Mr. Speaker, I am pleased to have the opportunity to discuss the budget of the finance minister for 1995-96.
The budget was about keeping promises: the promise contained in the red book to reduce the federal deficit to 3 per cent of GDP by 1996-97, the promise made by Liberal governments past and present to preserve a sustainable social safety net that provides for those who are most in need, and the promise to ensure that all Canadians in all regions share equally in the necessary burden of reducing the deficit.
Through a combination of spending cuts and revenue increases the finance minister reduced the deficit for 1995-96 to $32.7 billion. This is the second year in a row the deficit has been reduced. I am proud to be a member of a government that backs up its talk on deficit reduction with action. Unlike the previous Tory government and some members of the third party, the finance minister realizes there is a purpose to deficit reduction and that deficit reduction is not an end in itself.
As a result of the huge debt that has been run up by the last government, Canadians last year saw roughly 33 cents of every taxation dollar go toward paying interest on the debt. This meant less money available for services that Canadians deserve and respect.
The large debt also creates a climate of instability which discourages business investment and job growth. The purpose therefore of deficit reduction is to guarantee Canadians an environment for sustained growth and job creation both now and into the future.
The government understands and respects its obligations to Canadians to stop the practice of borrowing from future generations to finance the spending habits of today. Therefore it is not with enthusiasm that the government set about reducing spending but rather out of necessity.
Canadians from coast to coast to coast understand this point. In fact a recent poll confirmed it: 69 per cent of Canadians said they approved of finance minister's budget, even though a large number of those who approved of the budget expected to be somewhat worse off under it.
I refer to some of the remarks made by my colleague from Ottawa West. She said that some of her constituents spoke to her about their concerns under the budget but were willing to accept the cuts and to live with the budget.
Not only is the budget remarkable for the progress it makes toward the goal of reducing the deficit. It is commendable for the way in which it achieves deficit reduction. Reduction in the deficit was achieved largely through expenditure cuts.
For the second year in a row the government did not increase personal income tax rates. I congratulate the minister on his willingness to listen to Canadians and to refuse to take the easy way out by raising taxes. While personal tax rate increases may have been easy they would not have been equitable.
Rather, the finance minister has managed to reach his deficit reduction primarily through expenditure cuts. For every $1 of revenue increase contained in the budget there are $7 in spending cuts. These cuts are reached largely through a rationalization and downsizing of government while ensuring that the spending cuts do not jeopardize the social programs Canadians value so dearly.
I should like to comment on three specific areas which the budget affects: social programs, small business and changes to the Department of Fisheries and Oceans.
While many Canadians including myself were encouraging the minister not to raise personal income taxes as part of his campaign to fight the deficit, equally compelling was the need to maintain the hallmark of Liberalism, our social safety net.
It was the Liberal government that built the social safety net and it is the Liberal government that is committed to maintaining our social programs. The problem was to adjust the programs to reflect the challenges and realities of the nineties.
Too often complaints were heard about how the social security system did not aid those most in need. At the same time it was becoming obvious that the social safety net was in many instances not providing incentives to Canadians to become less dependent on assistance.
Helping individuals to get back to supporting themselves must be a fundamental goal of any social system. In an attempt to encourage innovative and timely approaches to social security the government has established the Canada social transfer. This payment to the provinces will combine payments for health, post-secondary education and social assistance into one payment called the Canada social transfer. It will allow provinces the flexibility to pursue innovative approaches to the programs.
In conjunction with the transfers the federal government will impose national standards on all provinces as a condition of receiving funding. It will ensure that our commitment to provide for the most vulnerable in society will be maintained. For example, the Canada Health Act and its standards of accessibility, portability and universality will remain intact. Further, the Minister of Human Resources Development is to meet with his provincial counterparts to work out a set of national standards to govern post-secondary education and social assistance.
It has been said that the provinces will receive less funding under the Canada social transfer than previously. However the government has shown its commitment to social programs by cutting its expenditures in this area much less than it cut expenditures in other areas. Further, by announcing the changes in its transfer payments this year to take effect next year, the federal government has given provinces plenty of notice of the changes so that they may have the time to prepare.
Statistics show that under the Canada social transfer total transfers including equalization to the most needy provinces-