Debates of April 22nd, 1994

Income Security

[Chris Axworthy, NDP, Saskatoon—Clark's Crossing, SK]

moved:

That, in the opinion of this House, the government should consider the advisability of ensuring that the reform of the tax system is harmonized and integrated with review and reform of the Canadian system of social security as a whole with a view to most efficiently realizing the fundamental objective of income security for all Canadians.

Mr. Speaker, my motion is seconded by the member for Regina-Lumsden.

It calls on the House to agree that the government should consider the advisability of ensuring that the reform of the tax system is integrated and harmonized with the review and reform of the Canadian system of social security.

My motion has three themes to this point. The first is that our tax system needs to ensure that we have the revenue needed to provide for the social programs we have deemed necessary so as to ensure that all Canadians can live at a reasonable level of security and dignity.

The second aspect of this motion revolves around the use of the tax system in social policy administration. The tax system has been used over the years as an integral way of ensuring the administration of social policy through various different measures, tax credits and so on.

The third aspect of the motion deals with the issue of the unfair tax burdens and tax implications on Canadians who are moving off social programs into the workforce. I will deal with each of these separately.

To date, the focus of the government as it looks at social programs, as it was for the previous Progressive Conservative government and following the wishes of the Reform Party, has been to focus on cuts to expenditures and programs, cuts to people, cuts to those most vulnerable, the poorest in society. That has been the focus of the government's attention to social programs.

It is worth pointing out that the Bloc Quebecois has made many important contributions against that approach, arguing as the New Democratic Party would, for a more holistic, a more people oriented approach to social policy reform. I thank the members of the Bloc Quebecois for that.

The government has placed no emphasis on solving the problem. The problem is that the economy simply does not work for more than four million Canadians because these people do not work in the paid workforce, not through any fault of their own but because the government has not made a priority of job creation. Neither did the government before it.

No emphasis has been placed on making the economy work, giving Canadians the opportunity for the jobs they so sorely need in order to feed themselves and their families and make a contribution to our society. As a result of this, we have seen an increase in social program payments because of the large numbers of Canadians who have been unable to find work.

In addition, there has been no emphasis by the government or any emphasis from the previous government on ensuring a progressive, fair tax system even though this is recognized in the budget. Indeed one of the budget quotes from the government says that the fundamental basis of a sound tax system is the reality and perception that everybody pays his or her fair share.

That may be the perception but clearly it is not something the government has seen fit to do anything about. We continue with a tax system which is unfair to most ordinary Canadians because it loads the tax burden on middle and lower income Canadians while allowing those who are wealthiest and our largest corporations essentially to get a free ride.

We need some action in a holistic way to deal with our social programs. They are there for those who need them. Those who need them have grown in numbers because our economy is simply not working for them. We also have a tax system which unfairly burdens middle and lower income Canadians. Essentially we have seen no action from the government on this measure even though in opposition they frequently criticized the Conservative government for its regressive tax changes.

I would just like to point out too that Canadians are concerned about the speed of social policy reform and its implications. They are concerned the government is focusing only on cuts to social programs, cuts in the order of billions of dollars, with inadequate consultation and inadequate consideration of the major impact this will have both on the provinces but more important, on those Canadians who need those programs.

In spite of the advice to the contrary from the government's own advisers, it continues to make ad hoc social program changes while trying to consider the overall picture.

One member of the task force of the Minister of Human Resources Development, Mr. Ken Battle, proposes a moratorium on changes to social programs and changes to the income tax system until a comprehensive in-depth review of those programs has been conducted. That advice of the government's own adviser is not being taken.

Going to the tax system itself, we have seen nine years of Conservative government focusing on cutting expenditures to deal with the debt and deficit problems that Canada faces. We see governments across the country, Conservative and Liberal governments, focusing in that same way. We see New Democratic governments balancing budgets without cuts to social programs.

My own province of Saskatchewan cut the deficit from the highest per capita to the lowest in three years, the very best deficit cutting record of any province or any government in the country, according to all the reports of financial managers who are not normally friends of the New Democratic Party. In addition it has increased spending on social programs and health care.

It is not necessary to attack the deficit by attacking those who are most vulnerable in society. The New Democratic Government of Saskatchewan has proven that to all Canadians. Anybody who would rather live in Alberta with Ralph Klein's slash and burn deficit cutting than in Saskatchewan is probably somebody making hundreds of thousands of dollars a year in income.

The debt as we know was not caused by social programs. Statistics Canada has indicated many times that half the debt Canada has faced since 1975, which is when the debt became a major problem, was due to tax breaks and tax loopholes for wealthy individual Canadians or about 50 per cent. Forty-four per cent was due to high interest rates; only 6 per cent to increases in government spending, and of that 6 per cent only 3 per cent was for social programs spending.

The problem has not been social programs spending. It has been a weak tax system, a tax system that has favoured the rich. After all, the rich have their own political parties in the House that have served them well by providing them with this very favourable tax situation.

Surely, if we are to attack the problem, we need to attack the regressiveness of our tax system. More than $140 billion in corporate taxes, for example, have gone untaxed in the last nine years. Eighty corporations each owe $100 million or more in deferred taxes. Workers often pay more taxes than the companies they work for. New Democrats and Canadians think it is time the government at least treated corporations as they treat other Canadians.

Why not impose a minimum corporate tax? Even Ronald Reagan imposed a minimum corporate tax. Why not charge interest on deferred taxes which are outstanding on the part of these corporations? Why not pursue more aggressively those companies that are deliberately avoiding paying their taxes?

Let us look at one example of the implications of the unfair tax system. If Imperial Oil had paid its 1992 deferred tax bill of $1.58 billion, we could have created 600,000 child care spaces in the country or we could have built 54,000 social housing units. The costs to Canadians are significant as a result of a tax system which favours the rich. It also ensures that middle and lower income Canadians pay an unfair proportion of taxes and that there are not enough resources available to deal with the social program costs required as a result of the fact the economy is not working for four million Canadians.

Another example which we know well in Canada is that of the family trust. It is an example in which the richest Canadian families are able to escape taxation while others have to go to the food bank to beg for food. Estimates indicate that over a billion dollars a year are lost to the federal treasury as a result of giving Canada's richest families a tax break that enables them to hide their tax benefits.

This tax benefit was introduced by the Liberal government of Pierre Trudeau and was extended by the government of Prime Minister Mulroney.

It is an outrage that Canadians are faced with a tax system which gives the richest Canadians huge tax breaks while it forces the poorest Canadians to go to food banks to find food.

There are many other tax loopholes that could be eliminated. We have seen some attention in the government's budget paid to the business entertainment tax deduction. More could be done there. Another half a billion dollars could be saved as a result of closing that loophole. I do not see why my constituents who cannot afford to get to Toronto to watch a Blue Jays game should subsidize business people who are entertaining their friends in skyboxes at the SkyDome. There is a clear inequity in that process.

We should eliminate special tax breaks enjoyed by real estate developers. To give real estate developers tax breaks on an imagined depreciation of their assets when in fact their assets are increasing in value is a perverse gift to the richest of Canadians. We see very large wealthy development companies paying no or very low rates of corporate tax.

We should eliminate the tax breaks for corporate mergers and acquisitions. There is absolutely no gain to the average Canadian there. These three tax breaks to the very wealthy would save another billion dollars for Canadians and provide more resources for the social programs we need.

I could go on. We could tax wealth. We could clamp down on tax cheaters. As I mentioned we could put a minimum corporate tax on corporations to ensure they at least pay something.

I have made my point that our tax system is unfair, balanced in favour of the wealthy who have had political parties and continue to have political parties in the House working for them, and unfairly harsh on middle and lower income Canadians who have seen their taxes increase significantly over the last few years.

It is time, if Liberal words mean anything and if Liberal words in opposition mean anything, to make some changes to ensure that Canadians do not see this matter continue.

Briefly my second point is with regard to the use of the tax system for social policy implementation. It has a long tradition in Canada. It can work well if those tax changes are progressive. However, it works badly if those tax changes are regressive.

Mr. Ken Battle, an adviser of the Minister of Human Resources Development, has pointed out over the years that progressive changes to social programs and tax policy have been undermined consistently by regressive changes under the past government. The only significant change in the first budget of the Liberal government was to get rid of the lifetime capital gains exemption. There is perhaps $12 billion lost to the treasury as a result of high tax deductions for RRSPs which only the wealthy can take advantage of and child care expenses that favour well-off taxpayers.

We have also seen how our tax system has impacted on our social programs in a way in which most Canadians have not realized until well after the fact. The minister's own adviser, Ken Battle, calls this politics of stealth. We are seeing that same politics of stealth carrying on under this government, although its members criticized it extensively when in opposition.

We see universal child and elderly benefits no longer existing as a result of the clawbacks imposed on old age pensions and family allowances. We see a replacement of family allowances based on an income tested child tax benefit, all things that were criticized by the Liberals in opposition, all things they continue to allow to take place in government.

Lastly we see the impact of partial deindexation which is catching ever more lower income Canadians in its net, excluding them from social programs and placing them in ever higher tax brackets.

It is necessary for the Minister of Human Resources Development, in conjunction with the Minister of Finance, to take charge of the issue to make sure that tax policy as it impacts on social policy is progressive, helpful to those who are experiencing difficulties in our society, and contributes, as the government's own words indicate, to a fairer tax system so that we can all be satisfied the tax system is fair and that we are paying our fair share as is everyone else.

My last point deals with something about which there has been much loose talk.

As with the previous government, this government is fond of talking about deterrents to work which can be addressed by reducing the social programs for people who are not working. The biggest deterrent to work, as every Canadian will say, is that there are not enough jobs with adequate wages. If we address that problem we also address not only our deficit problem but our social programs. We would simply not have as many Canadians drawing on social program expenditures.

There are significant practical problems to be addressed dealing with moving off social programs, social assistance or unemployment insurance, and into the workforce. This has been described as being a welfare roll. Thousands of welfare recipients each year are blocked from moving into the workforce because of the adverse economic consequences that would give rise to, the so-called welfare taxback in which those who move off social programs experience the very highest marginal rate of income tax in the country. Either 100 per cent or something very close to it is taxed back from them on earnings they make as they attempt to move from social assistance to the workforce.

Many Canadians who are on the verge of moving from social assistance to work and are able to earn a bit of money on social assistance lose a dollar of welfare assistance for every dollar they earn. That is the highest rate of marginal tax in the country on the very poorest of Canadians. Of course it is an outrage.

We have also seen the value of refundable tax benefits and GST being determined by net income. As a person leaves social assistance they lose those programs. We have to ensure that is not a deterrent, as it presently is, to moving off social assistance and into the workforce. We have to ensure that our tax policies at the federal and provincial levels and our welfare policy fit together so that we encourage wherever possible, wherever

there are jobs, those people who can fill them to move off social assistance into the job market.

We have to ensure that the transition period from social assistance or unemployment insurance into the workforce is a smooth one and is possible for Canadians to make. We have to take notice of the high cost of working for some families as they move from social assistance into the workforce.

In conclusion, it is incumbent upon the Minister of Human Resources Development to work with the provinces to ensure these transitional arrangements are smooth and encourage participation in the workforce.

The motion brings together the important points on how we deal with one of the most serious problems in our country: how to find the resources necessary to ensure that those who are not part of the paid workforce live in security and dignity. Surely that is a role of any democratic and decent society.

We have to ensure that our tax system is fair, that those who can pay do pay, and that we close tax loopholes which would bring in, as I have indicated, billions of dollars that could be used on social programs. We have to ensure that tax policy as it affects social policy is progressive and that the transition from social assistance or unemployment insurance into the workforce is a smooth one.

This is not easy but with political will to solve this problem it can certainly be achieved as it has been in many other countries.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I was pleased when I read the motion. In the beginning I searched to see whether it was from the member for Saskatoon-Clark's Crossing or put forward by the Minister of Human Resources Development.

Of course, as we know, the two hon. members have the same surname, and that has caused some confusion. I thank the hon. member opposite for fully supporting this government's policy, seeing that by and large, what he is proposing in his motion is in fact what this government is seeking, and indeed has undertaken, to do.

I am sure the hon. member across has read the red book. I say that because of the way his motion is written. He has inspired himself with Liberal policies. I am very glad though that he has done so. I do not agree with the text of his presentation to the House today but I do agree with his motion.

For instance, today he complimented the provincial government of Saskatchewan for its social policy. My very distinguished colleague from the riding of Prince Albert has just informed me that a number of hospitals were closed in his riding alone. Can you imagine that? That is the kind of policy that gets praise from the member for Saskatoon-Clark's Crossing.

He also complimented the NDP generally. I am sure it was an oversight on his part. I cannot for the life of me think of anyone wanting to compliment Bob Rae for any of his policies, particularly social policy, job creation policy and tax policy, in the province where you and I have the honour and privilege to represent constituents, namely the province of Ontario.

In my area in Ontario we have seen the devastation of NDP provincial policies. We have seen what they have done to our area. It is more than a passing coincidence that every single NDP candidate, every single NDP MP in Ontario without exception, was soundly defeated. That tells you something. The NDP in my riding got approximately 4 per cent of the votes. That tells you what the people thought of that party.

I get back to the motion because it is a good motion. I want to read portions of the red book. I know that all members of the House will consider it a privilege. Reading from page 22 of the red book, let me read the following:

The federal and provincial governments share common problems of too much government debt, too much foreign owned debt, and too high borrowing requirements, domestically and internationally. All three levels of government put the burden of these problems on the same taxpayer who is subject to taxes on income, capital and consumption. To this list governments add other charges in the form of licences, permits, user fees, and additional payroll deductions. A Liberal government will work closely with the provincial governments to achieve maximum possible co-ordination of tax policies.

That is just the kind of thing that is advocated in the motion. I read further, Mr. Speaker, from the red book because I know that you would want me to do this. It says the following:

In the first session of the new Parliament the Liberal government will give the all party finance committee of the House of Commons a 12-month mandate to consult fully with Canadians and provincial governments and to report on the ways to achieve tax fairness, simplicity and harmonization.

That is the exact thing that is asked for in the motion. Let me read the motion a little bit here. It says:

That the government should consider the advisability of ensuring that the reform of the tax system is harmonized and integrated with review and reform-

And so on. This is exactly what our government is doing. I am sorry I was interrupted in my reading of the red book and we should never do that to the red book. I continue:

In particular, the committee will be mandated to report on all options for alternatives to the current GST. A Liberal government will replace the GST with a system

that generates equivalent revenues, is fairer to consumers, to small business, minimizes disruption to small business and promotes federal-provincial fiscal co-operation and harmonization.

So, you see, Mr. Speaker, that is what the Liberal Party was suggesting during the last election campaign and we, of course, had made our intentions known in the red book, from which I have just quoted.

But that is not all, Mr. Speaker. As you know, earlier this year, the Minister of Finance tabled a budget, a budget that this House has passed.

In this budget, we have made good our promises, if not all at least most of our election promises, and this just in the first year of our mandate. So, you see, Mr. Speaker, I think that on the strength of this first budget alone, this government would deserve to be re-elected. Of course, in the years to come, we will give the public many more reasons to re-elect us, as the hon. members opposite will learn to appreciate.

In our red book, and again in the budget, we promised to bring the deficit down to 3 per cent of GDP within three years. There it is, in the budget.

Also in the budget: to implement a national program to renew infrastructure; restore funding for the National Literacy Program; establish a Youth Service Corps; provide new youth internship and apprenticeship programs; improve access to capital for small business; replace the GST; re-institute the Residential Rehabilitation Assistance Program; create a Canadian information highway. As you can see, Mr. Speaker, I could go on and on. Perhaps I should: set up a Technology Partnership Program; launch an Engineers and Scientists Program, and so on.

These are all things that we had promised in the red book, electoral promises that we are acting on.

There are two main thrusts. The first one is to make the tax system better, more balanced and more in line with our social programs.

I will now outline the second.

The hon. Minister of Human Resources Development proposed to this House a change in the system in which we deliver social programs. Much to the chagrin of some opposition members, we are proceeding to do exactly what the motion is asking us.

The Minister of Human Resources Development has mandated a committee to do some work. Stage one of that will be hearings by this committee, federal-provincial and territorial labour market and social services ministers to meet and to discuss this, later on a task force to advise the minister and then an action plan to be drafted and presented in this House.

I congratulate the member for Saskatoon-Clark's Crossing for supporting so wholeheartedly the policies of our government.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, I rise today as a member of the committee responsible for reviewing the social program reform action plan of the Minister of Human Resources Development and, unlike the hon. member for Glengarry-Prescott-Russell, I think that the vision of Mr. Chris Axworthy, the hon. member for Saskatoon-Clark's Crossing, is much broader than that of his namesake, the Minister of Human Resources Development.

His motion, in favour of which I will speak, has only one flaw in our eyes: it should be more proactive since the hon. member says that "the government should consider the advisability of ensuring that the reform of the tax system is harmonized."

I myself think that the government must ensure that the reform of the tax system is harmonized, and I think it is important to make that clear because the current approach used by the Minister of Human Resources Development in this area is no guarantee of future success and because he announces changes, to the Unemployment Insurance Program in particular, even before his reform initiative is in place, and it is clear that there is no harmony between the budget and the objectives, and the way social program reform is being conducted.

So we obviously support the proposal of the hon. member for Saskatoon-Clark's Crossing, since the Bloc Quebecois has been calling for tax reform since the election. This issue was part of our election platform and we think it is important to harmonize the two elements, namely the tax system and social security programs, regardless of our opinion on how to approach social program reform in the future. Be it the Reform Party or the Liberals, I think that, in this respect, everybody will admit that we need a little more harmony. I believe that, at the present time, there is a serious lack of co-ordination on the part of the government, and a warning such as the one the member for Saskatoon-Clark's Crossing is proposing is in order.

It seems to us that the planned social program reform might create more inconsistencies if it does not take the tax system into account. We will end up with the same counterproductive situations we saw in the past, where we gave people incentives to increase their income but these same incentives discouraged them from working and being productive members of society. Harmonization is a must.

We must harmonize because the present government does not seem in any hurry to deal with some elements of the tax system which impact on the reform of social programs. I am referring to family trusts, for instance. We can reform all the social programs in the world, but if we do not take care of the revenue

side of things, making sure that everybody pays their fair share, we are not doing our job as a government, as a Parliament.

In 1969, there were $18 billion in family trusts. In 1982, there were $80 billion. The potential growth of those trusts should encourage us to check to see what today, in 1994, the exact amounts involved are, to determine why these people pay no taxes and to find ways of obtaining a reasonable amount of tax revenues from those trusts. After all, they belong to a few very rich families, as Mr. Claude Piché said in La Presse on January 19, 1994, when he explained that the creation of a trust is a very complex and costly process which is not really worthwhile unless you have a real fortune.

Therefore, on the question of family trusts, it would be interesting to know exactly what is going on as soon as possible because since 1983-84, we have not been able to find out what funds are in there. In my view, the government should take a close look at its own actions on that issue and publish the exact figures as soon as possible.

Tax reform also seems very important because the tax structure must be fair for everybody. We should make our tax tables much less regressive because right now taxes do not serve justice and equity in our society and there is a lot to be done in that area. The present government is saying nothing and does not seem to be really willing to make the necessary changes; it is burying its head in the sand.

There is also the issue of tax shelters that need to be abolished. There would be a lot of work to be done just to determine which shelters should be maintained and which should be abolished. In that sense, the motion of the hon. member for Saskatoon-Clark's Crossing is very interesting and it is a needed reminder for the government which seems to forget that what it does on the one hand does not necessarily agree with what it does on the other.

The other important element is that the fiscal structure must be harmonized to take income security into consideration. There are examples from the past which demonstrate that income tax tables can be used to help low-income earners. In Quebec, Mr. Parizeau, when he was Minister of Finance, made sure that low-income families would pay no income tax. That kind of initiative should be taken by the current government, which seems to be forgetting its electoral promises to the neediest and more inclined to protect those who financed its electoral campaign.

We therefore consider it important to support the motion of the hon. member for Saskatoon-Clark's Crossing. There are also a few other things that I would like the government to take into consideration when harmonizing, and one is a minimum corporate tax. There is no doubt that Canadian tax policy is very favourable to business. Naturally, businesses should be allowed to develop, but at the same time we have to avoid an imbalance between the share individual taxpayers must bear and that of business. In that area, I thing we have a long way to go.

Another thing I would like to mention are the changes to fiscal arrangements that apply to foreign corporations. For example, in 1990, taxpayers with incomes of over $80,000 accounted for more than 70 per cent of all taxable capital gains, and 66 per cent of those were investors. We in the Bloc Quebecois believe that the financial position of the government requires a larger contribution of high income taxpayers, and in the spirit of this motion we could, at the very least, undertake a thorough study of this aspect, to make sure that in the future, the tax policy and the forthcoming reform of social programs guarantee some harmonization between the two and that, in effect, we do not create situations that are even more absurd than the ones we now have.

I would like to add that when the hon. member for Glengarry-Prescott-Russell quoted from the red book, it reminded me of a saying my grandfather was fond of. Do not judge people by what they say but by what they do. It is particularly true with the Liberals' election platform. During the campaign, all they promised were jobs, jobs, jobs, but they have yet to deliver. The Liberals made a lot of commitments concerning social equity in the red book, but they have not achieved much. And worst of all, they do not seem to have the will to forge ahead in this area.

To conclude, I would like to say that, unlike the hon. member for Glengarry-Prescott-Russell, I do not see how you can compare the motion put forward by the hon. member for Saskatoon-Clark's Crossing with the position taken by the Minister of Human Resources Development. There is a fundamental difference between the two in that the minister tends to act a bit like a bulldozer these days. However, he may be realizing that provinces have some rights in this area and will expect the government to respect them.

The public also want things to be done legally and has shown in the past that if governments are divorced from the realities of their constituents, voters can remind them of the harsh realities come election time. I think that a motion like the one before the House today should prompt the government to review the need for more harmonization at the Cabinet level, which would allow people to share their ideas and dovetail their programs.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Mr. Speaker, I agree with the bill that has been put forward by the hon. member for Saskatoon-Clark's Crossing. The tax system does need to be reformed. How can anyone disagree with that broad goal of income security for all Canadians?

The disagreement, however, comes on these two questions: How should the tax system be reformed, and what constitutes social and income security?

Let me deal with the second question first. What is social and income security? In the minds of most Canadians it can only exist in a society in which there are good jobs with good incomes. That is the bottom line. To have good jobs there must exist good investment opportunities and there must be good rates of return or profit. Without that we will not have good jobs in this country. Such a society must also have an environmentally sound, financially viable economy alongside a supportive, responsive public services sector.

How do we get on the right road to achieving this objective for our society? How do we get there from here? There are many areas that need to be reformed. Reforming our tax system would be a major variable in the equation.

What kind of tax reform is needed? Our current system with its unjustifiably high taxes is a wedge, one that is being driven between Canadians eager to be fruitful, prosperous and just and the ultimate goal of achieving a socially and income insecure society. It is a wedge that is being driven between the intentions and the realization of that goal.

What is the real culprit? Why is the current system of high taxes a problem? These unfair high taxes are only a symptom of a bigger inherently related problem. We cannot separate the two.

What is the real problem? The real root that necessitates high taxes and prevents us from achieving the kind of society which we really want is government fiscal irresponsibility. We consistently spend more money than is brought in. These high taxes are detestable and they are a wedge that is coming between the ambitions of Canadians and the realization of their goals.

The driving force that forces up taxes and that fuels the underground economy and that causes unnecessarily high unemployment and makes businesses and jobs pack up and flee the country and creates social unrest and crime and a general loss of confidence in our whole country drives up interest rates and depreciates our currency.

The root cause is the fact that as a country we have lost control of our finances. We spend too much. Let us not blame anybody. We are in this together. High taxes are destroying jobs and they are destroying social programs because they destroy the initiative of the people and their desire to invest and work.

The common sense of the common people could have foretold us our fate. Do we seriously believe we can continually spend more money than we bring in? Can we keep borrowing from our neighbours, from businesses and from other countries? Someone, some time, has to pay.

Many of my hon. colleagues from the other parties in this House will on almost every subject in this House Reformers talk about the same thing, fiscal responsibility. Why are they stuck on that? Let me explain why.

We are focused on the financial matters of this country because we want Canada to decide its own future and not destroy it. We want Canada to have the best social programs and infrastructure, the most beautiful environment, the best jobs and incomes for its people. We are not going to get it the way we are going now. We cannot achieve a socially and income secure society for ourselves and for our families and future generations by continually demanding more.

We cannot withdraw from what will happen. We will eventually deny ourselves and our children everything that we are trying to preserve. We have to decide now how we are going to adjust our lifestyles, that we are going to tighten our belts and that we are going to expect less. It is really a cruel hoax on all our fellow Canadians to let them think that we can continue as we are. It is wrong.

It is a lot of fun to talk about spending, talk about social programs, to talk about women's rights and minority rights and immigrant rights and refugee rights, criminal rights, language rights, universal social programs like health care and day care and many other noble causes which some other group might feel is deserving money. It is fun to talk about those things and plan. The final result is that somebody has to pay.

Occasionally we may sound apocalyptic when we talk about our nation's finances. Perhaps things will turn around. Maybe it will happen some day. Maybe it will happen soon. Perhaps our debt crisis will not become drastically worse. Maybe we will look back in 50 years from now at this session of Parliament and on the continual attention that Reformers gave to the government finances as overkill. Maybe we will look back and see it as that.

I sincerely hope that happens. If it does it means we have done one thing, that we were able to control spending and taxes and bring in real fiscal reform. At the present time we are in a free fall. We are plunging downward. We are skydiving without any intention of opening our parachutes.

I agree with the motion. Let us reform our tax system. Let us reform the GST. Let us slash personal income tax, corporate tax and payroll tax. Let us pretend for a moment that all govern-

ments were able to cut taxes; federal, provincial and property. Would Canadians not love us? We would be heroes. We would go from being one of the highest taxed countries in the developing world to one of the least taxed.

What would Canadians do with all the money that previously went to government? One can only imagine and we should imagine. Canadians want to be freer. Canadians want to be free to decide what to do with all their hard earned money. What if the government kept its greedy, grimy tentacles out of the people's pockets?

Governments often have a philosophy that they have some absolute sense to know what is best for people. It is deceitful, it is dishonest and it is immoral. That ideology has manifested itself in the extreme repression of the former East Germany, Romania, Czechoslovakia, Hungary and the Soviet Union, just to name a few. Such regimes were ruled by elites, elites who believed very strongly that they had the ultimate answer for a perfect society, indeed for a perfect world. Because of this elitist attitude they taxed to the max. Poor, hard working citizens had to pay the bills. There was very little regard for them. Their mental skills were seen as inferior.

If Canadians felt that the government was spending their hard earned dollars in a responsible way and that these programs were good for all Canadians, they would jump on board. However, Canadians see governments misspending their money and they feel things are out of control.

Canadians see government responding to policies and programs and funding any group or cause that will keep them in power. Our current system allows a majority government to implement policies to a myriad of controversial programs. Quite frankly, the government simply does not have a mandate for these programs.

One example is the bilingual-multiculturalism notions that the government is inflicting on the nation. We have never had a referendum on official bilingualism or official multiculturalism. We simply have to accept these policies because the elites have told us it is good for us.

When we question them we always get: "If you don't like it, five years down the road you can throw us out". However, if our leaders are accountable only every five years and not every day they end up representing the people only once every five years.

The essence of democracy is that we must be accountable every day. We are usurping individual freedoms, choices and responsibilities in favour of some elitist version of "what is best for them". The guiding hand must come from the bottom not from the top. We need government to promote law and order, but the big disagreement comes over how and what amount of government we have. The Reformers call it the legitimate role of government.

The legitimate role of government is to do for people only what needs to be done for them or they cannot do at all or as well individually or through non-government organizations. That is the legitimate role of government. If we want to have the best tax system in the world we must look at our expenditures. We must finance only those services that Canadians cannot provide for themselves or through non-government agencies.

In order to do that we must also have a different attitude toward government and a different attitude by our government toward ordinary Canadians. That is the only way we are going to have real tax reform.

[Gordon Kirkby, Liberal, Prince Albert—Churchill River, SK]

Mr. Speaker, I am honoured to rise on this motion that has been brought forward by the member for Saskatoon-Clark's Crossing.

In his motion he suggests that while the reform of the tax system needs to go ahead, it needs also to be harmonized and integrated with the reform of the Canadian system of social security.

If we look at what is involved in reforming a tax system and what is involved in reforming a social security system we can see some very complicated and very difficult, long and tedious hard work to do.

For instance, if we look at the GST, a very small portion of the taxation system that is now being reviewed with a view to changing it and making it better, we see that hours and hours of study need to go into it, consultation, hearing from the people affected by it.

It would seem even this small area within the taxation system that needs to be reviewed takes a lot of work. We can imagine the effort it is going to take to completely review the entire tax system.

At the same time, with the social safety net review the Minister of Human Resource Development has begun an unprecedented consultation across this nation with provinces, with citizens across this country to find out what they are thinking about these issues, what the problems are, what the needs of Canadians are.

In this motion it is suggested that these two massive reviews be brought together. I see a lot of danger in this. This proposition in my view would delay reform in an interminable fashion, years to complete this type of integrated review.

I am not saying that there is not overlap in specific areas between the taxation system and the social safety net system. For instance, we have the child tax benefit, child care expense deduction, the personal pension income credit, the age credit, the disability tax credit, the medical expense tax credit and there are certain other tax measures for people who have disabilities within the taxation system which assist with the social safety net.

Where there are these links, they can be dealt with on their own. There does not have to be a complete linking of these reviews. What is so dangerous about this is that we can see that our present welfare system and much of our social safety net system are designed and have created dependencies across this country.

Welfare and a lot of the housing and things like that, all the things that have gone together to compose the social safety net, have become a prison from which people cannot escape.

I have gone around my riding a number of times before the election and after the election. When I talk to people who are on social assistance there is no doubt that they want to work. What is the biggest inhibitor to going to work? It is the dependency and the rules created and put in force dealing with welfare that keep people from being able to earn money, that keep people from using their initiative and drive to make better lives for themselves and their families, that keep people from having the dignity that comes with having a job and putting bread on the table.

What worries me is that if these two major reforms are brought together the pace of reform is going to slow down to nothing. Then perhaps that is what the hon. member who is proposing the motion wants. Perhaps he wishes to keep a system in place that is going to prevent people from getting away from the dependencies that have been created by this very system.

That cannot happen in this nation. It cannot happen in my riding. There are too many people who have been asking for years for the opportunity to get out of the system that presently holds them captive. We cannot take a chance that this type of reform will be derailed, that it will be stalled.

We want to see a simplified tax system. We want to see an equitable tax system. We want to see the deficit go down. The Liberal Party has stated that it wishes to see the debt go down to 3 per cent of the GDP within the first three years, but we want to see people go back to work. We have undertaken a number of initiatives to achieve that, whether it is our infrastructure program, whether it is a number of the small business initiatives, or whether it is other initiatives designed to get people back to work.

I do not think we should delay what we are going to do any longer. I think the motion is designed to do exactly that, not to allow another generation to go forth before getting rid of a system that creates dependency. The people need to be free to succeed and the Government of Canada is committed to making that happen.

[The Acting Speaker (Mr. Kilger)]

The time provided for the consideration of Private Members' Business has now expired. Pursuant to Standing Order 96(1), the order is dropped from the Order Paper.

It being 1.38 p.m. the House stands adjourned until next Monday at 11 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 1.38 p.m.)