Debates of Oct. 19th, 1994

Taxation

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, my question is for the Minister of Finance. Instead of getting spending under control, the Minister of Finance has clearly announced that he is not giving up the idea of raising taxes. His document proposes a review of tax expenditures that affect mainly middle-income people, such as education tax credits, RRSPs, credits for charitable donations, credits for seniors, credits for married people, compensation for work accident victims-it is all fair game.

After hitting the unemployed and the very poor hard, how can the Minister of Finance now consider taxing the middle class more when he makes no reference in his paper to the scandal of family trusts and of tax shelters which benefit rich Canadians?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, all the hon. member just did, really, as I did yesterday, was to read the public accounts. Now we know that he can read. We now ask him to take a closer look, to make choices and to tell us what he thinks should be done. We also asked the member many times to give us his suggestions about family trusts. We asked him to participate fully in the debate, but all we hear are political speeches, not constructive suggestions!

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, yesterday we made some very specific suggestions to the Minister of Finance. And I even challenged him to apply them and to attack the problems that are out there: operating expenses and tax breaks for wealthy Canadians. That is where he must cut.

Under these circumstances, how can the Minister of Finance consider going after RRSPs when he refuses to touch family trusts and tax shelters? That is the question and it is outrageous that he is not doing it!

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, in the last budget, we closed the $100,000 capital gains loophole. That was the biggest tax break. We closed a great many corporate tax loopholes. We will certainly follow through in the next budget. Until then, the hon. member and his colleagues can make suggestions. Instead of making partisan speeches and praying to heaven, why do they not act as responsible members of Parliament and join the committee to really improve the lot of Canadians?

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, yesterday the finance minister admitted that the spending cuts contained in his last budget were not sufficient to even meet his own modest deficit cutting target. He admitted that unless another $3 billion to $5 billion in savings is achieved in 1995-96 and another $6 billion to $9 billion in 1996-97 he will not meet his target.

My question is simple and direct and I hope to receive a simple and direct answer. Where does the minister expect to get that order of savings?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development- Quebec]

Mr. Speaker, what I set out yesterday, among the various scenarios, was a scenario based on a prudent assessment of what interest rates are going to be and of the necessity to arrive at savings of $9 billion cumulatively over a two-year period.

As to where that is going to come from, I set out very clearly a list of all government expenditures, a list of all spending and tax expenditures. We have set in place a process of consultation which is unique in Canadian economic history. It is very important that the process work.

I ask the leader of the Reform Party and his colleagues who sit on that committee to give us their suggestions, to join in drawing Canadians out as we have to, to make the trade-offs.

It is crucial, in the period into which we are going and the budget into which we are going, that we build bridges to Canadians so there is a national consensus of the need to face up to the problems at which we are looking.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, the minister was told in the budget debate six months ago that his spending cuts were inadequate. He insisted that they were good enough. When interest rates went up, the minister was told by analysts, by officials in his department, by the money markets, that his deficit cutting was off track. He insisted he was on track.

The minister has repeatedly been advised over the last six months that his deficit control program is off track and how to fix it, but he has ignored that advice.

Why should Canadians believe that their advice would be listened to now?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development -Quebec]

Mr. Speaker, the leader of the Reform Party is engaging in a certain amount of revisionist history.

What took place in the House was members of the Reform Party consistently crying wolf and saying, within about two weeks after the budget, that we were going to miss our targets this year, that we should have a mini-budget in March, that we should have a mini-budget in April, May, June, July.

I do not know if they have ever run anything, but that is not the way a big institution works, certainly not the Government of Canada.

As we indicated yesterday, we are going to hit our deficit target this year for the first time in Canadian history.

If someone would like to talk about the last budget and how I feel, I am a little upset that the Prime Minister announced that business confidence was up. I was going to announce that. I am even more upset that the Prime Minister said that business confidence was higher when he was the finance minister than now-

[Jean Chrétien, Liberal, Saint-Maurice, QC]

Same level.

[Paul Martin, Liberal, LaSalle—Émard, QC]

On the same level. I would like to tell the Prime Minister that not only is business confidence up but that real exports are up to record levels, 17.7 per cent higher than at this time last year.

[Some hon. members]

Hear, hear.

[Jim Silye, Reform, Calgary Centre, AB]

Keep laughing while you go further in debt. Enjoy yourself now.

[Some hon. members]

Oh, oh.

[The Speaker]

I love these Wednesdays.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, the truth is that the Liberal cabinet has not the foggiest notion of how to balance budgets and Canadians are paying the price for it.

Reformers in the House know that the Minister of Health cannot read a financial statement, that the Prime Minister does not know that jobs are created by deficit cutting and not public spending, and that the Minister of Human Resources Development has never balanced a budget in his entire political life.

How much more are Canadian taxpayers going to have to pay while high spending Liberals learn the elementary lessons of fiscal responsibility?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development -Quebec]

Mr. Speaker, just a slight correction. I believe the Minister of Health is an accountant. I have never said very much about accountants, but I think they can read balance sheets. In fact she is a very good accountant.

We have offered members of the Reform Party the opportunity time and time again to set out before us what they would do. We gave it to them in the prebudget debate and they did not take advantage of it. We gave it to them this summer and they did not take advantage of it. We have given it to them over the last two days. What we are saying is this: You now have a unique opportunity to lay in front of us what the Reform Party would do, and we are looking forward to the details. I was going to say one other thing before I was so rudely interrupted. Mr. Speaker, I would like to tell you that manufacturing shipments are also up. We have just had the strongest six months growth since the start of the recession.

Social Program Reform

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, my question is for the Minister of Finance. In his grey paper, the minister admits for the first time that he intends to make major additional cuts in the social program reform, on top of the $7.4 billion cuts announced in last spring's budget and which have largely been approved already.

Now that the Minister of Finance has confirmed that he will cut billions more at the expense of the poor and the middle class, the question is: How many billions?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, we made it very clear in the budget that, in 1996-97, transfers to provinces would be frozen to the 1993-94 level. This was also confirmed by the Minister of Human Resources Development in his document.

We said that a review of the UI program was in order and that it would be the second stage of the reforms undertaken. Again, this was confirmed by the Minister of Human Resources Development. Make no mistake about it: We will definitely have to cut in all government spending.

The Minister of Human Resources Development is holding consultations right across the country and the finance committee will conduct the same exercise. I do hope that members opposite will make suggestions. Indeed, instead of just yelling they should make useful suggestions.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, how can the minister announce additional cuts of billions of dollars in social programs without being more specific, when the consultation process on the social policy reform is barely getting underway?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, I suggested that the hon. member read not only the grey paper, but also the first document, which is mauve as you can see. She will see that the policy statement is very clear: we have to improve government finances in order to protect our social programs.

Obviously, we cannot let international markets tell us how to build our country. Again, it is to protect our social programs that we are undertaking a true structural reform and I hope that the hon. member will come before the committee to make suggestions. I will welcome them.

The Deficit

[Stephen Harper, Reform, Calgary West, AB]

Mr. Speaker, on February 23 of this year I asked the Minister of Finance to admit that if he provided realistic economic projections in his budget, as a result of that budget the deficit would not go below $30 billion in the third year and would remain close to 4 per cent of GDP. The minister replied: "The answer is quite the opposite. Absolutely we will attain the 3 per cent of GDP".

Yesterday the minister admitted that my original assumption was correct. Will he tell the House why he did not know what he was talking about when he presented his budget projections in February?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, there obviously is a little confusion here. The member says that I did not know what I was talking about in the House yesterday. I was not in the House yesterday.

Perhaps these might help. The fact is-

[The Speaker]

Order. We would prefer that there not be any props.

[Paul Martin, Liberal, LaSalle—Émard, QC]

I wish they were props, Mr. Speaker.

The fact is that we have been unequivocal. The Prime Minister has stated it unequivocally. All the members of cabinet and all the members on this side and on that side of the House have stated it unequivocally. We are going to hit our target. If there should have been any doubt about it, there could not have been any doubt after yesterday with what this country is going through.

[Stephen Harper, Reform, Calgary West, AB]

Mr. Speaker, perhaps the minister missed the English translation. What I said was that the minister made precisely that statement about his February budget and he was wrong just as every finance minister with weak intermediate targets-Marc Lalonde, Michael Wilson, Don Mazankowski-have been wrong in the last 10 years on this very subject.

When will the Minister of Finance admit that a two stage approach to this problem will not work? Will he admit that it is not possible to jump over a wide chasm in two short leaps?