Bill C-52 (Historical)

Budget Implementation Act, 2007

An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007

Part 1 implements income tax measures proposed or referenced in Budget 2007 to
(a) introduce a tax on distributions from certain publicly traded income trusts and limited partnerships, effective beginning with the 2007 taxation year;
(b) reduce the general corporate income tax rate by one half of a percentage point, effective January 1, 2011;
(c) increase the age credit amount by $1,000 from $4,066 to $5,066, effective January 1, 2006;
(d) permit income splitting for pensioners, effective beginning in 2007;
(e) introduce a new child tax credit of $2,000 multiplied by the appropriate percentage for a taxation year, effective beginning in 2007;
(f) increase the spousal and other amounts to equal the basic personal amount, effective beginning in 2007;
(g) increase the age limit for maturing registered retirement savings plans, registered pension plans and deferred profit sharing plans to 71 years of age, effective beginning in 2007;
(h) expand the types of investments eligible for registered retirement savings plans and other deferred income plans, effective March 19, 2007; and
(i) increase the contribution limits for registered education savings plans and expand eligible payments for part-time studies, effective beginning in 2007.
Part 1 also amends the Canada Education Savings Act to increase the maximum annual grant payable on contributions made to a registered education savings plan after 2006.
Part 2 amends the Excise Tax Act to clarify the legislative authority that allows the Canada Revenue Agency to pay refunds of excise tax directly to end-users, where fuel subject to excise has been used in tax-exempt circumstances. It also amends that Act to repeal the excise tax on heavy vehicles and to implement the Green Levy on vehicles with fuel consumption of 13 litres or more per 100 kilometres. It also provides an authority for the Canada Revenue Agency to pay a refund of the Green Levy for vans equipped for wheelchair access.
Part 3 implements goods and services tax/harmonized sales tax (GST/HST) measures proposed or referenced in Budget 2007. It amends the Excise Tax Act to exempt midwifery services from the GST/HST and to zero-rate certain supplies of intangible personal property made to non-GST/HST registered non-residents. It also amends that Act to repeal the GST/HST Visitor Rebate Program and to implement a new Foreign Convention and Tour Incentive Program, which provides rebates of tax in respect of certain property and services used in the course of conventions held in Canada and the accommodation portion of tour packages for non-residents, and establishes new information requirements in the case where rebates are credited by the vendor.
Part 4 implements other measures relating to taxation. It amends the Customs Tariff to increase the duty-free exemption for returning Canadian residents, from $200 to $400, for absences from Canada of not less than 48 hours. It amends the Federal-Provincial Fiscal Arrangements Act to clarify that when a federal corporation listed in Schedule I to that Act pays provincial taxes or fees, wholly-owned subsidiaries of that corporation also pay provincial taxes or fees. It also authorizes the Minister of Finance to make payments totaling $400 million out of the Consolidated Revenue Fund to the Province of Ontario to assist the province in the transition to a single corporate tax administration. This last measure is consequential to the October 6, 2006 Canada-Ontario Memorandum of Agreement Concerning a Single Administration of Ontario Corporate Tax.
Part 5 enacts the Tax-back Guarantee Act, which legislates the Government’s commitment to dedicate all effective interest savings from federal debt reduction each year to ongoing personal income tax reductions. That Part also commits the Minister of Finance to report publicly at least once a year on personal income tax relief provided under the Guarantee to Canadians.
Part 6 amends the Federal-Provincial Fiscal Arrangements Act to set out the amounts of the fiscal equalization payments to the provinces and the territorial formula financing payments to the territories for the fiscal year beginning on April 1, 2007 and to provide for the method by which those amounts will be calculated for subsequent fiscal years. It also authorizes certain deductions from those amounts that would otherwise be payable under that Act. In addition, it makes consequential amendments to other Acts.
Part 6 also amends that Act to provide increased funding for the Canada Social Transfer beginning on April 1, 2007, and to provide for the method by which the Canada Social Transfer and the Canada Health Transfer amounts will be calculated for subsequent fiscal years, including per capita cash allocations. It also provides for transition protection.
Part 7 amends the Financial Administration Act to modernize Crown borrowing authorities.
Part 8 amends the Canada Mortgage and Housing Corporation Act to permit the Minister of Finance to lend money to the Canada Mortgage and Housing Corporation.
Part 9 amends the Bankruptcy and Insolvency Act, the Canada Deposit Insurance Corporation Act, the Companies’ Creditors Arrangement Act, the Payment Clearing and Settlement Act and the Winding-up and Restructuring Act to allow the Governor in Council to prescribe the meaning of “eligible financial contract”. Those Acts are also amended to provide that, after an insolvency event occurs, a party to an eligible financial contract can deal with supporting collateral in accordance with the terms of the contract despite any stay of proceedings or court order to the contrary. This Part also includes amendments to the Bankruptcy and Insolvency Act and the Winding-up and Restructuring Act to provide that collateral transactions executed in accordance with the terms of an eligible financial contract are not void only because they occurred in the prescribed pre-insolvency or winding-up period.
Part 10 authorizes payments to provinces and territories.
Part 11 authorizes payments to certain entities.
Part 12 extends the sunset provisions of financial institutions statutes by six months from April 24, 2007 to October 24, 2007.
Part 13 amends the Department of Public Works and Government Services Act to provide the Minister of Public Works and Government Services with the power to authorize another minister, to whom he or she has delegated powers under that Act, to subdelegate those powers to the chief executive of the relevant department. That Act is also amended with respect to the application of section 9 to certain departments.
Part 14 amends the Financial Consumer Agency of Canada Act to allow the Minister of Finance to provide funding to the Agency for activities related to financial education.

The House resumed consideration of the motion that Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, be read the third time and passed, and of the motion that this question be now put.

Budget Implementation Act, 2007

[The Speaker, Peter Milliken]

Before question period, the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons had the floor. He has two minutes remaining in the time allotted for his remarks.

Therefore, we will now be able to hear the conclusion of the speech of the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons, with a little order, please.

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, before question period, I was remarking that there was a number of myths and half-truths that had been propagated by members of the opposition today with respect to the budget implementation act, Bill C-52.

I pointed out that in contrary belief to what the member for Wascana had been advocating, we in fact had spent more days debating this bill than the last two budget implementation bills brought forward by the member for Wascana, when he was minister of finance. To suggest we are not giving adequate debate is absolutely a fallacy.

Let me point out two more points before I sit down and entertain comments and questions with respect to equalization and the formula respecting Saskatchewan.

One of the other fallacies is that members opposite, as well as the Premier of Saskatchewan, suggest that Saskatchewan will get no equalization money next year because of changes made to the equalization formula. That is an absolutely untrue statement. The reason Saskatchewan will receive no equalization dollars next year is because it does not qualify for equalization. Its economy is red hot. It is the third fastest rising economy in Canada. The Premier of Saskatchewan, as well as the public of Saskatchewan, should be proud of that.

Here is one thing that is true. If the previous Liberal government were in power today, Saskatchewan would receive no money in equalization this year. Why? Because the position of the Liberals is not to remove non-renewable natural resources from the equalization formula and, on top of that, put a fiscal capacity cap.

The member for Wascana said that it is not true. These are words echoed by his own leader a month ago on the Mike Duffy Live show. We can check the transcript or the film. He stated that he believed there was no equalization receiving province that should have money that would result in a fiscal capacity higher than a province that paid into it.

Saskatchewan is far better off under a Conservative regime than it ever would be under a Liberal regime.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, one of the key issues in the budget has to do with the broken promise related to income trusts. I noted that the chair of the Conservative caucus spoke earlier. He said that, yes, the Conservatives did hurt seniors, but that they promised them pension income splitting and that would offset all the problems.

The problem with this argument is that 70% of seniors do not have pension plans. It is those seniors who invest in income trusts so they can emulate a pension plan. Any benefit to pension plan holders to split their income, if they qualify, and only 12% to 14% of pensioners qualify for splitting, would not be an offset to the people who were harmed by the broken income trust promise.

Is the hon. member aware of the facts related to the income trust broken promise and would he concede that the methodology was wrong since the legislated tax increases were not included in the calculation of the finance minister's tax leakage calculation?

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, let me point out a couple of facts, as the member is so fond of quoting himself. With respect to this government's performance, because of the budgetary changes in budget 2007, over 650,000 Canadians are off the tax rolls altogether, an accomplishment never once challenged by the former government.

With respect to benefits to seniors and all Canadians, we have raised the age credit. We have doubled the income credit from $1,000 to $2,000 for seniors, something that has never been done in 20 years. We have raised the RRSP from 69 years to 71 years in terms of conversion. We have done an awful lot for seniors in our country, more so than anyone who I can see on the opposite side of the House.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, one of the crucial issues in the budget bill, as it relates to Saskatchewan, is the issue of the fiscal capacity cap, which the government has chosen to impose. What is problematic about that cap is while it is very clearly imposed by the budget, it was never mentioned to the province of Saskatchewan as the intended government policy before the budget was introduced in the House on March 19.

The Conservatives' answer to that, when asked why they did not mention this rather important fact before the budget was introduced, is that they did not expressly promise not to have a cap. They did make that promise very clearly in Atlantic Canada in a widely circulated brochure that said there would be no caps. I guess Saskatchewan is not entitled to read a brochure that circulated in Atlantic Canada. It should only read the brochures that are circulated in Saskatchewan. Obviously, that is disingenuous.

The government members now say that they always intended to have a cap, they just failed to mention it, that was accidental and that was too bad. The Premier of Saskatchewan, the leader of the opposition in Saskatchewan, who by the way is not a New Democrat but a Conservative, the media, all the experts who have analyzed this say that the failure to mention the cap and then the imposition of the cap constitutes a betrayal, a demonstration of bad faith.

How can the government justify the fact that it did not once mention to Saskatchewan that it was fully its intention from the beginning to impose a fiscal capacity cap?

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, as I said before in my earlier comments, which obviously the member for Wascana was not here to listen to, the fiscal capacity cap is merely a maintenance of an existing convention that has existed for 50 years. In 50 years since equalization has been a program here in Canada, there has never been one time where an equalization receiving province ends up with a fiscal capacity higher than that of a non-receiving province.

That is what the convention is, because it deals with equalization. It allows all provinces to offer relatively the same level of services at relatively the same level of taxation. That is why this convention has been in existence for over 50 years. We are merely maintaining it.

However, the member for Wascana says that no one from the Conservatives talked about a fiscal capacity cap. I will tell members who did talk about a fiscal capacity cap, the leader of the official opposition, when he said on the Mike Duffy show, “I believe a fiscal capacity cap should be put be put on to ensure that no equalization receiving province ends up with a fiscal capacity higher than a non-receiving province”. On top of that he also stated, “I do not believe that equalization should mean that non-renewable natural resources are removed from the formula”.

That would result in absolutely no money for the province of Saskatchewan. It is far better off with a Conservative government than it ever was with a Liberal government.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Mr. Speaker, I am pleased to stand today and speak on behalf of not only my constituents of Brampton—Springdale but also on behalf of some of Canada's most vulnerable, the vulnerable who the Conservative government has failed time and time again, the homeless who have been left out in the cold and the single mothers who have not had access to appropriate day care. The Conservative government has failed those who have needed it the most: the Canadians families that are working hard to make ends meet and put food on the table for their children; the homeless; the women; the children; the students; aboriginals; and, unfortunately, the list goes on and on.

The Conservative government had an opportunity to close the growing gap in our country between the rich and the poor but, unfortunately, it chose to cater to its voter base, to those who are already rich.

It is evident that the government is not interested in giving a hand to those who need it most, whether we talk about the issue of health care where it failed to deliver a guaranteed wait time list, whether we talk about the Kelowna accord which the government tore up into shreds, or whether we talk about the Canada summer jobs program which failed to employ thousands of students who needed jobs and needed an opportunity to ensure they could make ends meet and pay for their tuition.

Let us talk about the issue of child care. One of the first acts by the government was to tear up the Liberal early learning child care agreements that were signed in consultation and collaboration with the provinces. These agreements would have ensured adequate, quality, universal, accessible and affordable day care programs for the children of Canada. They would have ensured that mothers and fathers wanting to enter the workforce would have every opportunity. However, the government tore those up and replaced them with its so-called child care plan, a plan that was supposed to provide a choice. Parents, however, quickly learned that it was not a choice.

Why was this plan not an adequate choice? For the $1,200 a year that was being promised for children under the age of six, parents quickly learned that the $1,200 or, if we break it down, almost $100 a month or $20 a week, they were looking at about $3 a day. Where in the country will parents be able to find quality, universal, accessible and affordable child care for $3 a day?

The Conservatives promised that they would give $1,200 to parents for day care but parents realized, once they did their tax returns in 2007, that the $1,200 was actually taxable. By the time all was said and done, parents ended up with approximately $300 to $400 a year for child care.

Therefore, a two income family in Ontario making about $40,000 would actually need to pay the government $31 a month out of the $100 a month that they were receiving. The government actually made back about $624 million as a result of taxing all of that income. However, it refused to put it where parents wanted it go, which was toward the creation of child care spaces.

One hundred and twenty-five spaces were promised. If we take a look, 16 months after being elected, how many spaces have been created? Zero spaces have been created for the children of Canada.

Time and time again, research reports and experts have highlighted the importance of investing in early learning and child care. Independent experts, such as the think tank, the Caledon Institute, have already concluded that under the Conservative plan and within the Conservative budget, it is the rich who stand to benefit. The government is failing low and middle income families. Once again, the government is showing that it is out of touch with the needs of average, hard-working Canadians.

Let us look at the summer jobs program that was created by the former Liberal government, a program that provided opportunity. It provided opportunity for non-profit organizations. It provided opportunity for students of Canada to have gainful, meaningful, valuable employment to ensure they would y be able to work during the summer, have quality work experience and utilize the money they made to pay off their tuitions and their student loans.

What did the Conservative government do to the summer jobs program under this budget? It actually cut funding to the program and rebranded the program that the Liberals had introduced and which had worked phenomenally well for many years past. They created the Canada summer jobs program. What did non-profit organizations, community groups, students and parents find out when the program was announced? They found out that their funding was denied because the Conservatives chose to target the most vulnerable in our society, the hard-working students, the non-profit organizations and the community groups.

We on this side of the House, the Liberal opposition, are working to provide an effective voice for the students, the non-profit organizations and the community groups to ensure they would get their funding back.

Mysteriously, after speaking to this issue time and time again on this side of the House during question period, during statements by members and through press releases, we quickly learned that the minister had reversed the decision.

We have seen that this budget has provided almost nothing for the aboriginal and first nations communities in Canada. We see the frustration and the anger. The aboriginal community wanted to work with the Kelowna accord that invested in health care, in education and in housing for the aboriginal community but the agreement was torn into shreds. It is due to this frustration and this anger that the aboriginal and first nations communities, championed by Phil Fontaine who has done excellent work, will be holding a national day of action, The aboriginal community, like many of the other vulnerable groups that I have mentioned, all want action. They want results and they want them now.

Due to the excellent fiscal management of the previous Liberal government, we delivered eight consecutive balanced budgets and we reduced the debt. However, it is unfortunate that despite the surplus the former Liberal government left the Conservatives, the first act of the Conservative government was to cut funding to the Status of Women Canada, which provided opportunity, to the court challenges program, which provided a voice.

It is clear that the budget does not meet the needs of Canadians.

Let us talk about the issue of housing. When we take a look at the issue of housing, one realizes that the Conservative budget is actually leaving the homeless out in the cold. When we think of basic human needs, we think of food, of water and of the importance of having a roof over one's head, but the Conservative government did not invest one cent of funding for affordable housing in the budget.

In the previous Liberal government, we had committed over $2 billion a year to housing. How much would a $2 billion a year investment have created in terms of housing units? It would have created 636,000 housing units: $1 billion in new affordable housing and $1 billion on the homeless to ensure they had opportunities. We also had national consultations conducted to develop a national housing framework. We had a budget that committed to additional resources to ensure the homeless would have the very best.

When we look at the budget, we realize that the government has not delivered for the most vulnerable in our society. Whether it is the students of Brampton—Springdale, whether it is the women in the country who worked with organizations that benefited from Status of Women Canada or whether it is with regard to housing or the environment, it is unfortunate that the Conservative government has not stepped up to the plate and has not done the job done.

Canadians are counting on some leadership. They are waiting for an action plan. When will the Conservative government step up to the plate and deliver a budget that will meet the needs of our country and move Canada forward so we can compete with the best and the brightest?

[Patrick Brown, Conservative, Barrie, ON]

Mr. Speaker, I rise today to speak to Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007.

Bill C-52 is an economic plan that will reduce taxes for hard-working families, pay down debt and invest in Canadians' key priorities, like improving health care, protecting our environment and making our communities safer.

In my riding of Barrie, parents are faced with the daily financial challenges of raising a family. Bill C-52 offers parents a choice in child care by making it more affordable for families to raise their children. Bill C-52 includes a working families' tax plan. This plan has three components.

First, for families with children it includes a brand new $2,000 per child tax credit for children under 18 that will help families get ahead. A constituent of mine, Jennifer Woods from Lions Gate Boulevard, called me after hearing the news and told me how much this means to single mothers like her with three young kids.

Second, this piece of legislation would end the marriage penalty through an increase of the spousal and dependant amounts to the same level as the basic personal amount.

Third, it would help parents save for their children's education by strengthening the RESP program.

The bill would also help Canadian seniors by raising the age limit for RRSPs to 71 from 69 years, increasing the age credit by $1,000 and permitting pension income splitting.

Since being in power, the Government of Canada has introduced nearly $38 billion in individual tax relief over this and the next two fiscal years.

Our government has proposed to lower our national mortgage by $9.2 billion, on top of the $13.2 billion we have put against the debt since being elected. That is the equivalent to $700 in debt relief for every Canadian. Lower debt will mean lower interest payments, which will mean lower taxes. Through the tax back guarantee, every dollar saved from lower interest payments would be returned to Canadians through personal income tax reductions.

Bill C-52 also provides a total of $2.6 billion in new health care investments, as well as an increase in health transfers. This means our government will transfer $44 billion in health care funding to the provinces and territories over the next two years.

The Canada health transfer would provide $21.3 billion in 2007-08, or $1.2 billion more than in 2006-07, to support provincial and territorial health delivery. This would continue to grow by 6% annually to reach $30.3 billion in 2013-14.

This new health care spending is positive news for my riding of Barrie. According to Statistics Canada, Barrie is one of the fastest growing census metropolitan areas in Canada and for many years now we have been faced with the challenge of critical physician shortages and an overload of pressure on our local hospital, the Royal Victoria Hospital. The fund increase in health care by this budget would help hospitals like RVH by providing the provinces with more discretion to fund their needs.

Just recently it was announced that Barrie and Simcoe-Muskoka cancer patients will soon have access to Canada's first portable radiation unit at our local hospital. This new cancer treatment technology will begin to provide life-saving radiation therapy to hundreds of patients by this coming fall.

I want to specifically thank the Minister of Health and Dr. Rob Ballagh for first examining this concept last November. The announcement of this mobile cancer unit is an example of what increases in health care transfers to the provinces can achieve.

In addition to these transfers, Bill C-52 would provide $612 million to a patient wait times guarantee trust. For Ontario, this would translate into $205.4 million to the Ontario government for patient wait time reductions over the next three fiscal years.

Additionally, Bill C-52 would offer $30 million over three years for patient wait times guarantee pilot projects to assist the provinces and territories in implementing their patient wait time guarantees. Many Barrie residents will be positively impacted by this government initiative.

Since the introduction of the federal-provincial wait times strategy, the Royal Victoria Hospital has been a success story. Hospital procedures have been reduced by 19.6% for cataract surgeries, 17.9% for hip replacements, 11.8% for knee replacements, 25% for angioplasty, 23% for MRI exams and 13.6% for CT scans. Over $3 million has been directed to help RVH patients, and this has had a dramatic impact on our community.

We have seen an increase of more than 600 cancer, cataract and joint replacement surgeries performed at RVH, and more MRI hours of operation. The hospital has been able to increase MRI hours to 24 hour coverage on weekdays and extended hours on weekends. This means an additional 1,880 MRI hours for our hospital. I send kudos to the RVH management team of Scott Elliot, David Blenkarn, Janice Skot and Garth Matheson for using government resources so effectively to improve the health care in Barrie.

Another important priority that Bill C-52 addresses is the preservation of our environment. This includes $1.5 billion in the Canada ecotrust for clean air and climate change, the doubling of the number of environmental enforcement officers and the creation of a new national water strategy.

I am pleased that our new national water strategy commits $12 million over the next two years to support the cleanup of Lake Simcoe. This is one of the largest investments of its kind by the federal government in Canadian history to Lake Simcoe. These funds are a significant step toward preserving and protecting Barrie's beautiful waterfront, which is the heart of the city and brings the community together. Furthermore, these much needed funds will directly help residents in the community by creating clean and safe water.

Bill C-52 also takes action to make our communities safer. Many serious crimes that we read about today include gang activity linked back to the drug trade. Bill C-52 will launch a new national anti-drug strategy to combat the use of illegal drugs.

This legislation will also provide funding to protect children from online sexual exploitation and assist investigators in suspected cases of human trafficking. We have a great chief of police in Barrie by the name of Wayne Frechette. This is the type of action that the federal government should be doing to help and support our local police forces.

Budget 2007 is an excellent one for Ontarians. In fact, several leading provincial Liberals have sung its praises. Premier Dalton McGuinty said that it meant real progress for Ontarians. The Minister of Finance said that it contains some really positive elements for Ontario. The Minister of Intergovernmental Affairs said that it offers concrete results to Ontarians.

If Dalton McGuinty's provincial Liberals think that this budget is excellent for Ontario, that means it is a good budget for Barrie, for Ontario and for all of Canada. Perhaps the federal Liberals should follow their provincial counterparts' example.

Bill C-52 will help create a Canada that will make us proud to pass on to our children and grandchildren, a Canada with a standard of living and quality of life that are second to none. The Minister of Finance has delivered another balanced budget that builds a stronger, safer, better Canada by cutting taxes for working families, paying down the nation's debt and investing in the priorities of Canadians.

It is a good budget for my riding in Barrie, a good budget for Ontario and a great budget for Canada.

[Gary Merasty, Liberal, Desnethé—Missinippi—Churchill River, SK]

Mr. Speaker, I am pleased to rise today to speak to Bill C-52. I am going to speak mostly from a Saskatchewan perspective.

I have heard a few things that I am quite disappointed about from my colleagues across the floor with respect to Saskatchewan. I want to break it down and talk specifically about some of the things that I think are drastically unfair when it comes to Saskatchewan's treatment under Bill C-52, the budget of Canada.

First of all, we have heard the Conservative members from Saskatchewan boast about the spending in Saskatchewan. I think this is quite misleading from the perspective that we have also seen increases in taxes to Saskatchewan. It is from that perspective that I am going to spend a bit of time.

First of all, we have seen that taxes have been raised in Saskatchewan by tinkering with the basic exemption. Most people in Saskatchewan unfortunately earn middle to lower income salaries. What the tinkering with the basic exemption has done is cause most people in Saskatchewan to pay more taxes at the end of the year. This is not good because it clearly does not help Saskatchewan. That is one issue.

Then we have the issue of the child tax credit. It is not available to lower income families because it is non-deductible. We have a demographic in Saskatchewan, the low wage earners, who probably need this type of supplement the most but they are virtually unable to get it because it does not apply to them. The group that needs it the most is denied it. Other tax credits are not available to low income people, and again they are being shut out, for example, spousal support and so on and so forth.

The tax regime is not favourable to the majority of Saskatchewan residents because the tax treatment they are getting at the end of the day raises their taxes and does not allow them to participate in a lot of the supposed investments that the government has announced in Bill C-52. That is a concern for a lot of people in Saskatchewan right now. It has been one tax year already, and they have seen at the end of the year that holy cow, they are paying more taxes than they ever did and that is not good. They cannot find places to reduce the tax grab from the government. They are not very pleased.

Then there is the income trust fiasco. A lot of people in Saskatchewan lost their life savings because of the flip-flop that occurred. The Conservatives promised they would not do it. People took them at their word and people in Saskatchewan have suffered. We should chalk it up as another attack on Saskatchewan. People lost their life savings, and they are not very happy about that. I certainly would not be happy. I know many people who have lost a lot of money because of that broken promise, which is just one of many broken promises.

Then there is the registered education savings plan. Again, it can be argued that by raising it and changing it in the way the government did it could be good, but lower income people could not even meet the original benchmark. The government raised it but what help is it providing to lower income people to allow their children to pursue their dreams, to obtain a post-secondary education, to pursue the careers they would like to pursue? In effect they have been cut out. They are not happy with that either.

The working income tax benefit does nothing for lower income people. It does not help them scale the welfare wall. They are kept in the situation they are in because lower income people cannot access the benefit. They are not happy with that.

The gist of my speech so far is that lower income people in Saskatchewan are being left out.

The GST cut is fine but not if one does not have the income to purchase, because it is a consumer tax. Most lower income people do not have the disposable income to make large purchases so they benefit very little from the GST cut of 1%. Again it is the lower income people who are left out in the cold. They are not happy. I get calls. I talk to people, I get phone calls, and I visit different communities. People ask why they are being targeted. It is not fair.

I guess one of the biggest things on which everybody in Saskatchewan agrees is that the Kelowna accord was virtually killed and gutted. In my previous statements in the House, I talked about how Saskatchewan's share of the Kelowna accord, if it were implemented fully, would have been approximately $600 million or $700 million over five years. This is money that would have been invested in that young aboriginal population, to mobilize them into post-secondary education, to mobilize them into the workforce, to invest in housing, to improve the quality of life for aboriginal people in that province. When they do well, Saskatchewan does well.

With the Kelowna accord we would have seen aboriginal people and non-aboriginal people in Saskatchewan walking hand in hand, prospering, taking advantage of the opportunities available for them. Saskatchewan is doing fairly well. Saskatchewan just moved out of a have not status to a have status. We are worried because we do not want to slip back. Resource revenue is just that; it is one time and once it is gone, it is gone. What is Saskatchewan to do? Saskatchewan needs to firmly establish itself so it never slips back into being a have not province.

With the killing of the Kelowna accord, not only did the Conservative government abandon the aboriginal people in Saskatchewan, it abandoned all people in Saskatchewan, because as I said, when aboriginal people do well in Saskatchewan everybody does well. They would have walked hand in hand. They would have prospered and been able to capitalize on the benefits that Saskatchewan has to offer its residents.

I guess one of the big issues over the last month has been the broken promise to exclude resource revenue from the equalization formula. Very clearly, a promise was made. The Conservatives very clearly have broken their promise to Saskatchewan.

My colleagues from Saskatchewan are feeling the pressure, and I do not blame them for feeling that pressure, not only from Saskatchewan residents but I am sure from all sectors. Saskatchewan media has chastised my colleagues from Saskatchewan for their lack of action to stand up for Saskatchewan, for trying to mislead Saskatchewan with irrational numbers which I heard today. As I said previously, the Conservatives give a new definition to the algebraic term of “irrational numbers” because their numbers simply do not make sense. They are trying to confuse and distract from their broken promise. Very clearly, a promise was made and a promise was broken. That is what people in Saskatchewan understand.

People in Saskatchewan may be misled once, but they will not be misled again. People in Saskatchewan do not like to be taken advantage of or taken for granted. Do this once and they will not let it happen again. People in Saskatchewan do not think that the government cares for them, and they are going to be voicing their displeasure through many and various means.

I talked about income tax being raised in Saskatchewan. My colleagues across said, “Look, we are putting some $250 million into Saskatchewan this year”. People in Saskatchewan are paying for that because their taxes have been increased. They are paying for it because they are not able to access the tax deductions that are made available to everybody else.

At the end of the day, people in Saskatchewan are paying for their own lack of funding from the Conservative government. At the end, it is zero. I would say there is a net loss at the end of the day to people in Saskatchewan because of the way the Conservative government has manipulated the numbers.

It is a shame to mislead the people in Saskatchewan, but it is more of a shame to take advantage of lower income people who work very hard to make a living in Saskatchewan. Instead, they see their taxes are being raised. They are being marginalized even more. They are being given no support and then there is the promise that has been broken. It is unfortunate.

[Gerry Ritz, Conservative, Secretary of State (Small Business and Tourism)]

Mr. Speaker, as one of the members of Parliament from Saskatchewan helping sell this budget out there, there are few things I take umbrage with in the member's speech.

He talks about the GST cut. Actually, if he were to re-read the document, he would find out that was last year's budget. We did that in 2006.

He talks about it not really helping poor people at all. I am here to say that I get calls all the time from folks in my riding. I actually attend my riding office. They call me and say they are noticing a difference in the GST on the rent they pay, the power bill, the telephone bill and the gas bill. It really does not matter what layer one finds oneself stratified in society. The GST cut helped a lot of people. There are a lot of instances where people paid GST and did not even know it was part of a grocery bill or that type of thing, so it had a very positive impact.

He also talked about the Kelowna accord. Again, he is going back a year in that vintage. I guess he does not have a whole lot that is bad to say about this budget and has to go back to the one prior to it. Maybe he did not get an opportunity to speak to last year's budget.

The biggest concern I had was with Kelowna, and I certainly campaigned on it. I have nine reserves in my riding including the urban reserves and so forth. My message to them was that Kelowna was not good enough and that point has been proven. We have actually spent more on aboriginal affairs in this country since the Kelowna accord did not go through than the Kelowna accord would have actually called for. On top of that, we settled the residential schools file and those cheques will start to flow.

When I talk to people in my riding about budget 2007, taxpayers in general, the municipalities with the infrastructure moneys that are flowing and business groups are all ecstatic about this budget and are saying, “Let's get it passed and let's move on”.

The only person upset with the budget is the premier. When he came before the finance committee his major concern, and no one will believe this, was that 60% of the money allocated to the province he did not get to put his sticky little fingers on. The municipalities are saying that is good because the premier of Saskatchewan alone charges a percentage on the flowthrough moneys. Can you believe that, Mr. Speaker? That is how unfortunate it is out there.

There is a tremendous amount of positive in the budget for Saskatchewan residents. There is the biofuels strategy and the ecotrust moneys. Saskatchewan is one of the worst polluters in the country with its coal fired plants. Our ecotrust money gives it a chance to get on top of that. We also have the health wait times guarantee. This is a great budget for Saskatchewan residents.

The only question I have for the member opposite is this. Last Thursday the Liberals had a supply day which was again on this particular issue. Why did the member not stick around to vote for that supply motion?

[Gary Merasty, Liberal, Desnethé—Missinippi—Churchill River, SK]

Mr. Speaker, a few things the member brought up were interesting. Yes, I mentioned some things from the previous budget, but Saskatchewan people are feeling the effects today and are not very happy. Then they see more of the same in this budget, which is bad, bad and bad. They are not very happy.

I cannot remember the name of the riding my colleague gave, but he said he would like to move to Saskatchewan. I would encourage him to move to Saskatchewan and maybe prop up some of the Conservative MPs there to maybe deal with this issue.

It is interesting that he talks about the Kelowna accord and says that the government is investing now. I do not know if the member realizes it but last year's announcement for aboriginal funding actually never left Ottawa because it was designed not to leave.

After talking to Saskatchewan people and others across the country, they have actually had a net loss in funding. That is unfortunate. I am not sure where this imaginary funding is coming from that the member speaks of.

One of the things we heard Mr. Calvert say was that this is one time money, that 85% of what we are supposedly getting is one time only. He said Manitoba is getting more than his province next year. Saskatchewan gets zero next year. This is not a good deal for us. Saskatchewan is being shafted. That is the end of the story and Saskatchewan people know it.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, after his excellent set of remarks, I would ask the member to acknowledge that it is very easy for the government to list a whole bunch of government expenditures flowing into the provinces. In fairness to everyone around here and all taxpayers, we have a budget of a couple of hundred billion dollars and there is a lot of money moving around the country being spent by the federal government in transfers, equalization and other things.

The nub of the issue here is this. Would he not agree that it is the letdown that people in several provinces feel now as a result of the decision by the government to, if not renege totally on some of the previous federal-provincial agreements, attempt to do an end run around them and remove the benefits that had been earlier negotiated and signed with the federal government?

[The Acting Speaker, Royal Galipeau]

Time has run out. Resuming debate, the hon. member for Vancouver Island North.

[Catherine Bell, NDP, Vancouver Island North, BC]

Mr. Speaker, thank you for this opportunity to once again speak about this Conservative budget.

The last time I spoke, I outlined what we see as the government's true agenda, driven by its five priorities: first, help the rich get richer and pretend the prosperity gap does not exist; second, privatize at all costs, including municipalities and infrastructure; third, treat first nations with disdain and ignore their advice; fourth, invest as little as possible in social programs, no matter how high the surplus; and fifth, ignore the crisis situation in the forestry sector.

These Conservative priorities are doing little to address the needs of everyday Canadians, however, they are in the best interests of the corporate sector.

Today I want to talk about the significance of rising inequality in Canada, but I also want to address another important issue facing Canadians that the government failed to address in the budget, and that is the failure to live up to our commitments to the world on foreign aid.

According to a study done by the Canadian Centre for Policy Alternatives, the Canadian economy is doing great and we have not seen it this good in over 40 years. We have sustained economic growth, low interest rates, a low inflation rate, the lowest unemployment rate in 30 years, and years of back to back surpluses in the federal budget.

Yet, there is a growing gap between the richest 10% and the poorest 10% of families raising children. Despite nine fiscal surpluses in a row, the gap between the rich and the poor is growing in this country and it is at its highest that it has ever been in 20 years.

What about those families in between? With this greater polarization of incomes, middle class working families are losing ground. Families today are better educated. They are working more for longer hours, but they are feeling the squeeze of rising housing costs in all our cities and communities, a lack of child care spaces, rising prescription drug costs, no relief from tuition fees for post-secondary education, rising bank fees at a time when bank profits are at an all time high, and rising gas prices when the industry is making record profits, not to mention getting record subsidies.

It is an embarrassing list that impacts hard-working families. Their real incomes are stagnant or decreasing in the face of economic growth. Most Canadians are taking on greater levels of debt for mortgages, tuition fees and child care expenses. They are virtually only a couple of paycheques away from hard times and with all those stresses, everyone working more and earning less, our society is at the breaking point.

With the surplus in the federal government's coffers, the government could have made the choice to address the real concerns of hard-working Canadian families, but it chose a different path. It threw a few crumbs to those hard-working families, but its corporate friends got the biggest pieces of the pie.

What ordinary Canadians wanted was assistance up front, not a refund. Everything in the government's budget is designed to make hard-working Canadians part with their hard-earned cash first, then apply for rebates or tax credits. The problem is that most families are stretched to the limit, making it hard for them to participate in the government's consumption plan. These are just some of the reasons why we in the NDP will not be supporting this budget.

I would like to switch gears now and talk about my second topic, the failure on the part of the government to live up to our commitments to the world, just one more broken promise in a long list.

When we talk today about committing 0.7% of our gross domestic product to foreign aid, we are actually referring to an international agreement made many years ago. In September 1969, Lester B. Pearson, the former prime minister of Canada, unveiled a report for the World Bank entitled “Partners in Development”.

This report reviewed the results of how wealthy nations had distributed development assistance over the past 20 years. The report clearly stated that there was a great need to increase the amount of resources that were going to developing countries. The commission recommended that funds equivalent to 0.7% of the GNP, or gross national product, of developed countries like Canada flow to developing countries.

In October 1970 the UN General Assembly adopted resolution 2626, the international development strategy for the second United Nations development decade.

Through this resolution Canada and other developed countries agreed to increase our foreign aid contributions to developing countries to a level equal to 1% of their GNP and that a minimum of 0.7% of the GNP would be provided by 1975.

This was the commitment that we made in 1970, 0.7% of GNP was the minimum that we had promised to the world and that is our responsibility. However, we are not even coming close to meeting our promises of assistance. The closest that any Canadian government has ever been to meeting our goal was in 1975 when 0.53% of our GNP was committed. Since then, our contributions have gotten smaller.

In 1993, when the previous Liberal government came to power, our contribution went from 0.44% of GNP down to 0.22%, our lowest point since 1970. All of these cuts were in the name of balancing the budget.

The most recent calculations show that our contribution lies at less than 0.33%, better than in 2001 but well below our commitment. In fact, it is not even half.

One might ask if anyone has ever met these commitments. The answer is yes. Denmark, Luxembourg, the Netherlands, Norway and Sweden have all met their commitments and they have gone above it. As well, the United Kingdom, France, Germany, Finland, Spain and Belgium all have timetables to meet their obligations, all before 2015. Many of these countries have almost identical economies to ours, so we know that it can be done.

Canada has no timetable. Neither the previous Liberal government, nor the current Conservative government have committed to meeting our promise. In fact, out of the 22 most developed countries Canada ranks 14th in terms of development aid, an embarrassing fact and one that questions Canada's image as a model of leadership in the world.

Canada must face up to the shameful record the country has had in the last 15 years on foreign aid. The NDP strongly believes that reaching 0.7% must be a priority. With surpluses every year, it is blatantly unfair to deny and turn our backs on the promise that we made to the world.

The NDP's foreign affairs critic, the member for Halifax, described the state of affairs most clearly when she said:

Millions of people are dying unnecessarily of hunger and disease because of the grinding poverty in which they are living. Canada is a contributor to those killer conditions. Instead of the Liberal government moving us forward with a level of overseas development assistance that would allow Canadians to hold their heads up high, it took us from 0.5% of ODA, which was in place under the previous Conservative government, back to where it was at .23%...then in the name of heaven let us agree and commit ourselves to fast track a bill that the government would introduce so we could then get on with taking action.

Canada can afford to do better. In fact, all parties of the House of Commons agreed with the member for Halifax in 2005 that the government should set up a plan and a timetable to achieve the 0.7% target by the year 2015. That included the Conservatives and this Prime Minister.

With a record federal surplus and after promising Canadians and the world that we would live up to our commitments on foreign aid, we see nothing in the budget, no plan and no commitment.

The government knows that its budget falls short on many fronts. In B.C., the province the Conservatives forgot in their speech, I guess they really meant it when they said their Canada goes from the Rockies to New Brunswick. Whatever happened to “from coast to coast to coast”? In B.C. the budget falls short.

In the Atlantic provinces the government chose to turn its back on yet another previous commitment, forcing one of its own members into a corner with no way out except to sit on the other side of the House.

In the north, where it is even more costly to live, the government could have given some relief by changing the northern residence tax deduction, an allowance that has not been changed in almost 20 years. On so many issues where they could have made meaningful contributions, the Conservatives did not.

Some things can be done: a national housing strategy to make sure ordinary families do not have to live in poverty just to put a roof over their head; a national child care program to provide security, stability and affordability to parents when they go to work; and lower tuition fees so young people do not have to start their careers with enormous debt loads.

These are just a few of the ideas that the NDP is happy to share with the government. These are some of the things that the government could have done with the record surpluses. Unfortunately, it did not.