Mr. Speaker, I would like to inform the House that I will be sharing my time with the hon. member for Davenport.
Many Canadians are concerned with Canada's future prosperity and with maintaining our quality of life. The finance minister's February 27 budget is a key element in maintaining prosperity and Canada's way of life.
The budget is a plan that will bring this country into the 21st century. It demonstrates our commitment to reshaping government to meet the needs of Canadians and to deliver on our promise to get our fiscal house in order. It supports our primary economic objective to sustain growth and job creation by cutting our deficit. It demonstrates our commitment to fiscally responsible government.
I will not make any bones about it; I believe that the budget is tough, very tough, but fair. The budget is tough but fair both in what it does but also in what it does not do.
Like many members of Parliament, I took advantage of the finance minister's opening up of the budget process. The government held the widest and most open prebudget consultations ever held. To ensure that my constituents had their say, I held two prebudget meetings in my riding of Essex-Windsor. The actions of the finance minister proved that this was not a cynical exercise. My constituents and many Canadians asked the finance minister to tackle the deficit in real terms. That is what this budget does.
This government is the first government in years to set deficit reduction targets and to meet those targets. Let me reassure the House that the deficit will be brought under control and our deficit targets will be met. The government has shown that it has the resolve and commitment to Canada's long term future to do what is necessary to meet our targets.
By 1996-97 Canada's deficit will be at 3 per cent of gross domestic product. That is $24.3 billion. If the economy keeps growing, and it will, this figure may be even lower. The bottom line is close to a cut of $7 in spending for every dollar for new revenues over the next three years.
To ensure fairness, both business and individuals are being asked to share the load. Recognizing that individuals' income taxes have increased over the last decade at a much faster rate than corporate taxes, the budget includes measures to address that inequity.
The large corporation tax rate will rise from .2 per cent to .225 per cent, an increase of 12.5 per cent. The corporate surtax, which is currently 3 per cent of the basic corporate tax rate, will increase to 4 per cent. There will also be changes made to strengthen Revenue Canada's ability to enforce the law and ensure that all Canadians pay their fair share of taxes and to reduce unfair competition for businesses that do play above board, that play by the rules.
Banks and trust companies are also being asked to contribute further toward deficit reduction during the next year and a half. They will contribute $100 million through a special tax on deposit taking institutions.
Big business has often stated that it does not need or want the level of assistance it receives from the federal government. Accordingly, the government has listened and taken these claims at their word. We will reduce spending on subsidies for big business by close to 60 per cent over the next three years.
However, the government, unlike the last one, realizes that a successful tackling of the deficit requires a two track approach, as was advocated in our red book. To eliminate the deficit, the government must also create a climate that creates jobs.
This budget recognizes that small and medium sized businesses are the cornerstone of Canada's economy. They are the number one job creator. To further help small business we intend to work with Canada's banks and trust companies to establish clear rules so that small business loans are easier to get.
In my prebudget consultations many of my constituents recommended Canada re-examine our commitment to foreign aid in view of needs in Canada. The government has done this and will reduce foreign aid by 20 per cent over the next three years for savings of over $500 million.
Many of my constituents also questioned the need for so many agencies, boards and commissions. As a result of the government-wide review of these government bodies, decisions have been made affecting 120 of them: 73 of these will be closed, 47 will be streamlined and restructured. The result will be 665 fewer government in council positions, fewer ministerial appointments and savings of $10 million a year.
In my prebudget consultations my constituents had many suggestions on what action the government should not take. Do not eliminate RRSPs, they said, and we did not. Do not increase personal income taxes. We did not. Do not introduce a health or dental tax benefit. We did not. Do not eliminate capital gains exemptions for farmers and small businesses. We did not. Do not introduce a tax on casino winnings. We did not.
I have said that this budget is tough but fair. Many of the reviews have also been tough but fair. A Windsor Star , editorial of February 28 stated: ``What we can applaud in the budget is the vow to create a smaller and smarter government. The 14 per cent reduction in the civil service over the next three years combined
with the $10 billion in cuts to departments will result in a fundamental reshaping of government".
The Windsor Star also reported that Windsor's business community was encouraged, shocked even, by the wide swing of the minister's budget axe.
The Windsor Chamber of Commerce chair, Othmar Stein, was quoted in the Star as saying of the finance minister: ``He's got the message. A lot of this was overdue. A lot of the subsidies are gone, even for business''.
Mr. Stein, a vice-president of Chrysler, concluded: "Overall I'd say it's a very realistic budget, quite positive. It's one of the first budgets in a number of years that has not been smoke and mirrors."
Aron Gampel of the Bank of Nova Scotia says it is a strong fiscal statement that meets all the tests.
The Wall Street Journal reversed its editorial stance regarding Canada, summed up in its headline several weeks before the budget as "Bankrupt Canada". After the budget it proclaimed Canada made a right turn.
The editorial commends the finance minister for showing the determination needed for Canada to claw its way out of the debt hole which decades of spendthrift policies landed it in.
The budget charts a new course for agriculture. In agriculture the government has set a target to achieve by the turn of the century, annual food exports valued at over $20 billion. This is an increase of at least one-third over our record setting performance in 1994.
To do this the government will be introducing a new export credits guarantee program to support grain and other agri-food export sales up to a value of $1 billion.
Consistent with the red book, the government will implement a Canadian agri-food marketing council and Canadian agri-food marketing service to ensure enhanced market development and effective use of the global information highway.
Our first fiscal year was not all doom and gloom. The Canadian economy is stronger than it has been in years. Real economic output grew at about 4.5 per cent in 1994, the fastest of the G-7. Over 433,000 jobs were created in the past year, almost all of them full time.
The unemployment rate has fallen by 1.7 percentage points nationally. Manufacturing output is up over 9 percent in the past year. Improved cost performance has lead to record breaking exports, a growing trade surplus and a dramatic improvement in the current account.
I assure my constituents the budget belongs to a Liberal government. A Liberal government brought in new and innovative programs in the sixties and seventies to meet the challenges and needs of those decades. The government is adapting all programs to meet the needs and challenges of the nineties and the 21st century.
We understand change. We have always been at the forefront of change. The budget is change. The Liberal Party has been traditionally a pace setter. I know the budget sets the pace for the 21st century.
I will end with a comment one of my constituents sent me during the prebudget process. With reference to the difficult choices facing the Minister of Finance, he wished him resolve: "My two young children will thank you, as you will be remembered as the finance minister who saved Canada from bankruptcy".