Mr. Speaker, I appreciate the opportunity to speak on this private member's bill by the member for Mississauga South. I hope his constituents will appreciate the hard work he has put into this. I know of his deep concern. Members of Parliament have all heard this concern from our constituents. Perhaps there is no concern that hits as close to the heart of every citizen in the country as what is taking place in the underground economy. I applaud the hon. member for trying to address the problem.
The underground economy is costing the Canadian economy upwards of $90 billion every year. The underground economy is a clear response from the taxpayers that they are angry and fearful. They are angry because they see more and more of their pay cheques being eroded and they receive less and less money to provide for their needs. It is becoming increasingly difficult to survive in this country. Perhaps the single most important reason for this is because of our tax structure. I will look at the reasons a little later.
The high taxes have also damaged our ability to compete internationally. For a country such as ours, which relies on our export potential to maintain our standard of living, there is perhaps no other factor within our economy that is so damaging to the ability for us to do that. We worked so hard to get agreements on the NAFTA and the free trade agreement, but we have unfortunately hamstrung the ability of businesses in the country to compete internationally. The single most important reason we cannot do it is because of the tax structure. We have seen many business go under. When I go back to my home in Toronto, I see many businesses that have been passed down from generation to generation that have gone bankrupt. The reason is partly because of the tax structure.
We see many businesses that flock south. People hold up the free trade agreement as a reason that is so, our inability to compete. The real reason most companies have actually fled south is because of the high tax structure, which strangles the ability of Canadian companies to compete internationally. We have one of the highest tax structures in the world.
Yesterday we saw that the IMF has actually downgraded our ability to get money from the IMF. The reason is because our ability to get our debt and deficit down is not good enough. The high taxes that we have are the result of the high debt and deficit that we have in this country, nothing else. It has been a consequence of course of the high spending that Canadians have endured for years and years, overspending by successive governments. This has combined with an extremely complex tax structure and high administration costs to create the terrible tax structure we have today. The result of that has been the underground economy, which is costing us $90 billion or more a year. That is why the hon. member for Mississauga South has put forth these endeavours.
I will just talk for a moment on what I agree with and what I disagree with. Part C of the hon. member's bill, which would provide a tax credit for individuals who wish to hire other individuals in their homes to do work, is a very good one. It will provide transparency in a system that is currently opaque. A good member from my community in Esquimalt-Juan de Fuca, Mrs. Shirley Wilde, put forth a similar idea. We have presented this to the Minister of National Revenue. I look forward to a response from him in the near future. I hope this is something we can work together on in this House.
I disagree with part A of his bill, the information campaign, for the simple reason that it will entail costs and expenses for the government and in fact will add to the tax burden of Canadians.
I would suggest that the government look at new ways to get our spending under control, to get the deficit down to zero, and to attack the true ogre in this equation, which is the debt. We presented our zero in three deficit reduction plan, which I hope the government will look at, because there are very sensitive but very concrete ways in which we can get our spending down so that it will not hurt the people in our country, in particular those who are most dispossessed, which is something we share a common interest in.
Second, we have to get the GST down and simplify it. When we go out to the business community, no other single complaint so irks them as the GST, a system that is unfathomable, entirely complex,
and whose administration costs chew up over one-third of the moneys that are generated.
Third, we have to decrease taxes overall. Back in 1992 the government of the day did decrease taxes. Interestingly enough, it found that its revenues increased. What did it do? It began taxing wildly. This wild taxing spree, instead of increasing government revenues, actually decreased them. There is a lesson in there for any government: decrease the taxes and the public will become more honest in their representations and will spend more. In fact, there will be a stimulation to the economy.
Fourth, I would ask the government and the Minister of Finance and Minister of National Revenue to look at the flat tax that has been proposed by our party. The flat tax will provide equanimity to all Canadians.
One of the things that make Canadians extremely furious is they feel that the more they work the less they have to take home; the harder they work, the more they give to the government. Little erodes the soil of the Canadian economy or any economy more than if a worker feels that if they work harder they are going to take home less. We have to institute the incentive factor back into the soul of the Canadian economy. Right now it is dead. Canadian workers wonder why they should work harder when they are giving more and more tax money to the government and less and less money is left for them to spend.
I would ask that we provide the Canadian people with increased earning power, with an increased ability to keep more money at home. The only we way can decrease the extent of the underground economy is to get spending by the Canadian government under control. Canadians are fed up with the overspending. We must do this not only for the future of the people in this House and our families but for future generations.
I appreciate the hon. member's introduction of this private member's bill. I hope we can look at part C of that bill to discover new ways to increase transparency in the economy we have now so we can decrease the extent of the present underground economy so there will be more money in the public coffers and fairness and greater equanimity among the tax structures we have.
We are working on this together. I hope we can come together to develop a tax structure that is fairer to all Canadians, a tax structure that provides the government with the ability to get its spending under control while providing more money for Canadians to spend.