Madam Speaker, it is a pleasure for me to join in the budget debate. The budget was the defining moment in Canada to develop a new direction in its financial dealings and also a new direction in the way the government does business with its people.
The budget was coherent. It had integrity and a sense of purpose. Every feature presented to us met all three of those features, coherence, integrity and purpose.
The overriding goal of this government since the day it took power has been jobs and growth. We believe good economics and good social policy are one and the same thing. In the most fundamental way good social policy begins with a good job.
We believe a country that continues to care for its citizens must be a country that can pay its bills. We must respond to the challenges of our time. We must adapt to the new economy, the new infrastructure based on ideas and innovation. The very nature of government must change. We must develop a new notion of responsibility. The time has long passed when governments can or should do everything.
Several major things have happened. The world economy has become truly integrated. We must think globally. Trade barriers have been brought down. Communications are instant and transportation is swift. Markets never sleep. There are no longer any islands. Like it or not, there is no place to hide.
Since 1984 our debts have risen by three times. Compound interest is gobbling us up a second at a time. The government has a two track approach, sustained and sustainable economic growth. Growing economies produce jobs. Economies that are not growing produce no jobs. The key to growth is productivity. Productivity is about how well ideas, workers, resources and investment are brought together in a country's economy. Productivity is about ingenuity, better management and paying attention to the common sense of our workers.
High productivity growth increases income. How do we do it? We must improve our skills. We must have better innovation. We must provide a welcoming climate for investment. We must remove disincentives that we have created for people and for businesses. We must get our fiscal house in order.
This budget's plan for action introduces far reaching action to restore the fiscal health essential for a strong, growing economy. The budget will fundamentally reform what government does and how. It will bring permanent change in the way government does business. The objective is to get government right so it can fill its social and economic mandates and be more effective and sustainable will include deep cuts in the level of federal program spending, not simply lower spending growth, but substantial reduction in actual dollars.
One of the things that gives this government integrity is that its plans have been prudent and it has met its targets. The budget actions have delivered on this government's commitment to
meet its interim deficit targets and the ultimate goal is a balanced budget.
The interim deficit target is 3 per cent of the gross domestic product for 1996-97. We will be achieving the usual prudent economic exceptions, incorporating credible fiscal action. The deficit could be well below that if economic performance is in line with the average private sector estimates. Significant reforms will ensure that spending will be restrained beyond 1996-97 and the deficit will continue to fall.
What are the major elements of expenditure reform? This budget is the second in a two stage process that began with the February 1994 budget. It takes fundamental action certain areas. It implements results of the long overdue program review and a comprehensive examination of federal department spending. As a result the government will focus on what is essential and we will do it better.
It acts on a new vision of the federal government's role in the economy. It includes substantial reductions in business subsidies.
It introduces major changes in transfers to the provinces that will renew and modernize the federal-provincial fiscal regime, making it more effective, flexible and affordable.
The major fiscal actions in the budget total $29 billion over the next three years, by far the biggest actions of any Canadian budget since the second world war and demobilization. There will be about $7 in expenditure reductions for every $1 in new tax revenues. This is the most significant event since that era.
Three years from now federal spending in programs will be $10.4 billion lower than it is today, approximately 8.8 per cent. The cumulative expenditure savings in that period will exceed $25 billion.
A fairer tax system and sharing the burden of debt and deficit reduction is the goal of this government. The budget reflects the government's awareness and the heavy tax burden borne by Canadians and the cost this imposes on the economy. There are no increases in personal income taxes in the budget. Tax measures are largely directed at removing preferences and increasing fairness. To help meet deficit targets the budget announces increases in taxes on business and an excise tax on gasoline.
Significant features in the budget are jobs and growth. Economic growth is strong. The Canadian economy is stronger than it has been for many years. Real output was about 4.25 per cent in 1994, the fastest of the G-7 countries. There have been 433,000 new jobs created, all of them full time. The unemployment rate has fallen 1.7 per cent to 9.7 per cent this year. Manufacturing output is up a full 9 per cent. At 1.5 per cent, excluding the effects of the tobacco tax, it is the lowest rate in three decades.
Labour costs have fallen by 1.3 per cent since mid-1993. We have a trade surplus. We have a dramatic improvement in the current account and the highest business confidence since 1979. We have been picked by the OECD to be the fastest growing economy in 1995.
The budget will meet the targets set out in it and will meet the red book projection for jobs and growth for Canadians.
