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.

Budget Implementation Act, 2005

[Charlie Penson, Conservative, Peace River, AB]

Mr. Speaker, the member for Winnipeg North has a lot of bravado today about the budget vote that took place some time ago but my understanding was that if the Conservative Party had voted against the budget instead of abstaining, the NDP members would have been running for the hills so they would not have had to bring down the government.

There will be a time when the government will be brought down but we believe that Canadians are the ones who have to make that decision.

We were not happy with the budget either. It went some ways to satisfying Canadians about things like tax relief. That said, I have already pointed out in my speech today that they were not fast enough and they were not deep enough.

We are not in favour of Bill C-43, which would implement the budget itself, and I have just pointed out our reasons. We want three provisions separated out of the bill and then we will deal with those items separately.

[Charlie Penson, Conservative, Peace River, AB]

Mr. Speaker, I am pleased to take part in the debate today on Bill C-43, an act to implement certain provisions of the budget which was tabled just a short six weeks ago on February 23.

Unfortunately, this budget implementation bill is reflective of the Liberal government's arrogance that has plagued this Parliament for over a decade, back in 1993 when it was first elected. However, in this minority Parliament, it is time for the Prime Minister to stop behaving as if he had a majority and start governing, and take into account the best interests of Canadians. Unfortunately, that does not appear to be happening.

We in the Conservative Party have made it very clear that we believe the legislation contained in Bill C-43 should be divided into three stand-alone parts: first, legislation enacting Kyoto provisions; second, measures that fulfill commitments made to the provinces including the implementation of the Atlantic accord; and third, clauses traditionally found in budget implementation legislation.

Let me deal with the Kyoto measures first. We have a last minute decision by the government to include changes to the Canadian Environmental Protection Act and enabling legislation for a Canada emissions regulations agency. All it is, in this minority climate, is a crude bait and switch tactic that is not fooling anybody. I notice that the environmental community is not very happy about the government's tactic either, although the environment minister may have thought that he was going to have support there.

The Liberals knew the majority in the House however would not approve the Kyoto measures if they presented them in stand-alone legislation. That is why they attached it in a last minute amendment to Bill C-43. This move, at the very least, has delayed legitimate budget measures from implementation and may have even, depending on what happens in the next couple of months, put their very implementation at risk.

The government's cynical effort to divide and conquer has had the opposite effect. It does not matter what side people are on regarding the Kyoto debate. No one is prepared to swallow hasty, superficial and highly questionable Kyoto measures that are being presented in bad faith.

I would like to take a moment to talk about Kyoto and the whole business that was first developed in Rio back in the late 1980s. This is the government that sleepwalked its way to a very bad Kyoto agreement to begin with. Although it had left it for almost 10 years, it had to develop a position to take to Kyoto, Japan for the international conference that was taking place.

The Liberals hastily put a government position together. They went out and consulted with the provinces in about a week. They came back with a position the provinces could finally agree to, went to Kyoto, and doubled the amount of concessions that Canada was prepared to make, double what the provinces had just agreed to a week earlier. That is the kind of rocky start that they got off to, and quite frankly people are shaking their heads at the way that the government has handled this whole file.

From our point of view, these are not the same set of budget measures which the Conservative Party was presented with in the budget, and so we refused to defeat the government on the budget. Now we find this late amendment that has been brought in as a way to change things. It is a very strange approach.

Let me deal with the Atlantic accord. It is another problem we have with this budget implementation bill. I would say equally contemptuous is the Liberal tactic of holding the people of Newfoundland and Labrador and Nova Scotia hostage by linking the Atlantic accord provisions, which most members of the House support, with the obviously problematic Kyoto measures.

Members will remember the Atlantic accord. This was the promise that the Prime Minister made when he was slipping very badly in the last election, less than a year ago in June. He went to Newfoundland and Labrador to shore up his support and agreed that we had to make changes to the measures, especially on the offshore resource revenue. Then when the Premiers of Newfoundland and Labrador and Nova Scotia asked him to hold up his part of the bargain just a few months later, he was not prepared to do that. We all saw the negotiations that went on, including Danny Williams and his disgust at the way the Prime Minister had backed away from that agreement. Finally, under great pressure, the Prime Minister gave in.

We think the provisions of the Atlantic accord in Bill C-43 could be passed in one day in the House if the Liberals would table stand-alone legislation, but so far they have not agreed to do that very simple matter.

However, on April 6, just a short time ago, the leader of the Conservative Party rose in the House to seek unanimous consent for the following motion: “That, notwithstanding the Standing Orders or usual practices of the House, a minister of the Crown be permitted to table a bill without notice that implements the Atlantic accord; when such a bill is called for debate it be deemed read the second time and referred to a committee of the whole, deemed considered in committee of the whole, deemed reported without amendment, deemed concurred in at report stage, deemed read a third time and passed”.

Therefore, it is clear that the intent was to move this through very quickly. The accord was finally reached between the Premiers of Newfoundland and Labrador and Nova Scotia and the Liberal government after a great deal of pressure. However, the Liberals have linked it to the Kyoto amendment and this is problematic.

The member for Toronto—Danforth, the leader of the NDP, seconded this motion. We may disagree on many issues, but the Conservatives and the NDP share a sense of fair play and apparently the Liberals do not as they would not give their consent. Nevertheless, we remain united on this point. The Atlantic accord should be passed with no further delay, finally giving the people of Newfoundland and Labrador and Nova Scotia what they were duly promised in the last election campaign, which is a fair deal they so justly deserve.

The bottom line is that the Conservative Party does not believe in playing games with the well-being of Canadians and Canadians of that particular region on this issue. It is high time that the Liberals stop trying to score points and follow the lead of the Conservative Party by acting in the best interests of the people of Newfoundland and Labrador and Nova Scotia. We request that this be split away from this bill and if the government refuses to do so, we will try to accomplish that in committee when it comes to us.

Traditional budget measures are normally contained in these budget implementation bills. In the last election the Liberals campaigned against many of the Conservative initiatives which they seem to very strangely now accept, such as tax reductions. Our last platform, which the Liberals criticized as being fiscally irresponsible just about 10 or 11 months ago, committed to $58 billion in new spending and tax reductions over five years.

In budget 2005, the Liberals made $55 billion in new commitments for the same time period. Eerily and remarkably, almost exactly the same numbers. We could not afford them in June during the election campaign. They were highly irresponsible. Then the budget came down February 23, and strangely, the are exactly the same numbers. So it was just a crass political ploy at election time to discredit the Conservative Party. Now we see that it was affordable all along.

Unfortunately, many of the tax cuts embraced by the Liberals in the budget do not go far enough or occur fast enough to have a substantial impact on the well-being of Canadians. In fact, some people are calling the last budget “budget 2008” because many of the measures do not take effect until late in the five year period.

The personal tax relief measures in the bill are insufficient and back-end loaded. They amount to a reduction of no more than $16 next year. It is called the pizza of tax relief. One family could maybe buy a pizza with the tax relief it is going to get next year. So the Liberals back-end loaded many of these provisions and they are only going to be $192 when fully implemented in 2009. Not nearly enough, but it is the right direction.

The productivity enhancing measures in budget 2005 however are insufficient. They serve only to illustrate that the government is not taking the warning signs that Canada's high priority programs could be in jeopardy if comprehensive steps are not taken to grow the economy before the demographic crunch happens. I have been on the finance committee for some time. We have heard this story about the looming demographic change. We have an aging population in Canada. We will have less people paying the bills down the road. We believe that we have to take measures now to get Canada's economy going. We know that we are trailing our major trading partner, the United States, very badly in terms of productivity.

People may ask what that is, it really means we have a lower standard of living. It is not good enough. We have fallen behind very badly in the last 25 years. It means in real terms that people can understand that the average family of four in Canada has a take home pay of about $24,000 less than the average family in the United States.

What could people do with that? They could put some $2,000 a month on their mortgage payments. That is really what it amounts to in real terms. They could pay down their mortgage considerably faster if we had the same kind of standard of living as they have in the United States.

Why would we think that we should not aspire to have as high a standard of living? We have had it in the past. It is only in the last 25 years that we have drifted very badly. Our productivity has fallen so we are only about 75% as productive as the United States.

I would suggest that it is not the fault of Canadians. It is the fault of policy makers who put us into a whole bunch of areas of government spending in which we do not need to be involved any more.

Let us take some steps now to correct that before the big demographic crunch happens. Canada's productivity slack not only curtails the Canadian standard of living now but it puts the future affordability of our social programs into serious jeopardy. The time to fix a leaky roof is when the sun is shining, not to wait for a downpour to flood the house.

Some of the measures in the bill do not reflect how they were presented in the budget document. While the budget noted that each of the territories would equally share $120 million in trust, part 6 of Bill C-43 leaves the allocation up to the terms of the trust indenture. Maybe that is fine but maybe it is not. It does not spell it out.

Budget 2005 said that $150 million for the green municipal fund would be applied to clean up brownfields. We heard about the need for that many times but no stipulations to that effect were made in part 8 of Bill C-43, which I think is also an oversight or an error.

With regard to the much talked about gas tax transfer to the municipalities that the parliamentary secretary talked about a little earlier, part 11 of Bill C-43 only authorizes payments to the provinces regarding the gas tax until 2005-06 even though the budget stated that the amount of the share of the gas tax would rise to $2 billion annually by 2009-10.

I think some provisions still need to be cleared up.

Provisions to help low income seniors do not come out as beneficial as the Minister of Finance's budget speech would lead us to believe. For example, part 23 of Bill C-43 says that unless the provincial governments raise the comfort allowance amount, the total amount increased to the GIS, the guaranteed income supplement, would not be paid to seniors living in subsidized nursing homes but rather to the nursing home operator or the province.

There may also be provincial programs, such as GAINS in Ontario, which would claw back half of the GIS increase so that it may not be quite as rosy as the finance minister has suggested.

The area on which I am the most critical is the area of surplus projections. We just had the budget six weeks ago. The finance minister told us that the budget surplus for the year that just ended March 31, and he was only a few weeks away from it at the time, would be $3 billion. That has been changed many times this last year but we have heard him say there would be $3 billion.

Unfortunately, I suggest it is somewhat like the fiasco of last year when the finance minister stated that the budget surplus would be $1.9 billion and it magically turned out, after the election I might point out, to be $9.1 billion. A lot of people thought that maybe the finance minister was dyslexic or something when he got the numbers opposite but it turned out to be a huge advantage for the Liberal Party during the campaign. The Liberals said that they could not afford all the promises that were made by the Conservative Party but, alas, they could have afforded it all along because instead of a $1.9 billion surplus it turned out to be a $9.1 billion.

I am suggesting that the finance minister pull up his forecasting socks and stop hiding taxpayer dollars by lowballing surpluses.

Some people might want to know what is wrong with lowballing. What is wrong is that in the last seven years we have had seven consecutive budgets where the finance ministers have lowballed the surpluses and we actually had $80 billion more than the government said we had over the last seven years.

Why is that important? It is important because Canadians are shut out of the debate of how that money should be spent and what their priorities are, or, conversely, maybe too much tax money has been collected from Canadians. Eighty billion dollars would have been a pretty nice hit in terms of having tax relief.

Old habits die hard and the Liberals are at it once again using false numbers and saying that there would be a $3 billion surplus for 2004-05, the year just ending. We find those numbers strange because the fiscal forecasting group that the finance committee hired came up with a surplus of $6.1 billion. In terms of 2005-06, the Minister of Finance was saying that his estimate of the surplus would be $4 billion while the fiscal forecasters are saying $8 billion and that it could be considerably higher.

We know it is not an exact science, a point the parliamentary secretary has made many times, but it seems to me that if the government is going to be out it would be high as often as it would be low. However that does not seem to be happening. It seems to be quite a different process it has and it seems very deliberate.

I want to talk about the minister's fiscal update last November and how inaccurate that also was, which ties into this. What I am saying is that Canadians already have a problem. I remember when the Prime Minister was the finance minister he was in Toronto lecturing the business community about corporate malfeasance, how important it was that Canadians could rely on the numbers of the corporations and that they should be accurate in their projections so that when people wanted to buy stocks and bonds they could feel confident that these companies were providing accurate information.

Would that not also apply here? In fact, should this not be the place that sets the high standard on how projections are done? To that end, the finance committee, on behalf of especially the opposition parties that made amendments to the government's throne speech, asked that we have more accurate fiscal forecasting and asked that we look at an independent budget office.

We are in the process of doing that at committee. We have independent economists looking at the last two quarters of 2004-05. They have been able to give us timely updates, which is very important to parliamentarians in order to tell Canadians that we are reflecting their priorities and giving them the most current information.

The Auditor General has criticized the government in the past. The Conservative Party is working on the finance committee to bring truth and transparency to fiscal forecasting by establishing the independent parliamentary budget forecasting office. We believe it is in the public interest to have a healthy debate on what to do with the surplus, if there is one, and not play a game of hide and seek as to how big the surplus really is.

The Conservative Party will continue to hold the Liberals to account for spending that is unfocused and wasteful. Over a decade of Liberal waste, mismanagement and scandal has shown that billions of dollars sent to Ottawa could have been more effectively managed by Canadians themselves if left in their pockets. Canadians were overly taxed by $80 billion.

The Conservative Party has also said that it will strive to make this minority Parliament work so long as it is in the best interest of Canadians. Currently, the bill is not reflective of that principle. That said, we will try to turn the bill into pieces of legislation that are in the best interest of Canadians.

We can only hope the Liberals will keep those interests in mind and allow themselves to be guided by those same principles.

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

Mr. Speaker, thank you for the opportunity to introduce the 2005 budget implementation act at second reading. This is all about the government delivering on its commitments. That has been the theme of this year's budget and indeed it is the theme of the bill before us today.

Canadians expect the government to take major steps to deliver on our commitments and that is exactly what we have done. I hope over the next few minutes to demonstrate that this is exactly what we have done.

In the 2005 budget we have set out an ambitious agenda to promote national well-being, centring on five mutually reinforcing commitments: first, maintaining sound fiscal management; second, encouraging a productive and growing economy; third, securing our social foundations; fourth, promoting sustainable environment and communities; and fifth, strengthening Canada's role in the world. As I said, I hope that these five mutually reinforcing commitments will become obvious over the course of the next few minutes.

Proposals contained in the bill take major steps to deliver on these commitments, with action carefully paced over the next five years. I hope in the next few moments to illustrate how the measures contained in the bill reflect each one of these commitments. Before I do that, I think it is important to make a few comments about our economic situation, because this underlies each and every budget.

Canada is in an enviable position. Since balancing the federal budget in 1997, Canada has led the G-7 industrial nations with the best job creation record and the fastest growth in living standards.

Right now I can hear someone calling in their support, Mr. Speaker, so certainly there does seem to be someone who is agreeing with me on that very significant point.

Looking ahead, and based upon the average forecast by economists from the private sector, the real growth in 2005 is expected to be 2.9% of GDP, rising to 3.1% in the 2006. I would note in parenthesis, however, that since the budget has been proclaimed, private sector economists have actually rounded down the GDP growth for 2005 from 2.9% to 2.6%, so it gives us some sense that private sector economists are possibly not as robust as they were when the budget was being made. That of course is a concern to each and every one of us who considers a sound fiscal framework to be the cornerstone of our prosperity.

These forecasts are always subject to risk, including the evolving impact of the rapid rise in the value of our dollar. Canada is probably one of the most global trading nations, if not the most global, and because of that our risks are frequently risks that are outside of our control.

For instance, the principal risk is with the twin U.S. budget and account deficits. These could cause higher interest rates, slower U.S. growth and further depreciation of the American dollar, all leading to slower Canadian growth and some economic adjustment which could in many instances be quite painful for each one of us.

As I said, we do not have control over how the U.S. issues its budget or controls its current account deficit. These are principal risks to the forecasting which are completely outside of our control, similarly with the economy of China and with rising oil prices and things of that nature which are by and large outside the control of our economy.

It is the possibility of future risk that motivates the government's first commitment, and that is to sound financial management, with balanced budgets or better based on prudent fiscal planning. Even after dramatic investments in funding for provinces and territories and further new measures, budget 2005 projects a surplus for the current fiscal year ending March 31, a surplus for the eighth year in a row. That is the longest string of surpluses since 1867 and the founding of the nation.

The budget projects balanced budgets or better over the next five year period. The five year fiscal projection reflects the fact that the vast majority of the commitments it makes extend beyond the traditional two year planning horizon. This has further positioned Canada as a world leader and the only G-7 country to post total government surpluses in each of the past three years and the only nation that can expect to be in surplus in 2005 and in 2006.

Our strong performance has fueled a $60 billion plus reduction in Canada's public debt and a saving of more than $3 billion annually each and every year in debt servicing costs. This has led to Canada having a triple-A credit rating, producing lower interest rates for provinces, cities, businesses and families.

Again as a parenthesis, in my own community of Scarborough—Guildwood what we have noticed is a vacating of a lot of lower-end apartments while people get out and buy homes, because the interest rates are now such that the home which was heretofore unaffordable has become affordable. People are leaving the apartments and moving into their homes because their mortgage payments are the same as or less than their rental payments.

The combination of lower debt and lower interest rates has meant that the share of government revenue going to debt servicing or interest rates has been cut from almost 38¢ of each revenue $1; that is, 38¢ or well over one-third of every $1 was going to service debt. Now we are down to around 19¢. We have shaved it entirely in half. For the provinces, on average that has meant a significant reduction in their debt interest costs as well. Some provinces are down around an average of 12¢ of every revenue $1, and again, these are savings that are passed on to any entity that borrows money.

To sustain these benefits and to position Canada to meet future pressures such as our aging population, the government aims to bring down the debt to 25% of GDP within 10 years.

Balancing budgets and bringing down debt do not happen by accident. They require prudent fiscal planning. For this reason, budget 2005 again sets aside $3 billion in an annual contingency reserve. If not needed to keep our books in balance, these funds will go directly to reduce the debt.

We have also continued to build economic prudence into the budget plan, starting at $1 billion. If not needed, it will be used to invest in other priorities of Canadians.

Fiscal discipline also demands a rigorous approach to delivering value for the taxpayer dollar. That is why the government established the expenditure review committee of cabinet to scrutinize each and every line of government spending.

The committee has identified $11 billion in cumulative savings over the next five years. Almost 90% of that $11 billion comes from greater efficiencies in procurement, property management, service delivery and program administration. These savings have been incorporated in budget 2005 and are being reinvested in core federal programs and services.

The government's second commitment to Canadians is to encourage a productive and growing economy. Canada's current economic progress shows that we are on the right path, but increased prosperity and growth need constant improvements in productivity and our ability to compete in a fast-changing global environment.

Again in parenthesis, we have noticed in the last year some fall off in productivity, which is worrisome. I think it is largely reflected by the rapid appreciation in the Canadian dollar and that has made it very difficult for some businesses to adjust quickly. We can live with a higher Canadian dollar, but it is the haste at which that change occurs which makes it very difficult for businesses to adjust and build into their situation and productivity improvements that keep them competitive.

We face the challenge of a soon to retire baby boom generation followed by a much smaller generation of workers. This means we will no longer be able to automatically rely on labour force growth to boost the economy. It means that the workforce has to be as inclusive as possible, and we need the workforce to be as skilled and productive as possible to beat international competition.

Budget 2005 takes action to meet those challenges. This action starts with the understanding that quality child care and early learning is much more than just merely good social policy. It is also an investment in better productivity and economic success in the years ahead. I will reference this back to when I said that we needed an inclusive workforce. Clearly, men and women, as they raise children and work, need to have the most flexible arrangements possible for raising families.

Bill C-43 would provide for the creation of $700 million trusts for provinces to invest in early learning and child care programs. This amount is the 2004-05, 2005-06 portion of the $5 billion commitment by the federal government for five years to develop a shared early learning and child care initiative in collaboration with the provinces and territories.

We are also taking action to reduce taxes. A competitive tax system makes individuals more prosperous and firms more productive. That is why the federal government has cut taxes each and every year since the budget was first balanced in 1997, including the record five year $100 billion tax cut introduced in the year 2000.

The budget builds on these reductions by committing to increase the basic personal amount of income that all Canadians can earn to $10,000 by the year 2009. This will benefit all taxpayers, but in particular, it will remove 860,000 low income earners from the tax rolls, almost a quarter million of whom will be seniors.

Next, to help Canadians save for retirement, Budget 2005 boosts the overall contribution to the RRSPs and registered pension plans to $22,000 by the year 2010. This especially will benefit those who are entrepreneurs, the self-employed and small businesses, people who have no large pension entity to support them. As well, to expand the investment opportunities for Canadians, the government will remove the 30% foreign property limits, such as shares on RRSPs and pension plans.

Bill C-43 also takes action to maintain a competitive corporate tax environment to stimulate growth and jobs. It proposes to eliminate corporate surtax in 2008. This will benefit businesses, both small and medium sized. By 2010, the government proposes to reduce a 21% general corporate income tax rate to 19%. Even in the face of corporate tax reductions in the U.S., these measures will still maintain a tax rate advantage for Canadian businesses.

Further, a productive and environmentally sustainable economy is only part of the Canadian well-being. Budget 2005 also delivers on the government's fourth commitment to make further investments to secure social foundations. These investments build upon a $41 billion agreement for health care in Canada, which the Prime Minister entered into with the premiers last fall, and the new $33 billion framework for provincial equalization and territorial financing.

For example, the Prime Minister and the territorial first ministers have agreed to work together to develop a comprehensive strategy for the north. The north is entering into a time of unprecedented promise and opportunity, particularly with respect to the economic opportunities relating to oil, gas and diamond development.

Bill C-43 proposes to create a $120 million trust to help the territories meet the goals of the northern strategy, a joint initiative between the Government of Canada and territorial governments aimed at improving the quality of life for northerners.

Budget 2005 also recognizes our debts to seniors. Indeed, the budget makes significant investments across a wide range of policies that matter to seniors. An investment in health care, which was made in the fall, is of most benefit to those who are aging. People use up most of their health care allotment in the latter part of their lives. The health care investment is for us all, but is of particular significance to those who are seniors.

In Bill C-43 the increase in the guaranteed income supplement is a payment of $2.7 billion over five years, with improvements in place in less than two years. This will benefit 1.6 million seniors, the majority of whom are women. The maximum GIS will go up by more than $400 per year for a single senior and almost $700 for a couple.

The third commitment on the government's agenda is in recognition of the fact that a smart economic policy and environmental policy can go hand in hand, improving the quality of life, the health of communities and opportunities for growth. Budget 2005 introduces a $5 billion package of measures over five years to support sustainable environment. These include the new clean fund and a partnership fund to reduce greenhouse gas emissions.

Bill C-43 proposes to establish a new agency under Environment Canada to manage the $1 billion climate fund which will provide incentives for reduction and removal of greenhouse gases. Moreover, the bill proposes to amend the Canadian Environmental Protection Act to facilitate the future addition of greenhouse gases to the list of substances under the act. This will allow the Minister of the Environment to regulate emissions and implement the proposed large final emitter regime and emissions trading system.

Bill C-43 also would provide $300 million to the green municipal funds to support local environment projects. Of this amount, $150 million would be used to help communities clean up and redevelop brownfields.

A key element of the environment for Canadians is our cities and communities. Budget 2005 builds on the new deal for communities launched last year by providing municipalities with a growing share of the federal excise tax on gasoline. Bill C-43 proposes to provide initial funding of $600 million for this initiative, the equivalent of 1.5¢ per litre. This will grow to $2 billion a year for additional revenues over five years, delivering again on this government's commitment.

Canada's meeting its domestic needs should not obscure the fact that events like tsunami disaster emphasized that we in live in a global village. For example, when the tsunami struck southeast Asia last December, Canadians were deeply affected by this tragedy. Again in parenthesis, the Sri Lankan community, of which I have the honour to represent in my riding, is deeply affected by this tragedy. Canada responded very generously with an assistance package totalling $425 million.

In true Canadian fashion Canadians responded generously with their personal donations of approximately $200 million to charitable organizations and the government matched that.

Finally, the measures contained in Bill C-43 represent a comprehensive, integrated plan to enhance the well-being of Canadians. Over this period and over this budget, we have delivered on our commitments.

[Jim Peterson, Liberal, for the Minister of Finance]

moved that Bill C-43, an act to implement certain provisions of the budget tabled in Parliament on February 23, 2005, be read the second time and referred to a committee.

Business of the House

[Tony Valeri, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, this afternoon we will continue debate on the opposition day motion. As members know, there will be no sitting tomorrow.

On Monday the House will hold the debate on our procedures required by Standing Order 51. Mr. Speaker, I ask you to appoint the order of the day to permit that debate. If it is completed, we will return to Bill C-23 and Bill C-22, the human resources and social development legislation.

On Tuesday and Wednesday we shall consider Bill C-43, the budget bill.

Thursday will be an allotted day. At the end of the day on Thursday we shall return to consideration of the seventh report of the Standing Committee on Health.

On Tuesday evening there will be a take note debate. Therefore, I move:

That, pursuant to Standing Order 53.1, on April 12, 2005 a take note debate shall take place on the subject of the RCMP and law enforcement in Canada.

Points of Order

[Tony Valeri, Liberal, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I rise on a point of order. With the unanimous consent of the House, I would ask that we move to Bill C-43, move it at all stages, vote on it, approve it, and get it through the House. This would ensure that Atlantic Canadians get the Atlantic accord that they deserve.

The Budget

[Loyola Hearn, Conservative, St. John's South, NL]

Mr. Speaker, what a pile of unadulterated bull and the Prime Minister knows it.

The Prime Minister also knows that it would take 15 minutes on a word processor to prepare a new bill that would cause revenues to flow to Newfoundland and Nova Scotia immediately.

He is using the longest possible route to approval. Last year's budget implementation bill is still with the Liberal controlled Senate. If the Prime Minister can split Bill C-43 for Kyoto, why can you not do it for Atlantic Canadians?

Budget Implementation Act, 2005

[Ralph Goodale, Liberal, Minister of Finance]

moved for leave to introduce Bill C-43, an act to implement certain provisions of the budget tabled in Parliament on February 23, 2005.

(Motions deemed adopted, bill read the first time and printed)