federation, grew up a very long time ago. In fact, several of them were around long before Canada came into being in 1867. Since that time, they have come to assume responsibility for the programs and services that Canadians care deeply about.

In fact, it was on February 6, 1885, that Sir John A. Macdonald aptly described the division of powers that would come to characterize our nation. He stated:

All the great questions which affect the general interests of the confederacy as a whole are confided to the federal Parliament, while the local interests and local laws of each section are preserved intact and entrusted to the care of the local bodies.

The division of powers in Canada were clearly written into the Constitution and, consequently, have become enshrined by our history. Federal-provincial fiscal arrangements play a fundamental role in the delivery of the most important priorities of Canadians: health, education and social services.

However, the Liberal approach has served to undermine the very social and political fabric of Canada, endangering future funding for social programs and, frankly, jeopardizing federalism.

The Liberals have done this by using the federal government's ever growing fiscal capacity to control and manipulate the provinces with money and conditions. They pressure the provinces into developing expensive programs, raising the expectations of Canadians and then give them only cents on the dollar to pay for them.

We have watched the government and the Prime Minister, in particular, continue the dangerous game of pitting province against province, family against family. The government does this by signing side deals that simply epitomize unequal treatment.

The Liberal's budget continues these trends. It is an archaic way to conduct intergovernmental affairs, it fails to recognize the maturity, the strength and important modern role of the provinces. Most important, it fails to contain a national vision.

The most serious way in which this budget fails the provinces is in its complete failure to address the growing fiscal imbalance between the federal government and the provincial governments. Put simply, the federal government continues to collect far more revenue than it needs to fulfill its constitutional responsibilities. The provinces, meanwhile, are feeling pressures to not raise their taxes because in the end there is only one taxpayer.

I was fortunate enough to sit on the subcommittee of the finance committee that investigated the fiscal imbalance. This was a very enlightening experience. I sincerely wish that our recommendations could have been incorporated into the budget, as I believe they would have gone a long way to making this a lasting budget.

The Conservative Party of Canada agrees with the majority report submitted by the subcommittee on fiscal imbalance, which concluded that the fiscal balance existed and was a growing problem for all orders of government.

The Conservative Party of Canada, the New Democratic Party and Bloc Québécois unanimously agreed to a number of recommendations. The Conservative Party, however, went farther in its recommendations. It believes that any proposed solutions to the fiscal imbalance and changes to the equalization formula must be made with the following principles in mind.

They must reflect leadership with a national federalist vision. They must reflect a collaboration to ensure that changes to the equalization formula or proposals to address the fiscal imbalance are done in consultation with the provinces and the municipalities. They must also reflect the right of all Canadians to quality health care, education and social services regardless of where they live. They must also reflect the equality of all provinces. They must reflect the respect for the unique needs of Quebec within a collaborative federalist framework. Last but not least, they must reflect the belief that Canada's most essential national program, equalization, should be used for what it was intended, which is neighbours helping neighbours in times of need.

These principles are not reflected in the Liberal's approach to fiscal federalism. In a rush to buy votes before the next general election, the Liberals have abandoned any commitment to multilateral negotiations, disrespect of the need for a collaborative and comprehensive approach to fiscal federalism and undermine the security of important social programs.

The Liberal solution to the fiscal imbalance continues to be to deny that it exists and a reliance on a quick fix of patchwork federalism. The Liberals have abandoned fiscal federalism in the name of political expediency by signing a series of side deals and bilateral agreements with no national vision.

By signing these ad hoc bilateral side deals with provinces outside of the fiscal framework of the equalization program, the Liberals are ruining equalization, what I consider to be the most essentially Canadian national program. By abusing their federal spending power, disrespecting the constitution and approaching negotiations with provinces in an unfair and inconsistent manner, the Liberals have engendered mistrust between all orders of government and turned their back on collaborative federalism.

The Liberals have pitted province against province and Canadian against Canadian by neglecting the emerging fiscal imbalance between the provinces and the municipalities and the increasing pressure on provinces and municipalities to deliver core social services. The Liberals have now set cities against provinces and mayor against premiers.

In addition, our committee heard from witnesses who argued that the equalization formula must be revisited and reformed. A number of issues must be addressed, including the impact of the floor ceiling that was stipulated in the new equalization framework, reached in October 2004, and the treatment of resource revenues in the fiscal framework of equalization must also be revisited.

From those observations, the Conservative Party of Canada, in our recommendations, believes that non-renewable natural resources revenues must be removed from the equalization formula in order to encourage the development of economic growth in the non-renewable resource sector across Canada.

Additionally, the Conservative Party of Canada believes that the federal government should take a multilateral approach in examining the horizontal fiscal imbalance and equalization framework. Building upon the framework and resources already established by the provinces, through the council of the federation, we support the development of a consultative process which also includes representatives from the federal and municipal orders of government.

Most provincial governments clearly stated that the vertical fiscal imbalance has made it increasingly difficult for the provinces to engage in long term financial planning and to guarantee essential health and social programs. The Conservative Party of Canada believes that in order to help correct the vertical fiscal imbalance, the federal government conduct an indepth review of all tax fields, federal fiscal transfer mechanisms and consider transferring an appropriate level of income tax points to the provinces.

Most important though, for the state of federalism, the Conservative Party of Canada recommends that if the federal government initiates new spending in areas of exclusive provincial or territorial constitutional jurisdiction, it should have an agreement from the majority of the provinces to proceed and that provinces should be given the right to opt out of the federal program and continue to receive federal funding so long as the province offers a similar program with similar accountability structures.

However, the budget is about more than just fiscal federalism. It is the spending plan for the actions of the federal government. We have been consistent with regard to our position on Bill C-43. In committee we were able to make it better legislation and as a result, Canadians will be better off. The Conservative Party of Canada carries the sole responsibility for making this stronger legislation and we are proud of that.

By keeping in tax relief for our nation's largest employers, we have secured Canadian jobs. By making our environmental legislation more accountable, we have helped prevent future scandals. We will always fight for a made in Canada solution to the environmental issues of our time. We led the charge to remove part 15, the CEPA provisions, from this omnibus spending bill and we attempted to ensure that the government could not purchase foreign Kyoto credits to ensure that money stayed in Canada to support our environment.

On committee, we also fought for accountability and ensured that the Liberal appointed advisory board, which is administered under the Canadian emission reductions incentive agency, will make its advice public.

Furthermore, I look forward to the future when Canadians will have a Conservative budget, a budget that contains real tax cuts for Canadian families. That was something that was truly missing from this major spending initiative. We on this side of the House will always remember, and Canadians agree with us, that without fiscal restraint the social programs we cherish cannot be maintained and sustained.

Sadly, this is not the only budget bill that we are debating in the House. When the Prime Minister struck a deathbed deal with the NDP giving away the fiscal accountability and responsibility in exchange for a few NDP votes, the House was left with two budget bills. The House and the Canadian people can be assured that we will continue to hold the Liberals accountable for their undemocratic, wasteful, out of control spending contained in Bill C-48 and the other billions of dollars of announcements since then.

We kept our word to Canadians. We helped move this budget through committee and made important amendments to make it a better budget for Canadians. It was the Liberal Party that slowed the passage of the budget by filibustering to avoid a confidence vote until it had bribed opposition members to support it.

I look forward to the budget passing so that we as a country can move forward.

[Peter MacKay, Conservative, Central Nova, NS]

Madam Speaker, I am very pleased to take part in this debate that is so very important for our country.

I want to indicate at the outset that I will be splitting my time with the hon. member for Edmonton—Spruce Grove, who is one of the most impressive young women to come into the House in many years. I am honoured to be sharing my time with her tonight.

The previous speaker indicated her position on a number of issues. In particular, she spoke at some length and with passion about the health care system. The question I would have asked her, had I been given the opportunity, with respect to her plans and her government's plans for health care, is quite simple: what was stopping them for 12 years?

What was preventing the Liberal government from taking some of the very innovative and, I would suggest, very useful measures that she spoke of in her remarks? What on earth prevented the Liberal government from doing so?

In fact, when one reads between the lines and reads outright the words of the Supreme Court of Canada, that is essentially what they say. It was a scathing condemnation of this government's administration of the Canada Health Act.

Without a doubt, the state of health care today is in ruins as a result of the administration of the Prime Minister, who as finance minister made the brutal unilateral cuts to transfer payments to provinces that resulted in the deterioration of health care. No one in the country is more to blame for the abysmal state of health care than the Prime Minister of Canada today.

The blunderbuss omnibus bill that we see before us as the budget is typical in its approach as far as the Liberal Party is concerned. It reminds me of the old parable of how a loaf of bread is stolen and some crumbs are then given back to the thankful plebs. That is how the Liberal government tends to administer the money and the finances of the nation.

Bill C-43 is a bill which the Conservative Party sought to improve and, I would say with some confidence, did improve. Our position has been consistent. We saw this as initially a Conservative bill, but in need of improvement, with serious flaws that in fact would have been detrimental to the livelihood of Canadians.

In fact, we have been responsible in trying to make this a better piece of legislation and have done so. We have brought forward amendments that in fact, ironically when one looks at it, restored some of the initial tax relief that was put forward by the Minister of Finance before he was co-opted by the Prime Minister's deal with the NDP.

I think what we may find at the end of the day is that what the NDP has been promised will amount to a hill of beans because, like much of this budget, it is post-dated. It is a promissory note. It will happen years from now. In fact, the immediate impact of this budget is $16 to the average Canadian, the cost of a medium pizza.

I do not think that is good enough when we think of the number of working Canadians, of single mothers, of hard done by Canadians who are out there trying to get by. Far too many of those Canadians are still on the tax rolls. They should not be paying tax. The government should raise the basic personal exemption and take some of those working Canadians off the tax rolls. They are the working poor. This budget does not speak to those hard done by Canadians.

This bill, with 24 separate and in most cases unrelated pieces of legislation, has a lot of unwarranted and, I would suggest, unwanted measures and has caused regional divisions in the country. I am speaking, of course, of the Atlantic accord.

The Conservative Party made several very concerted efforts to pull the Atlantic accord out and have it presented to the House as a stand-alone piece of legislation, which would make common sense and which was in fact the original intent of the Atlantic accord, as we all know. It was consistent with the approach that the Conservative Party had taken in saying that we must deliver to Atlantic Canada, and to Newfoundland and Labrador and Nova Scotia in particular, the ability to benefit from their own natural resource revenues.

This approach that the Liberal government took to bury it in the budget was clearly an attempt to renege on that commitment. We have taken a positive and constructive approach throughout in trying to deliver on that promise to Atlantic Canadians.

We wanted to build a better budget. We wanted to improve the quality of life for Canadians. Again, I would suggest that we have. This is a compassionate, conservative way that is very much in keeping with the type of governance we want to bring to Canada, one that we will continue to pursue with passion and in a progressive way in the coming days and on in through the summer.

We want to protect the livelihoods of thousands of Canadians by preventing a Liberal-NDP coalition that will remove tax relief for Canadians. The tax relief was very much about improving competition, improving the job market, and improving the ability of companies to employ thousands of Canadians. We are going to continue to fight for hardworking and overtaxed Canadians.

This bill is a massive, cumbersome and convoluted bill. Yet what we see at the end of the day is an attempt to buy people with their own money. The government has really sunk to new lows when it comes to buying people with their own money, or buying members of Parliament even.

In contrast, the NDP add-on budget, if I can call it that, has three clauses and is one page. Imagine allotting $4.6 billion in spending and scratching it out on a page and a half. There is no plan or fiscal framework whatsoever. It is an absolutely abysmal and irresponsible approach to governance and fiscal management, such as the sponsorship program, for example, or the gun registry, or the HRDC boondoggle, or many of the contracts that were cancelled that again were an absolute pillage of the public purse. They were consistent with the government's approach for the last 12 years that included irresponsible and out of control spending practices with no consequences. Well the consequence has come. It is called the Conservative Party of Canada.

This attempt to have the NDP on side was of course also about a shameless attempt to cling to power. Much of what we hear from the NDP in the House now, the rhetoric and criticisms of the government, mean nothing because the NDP is propping the government up. Since this budget was announced, we know that all pretense of fiscal prudence is out the window. It was all about partisanship and buying the temporary support of the NDP. That house of cards will crumble soon enough.

We now have an additional $26 billion in spending outside of the budget. This is all since the Prime Minister took to the airwaves with his much publicized mercy plea to wait for Gomery. We have seen in recent days attempts for the old Chrétien and current Prime Minister coalition to come together again to somehow derail Gomery through a secret deal that would allow Mr. Chrétien to file an objection to the Gomery report and most likely prevent an election that was promised by the Prime Minister. This is the Prime Minister's little election escape hatch.

Some members in the House, not many, may recall that Jean Chrétien's fiscal policies as finance minister brought about an 83% net increase in the federal deficit from 1977 to 1980. I do not think even you were here at that time, Mr. Speaker. We often hear from the Prime Minister about the deficit that he inherited, the much ballyhooed deficit that was inherited by the Liberal government in 1993.

What is never mentioned and what is always overlooked but is factual, as Yogi Berra said, “You could look it up”, is that the incoming Conservative government in 1984 inherited a $38 billion deficit from the Trudeau years. It is all about convenient memory and selective quoting when it comes to fiscal figures.

The Liberal government came to office promising to clean up government. However, since coming to office the Liberals have been involved in the sponsorship scandal, the envelopes of cash being passed around in restaurants, and the unbridled, out of control corruption that we have seen. This has all been playing out before the Gomery commission. The Liberal Party is being exposed day by day and the dance of a thousand veils is over. We see it laid bare. It is the proverbial emperor without clothes now that we have before Canadians.

It is perfectly clear. There is now an opportunity for Canadians to judge for themselves, based on factual information, what they want. They want an ethical, clean government that is going to provide health care and direction on important matters of fiscal concern to them dealing with trade, the economy, and issues relating to national defence, the justice system and the environment.

It was interesting to hear Elizabeth May from the Sierra Club recently describe Prime Minister Brian Mulroney as Canada's greenest Prime Minister, compared to the Kyoto disaster that is still being peddled by the government. The government is attempting to dupe Canadians that this is good for them and that we are somehow going to reach those unrealistic targets. That by buying foreign credits we are going to actually improve the Canadian environment. That is just not true.

For the last 11 years we have seen a government that has consistently made poor decisions that have hurt Canadians, hurt our economy, and hurt our international reputation. This budget is a chance at least to bring back some semblance of fiscal prudence without the NDP add-on.

I will now forfeit the floor to my colleague from Edmonton—Spruce Grove who will enlighten the House further as to her insights into what we should be doing in the future with respect to fiscal management.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Madam Speaker, this is a great day for the New Democratic Party in the House today. We are in the final stages of the approval of Bill C-43, the budget implementation act, which has been changed, altered and fundamentally transformed into a document that Canadians appreciate and welcome. We are talking about a budget bill that has had the benefit of input from a cooperative approach in this minority Parliament.

We have had input from the Bloc and the Conservatives. I want to add my astonishment at the members of the Bloc who today oppose Bill C-43 yet again. They have stood in this House time and time again, joining with us in calling for a reduction in corporate tax breaks.

The Bloc is a party that has been tireless in working with New Democrats in committee, in the House, raising questions and concerns about tax havens. In fact, tomorrow we will discuss a motion brought before to the committee by the Bloc on how we deal with the money that leaves Canada because of lucrative loopholes and the permission granted corporations in moving money outside the country.

It is with a great deal of shock and astonishment to hear, yet again, that the Bloc is not prepared to support a most progressive budget that has been fundamentally altered. The New Democrats chose to ensure it was more reflective of Canadian needs. The budget guarantees we can invest in projects and areas that would reap benefits for Canadians over many years to come. That is one extremely difficult situation to assess this evening.

On the other hand, for days on end we have heard the Conservatives say that the budget, with its changes with respect to corporate tax reductions and the elimination of yet another benefit for corporations, will bring the country to rack and ruin, It will cause the country to go bankrupt and jobs will be lost, It will cause huge problems with the dollar and inflation will spiral out of control.

We have heard those arguments time and time again without any basis in fact and without any statistical evidence to support such conclusions. Yet, lo and behold, Conservatives supported the NDP amendments to Bill C-43. Conservatives in the House joined with us to call for the elimination of corporate tax reductions. We cannot believe it. Did anyone ever think that we would get to this day?

We know other issues are at stake here in terms of the Conservatives. They have flip-flopped so many times on the budget bill that it is hard to keep track. They were for it five minutes after the budget bill was introduced. Then they were against it a little while later. They then were for it, then against it, now for it. It is hard to keep track.

I am sure it must be very difficult for the Conservatives to sit in this chamber tonight and have to support a bill that has been fundamentally altered by the NDP. I think they had a hard enough time agreeing with their leader on February 23, when he walked out of the chamber and supported the Liberal's budget bill without even a cursory glance at it, never mind the fact that they have to support the bill now that it has been fundamentally altered by the NDP. However, we are glad for their support.

I do not know if they have seen the light of day. I do not know if they have changed their minds in terms of the benefits of investing strategically in our country and not continually supporting corporate giveaways. I do not know if they have had a complete transformation.

At this point we will not question their motives. We will accept their support. We will work with them to help them see the light of day in completing this better balanced budget project and have them come around to our view and support Bill C-48. That legislation takes the money we save by eliminating the corporate tax breaks and puts it into areas that create jobs, improve programs for Canadians and enhance the quality of life in the country

Perhaps there is hope. Before the end of this process, maybe will convince the Conservatives that this was an important contribution for Canadians and one that makes sense in terms of the future of the country.

The concerns of the Conservatives over the budget were certainly heard from their buddies in the corporate sector. We heard from the C.D. Howe Institute, the Canadian Taxpayers Federation and the Chamber of Commerce. They spoke the Conservative line. They spoke with one voice, suggesting that this little change in the corporate tax rate would create disastrous consequence for the country. They did not tell the whole story to Canadians. They did not acknowledge the fact we were talking about 1.15% of total federal spending. That is the amount of money we are taking away from the corporate sector, which continues to benefit to the tune of $9 billion every year to the year 2010.

Therefore, let us remember to keep this in context. Canadians need to hear the whole story. They need to know that we are talking about a very small adjustment in terms of the corporate sector. That is 1.15% of total federal spending. We are talking about a project that amounts to 0.02% of GDP. We are talking about $2.3 billion this year and next year. That is $2.3 billion of a GDP of $1.14 trillion.

Let us please have the Conservatives apply some logic to this debate. Stop the Mickey Mouse mathematics. They should start to understand that we are speaking about project that will enhance jobs, create investment opportunities and improve competitiveness. At the same time it will bring some necessary relief for Canadians who are trying to find the money to send their kids to university, or trying to find safe secure affordable housing for their families or trying to ensure that there is less smog and less pollution so their kids suffering from asthma have a chance to breath and to lead normal lives.

We are talking about something that is relatively small. As New Democrats, we would have liked to have seen a better budget than the one we achieved, but we did make a step in the right direction. We have improved the federal Liberal budget, as announced on February 23, in significant ways that will enhance the quality of life for many Canadians and help bring some hope to Canadians who have suffer through some very difficult situations.

Budgets should be about growing the economy. They should be about taking care of the needs of Canadians. However, the budget the Liberals introduced on February 23 did not do that. It did not address those pressing needs of Canadians. It did not ensure investments in strategic areas where the economy would grow at the same time the needs of Canadians would be addressed. Its flaws and shortcomings clearly outweighed its advantages.

We understood that almost immediately upon assessing the federal budget and made plans to try to change it, unlike the Conservatives who accepted it, walked out of the chamber and said “We'll go with it”.

The Conservatives are yelling that they abstained on it. We do not know what the Conservatives are doing these days. One minute they are voting for it, the next minute they are abstaining, the next minute they are opposed, the next minute they are voting with the NDP.

It is a strange world in this place. As I said on many occasions, the Conservatives are suffering from a case of sour grapes and NDP envy. They would have liked to have been in the driver's seat like we were. All but their leader would have liked to have been in a position of trying to influence the federal budget, instead of abdicating responsibility for change. They walked out of this chamber and accepted it as it was. We did not accept it. We worked to change it. Canadians sent us a message to try to make the minority Parliament work and to do the best we could for Canadians. That is what we have tried to do.

When we first saw the budget on February 23, we were quite shocked at the fact that there was another $4.6 billion set aside for corporate tax cuts. We did not expect to see that. As I have said on many occasions, the Prime Minister promised in the last election not to pursue any more tax cuts until program funding had been restored to some level close to that which was the operational amount before the cuts began in 1995.

Canadians woke up after February 23 in utter disbelief. The budget contained $4.6 billion in corporate tax cuts, yet their household income had decreased by 38% since 1989. Food bank use had increased by 8.5% in the previous year. The gap was still growing between the upper and lower rungs of the income ladder. They saw youth unemployment at over 13%, but no federal action to relieve high tuition across the country. There was a housing shortage, but not a penny for affordable housing. There was no sign of a comprehensive housing strategy.

They knew Canada had signed on to Kyoto. At the same time they knew that pollution had risen 20% instead of dropping. A watershed health care accord had been signed, but the drug costs and out of pocket payments were still rising. The Bank of Canada governor said that the economy was at capacity, but unemployment was still hovering around 7% and 40% of the jobless could not access benefits.

Something had to be done. We could not just continue to pursue the same course of action with more tax cuts for the corporations and the wealthy without seeing no results. We saw little investment in the economy and very few jobs were created. When profits were booming, reinvestment was disproportionately low. Between 2001 and 2004 the percentage of available cash flow reinvested in capital assets dropped from nearly 100% to only 66%.

Investment spending as a percentage of GDP dropped from 13% in 1998 to less than 11% in 2004. Many economists commented on this situation. Many have said that the lower corporate taxes fall in Canada, the less business invests in new capital. Even the Minister of Finance hinted at that in his speech in Halifax to the chamber of commerce this past week. He suggested that despite all these tax breaks over the last number of years and despite record level profits, investment had declined. It had not kept pace with the kind of benefit the Canadian government had expected.

It was time to try another way and that is what we proposed. Take that small amount of money, which reduced the corporate tax break from 21% to 19%, and invest in education to ensure accessibility for Canadians to higher education, invest it in housing, ensuring some measure of decent, affordable housing, invest it in the environment, ensuring some measure of clean air and public transit to help bring down greenhouse gas emissions, and invest it in some assistance to meet our international obligations for poverty on a worldwide basis.

Many economists have suggested that we will achieve much more by investing strategically in those areas than simply giving another tax break to the corporations.

I know the Conservatives, despite their vote, are still preoccupied with the notion of giving more tax breaks to corporations in spite of record level profits. I cannot believe their tune does not change despite the most recent statistics. Today's business report shows corporate profit surging 21% in the first quarter. Statistics Canada reports show that corporate profits continued to rise in the first quarter of 2005 with operating profits rising 3.4% to $51.5 billion.

I cannot believe the Conservatives continue to stick to their narrow focus of the economy when the TD Financial Group issued a report entitled “Canadian Corporations are Riding the Profit Surge”. It also said that with few exceptions, corporate Canada is flush with cash.

In that context, knowing that the corporations are flush with cash, that profits are surging and Canadians are suffering, surely it makes sense to try to do what we can as parliamentarians to give Canadians a chance, to give Canadians a break and an increase in their wages. Surely it makes sense when we know that investing in affordable housing not only meets a social need but actually creates thousands of jobs. In fact, the estimates for the $1.6 billion promoted by the NDP in the budget process would produce 26,000 jobs, if not more.

Does it not make sense, when looking at the economy, to invest in areas where young people will have access to higher education and be able to use their talents to develop our economy? Does it not make sense to invest in public transit, which ensures jobs, provides accessible transportation for citizens and helps us bring down greenhouse gas emissions?

Why would we not do what makes the most sense in terms of all of our needs as a society? Why would we not look at those areas where we can get the biggest bang for the buck?

It is time we actually put to rest the myths perpetrated by the Conservative Party with the support of its cheerleaders, the Chamber of Commerce, the taxation federation and the C.D. Howe Institute. I am not sure if they are the cheerleaders of the Conservatives or if the Conservatives are the cheerleaders of those right wing organizations, but together they represent a very small voice on the Canadian political scene. The vast majority of businesses, economists and Canadians know that when we invest in areas that create jobs and build a future for Canadians, then that truly is the most efficient and cost effective way to go.

It is important to note many of the studies. The Canadian Centre for Policy Alternatives show that over the next five years revenue coming from corporate income taxes will drop as a percentage of total revenue from 15% to 11%. We should put that in perspective. I hope the Conservatives are listening to this. This is Statistics Canada information. This is not coming from the NDP or some policy organization. This is Statistics Canada information showing that corporate tax as a percentage of total revenue is dropping significantly while personal income tax is rising from 45% to 65%.

Finally, I should point out that we seldom hear about the flip side of corporate tax holidays, which is the cost to individual Canadians. For example, it would cost every Canadian about $400 a year more to maintain public services at roughly the same level as they were five years ago. Even without adjusting fully to make up for the 9% cut in corporate tax rates between 2000 and 2010, plus the elimination of the surtax and capital tax, it would be a total of $12.6 billion in 2010.

We have found a better way. It is a first step. It is the combination of Bill C-43, which would eliminate these corporate tax cuts, together with Bill C-48, which would invest that money in housing, education, the environment and international aid. Together it is a package that produces a better balanced budget for which Canadians can be proud. I hope the House will get on with it and support both so Canadians can reap the benefits of this progressive agenda.