Mr. Speaker, although I have spoken many times in the House during members' statements and question period, I am pleased to rise in the House for the first time without a severe time constraint in response to the debate on Bill C-14.
I would first like to offer my congratulations to you on your appointment as Deputy Speaker of the House. I also congratulate all members of the House on their successful campaigns, especially those members who have been re-elected. During a time when the public is growing more wary of politicians being returned to Parliament that is a feat worth noting. It should be an interesting and productive Parliament.
My thanks to the constituents of Kootenay West-Revelstoke for the confidence they have shown in me to be their representative here in Parliament.
I will not take the usual time to wax eloquent about the beauty of my riding. Those who are from there know how incredible it is. Those who are from other places are mistaken in believing that theirs equal it.
It is not the intention of the Reform Party to criticize the government just for the sake of opposition as was often the style of opposition parties in the past. We will be the first to acknowledge good legislation when it occurs. Likewise when we do not agree with the government position we will try to offer constructive alternatives.
We want this Parliament to work for all Canadians, not just whoever makes the best speech from time to time. We stand prepared to work with the government and co-operate on any legislation that is in the best interests of the citizens of Canada.
Bill C-14 is somewhat of an enigma. I recognize on one hand that the government must have funds to operate during the ensuing period of awaiting the arrival of some of the tax dollars Canadian taxpayers have been sentenced to pay. On the other hand I am in a position in which I cannot in good conscience vote to support providing the government with its first instalment of an unacceptable level of spending. What is the alternative?
The alternative is to have come out with a budget based on spending reductions leading to a balanced budget and ultimately tax reductions. Had this been done Canadian taxpayers, myself among them, may not have felt the same level of hostility about the lack of restraint by the government. I would have been able to support this bill to temporarily borrow funds for reduced levels of spending.
Whenever someone goes to the bank or another financial institution to borrow money, the first thing the lender does is to look at the ability of the borrower to repay the loan. The Canadian government goes to a lot of lenders these days. I can assure members that these lenders look very closely at Canada's ability to repay the loans and they do not like what they see.
When these lenders look at Canada, do they see a borrower who needs to borrow to fulfil a short term shortage?-not likely. Canada has been in debt since the first world war. Do they see a borrower that is paying off its loan? Again the exact opposite is true. Not only are we not paying off our loan, we cannot even pay any of the interest on it.
In 1993 we were going into debt at the alarming rate of $56,000 a minute. Now one year later and four months into the new Liberal government we are going into debt at the rate of $84,000 a minute. It would be bad enough if the rate at which our debt was increasing had not improved, but in reality we are heading into a national debt hole we may not be able to get out of, at the accelerated rate of 50 per cent faster than one year ago. This is hardly something to inspire the confidence of the international lending place.
Do these lenders see a borrower that is expanding its business so as to be more profitable at some point in the future? There is no question that in the new budget the government intends to increase its revenues. Does this really relate to the equivalent of a business increasing its profits?-hardly. A more fitting analogy would be a situation where a business proposed to charge higher prices for its goods or services with absolutely no indication that anyone would or could pay this inflated price.
The government's utopian projections are based on so many variables that even a fanatical optimist would be shaken.
The next thing a lender looks at is the credibility of the main players in the company. They want to see if those major players are likely to lead the company to success and solvency or to greater debt and bankruptcy.
If the lenders look at the main players in the government, who do they see? They would see the Minister of Finance, the main financial officer of the government who went on a great tour of Canada to find out what Canadians wanted them to do. An overwhelming number of those consulted and not consulted said we should cut the spending and we should not raise taxes.
What did Canada's chief financial officer do? He increased government spending by $3.3 billion. He relied on increased revenues, taxes, to make up the difference in the spending hike, the exact opposite of what Canadians asked for. If he was not going to listen to what Canadians said, why then did he go through the sham and the expense of these hollow hearings?
Who were these Canadians who spoke out against increased spending and taxes? They were everyday Canadians who turned out at meetings across this country. They were small business owners and major corporations. They were organizations like the Vancouver Board of Trade, the British Columbia Chamber of Commerce, the Fraser Institute and the Canadian Taxpayers Federation. They were publications like Maclean's , the Vancouver Sun , the Toronto Globe and Mail and the Financial Post . They were economists and financial experts from across this country.
Even a member from the government side of the House was compelled to rise in defence of his own constituents. He pointed out to the Minister of Finance that if he had somehow heard Canadians state that they welcomed tax increases as he claimed they did, he did not hear it in the member's riding.
If the lenders looked at the CEO of the government, the Prime Minister, what would they see in terms of assurance, of the will and the expertise to bring the country out of its financial crisis? They would see a former Minister of Finance in whose hands the debt of this nation rose by 60 per cent during the two fiscal years he held that position.
During the week following the release of the 1994-95 budget figures the Prime Minister went on a national tour to sell this spending package. During an interview in Calgary in which it was very obvious the package was not selling well, the Prime Minister retorted that this was not a Tory budget nor a Reform budget nor an NDP budget; it was a Liberal budget. Of this there can be no doubt. It has always been the philosophy of the Liberal Party to tax and spend and in this it certainly has been true to its own philosophy. The question is can it work? The answer is a resounding no. The problem now is how do we get this point across to the main players of the government.
Let us suppose for a moment that these two people were mere mortals like the rest of us. Let us suppose they had a house with a mortgage, a car loan, children going to college who needed financial help. Let us suppose they had a paycheque with an ever decreasing disposable income and an economic future that held very little security. Can either of them honestly suggest that if they were in that situation they would support an increase in the very taxes that drained the lifeblood from them, their families and their future? I think not.
Would the Minister of Finance operate a company with the huge debt and interest payments this country has? Would he maintain inefficiency and duplication in that company by paying out more than required for various services and by expanding the company in areas that would lead to more debt without any increase in revenues or relief of the overall problem of the debt? Not very likely.
Why then is he offering this as a solution to the identical problems of this country? Why is he going to the Canadian taxpayers by way of their elected representatives and asking for the authority to begin this great spending plan by borrowing money for round one?
An explanation of the cause of this country's debt is not some great mystery like how they get the caramilk inside the chocolate bar. It is very simple for anyone who takes the trouble to look at the problem.
Canadians are looking at two problems: unemployment and debt. To solve these problems we have to decide if one causes the other and if so, which one to remove to solve the other.
If the government were to incur enough new debt to put every person in this country to work would that solve the debt problem? Of course it would not. If the country were able to get rid of its debt which is eating up our tax dollars and screaming ever louder for more would employment return? To answer that let us look at the unemployment problem and how it got so bad.
As this country's debt became larger and larger so did its appetite for tax dollars. When taxes go up, individual Canadians have less disposable income to spend on Canadian goods and services. At the same time when the taxes of Canadian companies go up, it is reflected in the price of their products. This makes it even harder for Canadians to purchase those products and also makes it difficult for these companies to compete with their international trading partners.
As a result, these companies have to shut down non-profitable sections of their operations and streamline the remaining operations. This results in the laying off of a great number of Canadian workers.
The solution then is to reduce the government's appetite for these tax dollars by reducing spending, balancing the budget and then working toward the reduction of taxes in this country. Simply put, this will provide individual Canadians with more disposable income with which to purchase Canadian goods and services. It will reduce the cost of these same Canadian goods and services and will make Canadian companies more competitive with their international trading partners.
It stands to reason if Canadian companies are able to market more products profitably they will expand and hire Canadians instead of closing down and laying Canadians off. Is this a
simplistic solution? Of course it is, but it is the only one that will work.
Maybe part of the problem is that everyone wants to find some complex, earth shattering solution which puts their own personal stamp on the recovery. The real solution does not belong to any one party or person. It is a matter of facing reality and reversing the disastrous actions of the past. Maybe then Canadians would not be so reluctant to approve temporary borrowing authority.
What we should do is take an honest look at how we got into our current financial mess. In the past the vote of Canadians has been for sale and the politicians of the past have bought that vote.
They bought it with overly generous social spending; not overly generous for those in need but overly generous for those not in need. They bought it with subsidies to business; not all business, only specially selected businesses that were in a position to aid the politicians or parties providing the grants. They bought it with subsidies to crown corporations in answer to special interest groups. They bought it with grants to those same special interest groups instead of requiring them to get their funding from those they claimed to represent. They bought it from rich or politically well connected individuals with promises of plum patronage appointments. Then they made good on those appointments.
Why would anyone act in a manner that is so detrimental to the needs of all Canadians?
In the politics of the past, with exceptions, there have been two rules. The first is to get elected and the second is to stay elected. Nothing else mattered. Now we have to pay the price. We have run up a debt of over half a trillion dollars and we are increasing that debt by $1 million every 12 minutes.
If government members want to restore public confidence in them and get the country on its feet, they must alter the budget by reducing the government's spending and balancing the budget within the term of the 35th Parliament of Canada.
The country will balance its budget and start paying off its huge debt in the foreseeable future. That is not in question. What is in question is the manner in which it will be done. We can choose to start now selecting the methods and speed with which we implement the program of financial responsibility, or we can wait as New Zealand did and have someone else make those decisions for us. Some might scoff at the idea of comparing ourselves with New Zealand and they would be right. The truth of the matter is that we are now much worse off financially than New Zealand was when it was forced to deal with its financial crisis.
Could the government have made a significant reduction in spending in its first budget in 10 years? I bet it could and I suspect more than one of its members would like to follow that course of action.
The areas in which the government could have reduced spending in its budget are numerous. I will list but a few examples of what could have been accomplished. Budget cuts in government operations will save $470 million. A reduction of 15 per cent of non-salaried overhead is achievable and would save $1.25 billion and the elimination of low priority government functions would save hundreds of millions more.
The budget reduced business subsidies by $120 million. Business subsidies are selective and available only to the chosen few. It would be far better off to eliminate all subsidies totalling up to $5 billion and work toward general tax deductions instead. If this had been done, the elimination of the capital gains exemption and tax increases on medium sized Canadian businesses would not have been necessary and job creation would have been stimulated, not discouraged. Instead of spending money to study funding of special interest groups, it could cut that funding, saving half a billion dollars a year.
Reductions of supplements for senior citizens who have a higher than average income is not an unreasonable concept, but the government should have looked at family income rather than at individual income. An income of $26,000 a year is not particularly high, but if a couple has $52,000 a year income a reduction of non-contributory income or credits is not unreasonable. In that area refocusing of the old age pension on people with family income below $54,000 a year would save $3.5 billion. A 25 per cent reduction in the subsidy of crown corporations would save $1.25 billion a year.
The government knows well that we have many other spending reduction proposals. I am sure it has many in mind. The few I have listed would have resulted in a reduction of this year's deficit by $10.5 billion. If the government complemented that by eliminating the spending increases in the budget, we would have had a deficit this year of approximately $26 billion. Had the government followed this course of action, I believe it would have won the approval of an overwhelming majority of taxpayers and I would have been able to support Bill C-14.
It is not too late. If the government is now ready to accept the $153 billion spending cap proposed by the Reform Party in the throne speech debate, I would be pleased to support the government's bill to borrow money for necessary spending.
