Mr. Speaker, I will say at the outset that I am sharing my time with the hon. member for Kitchener—Conestoga.
It is an honour to rise and address the House on budget 2013. I came to Ottawa from Edmonton Centre as part of this Conservative government. Since that time we have been both sound economic managers and prudent investors in all areas of government. We have lowered taxes to the lowest level in more than 50 years. The GST was cut from 7% to 6% to 5%. This has placed more money in the pockets of ordinary Canadians, where it belongs.
We have paid down $37 billion worth of debt between 2006 and 2008. During this time, we also invested in our armed forces, which were in desperate need of equipment and rebuilding after decades of darkness under previous governments.
It was not long, however, before trouble appeared on the horizon. In August 2007, the credit bubble burst. The United States officially went into a recession in January 2008. This was the worst recession to hit the world since the 1930s. Those were troubling times five years ago. However, in the face of trouble our government responded decisively.
On January 27, 2009, the Minister of Finance introduced the first phase of Canada's economic action plan. This budget was a $60 billion shot in the arm to the Canadian economy, including a $12 billion infrastructure investment and $20 billion worth of tax relief. As the Minister of Finance indicated at the time, these measures were targeted, timely and temporary. With an extra six-month extension, the stimulus funding wound down on October 31, 2011, as promised.
I am a Conservative, and I believe in balancing our budgets, lowering taxes, and individual initiative and enterprise. Canadians understand the importance of prudent fiscal management in their household budgets, and they expect the same from the government. I could not agree more. That is why I am pleased that our government has made fiscal prudence a priority.
I would like to speak to three of our government's fiscal priorities today, which budget 2013 keeps us on track to achieve. These priorities are the elimination of the deficit, introduction of balanced budget legislation as promised in the throne speech and paying down the federal debt while fostering a sound economic environment.
When Canada's economic action plan was initially introduced in 2009, we made it clear that deficits were not here to stay and neither was the stimulus. We acted, and deficits have been falling ever since. From a peak of $56 billion in 2009-10, it was reported on October 22 that the federal deficit had fallen to $18.9 billion for the 2012-13 fiscal year, coming in nearly $7 billion below forecast. We made it abundantly clear that the deficit elimination would not be done on the backs of provinces or seniors.
Budget 2013 builds on previous actions, with an additional $500 million in savings in 2013-14, rising to $2.3 billion in 2017-18, for a total of $8.4 billion over the next five years. When this is combined with actions taken since budget 2010, it means our government has announced savings that will reduce the deficit by more than $15 billion in 2014-15 and beyond. This will amount to cumulative savings of more·than $84 billion over the 2010-11 to 2017-18 period. More than 75% of these savings will result from measures to restrain the growth in direct program spending.
Some of these measures to control program spending were developed during the strategic and operating review, of which I was privileged to be a member. This review found savings of $5.2 billion in government operations, savings that will certainly contribute to not only eliminating the deficit but making government leaner and more efficient.
Direct program spending is projected to remain roughly at or below its 2010-11 level over the forecast horizon, 2017-18. However, federal transfers to individuals to provide important income support, such as old age security and employment insurance, and major transfers to other levels of government for social programs and health care will continue to grow over the forecast period.
With the recent Speech from the Throne, our Government again signalled our continuing belief in the importance of sound fiscal management by promising to introduce balanced budget legislation.
Government holds the keys to the federal treasury and with that comes the expectation that those resources will be spent and managed wisely. As we are all aware, these past five years have been anything but ordinary economic times. With sovereign debt crises in the eurozone, the fiscal cliff, sequester and government shutdown in the United States, it is clear that turbulent economic waters remain for the foreseeable future. However, a balanced budget is essential for the long-term financial health of the government and Canada and generates confidence in the Canadian economy.
We have promised to balance the budget by 2015. That promise we will keep, and we will go further. Our Government will enshrine into law its successful and prudent approach.
Our balanced budget legislation will require balanced budgets during normal economic times and concrete timelines for returning to balance in the event of an economic crisis.
I am pleased with this additional commitment to financial responsibility. However, to that end we must balance the budget, and budget 2013 keeps us on track to do so. We have promised to do so without raising tax. To do so we must reduce government spending.
Budget 2013 builds on these efforts to reduce government spending by announcing an additional $1.7 billion in ongoing savings, including examining departmental spending to ensure that government operations are managed as efficiently as possible; reducing travel costs through the use of technology by using remote meeting solutions, such as telepresence and video conferencing; modernizing the production and distribution of government publications by shifting to electronic publishing and making print publications the exception; standardizing government information technology to reduce costs; and by closing tax loopholes and keeping taxes low and competitive in order to give businesses the incentive to create jobs.
Lastly, as part of our commitment to return to balanced budgets by 2015, we must ensure that our economy continues to grow and create jobs. To this end, the Prime Minister announced at the G20 summit in St. Petersburg in September that the Government of Canada is committed to achieving a federal debt to GDP ratio of 25% by 2021. The government will consider advancing the planned targets if economic growth is significantly stronger than anticipated.
Canada currently has the lowest total government debt of any nation in the G7, a number that includes the entire provincial, territorial and local governments, as well the Canada pension plan and Quebec pension plan. In fact, Canada's net debt was less than half the G7 average in 2012, coming in at 34.6% of GDP.
Low debt levels will result in lower taxes for Canadians as less money is required to service the debt. Low debt levels also mean a strong investment climate that supports job creation and economic growth. Job creation and economic growth have been our government's focus since we began to tackle the recession, and that will not change.
That is also why budget 2013 introduced the Canada job grant to provide for retraining of individuals who are looking to retrain and fill some of the numerous vacancies in our economy. The government remains singularly focused on creating an economic climate where businesses of all sizes are able to create jobs and invest in their operations and where we address the issue of people without jobs and jobs without people. Everyone wins.
Budget 2013 also aims to balance the budget by penalizing those who seek to avoid paying taxes. Through budget 2013, we are introducing new administrative monetary penalties and criminal offences to deter the use, possession, sale and development of electronic suppression of sales software designed to falsify records for the purpose of tax evasion.
We are also closing tax loopholes relating to character conversion transactions, synthetic dispositions, leveraged life insurance arrangements and other schemes, to ensure that everyone pays their fair share. If people want the benefit of being a Canadian, that involves paying their share.
To better promote economic growth, we have also extended the hiring credit for small business. It gives small business relief from the employer's share of employment insurance premiums paid in a year. It does this by crediting up to $1,000 on the payroll account based on the increase in an employer's EI premiums paid in one year over those paid in the year before. The simple aim of this measure is to encourage job creation in small businesses, which form the backbone of our economy.
Finally, once the budget is balanced, we will begin paying down debt again. As promised in the Speech from the Throne, we will bring the federal debt to GDP ratio back down to pre-recession levels by 2017. Deficit elimination, balanced budget legislation and paying down the debt are essential cornerstones of a strong and healthy economy.
In closing, please allow me to quote the C.D. Howe Institute and its reaction to budget 2013:
...the 2013 budget should be well received by markets. Budgetary balance is projected based on reasonable assumptions and within the previously announced time frame.
That quote speaks for itself. Budget 2013 has been well received by the markets, and Canada is one of the few nations retaining their AAA credit rating. It was one of the last nations into the recession, it came out of the recession quickly and in the past four years the economy has created over one million net new jobs.
This is great progress, but on this side of the House we are not content with that. We are eager for more. It is clear that the Canadian way of prudent fiscal management comprised of debt repayment, responsible stimulus, timely deficit elimination, balanced budgets in the medium term and returning debt to pre-recession levels is the way to address extraordinary economic times.
It lays the foundation for security and prosperity for years to come, in fact generations to come. I am encouraged to know that the nation my grandson, Tyler, is growing up in is safer, stronger, more prosperous and filled with opportunity.
