Mr. Speaker, I want to start my remarks on Bill C-76 by recognizing that in February 1995 the Minister of Finance brought down a budget which departs substantially from normal Liberal philosophy.
This is the budget that should have been introduced in February 1994. Rather than taking firm action then, the Liberals just cried and moaned about the mess left by the Conservatives. That was the time to really reduce spending and take corrective action.
Even now, the unrealistic 3 per cent of GDP target chosen by the Liberal government is akin to a high jump contest where the bar is never raised above two feet. Anyone can clear the obstacle because it is not a real test of capability. So the minister's crowing about achieving or exceeding his budget goals is ridiculous.
The aim should have been to present interim targets on the way to a balanced budget by the end of this Parliament, along with a plan to show how this was to be achieved. But this government had neither the political will nor the courage to set these realistic goals which are desperately needed if Canada's vaunted social programs are to be protected and sustained.
There is no question that various special interest groups and some Canadians would cry: "Yes, cut spending, but not in my program", or: "Yes, you should save money, but not on my subsidy".
The Reform Party has established that there is a large constituency in our country which recognizes and is ready to accept the need for meaningful spending reductions which will lead to a balanced budget. Historically, governments, including this one, have preferred to take the easier road, making a few spending cuts and raising a few taxes but not taking the measures really required to balance the books.
The federal debt has climbed from $28 billion in 1970 to nearly $550 billion today, a 28-fold increase. Among major developed countries only Italy has a larger debt relative to the size of its economy.
I have trouble visualizing a billion. I can come into the picture somewhat with a million, but a billion really escapes me. To try to put it into context, I converted it into time and used seconds as the basis. One million seconds is just under 12 days, 11.82 days exactly. A billion seconds is almost 32 years. This puts it into some perspective as to how large a billion is.
After running up a serious deficit during World War II, Canada's debt to GDP ratio gradually declined until the mid-1970s. The last federal surplus was recorded in 1970. From that point on governments continually spent money they did not have and in so doing accumulated the debt burden which saddles us today.
It took Reform Party insistence and concerned taxpayers to convince this government that Canada has a serious debt problem which must be addressed not by increasing taxes, but rather by reducing spending.
Then Moody's rattled the chains. Foreign investors expressed their concern that Canada's finances are in serious trouble, saying: "Either put your act in order or we will invest our money elsewhere".
With one-quarter of our national debt held by international money markets, Canada is hostage to their demands for a good return on the buck. Furthermore, while Canada has been an attractive place to invest money because of our stable political climate, the Quebec problem has put that climate in question and thus our finances are subjected to greater scrutiny.
As I said earlier, the federal debt is now almost $550 billion and provincial and municipal governments owe another $190 billion. Under Liberal plans, within three years the federal debt will increase by $100 billion to almost $600 billion and interest payments on that debt will climb to $52 billion. The result is that interest payments will account for nearly one-third of our total federal budget.
In 1981 the share of the provincial debt for each man, woman and child was $4,500. When a child is born here today, he or she enters Canada owing over $25,000. In fact, everyone pictures a baby being born and the doctor holding it up by the heels, slapping it on the bottom to get it to cry and start its life cycle. That is no longer necessary. All the doctor has to do is hold the baby up and say: "You owe us $25,000 and the baby automatically starts to cry".
When the Liberals took office, interest charges on our debt were $39 billion. Under their projected budget plan, by the next election those interest charges will have risen to $52 billion and as I said before will comprise almost one-third of our annual budget.
This means that more than 30 cents out of every tax dollar will be devoted to paying the interest on the debt. At that time the Liberals still project a deficit of $24 billion. Our debt is continuing to rise as will the interest payments we will be forced to pay.
This Liberal budget fails to deliver. The Liberals have no plan to balance the books by the end of their mandate. They have no plan to answer the problems rapidly approaching with an aging population. The Superintendent of Financial Institutions has
warned that the Canada pension plan will be exhausted in 20 years.
Despite the added pressure of an ever increasing deficit and debt to service, the government must still deal with this problem. It is clear the looming interest payments on the debt will virtually kill pensions and other social programs. Also, transfers to provinces for health, post-secondary education and welfare will be lumped into the new Canada social transfer.
The deepest spending cuts are left until next year when the $7 billion in social program cuts begin. Provincial transfers will be reduced by $2.5 billion in 1996-97 and $4.5 billion in 1997-98.
To what extent will spending cuts be downloaded to the provinces? A lump sum payment will be given to them and the feds say: "Find a way to save the money, but you must still live by our rules or we will withhold the transfers".
This budget does not place resources and responsibilities in the hands of those levels of government closest to the people. It does not include tax point transfers which would give provincial governments the resources needed to pay for their social programs.
Without social program reform, the provinces and the taxpayer will have to carry the burden. They will be asked to streamline programs. However, if the federal government does not like the changes, it can withhold the money.
Programs to natives, Inuit and Metis will increase. Yet the government has not taken measures to clean up what are clearly identified as badly managed programs. Despite budget cuts, spending will increase by $600 million because of escalating interest payments alone. This budget is an example of the consequences of not eliminating the deficit quickly.
On the other hand, the Reform Party's taxpayers budget would eliminate the deficit in three years with spending cuts and no tax increases. The taxpayers budget would restore labour market efficiency through the reduction of social program dependency. It would create an economic climate that would lead to lasting private sector job creation.
What will it take to ensure governments-this one and those that follow-live within their means by not spending more than they take in? We can look to Switzerland for an example. The Swiss enjoy one of the lowest marginal income tax rates, a high standard of living and a generous social safety net. How do they do it?
The Swiss government is required to go to the voters if it wants to raise taxes or spend more money. The government is constitutionally bound to live within its means. This has been in place for years and it works. Government is accountable to the people. Is that not the way democracy should work? It is representation by the people and for the people with the people having control of the purse strings. I wonder how those fat pension plans for MPs would fare if they had to go to the public to be approved.
The Swiss must also be consulted on any law or regulation. Does anyone remember the Liberal red book's promise to scrap the GST? In fact, the Swiss government asked the people to approve a similar goods and services scheme. Three times the voters said no. The fourth time the plan was successful and has just been implemented this year. If the Swiss decide they do not like the tax, they can rescind it by petitioning government to remove it. I am sure every Canadian would approve of tax and expenditure limits for their government.
This government had the good fortune to inherit a healthy economy. If the economy slows, as is expected, added pressure will be brought to bear at a time when the deepest budget cuts must take place. If we call this a debt crisis today, what will we call it then? This budget plan will still add to the debt and continue the erosion of social safety nets.
Our only hope is that the Minister of Finance will not be swayed and will continue to find ways to save money and ensure that programs are effective in their delivery while providing the necessary means to evaluate the programs. If programs do not achieve what they were intended to, they should be eliminated.
Spending cuts are important, but even more important is the acceptance of the need to balance the budget and the presentation of a plan that will take us there. Although too little and too late the budget was a step in the right direction.
The government is now left to do what must be done: plan to balance the budget during this term of Parliament and tell Canadians how it is going to do it.