Mr. Speaker, this is the fourth day of debate on the 1994-95 budget. According to this budget, expenditures will reach $160.7 billion, which is $39.7 billion more than the anticipated revenue.
While the expected deficit should be 0.2 per cent lower than in 1993-94, it still remains an enormous burden for Canadians, and particularly for the middle-class and the poor.
Indeed, this budget asks the unemployed to tighten their belts even more. It asks the middle class to forget about salary increases, even though this has been the case for the last four years. It asks the elderly to accept smaller pensions. It asks small businesses to still wait for an economic recovery which will come of course when the recession ends. It asks municipalities which, in many cases, cannot afford it, to get even more into debts to improve their infrastructure and create a few thousand temporary jobs.
However, this budget reassures the well-to-do by maintaining most of the benefits which will enable them to increase their wealth as well as the gap between them and their less fortunate fellow Canadians. The rich will continue to get richer by taking advantage of tax shelters. Wealthy families will continue to avoid paying taxes, thanks to the maintenance of family trusts. Similarly, major corporations will continue to cash in millions in non-taxable profits, thanks to tax havens. The 90,000 companies which, in 1987, realized profits of $27 billion without paying any taxes, according to professor Léopold Lauzon, will carry on their operations without having anything to fear from the tax man. The underground economy will be able to continue to prosper.
Yet, according to the Association of Canadian Distillers, liquor smuggling alone results in an annual loss of $1.2 billion for the various governments in Canada. Last November, Gallup conducted a survey to ask Quebecers and Canadians if they had contributed to the underground economy in the 12 previous months. Thirty-three per cent of Canadians and 42 per cent of Quebecers candidly admitted to having paid cash for purchases, so as to avoid paying applicable taxes.
In fact, it looks as though it is perfectly acceptable to promote the emergence of two classes of citizens: the poor who have trouble meeting their basic needs, and the rich who live the life of Riley. The noble definition of just society advocated by the federal Liberals since the days of Mr. Trudeau has very little to do with the reality experienced by Canadians as well as with their perception of that notion.
The deficit is a chronic problem for which the federal government is the primary responsible, since close to 80 per cent of the total public debt in Canada is attributable to it. Yet, the Auditor General tells us that, for several years now, the federal government has been doing a rather good job of monitoring its budgetary expenditures. This was also the case at the end of the Conservative administration. So where is the problem?
To understand the root of the problem, you have to realize that this federal debt results from the accumulation of deficits over time. If we look at the evolution of the deficit in relation to the GDP, we can see that the debt really grew primarily under Liberal governments.
Indeed, from 1970 to 1985, the debt-over-GDP ratio went from a surplus of 0.3 per cent to a deficit of 8.5 per cent, an all-time record.
Usually, increases in budgetary revenues tend to follow a rise in GDP. However, during the 1992-93 fiscal year, the federal government's budgetary revenues fell by 0.41 per cent, despite an increase of 2.6 per cent in GDP during the same period.
The trend has continued. According to the forecasts of the Department of Finance, budgetary revenues will decline by 3.74 per cent or $4.592 billion during the 1993-94 fiscal year. This was abundantly confirmed by the results for the first eight months of the current fiscal year, since federal budgetary revenues were down 5.2 per cent, from the same period in the previous fiscal year.
During the second and third quarters of 1993, GDP increased 3.6 per cent and 3.7 per cent, respectively, on an annual basis. The decline in revenue is largely attributable to a decline in personal income tax payable, another indication Canadians' fiscal threshold had been reached.
Despite the extent of the deficit and the national debt, Canadian taxpayers may be willing to make additional sacrifices, provided all members of society and all economic partners do their fair share. And also provided that those sacrifices will be used solely to improve their individual and collective economic situation. As a guarantee to Canadians that this will indeed be the case and that the objective will be achieved, the government should immediately put in place mechanisms that will inform Canadians quickly and accurately on the state of the economy.
Since so many complex factors are involved, it is not easy for the average person to get a clear picture of the country's financial situation. Since the experts often disagree on the best way to deal with the economic situation, I realize it must be hard for the average citizen to weigh his own immediate interests against the broader, long-term interests of the country.
However, we must not underestimate the ability of average Canadians to make up their own minds if they are given clear and precise information or a number of simple indicators. As was pointed out by the Auditor General in Chapter 5 of his report to the House of Commons, it is important the government provide Canadians and their elective representatives with the appropriate tools they need to grasp the essence of the problem.
Simple tools and periodic information must be made available to Canadians so that they can evaluate the government's forecasts and its achievements. Any discrepancies between the two should be explained to them.
Canadians must be told with delay about the impact their future choices will have. For example, if it had been properly explained to them that the revisions to the 1992 economic plan made in the 1993 budget would mean an $8 billion increase in the projected deficit for 1993, if they had been told clearly that this would translate into an increase of $65 billion in the total debt six years down the road, then they would have understood that the government's objectives sometimes have considerable future cost implications.
The more Canadians know about the state of the government's finances, the less chance they have of being taken in by questionable interests. Better still, they will understand when the time comes to make difficult decisions.
In conclusion, let me just say that if this government honestly believes that it can achieve the economic and financial goals set out in this budget, then it should have the courage of its convictions and immediately provide the public with adequate evaluation mechanisms so that all Canadians can judge for themselves well before the next election whether they made the right choice when they democratically elected this government.