Mr. Speaker, I will be pleased to give my speech.
I am pleased to participate in this debate on Bill C-59, an act to amend the Income Tax Act and the income tax application rules. Last February the Minister of Finance told this House that he was restoring fiscal sanity to government.
That budget was about jobs for Canadians now and lasting jobs for their future. More important, that budget also offered Canadians for the first time in memory real deficit reduction and comprehensive changes to government programs.
Guelph-Wellington residents are concerned about their future. They know that in the past governments have overspent. They are also concerned that our current debtload includes increased borrowing from foreign lenders. They see their money being sent abroad and they would prefer that we concentrate on programs that will encourage domestic growth.
They know that the only way to show the world that Canada is committed to real deficit reduction is to prove our commitment to fiscal discipline. This bill is an example of this commitment and I am sure that all members of Parliament will want to support this government in these measures.
Guelph-Wellington residents voted Liberal because they know we promised to bring the deficit down to 3 per cent of GDP in three years. That is a real commitment we intend to make. They knew then and they know now that the Reform Party does not have the plan for deficit reduction. They know that the Reform Party has admitted that Reformers have no idea what impact their ideas for spending cuts will have on Canadians.
Guelph-Wellington residents want spending cuts and government action to be wise, made with their well-being in mind. They want a government that is serious about its commitment to Canadians.
Let me remind this House that our program of net spending reduction over the next three years is the most significant of any budget in a decade. Eighty per cent of the net fiscal improvements set out by our government will be from spending cuts.
These cuts as demanded from my constituents and constituents all across Canada will reduce the operating budgets of government departments by $400 million in the next fiscal year, with savings rising to $620 million annually in 1995, 1996 and beyond.
As well, the extension of the freeze in government salaries including those of members of Parliament will provide an additional saving of almost $1 billion annually by 1996-1997.
We have extended our ideas to include all facets of government. Grants and contributions made by government including foreign aid and grants to businesses have also been trimmed for savings of $253 million this year and $409 million in 1996-1997.
Changes to unemployment insurance will reduce expenditures by $725 million this year and $2.4 billion annually thereafter. We are reducing. There is no question. We are making changes to our social security system. These changes are necessary in order to respond to a different and more challenging society.
In an earlier speech in this House I outlined the support that my constituents have shown for changes to social security. They know that I as their member of Parliament and we as government are listening, but they also know we can no longer provide everything to everyone.
Social security changes like those announced to unemployment insurance will recognize our diverse society, our difficult economic situation and our commitment to ensuring that our children, and my children, have a future.
Our budget is about co-operation. We have launched various consultation initiatives asking Canadians what they want in our future. These consultations have been welcomed by my constituents. They also welcome co-operation with the provinces and local levels of government which study reforms and test new approaches. The challenge for deficit reduction and wiser spending is not only going to result from spending cuts but also from revenues.
My constituents have told me that taxes are too high and I agree with them. Lower deficits will mean lower taxes. People in Guelph-Wellington do not mind paying taxes as long as they are fair and as long as they know the money is well-spent.
Bill C-59 answers some of those concerns. Included in this legislation are changes to the corporate tax system that make it fairer and also allow it to better target the tax assistance made available to certain businesses. These include the reduction in the business income tax deduction and GST credit for meals and entertainment expenses; the elimination of certain tax preferences aimed at small businesses that are utilized by some large, private corporations; the elimination or reduction of certain regionally based investment tax credits that have not been cost effective in attracting new investment.
This legislation is about tax fairness and further broadening the tax base. For example, the full value of employer paid life
insurance premiums will now become taxable. This will remove the advantage that people with corporate plans enjoy over self-employed Canadians or those whose employers do not offer insurance benefits.
The $100,000 lifetime capital gains exemption will no longer be available for gain realized after budget night. The income tax credit provided to persons over the age of 65 will be income tested, affecting one out of every four seniors in Canada.
This legislation also modifies the provisions of the home buyer's plan, extending it indefinitely for first time home buyers, a move welcomed by real estate people in my area and all across Canada.
The 1994 budget and this legislation are only the beginning. These fiscal measures are but the beginning to our efforts to reach our goals. Action must be taken. Our response must be comprehensive and wide reaching.
Last year we spent $38 billion on interest payments, money my constituents believe could have been used for programs and services. My constituents have asked me to come to Ottawa and end the past excesses. Most are prepared to do without certain government services if it means we really make an effort to end that cycle of deficit and debt.
Our government is committed to action. We will meet our budget targets. There is no question. We have put an end to unrealistic projections. We are serious about meeting our commitments to the Canadian people. The measures included in Bill C-59 deserve speedy passage so we can move on to the next stage of our fiscal challenge. This legislation includes significant measures that will improve the fairness of our tax system while at the same time improving our fiscal situation.
These measures originated in last February's budget. This was a budget that took concrete committed action to bring government finances under control, action that is an essential step in Canada's economic revitalization.
My constituents heard the message in February. They accepted it during the last election. My constituents want a return to fiscal sanity. If we accept the challenge of fiscal management we will not only restore our faith in ourselves, but we will have made a real step in ensuring that our children will have faith in us because we have acted for them and for their future.
We cannot turn back, and this legislation today calls for our support.