Mr. Speaker, I am delighted to rise today to speak about the budget implementation act.
We have been down this path before in terms of the complexity involved in the challenging economic times we live in today. It requires large comprehensive budget implementation bills. This is the first of two. There will be one in the fall that we will debate.
As always, it is good to get a budget passed in the same year we propose it. We will likely get this budget all wrapped in December of this year. It is through a lot of work among all members of the House of Commons where we debate this bill.
I know they complain about process across the way, but that is the reality. These are not simple economic times. They are challenging economic times, and they do require large and comprehensive responses.
I will focus my comments on a few items that are very important to me and, I know, to the people of my riding of Etobicoke—Lakeshore and in Toronto.
First I will talk about what frames the budget, and we are looking to get to balanced budgets, which is really fundamental.
Before the recession hit, we paid down about $37 billion in debt between 2006 and 2009. That was very important. It actually put Canada on firm economic ground. It gave us flexibility to do certain things.
Unlike the Liberals, we do not believe that budgets just balance themselves. It does require a lot of effort to balance the budgets. We ran some deficits intentionally during the global economic crisis. There was stimulus that was required. A lot of infrastructure was built through the stimulus program and it was necessary to keep people working, but we want to get back to balanced budgets.
The way we get there is not by stifling consumer confidence, by raising taxes, or by raising all kinds of other taxes that drive people to work in the underground economy. One of the fundamental underpinnings of our approach to balancing the budget is to keep taxes low.
What we have in our plan are some sensible tax policies. My colleague, the Minister of National Revenue, talked about some of those sensible tax policies, such as pursuing aggressive tax avoidance and putting new plans there. It is also keeping those taxes low precisely so that the people work in the above-ground economy and pay those taxes.
We see this inverse relationship. When we are lowering taxes, tax receipts are going up. It is because it does create jobs and stimulate the economy, and more people and more companies are paying taxes.
We also have to have as an underpinning some very sound job creation strategies. I mentioned earlier that natural resources are an important plank in our economy, but there are all kinds of other places where we have seen significant job growth in Canada over the last few years. In fact, we have had the best job creation record in the G7.
A third very important underpinning is that we have to have some control on government spending. It is really important that we manage the tax spending on behalf of taxpayers. We are the custodian of these tax dollars that they send us and we have to spend those dollars responsibly.
I am proud of what we have put together in the last few years, and this budget builds on that theme of controlling expenses necessarily. We have done that. We actually have the lowest net debt to GDP ratio in the G7 as a result of that strong hand on the economic tiller.
I want to salute the previous minister of finance for all the fine work he did over the years. I look forward to working with the new Minister of Finance to make sure we continue with that strong tradition.
What are we doing to control those expenditures?
One, the President of the Treasury Board has been in negotiations with the public sector unions to make sure the wages and benefits we are paying our fine, hard-working public servants are affordable to taxpayers. They have to be reasonable. They have to be in line with what people would get for similar kinds of jobs in the private sector.
As I mentioned earlier, we are also closing tax loopholes to make sure we strengthen tax enforcement and ensure we can keep those taxes low.
We are looking at things that control the size, scope, and cost of government. We have done some things in the last couple of years to freeze departmental spending, which is very important, by using new technologies and consolidating back-office kinds of functions, as any good business would do. The Government of Canada is a very large enterprise and we have been doing certain things that have been saving taxpayers money.
We are also looking at assets that are under the control of the Government of Canada, and where it does not make sense for the Government of Canada to be in that business, we are looking at where the private sector can jump in and play a more important role.
I will talk mostly about what the Liberals did in the 1990s, because I think there is a strong contrast between what we are doing with our plan to return to balanced budgets and what the Liberals did.
In 1993, the Liberals came in with a promise to abolish the GST. Well, of course, they did nothing of the sort. In fact, they kept it in place and even encouraged an expansion of the consumption tax base through the HST without cutting the rates at all.
They also kept EI payroll taxes very high and ran enormous surpluses in the EI account, which they then transferred to pay down the debt, which was a tax on jobs; members know that. They also kept income taxes high, and this happened through bracket creep, by stealth, so more and more people who actually had lower income were paying income taxes. What we have done with our plan is remove those people from the income tax rolls altogether, by adjusting the brackets appropriately.
One of the things the Liberals did in the 1990s to balance the budget, which we are not doing, is they failed to meet the needs of our armed forces. The armed forces needs equipment. It needs the supplies. It needs all of the materiel to ensure it can do its job protecting Canadians and engaging in places around the world. That is something we are not doing. We are maintaining those important investments in our capacity there.
The biggest dollar item and biggest contrast between what we are doing and what the Liberals did in the 1990s to balance the budget is we are not slashing transfers to the provinces. That is very fundamental. As members know, we have a record high of $65 billion in transfers to the provinces for things like health care and social services. I should mention that it is an increase of 50% since 2006.
These are important differences between how we are balancing the budgets and what the Liberals did in the 1990s.
I also want to mention that, before we can do all these things, we have to have this foundation of jobs and growth. There are some important measures that we have taken to create jobs in this country. I mentioned natural resources. However, it is also important that we talk about the employment and skills strategies that we put in place. Last year, in 2013, we talked about the Canada jobs grant. This year, we have some agreements in place with the provinces because we know that, for companies to grow, they need to have the skills. We hear over and over again from employers across the country about the skills gap and what employers need. In fact, some employers are looking to bring people from overseas, which is great for those immigrants to come to Canada and take those high-paying jobs in various roles, but at the same time it is a shame that there are not more Canadians available who can fill some of those important jobs in areas like science, engineering, and technology. That is where the job growth is in our 21st century economy, so we are doing things to ensure Canadians are connected with those available jobs.
There are some significant investments we are making in R and D that need to be pointed out. We are working with universities and working with private companies. Where Canada has been challenged has been in private sector R and D. We have always maintained a very high level of public sector R and D, but we can encourage companies to make those investments and really take their great ideas to the commercialization stage. We have some specific measures in the budget, which I firmly support. In talking to people at innovative companies in my area of the GTA, I hear them talk all the time about the need for these programs, to ensure we are building those jobs for the 21st century.
One of the last things I am going to talk about is also what we are doing to foster small business. Many of my colleagues have mentioned the importance of small business, the way it flexibly adapts to changes in the economy and creates jobs all the time. Since 2006, we have had a very firm record of supporting small business through measures like tax reductions. Some of my colleagues mentioned we have reduced the small business tax rate from 12% to 11%. It does not sound like a lot, but it is actually reducing the taxes small business owners are paying by almost 10%.
We have eliminated that corporate surtax that they were paying, which is a very big item for small business. Very importantly, we are maintaining EI rates for small businesses. These are some significant measures. We raised the lifetime capital gains exemption for small businesses. So when they build capital and build a nest egg for their future, we have raised the rate they are not taxed on to $800,000 in 2014. Importantly, it is now indexed to inflation.
I would be remiss if I did not mention the important investments in infrastructure. In Toronto specifically, $4.5 billion has been spent by this government on GTA infrastructure, on things like subways and roads: for example, the Toronto-York Spadina subway extension, the Union Station revitalization, GO Transit enhancements, and finally, with the commitment with the City of Toronto, the extension of the subway into Scarborough.
With that, I am just going to mention that our plan is to keep taxes low, create jobs, and ensure people are paying taxes; and we are not going to spend recklessly like the opposition.
