Bill C-13 (Historical)

Budget Implementation Act, 2006

An Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006

Part 1 amends the Excise Tax Act to implement, effective July 1, 2006, the reduction in the Goods and Services Tax (GST) and the federal component of the Harmonized Sales Tax (HST) from 7 to 6 per cent. It also amends the Act to provide transitional rules for determining the GST/HST rate applicable to transactions that straddle the July 1, 2006, implementation date, including transitional rebates in respect of the sale of residential complexes where transfer of ownership and possession both take place on or after July 1, 2006, pursuant to a written agreement entered into on or before May 2, 2006. The Excise Act, 2001 and the Excise Act are amended to increase the excise duties on tobacco and alcohol products to offset the impact of the GST/HST rate reduction. The Air Travellers Security Charge Act is amended to ensure that rates for domestic and transborder air travel reflect the impact of the GST/HST rate reduction. Those amendments generally apply as of July 1, 2006.
Part 2 implements income tax measures proposed or referenced in Budget 2006 to
(a) reduce personal income taxes;
(b) increase the child disability benefit;
(c) increase the refundable medical expense tax credit;
(d) eliminate capital gains tax on charitable donations of publicly-listed securities and ecologically-sensitive land;
(e) reintroduce the mineral exploration tax credit for new flow-through share agreements entered into before April 2007;
(f) expand the eligibility criteria for the disability tax credit;
(g) expand the list of expenses eligible for the disability supports deduction;
(h) expand the list of expenses eligible for the medical expenses tax credit;
(i) clarify the eligibility of home renovation and construction expenses for the medical expenses tax credit;
(j) double the amount of disability-related and medical expenses that can be claimed by a caregiver;
(k) introduce a tax credit in respect of adoption expenses;
(l) introduce a tax deferral for shareholders of agricultural co-ops;
(m) reduce corporate income taxes;
(n) eliminate the federal capital tax; and
(o) extend the carry-over period for non-capital losses and investment tax credits.
Part 3 amends Schedule I to the Excise Tax Act to repeal the excise tax on clocks, items made from semi-precious stones and items commonly known as jewellery, effective May 2, 2006.
Part 4 amends the First Nations Goods and Services Tax Act to facilitate the establishment of taxation arrangements between the government of specified provinces and interested Indian Bands situated in those specified provinces. It also amends the Yukon First Nations Self-Government Act to provide transitional income tax measures consistent with negotiated agreements.
Part 5 amends the Excise Tax Act, the Excise Act, 2001, the Air Travellers Security Charge Act and the Income Tax Act to harmonize various accounting, interest, penalty and related administrative and enforcement provisions. These amendments will apply based on an implementation date that is the later of April 1, 2007, and Royal Assent. It also amends the Excise Tax Act to confirm that debt collection services that are generally provided by collection agents to financial institutions are not financial services for GST/HST purposes and are therefore taxable for GST/HST purposes.
Part 6 enacts the Universal Child Care Benefit Act to assist families by supporting their child care choices through direct financial support to a maximum of $1,200 per year in respect of each of their children who has not attained the age of six years. It also makes consequential and related amendments to the Income Tax Act, the Employment Insurance Act, the Children’s Special Allowances Act and the Old Age Security Act.
Part 7 amends the Federal-Provincial Fiscal Arrangements Act to determine the amount of the fiscal equalization payments to the provinces and the territorial formula financing payments to each of the territories for the fiscal years beginning after March 31, 2006 and to authorize the Minister of Finance to make an additional fiscal equalization payment to British Columbia and Newfoundland and Labrador, and to make an additional territorial formula financing payment to Yukon and Nunavut, for the fiscal year beginning on April 1, 2006.
Part 8 provides for a total payment of $650,000,000 to the provinces and territories for the fiscal year 2006-2007 in respect of early learning and child care. It provides for payments to the territories for the fiscal year 2006-2007.
Part 9 authorizes the Minister of Finance to enter into an agreement to provide protection to mortgagees in respect of mortgage insurance policies that are provided by a mortgage insurer that is approved by the Superintendent of Financial Institutions to sell mortgage insurance in Canada. It also fixes the maximum amount of such protection and determines how that amount can be changed.
Part 10 extends the sunset provisions of financial institutions statutes by six months from October 24, 2006 to April 24, 2007.
Part 11 amends the Canadian Forces Superannuation Act, Public Service Superannuation Act and the Royal Canadian Mounted Police Superannuation Act to change the existing formula by which adjustments are made to a contributor’s annuity.
Part 12 enacts the Mackenzie Gas Project Impacts Act, the purpose of which is to create the Corporation for the Mitigation of Mackenzie Gas Project Impacts. The corporation will provide contributions to regional organizations that will fund projects that mitigate the existing or anticipated socio-economic impacts on communities in the Northwest Territories arising from the Mackenzie gas project. The Part also provides that a payment of $500,000,000 may be made to the corporation and adds the name of the corporation to the schedule of certain federal Acts.
Part 13 amends the European Bank for Reconstruction and Development Agreement Act to permit the European Bank for Reconstruction and Development to carry out its purpose in Mongolia and to allow the Governor in Council to amend, by order, the schedule to that Act. It amends the Freshwater Fish Marketing Act to increase the Freshwater Fish Marketing Corporation’s legislative borrowing limit from thirty million dollars to fifty million dollars. It also amends the Public Sector Pension Investment Board Act to create share capital for the Public Sector Pension Investment Board

Budget Implementation Act, 2006

[Rahim Jaffer, Conservative, Edmonton Strathcona, AB]

Mr. Speaker, I have a lot of respect for the member in this House, but it is funny when he says that the government promised a lot, especially after what we saw in the deathbed conversion process during the campaign, when the Liberals were coming up with policies we had never heard from them in the last 13 years they were in power. They never made any meaningful changes to help students.

The member talks about the bursaries or scholarships they implemented. It is all fine and dandy to say that was in fact done, but when students are taxed on that same income they are getting as bursaries or scholarships, it is almost doing reverse damage to them. That is why this government moved very quickly in the budget to remove that unfair tax on scholarships and bursaries. It should have been done a long time ago if the previous government really was committed to students, but it lacked the intention to do so.

Again, promises are all we heard from the Liberal government for over 13 years. I was in opposition for the last 9 of those 13 years, and there were some really great promises, let us face it. Did the Liberals actually follow through with any of them? I would say not.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, one of the things about this budget is what I think of as the lack in the opportunity to plug one of the most egregious tax loopholes out there. What I am talking about is what is called tax motivated expatriation, which is in fact the transferring of money offshore to tax havens, whereby companies can avoid paying their fair share of taxes in Canada.

I sense that the Conservatives are generally sympathetic and think this practice should be stopped. It was used most notably by the former prime minister when Canada Steamship Lines was set up in the only tax haven left. The Liberals tore up all the tax treaties except for the one haven where Canada Steamship Lines happened to reside.

If the Conservatives did not see fit to plug that tax loophole in this budget, would my colleague at least agree that companies that take advantage of these tax havens should not be able to get contracts from the federal government while they are taking advantage of this tax fugitive situation?

[Rahim Jaffer, Conservative, Edmonton Strathcona, AB]

Mr. Speaker, I agree with my hon. colleague, especially in light of what we saw from the previous prime minister in taking advantage of that particular tax loophole. Obviously it was not the best way that Canadians like to see companies do business. I am willing to explore the idea of ensuring that contracts are done openly and transparently and given to the best people who are applying for those contracts with the federal government.

I think the member's question speaks to a bigger issue that we have to address, and I think this government has already taken a step to address it. That issue is the overall tax burdens that Canadians and business have been facing in this country for years and years. The only reason many of these companies look at ways to shelter their incomes and to move them offshore is that clearly we have had a regime in this country that has had very strict and very high levels of tax on businesses. That has affected competition, their ability to invest and their ability to actually look at ways to hide that income in other places.

I think we have moved in the right direction. We have to lower those tax levels. We have done so in this budget. We hope to continue down that track to keep our economy competitive and to stop that process of people looking at putting their money overseas.

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, I will be splitting my time with the member for the great riding of Thunder Bay--Rainy River.

After 13 years of Liberal government, Canada's economic and fiscal situation is among the best in the world. I hope the government would agree that it is extremely fortunate to inherit the strong economic house that was built and fostered by the governments that preceded it.

The budget we are debating today is in large part a budget of small advancements that is rigidly tied, it appears to me, to an ideology that really is the architecture of small government. It is in large part a short-sighted budget, in my mind. It is a budget that values political expediency, as the member from Markham pointed out, instead of long term stability or progressive investments in the future of Canada.

Liberals believe the budget should have included, for example, a national child care system that offers quality and affordable child care to all Canadians. As well, it is a shame that the Kelowna accord, which finally turned a page and enabled Canada to move forward on improving the social and political situation of Canada's aboriginal people, was entirely neglected.

While the Prime Minister may want to focus his attention on five priorities, this country is far bigger than that. There are many challenges facing this country, as well as many opportunities. This is not the time to put on blinders and ignore the difficult issues that Canadians expect us to be working on.

That said, the budget is not entirely without merit. There are some very positive aspects. The Conservative budget, for example, talks about tax relief, and the kind that applies to all Canadians equally, sales tax relief. It is a positive way to encourage our citizens to become more productive.

Don Johnson, a tireless crusader for the arts and social causes, has long been an advocate of tax abatement for those who give stock contributions to charities. Thanks to his hard work and tireless advocacy, a total exemption for charitable stock contributions was included in this budget. That is a good thing.

My riding is a thriving bastion for small business. Over 95% of all businesses in Canada are small businesses. They are responsible for not only the spirit and drive we find in York South--Weston, but also for nearly half the jobs created in Canada every year. I am glad, and I am sure all members in the House are glad, to see that the threshold for small business income eligible for the reduced federal tax rate will be increased to $400,000.

We are also glad to see that the government has listened to the many members on all sides of the House and has pledged to support our police forces. Funding those who shield our municipalities and protect our provinces and our people is a noble and necessary pursuit.

At the federal level, the RCMP need to be equipped with the latest technology and capable of handling the most challenging of investigative tasks. This budget at least recognizes that there has long been a shortfall in the funding of the mounted police. An accomplished force with such a rich history and storied symbolism deserves the best we can offer.

However, I am compelled to talk about some of the shortcomings of the budget. I wish I could say more positive things about what is being offered the rest of Canada, but sadly there is not that much. This is a budget that fails the regions, fails our health care system, fails our first nations and fails the environment. I would like to expand on the reasoning behind this statement.

First of all, I would like to expand on how this budget fails our health care system. During the election, the Conservative Party made wait times reduction one of their five core priorities. During his budget speech on May 2, the hon. Minister of Finance said his government was “committed to implementing the 10-Year Plan to Strengthen Health Care”.

The Conservatives' federal budget provides no additional funding for wait time reduction, nor any explanation as to how their wait times guarantee will be implemented. What happened to the Conservative priority of fixing wait times? They promised to outdo the Liberals, yet their budget invests no more funding for wait times reduction beyond what the Liberal government already committed.

How will the Conservatives pay for their wait times guarantee? Will they download costs to the provinces and territories without giving them more funding to cope? Despite their criticism of the Liberal government's 10 year plan to strength health care, this plan has now become the core pillar of their health care platform. Now that the groundwork has been laid by the previous Liberal government, the Conservatives seem ready to claim its successes as their own.

It was the Liberal government that worked with the provinces and territories to establish benchmarks for medically acceptable wait times, to set reduction targets for key medical procedures, to create the $5.5 billion wait times reduction fund, and to integrate foreign-trained medical professionals to supplement shortages within the Canadian medical field.

The Conservative government seems to have overlooked not only one of its own priorities but the number one priority for Canadians: a better, stronger health care system.

The budget also fails our children and working parents. The Conservative budget fails to provide a real child care choice for parents. Twenty dollars a week for child care is simply not enough. Low income parents will also be losing the young child supplement of the Canada child tax benefit. The Conservatives are cutting $1 billion from the child tax benefit, which was supposed to reach $10 billion next year.

The budget fails our first nations people. The hon. Minister of Indian Affairs and Northern Development has implied that he has doubts whether the $5 billion for the Kelowna accord was actually budgeted for by the previous Liberal government. This commitment is so fundamental that it is vital to dispel any such doubts.

The previous Liberal finance minister has confirmed that as of November 24, 2005, the day of the first ministers meeting when the agreement was signed, the fiscal framework of the Government of Canada included a total of $5.096 billion to address obligations arising from the Kelowna accord.

In the Liberal government's 2005 economic and fiscal update on November 14, the importance of the then upcoming Kelowna meeting was specifically stated, together with an undertaking to provide the needed financing, and there was more than enough unused fiscal room in our framework to accommodate the expected sum. When the Kelowna meeting actually took place 10 days later, the money was booked.

The fiscal treatment of the Kelowna accord was quite similar to how we handled special federal funding of $755 million to help grains and oilseed producers in the farm sector. Although we are pleased that the Conservative government has proceeded with our $755 million commitment to help farmers, it is just as important that it also follow through on our parallel commitment to aboriginal peoples, delivering the funding that was most certainly set aside for this compelling purpose on November 24.

What looms ominously over the budget is the Prime Minister's commitment to cutting $1 billion worth of unidentified programs each year for the next two years. Does that means that the right hon. Prime Minister intends to cut these things: the northern strategy, which ensures that economic development opportunities are developed in partnership with northern Canadians; the Mackenzie gas project, which increases federal and regional capacity; and the oceans action plan, which improves oceans management and preserves the health of Canada's oceans?

This budget also fails the environment on the commitment to Kyoto. The government has eliminated climate change programs and is getting ready to pull out of the Kyoto accord. Its transit tax credit is costly and ineffective. It will cost almost $400 million over two years and will increase transit use by only 5%. This translates to a cost of $2,000 for each tonne of carbon dioxide saved, and that will be 10 to 100 times the cost per tonne under the Liberal project green plan.

The budget also fails Ontario. A year ago, the Liberal government and the Government of Ontario signed an agreement that would see Ontario receive $7 billion in federal funding. This money was to be used by Ontario's government to help convert coal-fired power plants to natural gas, expand public transit, augment funding for universities and community colleges, and bring the province up to the same level as the rest of the country in federal spending on immigration settlement and job training programs.

During the election, the Prime Minister promised to uphold this agreement and transfer every single dollar of the deal to Ontario. Yesterday we learned that the Prime Minister's Minister of Finance has written to his provincial counterpart and informed him that the money on its way to Ontario will be $3 billion short of what was promised. This is no way to retune the Ontario economic engine, which in fact transfers through equalization two-thirds of the total amount of money that goes to those fiscally disadvantaged provinces in Canada.

This budget fails Canada. This budget is all about short term gain in exchange for long term pain. The budget has failed all Canadians.

[Daniel Petit, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, I thank my colleague for painting such a negative picture of our budget. I would like to draw his attention to this, though: by virtue of their attitude over the past 13 years, the Liberals came very close to ruining Canada because they did not recognize the fiscal imbalance. Today, the Conservative Party's budget does recognize that fiscal imbalance.

Since, by voting against the budget, the Liberals denied the existence of the fiscal imbalance, can my colleague explain why all Canadians acknowledge that it exists? By voting against the budget, the Liberals do not recognize the fiscal imbalance, when everyone knows that it exists. I would like to hear my colleague's answer about this fiscal imbalance that his party refuses to recognize.

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, let us use a case in point. I would like to expand a bit on the case that I use in terms of Ontario.

We do recognize that there is a fiscal imbalance. More than that, we realize that if we do not invest in the manufacturing economy of the province of Ontario, for example, at a time when natural resource based economies are booming, that is the economic engine that in terms of our federal history has produced the kinds of prosperity that we have all enjoyed. That budget does not do it.

I do not know what the member means in terms of challenging this side of the House. This is not the side of the House that he should be looking at. He should be looking at his side of the House because it is that side, through this budget, that is not going to generate the multipliers, transform the economy to the extent that we create jobs in high value added activity such that there is more of the economic pie that we can then equalize across this great nation.

That has been the history. That is what the Liberal Party and Liberal governments recognized and that is what they did so well, that this budget is not going to do, and that is tragic.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I do not think it is helpful to watch my colleagues point fingers at each other and blame one another for the recent state of affairs, or even the state of the nation, because they are both to blame to some degree.

It may be something of a cliche to say that the rich get richer and the poor get poorer, but I now have the empirical evidence here that in fact this is true. The average total income for all families might be the best measurement of how we are doing economically.

The average total income for all family units from 1989 to 2004, in quintiles, was: in the lowest quintile, the bottom 20%, the standard of living went down by 9%; in the second lowest quintile, $30,000 a year, it actually dropped by 4%; in the third quintile, the standard of living dropped by 3%. These figures are for 1989 to 2004, so there were some Tory years and some Liberal years. The only quintile that went up is the highest quintile, which went up 23%. These are not left-wing pinko figures; these are statistics. This is the truth. This is what really happened. Canadians are not better off.

For all the equality measures that we talk about and the successive budgets that are designed to make Canadians' lives better for most of us, 60% of us at least, we are dropping and only the rich are getting richer.

I would ask my colleague, does he not agree that equality should be the goal here and elevating the standard of living of all Canadians should be the goal and that something has gone terribly wrong?

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, that is the best question of the day, and I do not mean that in a patronizing sense.

I would like to direct my colleague to the 10 year trend with respect to the income tax reductions that had been distributed through the surplus to those who fit into that very category he talked about. If he looks at that 10 year trend under the budgets that were brought forward by a Liberal government, he will see that while it has not been fast enough, there was definitely an improvement in those lower categories through the regime and architecture that the Liberals had supported.

That is not the trend nor the pattern nor the philosophy of the current government through this budget. It is going to go in exactly the opposite way.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Speaker, in my address in terms of the implementation of the budget, I will show what will happen in northwestern Ontario, particularly in Thunder Bay—Rainy River. There should be several good things, and rightly so, as the government inherited one of the best financial situations of any provincial or federal government in recent memory.

Nonetheless, when we think about what is good, what is bad, what is missing or what the Conservative government has adopted in continuing previous government policies, the first thing that comes to mind is how offensive the raising of the income tax rate for the poor is. People all across the country are offended, hurt and indeed embarrassed by hurting the poorest classes.

The cancellation of the early learning and child care agreements in northwestern Ontario means the loss of 1,400 spaces that were desperately needed. Of course, Ontario and indeed all those provinces across the country that uploaded the child care support will now be facing the fact that they will have to download them again and raise property taxes in those municipalities. When that starts happening, people will really know the serious effect of this.

The slashing of the forestry agreement from $1.5 billion to $400 million is of concern to many northwestern Ontario companies that have been struggling over the past number of years, and in particular are paying the penalty of not having a chance to get that $1 billion of illegal duties paid back to them and only get 78% of that. For example, the Ontario industry has paid 12% of all the duty submitted and of that provincial portion northwestern Ontario companies have paid nearly 60% of that total. That is nearly $300 million out of the communities in and around my riding of Thunder Bay—Rainy River.

When asked about how good the softwood deal was, yes it has been rejected many, many times in the past number of years and indeed the reason the previous deal was never accepted is that it is not going to help us. For example, no money will likely be returned in less than nine months, but more important to the people of northwestern Ontario, the provincial and federal governments will not be permitted to change forestry policies in any manner that could be interpreted as assisting the forestry industries because of the terminology of the anti-circumvention measure. This means that for northwestern Ontario producers who are pushing for regional energy, as we call it, once that became implemented by the provincial government, an American company could simply overrule it and roll that back.

When we talk about the impact on tourism of the passport restrictions, there are no programs in the budget to assist border communities and no funding to educate Americans and Canadians about these changes. Indeed for communities such as Morson in my riding which depend heavily on tourism, because of the FedNor program we were recently able to expand cell tower and broadband services. This will greatly enhance tourism because tourists can use their cell phones and computers. But tourists will stop coming. That has already begun to happen and we have to be on full alert about this. Many people in the United States actually think that the passport requirement is a Canadian program. On top of all of this, significant progress had been made by American legislators, mayors and reeves of border communities, and the tourism industry, so we did not have to roll over on this one.

In terms of the Trans-Canada Highway, the previous agreement signed last year with the province of Ontario should allow us to continue with federal-provincial funding for a national highway program. We look forward to that.

In terms of agriculture, my riding has a considerable amount of agriculture as it spans a seven and a half hour drive over two time zones. The beef, dairy, and grains and oilseeds farmers are somewhat dismayed that they will get less this year than they did from the previous government. That is a concern for them, particularly when we know full well the impact on the grains and oilseeds right now during planting season.

I congratulate the government for continuing the FedNor program. I believe the Conservatives understand its value and I thank them very much for that. We hope that the program will also allow the people of the town of Fort Frances and the Rainy River district to benefit with the purchase of the privately owned bridge. With the FedNor contributions and the ministry of transport's assistance, we are looking forward to some kind of help for the town of Fort Frances.

From the health perspective, the regional cancer research centre has received support already from the municipality, the province and the private sector. All it is waiting for now is the federal contribution so hopefully that will come shortly. The minister is welcome to come to my riding and make that announcement at his convenience.

Environmentally there is a very high degree of awareness in Thunder Bay, very cost effective programs and a great deal of community buy-in. The loss of a program such as EcoSuperior was a dramatic hit. It was enlisting strong community based support for environmental programs and awareness.

When talking about the hopper car deal, the FRCC, the people of Thunder Bay, the port authority and I had been looking forward to an agreement. Now that the deal has been turned back to the railways, this will hurt all the communities along the Great Lakes and St. Lawrence Seaway, and particularly the port of Thunder Bay. That has been greeted with considerable dismay.

We are also concerned about the lack of identification of the continuance of regional programs for such organizations as the CBC. This would greatly take the pressure off that station which services an area larger than France and a couple of other European countries put together.

If we have a goal of becoming the most literate nation in the world, support for literacy programs is conspicuously absent in the budget, particularly support for aboriginal literacy. I am hoping that is perhaps a small print item that we will hear more about in the next little while.

Ridings such as mine have considerable distance and travel times. The Conservatives have previously campaigned on and made many overtures in the House about lowering gas prices. The fact that nothing has been mentioned about that has many of my constituents calling me. Even people who had supported that party in the last election have expressed considerable dismay and have referred to articles quoting the current Prime Minister and many members of that party about gasoline pricing.

The absence of mention of health care in the budget is something which many people have mentioned. If the government will be continuing the health care accord, then that is very significant. It would be an understanding that that was a significant achievement and that the current government understands how well the previous prime minister and former minister of health had done in bringing people together to come to an accord. It was historic and appreciated indeed by the whole nation.

I do not have time to dwell on many other topics, but there are some that I would like to mention. The government deserves credit for the apprenticeship programs for small business. If there are plans to build a prison for $500 million and $500 million worth of operating costs, please put one in my riding. We would be glad to take it.

When we talk about a budget we cannot just be negative and cynical. Every budget tries to put the government's best foot forward. I hope that I have identified some of the shortcomings, some of the good things, some of the things that are missing. I hope that members in the House today understand that when we make a point it is to try to make improvements. If there is a shortcoming, members should not get all defensive, negative and hostile. They should just know that someone is trying to make it better and I would ask hon. members to understand that.

[Pierre Poilievre, Conservative, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, the member mentioned 1,400 child care spaces in his region of the province of Ontario. He claims that those spaces will no longer exist. In truth, they never did exist. The reality is that after 13 years of Liberal government promises, of which he was a part, not a solitary child care space was created and billions of dollars were spent. There were no results, zero, zip and zilch, in that order.

Today we are confronted with a new debate. Do we continue with the path of the last 13 years where the Liberal government had promised $1 billion a year to create day care spaces, which 19 out of 20 children would not have received a solitary space? Let us do the simple math of one child care space costing $40 a day and multiplying that times the number of business days in an entire year. If one plays the math out, there would be enough money for about 1 in every 20 kids to have a day care space.

Automatically all the families who have a stay at home parent, or who rely on a family member to take care of children, or who send their children to a religious-based child care option, or who have a neighbourhood nanny, all those options, which polls show are far preferred by parents, would automatically have been excluded by that plan.

We have a choice that is very simple: a 1 in 20 chance at a government day care space for one's child or a 100% chance at a $1,200 a year choice in child care allowance. The choice is a universal system of $1,200 for every preschooler or an exclusive government run option, which gives a child care space to 1 in every 20 children.

Why does the member oppose the universal option of giving every child the opportunity of the $1,200 choice in child care allowance? Why is he—

[The Acting Speaker, Royal Galipeau]

The hon. member for Thunder Bay—Rainy River.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Speaker, if that is the hon. member's understanding of finance and history and he is in charge of the Treasury Board, that is like asking Colonel Sanders to take care of the chickens.

Clearly, history will prove that in 1993 the reason the child care program could not begin was because of the very sorry state of affairs the country had inherited. It took that many years to get out of that. The fact that we can get into a situation in our country where we are the leader of the G-7 is very significant.

For my riding, clearly child care spaces, which would have been created from the money that came from the federal government, is now being used by the provincial government to take care of the existing spaces for the next four years. It is essentially an uploading of that program.

Make no mistake about it, all municipalities are keenly aware of the hit they have taken in terms of early learning and care. They understand that those which had needs and backlogs which would have been addressed this year, in fact in January because the deal was signed, would have had those children in place. The Association of Municipalities of Ontario, the Federation of Canadian Municipalities and all people in every municipality understand what kind of hit they have taken.

In four years, after the money provinces are using to carry this through runs out and property taxes go up again, there is only one government that will take the full blame for hurting early learning and child care.

[Dave Batters, Conservative, Palliser, SK]

Mr. Speaker, it is an honour to rise today on behalf of the hard-working families of Palliser, on behalf of seniors, producers, small business people and students in my constituency who told me that during the last federal election, they wanted a government in Ottawa that would deliver responsible spending and real tax relief to put money back into their pockets after more than a decade of Liberal mismanagement.

Our government has delivered on that commitment with our first budget. When I went home after the budget last weekend, Palliser residents told me this was a good budget and that our government was on the right track.

We have delivered on our commitment to tax relief. In fact, the budget delivers $20 billion in tax relief over two years. As has been said by many members, that is more than the last four Liberal budgets combined.

If there was one thing I heard again and again on the doorsteps of Palliser residents during the last election campaign, it was that they were overtaxed. Is it any wonder that they felt that way? Under the previous Liberal government, billions of dollars were taken from Canadians through overtaxation and wasted on scandals and boondoggles such as the sponsorship program and a costly and ineffective gun registry.

Meanwhile, families in Palliser are working longer, paying more in taxes and saving less than they were 13 years ago, but I am proud to say that all that has changed under the new Conservative government.

The bottom line of budget 2006 is that every resident of Palliser, every family in Saskatchewan and every person across this great country will see real tax relief.

In the budget our government has committed to reducing the GST from 7% to 6%, effective July 1 of this year and creating a new $1,000 Canada employment credit, which starts effective July 1. We will reduce the lowest personal income tax rate from 16% to 15.5%, effective July 1. We will increase the amount that all Canadians can earn without paying federal income tax.

We will create a new apprenticeship job creation tax credit of up to $2,000 per apprentice. We will completely eliminate the federal income tax on all income from scholarships, bursaries and fellowships while creating a new text book tax credit for post-secondary students. I can not say how much I would have liked that to have been in place when I was a student while the Liberals were in power.

We will provide a physical fitness tax credit for up to $500 to cover registration fees for children's sport, which was very well received by parents with one, two or three kids in sports in my riding. We will double the amount of eligible pension income that seniors can claim under the pension income credit, the first such increase in more than 30 years delivered by the government and the Prime Minister.

As I said, budget 2006 delivers $20 billion in tax relief over two years. That is more tax relief than the last four federal budgets combined. For every $1 in new spending, we have delivered $2 in real tax relief back to Canadians.

As a result of these measures, residents of Saskatchewan will pay $250 million less in taxes in 2007. Families earning between $15,000 and $30,000 a year will be better off by almost $300 a year in 2007. Those earning between $45,000 and $60,000 will save almost $650. Those are real results for families.

Unlike the previous government, our government has focused spending on key federal priorities, Canadians' priorities, that will get results and provide value for taxpayers money.

I neglected to inform the Chair, Mr. Speaker, that I will be splitting my time with the excellent member of Parliament from Edmonton—Sherwood Park.

A significant example of this is the new universal child care benefit. As of July 1, Palliser families will receive $1,200 per year for each child under six. That is real results. That is real money in the pockets of constituents in my riding, not fictional spaces, not promised spaces. We heard promises for 13 years with no delivery. This is money in the hands of families. We will also spend $250 million, beginning in 2007, to create child care spaces.

We have also followed through on our commitment to make our streets safer and to reduce the crime epidemic that is sweeping our communities. We heard from the Liberal member opposite that he would welcome a prison in his riding. We can have that debate another time. I invite him to come on over and join us as we get tough on crime in the country.

Under federal Liberal and provincial NDP governments, my home province of Saskatchewan holds the dubious distinction of being Canada's crime capital. When I talk to seniors in Moose Jaw and families in Regina about the problem of crime, they have told me clearly that it is time to get tough on crime and tough on criminals.

During the last Parliament, I demanded many times that the former Liberal government get tough on drug crimes to address the crystal meth epidemic, which continues to sweep our province. The residents of Palliser indicated during the last election that they were tired of begging the Liberals to take action and that we needed a new government in Ottawa that was serious about getting tough on serious crimes. With the budget, we are keeping our word. We are cracking down on crime.

We will provide $161 million to put more RCMP officers on the streets. We will invest $37 million in my home city of Regina for the RCMP to expand its national training academy. This is great news for Regina and the province of Saskatchewan. We will provide $20 million for communities to use to develop programs designed to prevent youth crime. We will provide the money that is required to arm our border agents. We have delivered on our commitment to make our streets and our borders safer.

I want to turn now to agriculture and what budget 2006 delivers to agricultural producers, who are the backbone of Palliser's economy. Farming is part of our heritage. Farmers feed our cities and keep our rural communities strong. Falling prices and trade disputes are causing them real financial hardship. People are suffering. They are losing farms that have been in their families for generations.

Current insurance and income support programs are not doing enough, and we cannot allow this to continue. That is why our government will restore and sustain a strong, vibrant farm sector which provides the income farmers need to live.

One of our government's first actions was to accelerate disbursement of $755 million in payments under the grains and oilseeds payment program. We are now going further. In budget 2006 our government is committing an additional $2 billion in funding over two years, $1.5 billion of which will be allocated in this budget.

During the election we committed to an additional $500 million for farm support programs, and we are delivering on that promise. We will provide an additional $500 million per year for farm support. We will provide a one time investment of $1 billion to help farmers in the transition to more effective programming for farm income stabilization and disaster relief.

Unlike the previous Liberal government, which lurched from crisis to crisis on the farm gate without any real vision or commitment to improving things, our government has begun the process of scrapping the CAIS and replacing it with programs that are simpler for farmers and that will actually deliver results.

As the residents of Palliser understand and appreciate, the Conservative government has delivered on its key priorities. Families, seniors, students and working people will all see tax relief in this budget and new spending which addresses their priorities and improves their security. We have also addressed health care, which is of particular importance to the residents of Palliser. Despite being the home of Tommy Douglas, Saskatchewan continues to experience the longest wait lists in the country under an NDP government.

It is unfortunate that two parties did not support the budget. I do not know how they are going to go home and look their constituents in the eye and explain why they voted against real tax relief and real help for families in our country.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I do not know how that member is going to go home and tell the poor people in his riding that he is increasing their income tax from 15% to 15.5%. I invite all the people at home to look at their income tax forms. I would not have brought this up if he had not said it was a reduction. I ask people to look at their income tax forms, at the column with the lowest rate. It is 15% this year. On July 1 it goes up to 15.5%.

That is not the only reduction for low income people. The low income tax credit for young children has been removed. As for the $1,200, with cuts to that because of their income tax and other benefits they lose, it could be as low as $200 for low income people. The Caledon Institute said that, not the opposition. That is 55¢ a day for day care. How is the member going to tell stay at home parents that they will receive 55¢? The member for Nepean—Carleton just said it costs $40 a day and the government is giving 55¢.

The government is cutting culture by two-thirds of the increase it was going to get. How can government members be proud of that?

However, my question is about the broken promises, which seem to be adding up. Why was there so much talk about defence? Actually, I really enjoy our defence minister and I think he is a great minister, but he got scooped. Our party had larger increases for defence. After all the hyperbole, the Conservatives did not give such a big increase and there is no talk about equipment. The three icebreakers, which I was delighted to hear about, have vanished since the campaign promises.

I would like to ask the member about the capital gains tax promise that has now vanished from the budget.

The member also mentioned agriculture. The last part of my question is about how the Parliamentary Secretary to the Minister of Finance had a prebudget meeting. I congratulate her for that. It was reported to me that when Conservative members asked her where the $1.5 billion was, as the member just suggested, she said, “Oh, we can't talk about that until it has been through cabinet”. Then the Conservative members asked, “Where is the money for this spring? How is this money going to flow?” The answer was, “Oh, we don't know that”.

The farmers need money for this spring. Not a single Conservative member yet has mentioned any possible mechanism by which the farmers will be able to get any of that $1.5 billion to stop the bankruptcies that are going on right now.

Just so we do not get the common question about what our government did, let us remember that statistically and financially in the last several years we gave the largest funding to farmers at any time in history.

[Dave Batters, Conservative, Palliser, SK]

Mr. Speaker, I am very happy to respond to some of those comments. If we look at the press coverage of the budget, what we will see from poll to poll is that Canadians love this budget. They love what they are seeing from this Prime Minister and this government.

Let us look at the tax relief. There is $20 billion in tax relief over two years, which is incredible, more than the last four Liberal budgets put together. We have to look at the totality of the package. We have to look at everything. There is the employment tax credit, for example. We have to look at all the ways that the government is putting money back in the hands of hard-working Canadians.

There is money for child care, the $1,200 a year. The member talks about how much that equates to per day et cetera. Let us look at how much money hundreds of thousands of families across this nation received under the previous Liberal government.

Let us count it up.

What about shift workers in this country? How much did they get under the previous Liberal plan? Nothing.

How about people who utilized a neighbourhood day care or a trusted family member? What did they get? Nothing.

What about mom or dad who chose to stay at home and raise children? How much did they get under the previous Liberal government?