Mr. Speaker, I am pleased to stand today in what is a very solemn debate. We have been talking on and off about the budget since the Minister of Finance introduced it in the House. We need to begin very seriously asking questions on what is wrong and what we can do to correct it. It is time to lay aside the meaningless rhetoric and deal with reality.
One of the flaws in the thinking of governments past is they have assumed that deficit budgets are okay. In the next few minutes I would like to talk briefly about the urgency of reducing the deficit in order to stop adding to our debt.
A lot of Canadians are not well informed on the budget. A lot of Canadians are of the impression that because there are these cuts our debt is going down. That is not the case at all. Our debt is increasing.
I am not going to say we ought to stop decreasing it this year but we have a soft target which allows the debt to go on and on, even with this present plan if the government meets its stated goal, which the minister has said it will do. He has a neat little couplet which is normally not in my vocabulary. He said they will meet the budget deficit targets.
That is great, but what after that and where are we headed in the long run? I often say that Wayne Gretzky is one of the greatest hockey players but not because he knew where the puck was, not because he knew where it was going, but he knew where it was going to be. He has an uncanny ability to be at the right place. That was because he is able to think ahead. We need to start on behalf of Canadian taxpayers seriously thinking ahead.
Peter Cook in the Globe and Mail just before Christmas said: ``Our government problem is that we have politicians that have ignored deficits and debts for too long and even now put forward inadequate solutions. Rising rates make it less easy to postpone the inevitable. The level of government in Canada is simply too large for the private sector to support and must be cut back to what is affordable, and the sooner the better''.
I ask all listening to consider what wealth is. From what do we derive our standard of living in Canada, which we all enjoy bragging about so much? If we were to ask that question we would realize that primarily our wealth derives from the transformation of our resources into goods that are saleable around the world to ourselves and also to others.
Furthermore, we have people who provide certain services. For example, when I go to the dentist, the amount of material he uses is very small but I benefit greatly from his skill in fixing the problem I have with my teeth at the time.
We have these benefits that derive from creation of real wealth. No matter how you cut it, when we have a large burgeoning government, that is mostly a drain on the production of our wealth.
I admit there are areas where what government is doing is necessary. We have the transportation network probably most efficiently done by government. There are other things which government can do well, but it is not accurate to assume without challenge that unless government is doing it, it will not be done. I resent greatly the implication that the Reform Party's plan will make things worse for so many Canadians. That is not true. Our plan is to stop paying so much interest so that we have more money available for the things we value highly.
Why the hurry? I did a little spread sheet on our present fiscal situation and I took our current debt and I extrapolated it using a very simple assumption. This may not be accurate because we do not know what the future holds. I assumed an 8 per cent rate of interest and I assumed a 3 per cent growth in our economy, both of which are assumptions anyone can make but no one could really defend because we are not able to accurately predict the future.
Who would have ever guessed in the mid 1970s that the interest rates on mortgages would go from 6.5 per cent to 16 per cent? That was not predictable.
When we talk about our debt it is true that if the interest rates rise dramatically, we are captives. There is not a thing we can do about it; neither for our internationally held debt, nor for our domestically held debt because everybody who has lent Canada money will want it back or we will totally blow our credibility.
It is mandatory that we get our debt and deficit under control because with the government's plans, using the assumptions I have stated, 3 per cent growth, 8 per cent interest, by the year 2010, which at my age is right around the corner-when you get to be over 50 the years just fly, 15 years is nothing-our debt will have grown to one trillion dollars. Our annual interest payments, assuming interest is still then only at 8 per cent, will be $80 billion per year. That is $80 billion taken out of the economy just for interest. This is money that will not be available to help poor people, to provide health care and education.
One may ask what the big deal is on this. I did a little calculation and found if our total expenditures were to be brought down rapidly we would very quickly be able to pay off the debt. In other words, if we were able to reduce the rate at which we are adding to the debt to zero, we would call that elimination of the deficit, we would simply stop borrowing. Our plan calls for doing that in three years. If we could reduce the
debt, our interest payments would go down instead of continuing to escalate, which is so important.
We must remember it took the Liberals only 10 years approximately to increase the debt to $100 billion in the 1970s. However, according to the plan we have before us, it will take them only three to four years to add another $100 billion to the debt.
The plan the minister has presented will increase the debt by $100 billion in the next three years. That is not acceptable. It is a premise we reject and it is one which I think all Canadians should be very concerned about, particularly members of the House.
I would like to quote what was said to me by a voter, a taxpayer, from Edmonton Northeast. When we were discussing these things he said to me: "Where were our leaders in the last 30 years? Surely there are experts in the Department of Finance in Ottawa. Surely there are politicians who are businessmen who could think and see what was happening when they were presuming on the future with this borrowing way back then. What was it that motivated them? Where were they? What were they thinking?"
I challenge us all to start thinking right now.