The former. I intend to take most of the time allotted because it is an issue raised by my good friend from Capilano-Howe Sound, a gentleman who brings great credentials to the House and to the debate. However, he ought to use more of those credentials in formulating his motion but I will come to that a little later because the effort allowing us to debate this issue is applauded. For that I applaud my friend from Capilano-Howe Sound.
I am pleased to have the opportunity to participate in the debate because the motion does have its merits. I am confident that the merits of the motion will be addressed in the budget which is upcoming.
Unfortunately, however, I have to say to him that the motion is also a bit tainted in several areas by a bit of simplistic thinking. I would have expected something different from him. It is tainted by a search for panaceas that if we do this and this, all of our problems will go away. I do not think he believes that.
Let me emphasize that the government knows full well that Canadians believe taxes are already too high. We agree with them on that. We would get a certain impression if we saw some people trying to start a tax revolt or in Mackenzie King's famous statement: "There go my troops. I must rush out to lead them". I am not sure which it is, whether they want to start the revolt, join the revolt or what. It is either naive or treacherous as the case may be but you decide, Madam Speaker.
Our priority objectives as a government are to stimulate economic growth while putting in place some real fiscal discipline. It is this double barrelled thrust that will ultimately allow us to reduce taxes in the years to come.
Let us remember that the tax and deficit relationship is a two way street. Every dollar of deficit borrowing we accept today will lead to higher taxes tomorrow. Every dollar we can trim from the deficit is a step on the road to keeping the tax burden down.
That is why the government's 1994 budget was in many ways a tax reform and a tax reduction budget. It included measures to eliminate loopholes and to increase tax system fairness and equity. It also committed to direct action to bring down unemployment insurance premiums, a payroll tax that acts as a real barrier to new job creation.
It was also a tax reduction budget because of the firm commitment made by the Minister of Finance to cut the deficit to 3 per cent of the economy in three years. Again, let me make this central point. Fiscal discipline is the key to long term tax
reduction in two ways. Obviously the less we have to borrow, the less we have to tax to repay the loan and its interest.
There is another important dimension to this process. Controlling government's appetite for debt is our fundamental tool for getting interest rates back down. Lower interest rates mean lower carrying costs on our $500 billion debt. Again that means fewer tax dollars that we need to spend.
I understand the tax fatigue that so many Canadians feel. I can appreciate that some may be cynical about the possibility of measures that add to tax revenues today in order to let us cut taxes in future.
That is why the 1994 budget undertook a program of net spending reduction over three years that is the most significant of any budget in a decade. Over 80 per cent of the net fiscal improvement delivered by the 1994 budget over three years came from spending cuts.
In other words, there was $5 in spending cuts for every dollar of new revenue increase. Obviously I am not in a position to talk about the measures that will be set out in the forthcoming budget, but the Minister of Finance has already made it clear that he will rely overwhelmingly on spending cuts to achieve his fiscal targets.
Lower taxes are important and this government is committed to working toward that. In the process we cannot ignore the facts. The views expressed by the opposition on the issue of taxation appear to be partly driven by a belief that Canadians bear one of the highest tax burdens in the world, but there is more political grandstanding than truth in that particular perception.
The Canadian tax foundation, a highly respected non-profit, non-partisan research organization, has recently made this clear. Among the 24 members of the OECD, an organization that includes most of the world's advanced industrial economies, Canada ranks 14th in total tax burden. That represents 36.5 per cent of our gross domestic product compared with the OECD average of 38.8 per cent.
I say to my friend from Wild Rose, if he heard the first part of my speech, yes it is a matter of concern. If the hon. member is going to vent his concern based on facts rather than fantasies he should first get at the facts. Among the 24 countries we are 14th in total tax burden.