Mr. Speaker, I am also pleased to rise to debate the economic and fiscal update tabled by the Minister of Finance for us to take a look at as we begin our prebudget consultations.
The unfortunate part of the document, if I can recall back to last year, is that the Minister of Finance has laid it before us and said: "Here is the problem. Here are the facts. This is where we are". However he did not give us any idea what he has on his mind about where we are going. He did not lay out any options. He did not give any indication of his preference. He did not say we should explore this avenue or ask what we think of a particular suggestion.
As a result, when I attended the finance committee hearings on occasion as an associate member, I heard continuous rounds of presentations that indicated: "We have a problem in this country. We concur with the Minister of Finance. Therefore we should raise taxes, but don't raise mine". We also heard: "We agree with the Minister of Finance that we have to cut spending, but don't cut me". That was the general theme throughout the presentations.
Because the Minister of Finance did not use the power of his office to give any general direction on the kind of thinking he had in mind, much of that unfortunately did not actually produce a great deal of substance.
The Minister of Finance could have given us some idea about what he has in mind, the general direction in which he would like to go. The country would soon focus and either give him thumbs up or thumbs down. Then he would be able to plan his budget in accordance with the wishes of the people.
I am fairly convinced we will find in this round of prebudget consultations a repeat of last year: "Yes, we have a problem; raise taxes but not mine or cut spending but don't cut me". If that is applied across the board the status quo would remain, which is not what the minister had in mind.
Looking at the document, we see it is a fairly detailed and substantial document not only in its content but also in its omissions. I looked at annex No. 1 which states where the government spends its money. It goes through department by department: human resources development, citizenship, health and so on.
I was looking for finance. There is no annex on finance because it is going to spend $50 billion on interest on the debt. But we really do not want to highlight that. I am not sure if it was an omission by oversight or by design, but all of a sudden I find that this country's major expenditure, which is interest on our debt, is absent. While it is a good document for what it says, it is a good document for what it does not say as well.
On page 91 the document mentions budgetary revenues. We all know how strong the Minister of Finance is about wrestling this deficit down. He said: "I am going to bring it down to 3 per cent of GDP and now it is 2 per cent of GDP and no doubt it will be the magic number of 1 per cent of GDP". He never really tells us how, just that he is going to do it.
When we look at budgetary revenues on page 91 of the document, we find revenues from 1994 at $123.3 billion rising over two years to $136 billion. If my math is correct that is an increase in revenues of $12.7 billion.
The Minister of Finance has never wasted an opportunity to tell us that during that period he is going to reduce the deficit down to $24 billion or 3 per cent of GDP. The public accounts were tabled a few weeks ago and the deficit for 1994-95 was $37.5 billion. In the next two years the finance minister is going to wrestle it down to $24 billion, a decrease of $13.5 billion. We say: "Right on".
But then, he has squeezed another $12.7 billion out of taxpayers along the way, so his net saving is $800 million, $.8 billion. That is the total savings by the government which tells us at every opportunity that program spending is coming down and that all kinds of opportunities are being used to cut the deficit. He is not cutting the deficit; he is taxing Canadians. That is what the finance minister is doing. He is taxing Canadians more because every dollar by which he wants to reduce the deficit is a dollar out of the pockets of Canadians, not a dollar out of the government's pockets.
That is the clear point we want to make. Unfortunately, it requires doing a little bit of math because it just does not stand out in the presentation of the documents. Again, let me compliment the government on what it has produced, but let us not ignore what is not here either.
On page 91 there is tax on personal income, which is about the closest the government gets to recognizing what it is doing. It says: "In 1993 tax on personal income in Canada stood at 15.4 per cent of GDP on a national accounts basis and was higher than in all other G7 countries except Germany". At first glance we think we are bad, but we are not the worst. However, if we read on: "Relative to other G7 countries, Canada relies to a much greater extent on personal income taxes which were 13.5 per cent of GDP and social security taxes represented 1.9 per cent of GDP, the lowest share among G7 countries".
Let us take the two points together. Apart from Germany, we have the highest personal income tax as a percentage of GDP of any country and we have the lowest amount of social security taxes, those being Canada pension plan, UI, the things we return back to the constituents. We are the lowest on that, yet we are the highest on taxation which means that the money is being drained out of the pockets of Canadians and is being passed over on other issues.
Let us look at page 82 of the document. The only increase is transfers to individuals, which I can talk about later. Here we have on annex table 30, distribution of net federal elderly benefits by household income 1995.
Remember, as taxation goes up new families are being created and they are trying to buy a house. The spouse has to go to work. The Minister of Human Resources Development just announced $700 million for day care to help them over the hump because their finances are in difficulty. Canadian families are in trouble because of high taxation. We need to try to improve the prosperity.
Here we have on page 82 that we are giving $630 million to households that have incomes over $75,000, and we are spending another $500 million on households whose incomes are between $60,000 and $75,000.
I could go out on to Wellington Street in Ottawa, Jasper Avenue in Edmonton or any other main street to stop a young couple who is trying to find some money to buy Christmas presents and ask: "Do you realize that a lot of your tax money is going to pay $1.1 billion to families whose incomes are over $50,000?" Should the Minister of Finance not be taking a look at that? If he did he would find that there is room to cut spending. That is the Reform Party's platform: to cut spending rather than tax Canadians more. That is a big difference.
We can go through the document and find all kinds of references. Unfortunately the bad news has to be dragged out but the good news of course just hits us right in the face. It is a good document but the presentation on the bad news could be improved in another year. We do talk about the debt and deficit.
The other day the governor of the Bank of Canada appeared before the public accounts committee. I would like to bring to members' attention some of the things he said in his opening statement. He said: "At a minimum, this calls for action to stop the ratio of public debt to gross domestic product from rising. It is time we got the debt under control". He said further: "Just stabilizing the debt to GDP ratio may not be sufficient. Lower ratios may be needed". He concluded his remarks by saying: "We need a debt to GDP ratio for Canadian governments in total that is lower than it is now".
I am not saying that the Minister of Finance has an easy job. We all know how difficult it is. But let the Minister of Finance stand up and tell Canadians that it is the Liberal Party's policy to tax Canadians more, not to cut spending. Let us recognize that and let us get that point out.
The finance minister still has a long, long way to go before he balances his budget. If it is the intention of this Liberal government to do it totally and absolutely on the backs of taxpayers without cutting one nickel of government spending, Canadians will have something to say at the next election.