Mr. Speaker, I rise today to add my voice to those of my colleagues who lament the government's budget of February 22. This budget is not a disappointment as some members have suggested. It is a disaster.
The government says it wants to create jobs, yet this budget is disastrous for job creation. The reason for this is the heavy burden of taxation everyone in Canada faces now and in the future as a direct result of the failure to curb government overspending.
The Canadian Chamber of Commerce says that taxes are job killers for its 170,000 members. For every dollar the government taxes away, it is another dollar lost which could have gone toward job creation. Furthermore, the budget is disastrous for export trade because it stunts our ability to take full advantage of a golden opportunity.
We have just signed two very important trade agreements, NAFTA and GATT, that lower tariffs for our products around the world. I heartily commend this government for its role in those agreements.
Our Department of Foreign Affairs and International Trade has been doing an excellent job in developing markets abroad. Canada has gained a good reputation as a leader in helping the GATT to be established after the second world war and now the new world trade organization.
However our efforts are futile if we cannot give our industries a fair chance to compete. Our companies, small, medium and large, which have to break into and develop these foreign markets cannot do so effectively. They are hampered by disappointing results at home. They are hampered because our government will not act responsibly in fiscal management. They cannot sell strongly into their domestic market because their consumers are overtaxed and the cost of doing business is so high. That leaves them with limited resources to operate aggressively abroad.
At the moment our major trading partner, the United States, to whom 80 per cent of our exports go, is experiencing incredible growth. Our economy is also starting to pick up, led by promising increases in our exports.
If only this budget could have given a strong signal that we were getting our fiscal house in order the response from our business sector would have been incredible. The incentives would have been there to invest and take risks. The incentives would have been there to expand and hire new employees because the promise of tax relief would have been just around the corner.
By failing to deal with the deficit we are missing a golden opportunity to move further and forcefully into export markets. Canada is a trading nation. We simply do not have the population to warrant economies of scale that many businesses need. Our ability to be competitive internationally is crucial to our ability to grow and create jobs.
The Canadian Chamber of Commerce is presently doing a massive poll of 2,000 corporate members and 1,000 entrepreneurs. The purpose of this poll is to identify obstacles to job creation. Business people have been asked to list the five things that would improve their ability to create jobs. Guess what heads the list of responses: getting the federal debt and deficit problem under control.
The reason for this is that deficits and debt have caused the government to overtax our citizens. In fact personal income taxes have more than doubled in the last 10 years. Excise and sales taxes have gone up by almost 75 per cent. That means consumers have less disposable income. It also means Canadian companies face a smaller demand at home.
It was reported in the Globe and Mail this morning that Canadian individuals and corporations are the most heavily taxed in the industrial world, with the exception of France. This statement comes from our own Deputy Minister of Finance.
What is more, the $500 billion debt and the burden of refinancing approximately half of that every year crowds out other borrowers. When the federal government borrows huge sums of money it competes with private industry for the available capital. That reduces the amount of money available to finance private business expansion. It also drives real interest rates far higher than they should be.
Seventy per cent of the businesses reporting to the Chamber of Commerce survey are saying that the cost of business in Canada right now is much higher than in other countries. That is alarming. What is worse is that preliminary findings show that 22 per cent of the respondents intend to relocate all or part of their businesses outside of Canada because of high taxation and the cost of government regulations.
When taxes are too high businesses simply cannot survive and be competitive outside Canada. Many are forced to pass these taxes on through higher prices. If that means they cannot sell their products abroad they might as well move to where the cost of doing business is less.
This budget should have started the process of lowering government spending. That did not happen. Instead government spending increased. The promise that next year it will happen or maybe the year after it will really happen is not good enough.
There are lots of areas where cuts should have been made. Obviously social programs which consume a major share of the federal budget should be targeted to those who need it the most.
The leader of the Reform Party and others in the Reform Party have spoken of this already. This budget should have shown Canadians that government was really serious about job creation. We all know, or at least we should know, the private
sector, particularly small and medium sized businesses, creates jobs, not government.
This budget should have shown Canadians and the international community that the government is serious about tackling its huge deficit. If the government cannot bring its spending into line with revenues, how on earth are we ever going to handle the growing debt? In fact the international community is now responding to its concern about our failure to control government spending and overspending.
Canadian interest rates are rising. A good part of the reason for this rise in rates is the lack of confidence internationally in our ability to finance our debt. Higher interest rates mean it will cost more to refinance the federal debt and this will only compound our problem.
The way to job creation is to stop overtaxation. Let us not make our Canadian businesses have to compete with one hand tied behind their backs. The way to tax relief is to stop government overspending, not next year or the year after, but now.