Madam Speaker, I rise today to address Bill C-54, an act to amend the Old Age Security Act, the Canada pension plan, Children's Special Allowance Act, and the Unemployment Insurance Act. While the acts which the bill amends represent a significant portion of the federal component of Canada's income support system, the amendments are classified as minor administrative changes. Bill C-54 seeks to improve administrative efficiency.
The Reform Party is supportive of efforts by the government to streamline the delivery of services to the public. Any streamlining is more than welcome. What Reform members would ultimately like to see is an immediate overhaul of the programs to ensure long term financial sustainability for Canada's entire social security system.
The massive debt that has accumulated and the interest payments needed to service that debt taken out of every year's budget have been increasing yearly. The portion of the federal budget pie that goes toward social programs has been shrinking as a direct consequence of the federal debt and the accompanying interest payments. That is why the Reform Party constantly states that the debt is the nation's number one problem and is the greatest threat to our social programs.
Our position has been misinterpreted, misconstrued and misrepresented. We have been portrayed by government and those on the left as ogres with axes in our hands, ready and willing to swing those axes any time we get near social spending. This characterization is grossly unfair.
What Reformers have realized and realized over a year ago is that if we continue on the road of excess debt and borrowing our social programs will by necessity have less and less of the federal pie every year. The longer we ignore the debt problem, the worse the situation becomes for our social program.
The Minister of Finance, in his two-day presentation to the finance committee, presented a good analysis of the way in which the debt affects our economy, our standard of living, our social programs, and it was all for the worst. The minister outlined how the debt begins a vicious circle. I would like to quote from page 3 of the presentation the minister made on Tuesday, "Creating a Healthy Fiscal Climate":
Interest on the debt is doing more than shackling our finances. It is putting a damper on growth and jobs. Lenders looking at our debt demand a premium. That means higher interest rates. Higher interest rates dampen consumer spending and business investment, hurting potential growth and jobs. That in turn reduces the revenue government receives and increases our spending on social programs, increasing the pressure on our deficit. Those higher interest rates in and of themselves also add to our debt charge as we borrow to pay for the higher interest. Those higher levels of debt then put more pressure on interest rates to rise. And the vicious circle goes on and on and on.
I commend the minister for attempting to lay aside partisan politics in his analysis of the effects of the debt. He can expect constructive support and guidance from the Reform Party for viable efforts to control the deficit. He can also expect calls from this party that his own target of 3 per cent of the GDP, a deficit of approximately $25 billion in two years, is simply unacceptable. It is also unacceptable by his own analysis of the negative effects on the debt. For the sake of long term financial sustainability of our social programs the government should set a goal of zero deficit by the end of this Parliament.
The Liberals ran and by many accounts won the election on the issue of job creation. Their main proposal was the $6 billion infrastructure program intended to simulate job growth in the entire economy. The Liberals saw the program as the key to restoring hope and dignity to those on government assistance.
Reformers on the other hand have consistently put forward the view that the best stimulant for job creation and decreased government dependence is a serious attack on the deficit and the debt. By reducing our deficit we will be setting in motion positive effects that will create jobs which will in turn provide less demand on some of our social programs.
I want to quote the Minister of Finance once more on this subject:
Facing up to the debt challenge is the keystone of a responsible economic policy. If we fail at that, we will fail at everything else. It is not a question of focusing on jobs or the debt. It is question of focusing on both. The debt stands in the way of the growth we seek; in a very real way, it limits our economy's ability to create jobs. The fact is that we will not get the quality of growth we need to generate jobs we want until we gain control of the debt, until we have broken the back of the deficit.
I must applaud the government on the progress it has made in its thinking on this subject. In the first few months of Parliament the Reform Party's views on the debt and cutting of spending were characterized as letting people starve. Now our views are being repeated and strongly emphasized in the process by the Minister of Finance.
My point in talking about the debt is trying to explain its effect on social spending, the so-called vicious circle I referred to earlier. For just as there is a vicious circle for high debt and excess borrowing, there is also a good or a positive circle if we reduce the debt.
The lower the deficit and the debt, the lower the interest rates. Lower interest rates mean more consumer spending, business investments and increasing growth in jobs. That in turn increases employment and decreases reliance on social assistance giving people the opportunity and the dignity to work. The decreasing reliance on social assistance means less pressure on social programs and less pressure on government revenues.
Cutting the deficit is not an end in itself. It is a means to an end. That end is stronger growth, increased employment, decreased dependence on government and perhaps, dare I say it, lower taxes. However reaching these goals requires cutting spending and any real cuts in spending will include cuts in our social programs.
We in the House should be honest and recognize that the present social security reform discussion the minister of human resources has started is not only about reform but is also about saving money. Unfortunately after a year in the House it is only a discussion paper. It would be more preferable to be an action plan.
The most basic, most effective way the government could save money in this area without hurting the most unfortunate in our society is to target our social programs toward those in the most need. Applying the concept of universality to every social program we have simply undermines the long term financial sustainability of our social programs.
Another basic principle that should be applied to social programs is that they should be meant to be temporary measures to help those who are down, not permanent measures to create an unhealthy dependence on government.
In conclusion, the best course of action the government could take to ensure the survival of our social safety net is to upgrade its deficit reduction targets and to design social programs to target those most in need.