Mr. Speaker, I am pleased to rise today to speak in the debate on Bill C-17. I might point out that although I have spoken many times during the questions and comments periods of the debate, I find it hard to believe this is my first speech in the House. I hope all the folks back home in Prince George-Bulkley Valley are watching today.
In my address today I am going to acknowledge some of the good points of the budget, which I think is appropriate. Our party is not here simply to criticize. Where credit is due we certainly will applaud.
Accordingly I must inform the House that in our opinion there are very few good points in the budget, so a great deal of this address will deal with many of the problems in the budget generally and the negative effects that we feel it is having and will continue to have on the economy of the country.
First, I congratulate the government on certain aspects of Bill C-17 which indicate at least some fleeting recognition of the necessity to curtail government spending within the public service and in the area of transfers to persons and provinces. For example, the government has extended an existing salary freeze for public service employees and has frozen the salaries of members of Parliament. I applaud that. The government has also frozen transfers to the provinces under the Canada assistance plan for the fiscal years 1994-95. As well, amendments to the unemployment insurance lengthening qualification times may encourage some firms to hire and may discourage the abuse of the system.
On that point, it possibly would have been appropriate if the government had looked at putting a hiring freeze on the public service sector as well and let attrition actually contribute to this effort to cut costs in the public service sector.
Clearly these actions could be representative of a step in the right direction. There is some indication that the government recognizes problems surrounding expenditures devoted to public sector salaries, transfers to the provinces and social programs.
Unfortunately this is where the government's foray into the realm of reality ends. Despite repeated warnings from domestic and international investors there has been no significant reduction in government spending. Overall government spending has increased. The reaction of the markets in recent times reflects the government's continued neglect to address the financial problems of Canada in its recent budget.
On April 22, 1993, the present finance minister questioned the Conservative government on its budget. At that time he stated that the Conservative budget was a stop-gap budget that did not address Canada's real needs. I suggest to the Minister of Finance that perhaps he should apply his past comments to his recent budget. In so doing he may just come to an understanding as to why the financial markets have reacted in the way they have. Quite simply, the budget brought down by the Liberal government does not address Canada's real needs.
It is my opinion that the Liberals are on course to add $100 billion to the national debt over the term of their mandate. The consequences of that will cause severe stress to our economy. Specifically it could translate into such excessive tax increases that the Canadian consumer will be left with a severely deflated disposable income and those who would invest in this country, the investors and the developers, would end up having a zero comfort zone.
Our standard of living and our way of life would begin to become dramatically downgraded. The people of the country could be transformed into minions of the state, simply working to feed the government and its insatiable spending habits.
Some forecasters predict that government growth could be the strongest among the G-7 countries in 1994. I believe industry is looking to the government for stability in politics and in taxation so that as a result of the forecast it may begin to develop this comfort zone and take any advantage it can of any upswing in the economy.
Unfortunately it is not the intention of the government to allow industry to have that comfort zone and it has been demonstrated in the recent budget. The government appears to be well on its way to being a major deterrent to economic recovery in Canada as a result of the budget. Nowhere is it more pronounced than in the budget.
It is the opinion of our party and of millions of Canadians that we need serious cuts in federal spending if we are ever to transform Canada into an attractive country for investors. As well we need serious cuts in government spending and some clear indication that the government is getting its financial
house in order if the consumers of the country are ever again to develop any measure of consumer confidence.
The government has introduced some cost cutting measures. However the government will still be running a $40 billion deficit this year. This is because it has introduced 18 new spending programs and 15 new studies.
In the budget speech the Minister of Finance stated that people told the government it should freeze spending and it agreed. That is what he said.
The minister may have agreed with that point but he took no action to implement it. In fact he did the opposite. Total government spending is up from $160 billion to $163 billion. Because of this action and the recent rise in interest rates it is my opinion that the government cannot possibly reach its target of 3 per cent to GDP ratio in three years. It is impossible under the present budget.
Total debt as a percentage of GDP has been increasing steadily over the last 25 years. In 1970-71 total debt represented 21.8 per cent of GDP. Forecasting predicts that in 1995-96 total debt will represent approximately 75 per cent of GDP. By the turn of the century, if current government spending habits continue, total government debt will surpass our GDP. This would mean that we would eventually owe more than we earned in a year as an entire nation. I find this a national shame.
Our poor financial condition is evident in some recent trends in the Canadian economy. The dollar has come under increasing pressure and foreign investors are withdrawing their money in response to the staggering government debt load.
The IMF warned of such a situation last year. It predicted that the dollar would begin to slide if "Ottawa and the provinces fail to cut spending in their upcoming budgets". This is exactly what happened.
The Dominion Bond Security Rating Service recently downgraded its rating on Canada's foreign currency debt from AAA to AA high. Dominion stated that it had no choice but to downgrade the rating since there were no "meaningful reductions" in the government's recent budget.
This represents yet another harbinger that the nation's fiscal house is in disorder and could be on the verge of collapse. None of this has frustrated the Prime Minister and his government. It has not frustrated them at all. The encouraging news that I have just outlined has somehow prompted the Liberal government to embark on a $6 billion credit card infrastructure program.
Interest rates have been edging up as foreign investors see Canadian debt load increasing and as they react by selling off their Canadian dollar holdings. The dollar has lost two or three cents since budget day and as well the government deficits will continue at unreasonably high levels in the short term.
The budget similar to the Liberal election victory is a status quo entity, that is if they do nothing and say nothing they hope to emerge undamaged by public scrutiny. Contrary to the claims of the finance minister the budget is just nibbling at the edges of the problem.
The one area of spending that needs to be reformed and is not, which is the largest government spending program, transfers to provinces and persons remains relatively untouched by the government. Over 50 per cent of our budget is spent on social programs and transfers to provinces and persons. This huge area has been virtually untouched.
Industry, investors and individuals are looking for signs of stability and thereby certainty of the future economic direction of our country.