Mr. Speaker, when I was speaking earlier today I was referring to the Canada social transfer.
By announcing the changes to its transfer payments this year, to take effect next year, the federal government has given the provinces plenty of notice of the changes so they may have time to prepare.
Statistics show that under the CST total transfers, including equalization to the most needy provinces such as Newfoundland, will actually increase in 1996-97 compared with 1994-95. Total transfers including equalization to Newfoundland in 1996-97 will increase by $28 million compared with the 1994-95 levels. This demonstrates the federal government's commitment to both national standards and equalization among provinces.
Other initiatives to social security under the budget include an announcement that changes are to be introduced in September to reform unemployment insurance. These changes are to result in a reduction of 10 per cent to the overall size of the unemployment insurance program. In undertaking these reforms the Minister of Human Resources Development faces many challenges and has an abundance of conditions to rely on.
This past fall the Standing Committee on Human Resources Development undertook extensive consultations with Canadians on the topic of social security reform. During these consultations witnesses came forward time after time to tell the committee unemployment insurance systems often discourage people from getting back to work. People tell stories of being denied unemployment insurance because they wish to upgrade their skills while others get paid to stay home. Others tell of declining benefits while individuals whose spouses earn over $100,000 a year collect generous benefits.
The impetus for any change in the unemployment insurance system must be to design a system that has as its underlying goal helping people get back to work while providing the limited resources available to those most in need.
The Minister of Human Resources Development will keep these goals in mind when he prepares to make the necessary reform to the unemployment insurance system.
On the scheme of social security reform the finance minister has promised to release a paper on the changes required to the public pension system in order to ensure its continued sustainability as our population ages. The underlining goal again in this review will be to ensure those most in need receive the limited resources available. Therefore old age security benefits will be provided on the basis of family income as is currently the case with the guaranteed income supplement. In addition, the Canada pension plan will be reviewed this fall to ensure its continued sustainability.
Another area I would like to address is the impact of the budget on small business. Small business is the engine that drives our economy. Today over 99 per cent of all businesses in Canada employ fewer than 100 people. The small business sector accounts for 40 per cent of Canada's GDP. More important, it now accounts for over half of all the private sector employment.
A recent survey by the Canadian Federation of Independent Business cited the deficit-debt as its number one concern. The finance minister listened to this concern and is maintaining his commitment to lowering the deficit, thereby providing the environment needed for small business to prosper. A lower deficit also means lower interest rates for small business borrowers.
The inability to access financing has also been cited by small business groups as an area of major concern. To this end the government has announced it will be working with the banks to devise meaningful performance benchmarks for small business financing. It is expected this process will be completed by the fall of this year. This will make loans more accessible to small business which in turn will generate job growth.
The government has further demonstrated its commitment by maintaining tax preferences for small business such as the $500,000 lifetime capital gains exemption for small business shares and a lower tax rate on the first $200,000 of income.
These measures in conjunction with measures to reduce the paper burden should ensure continued job creation through the small business sector.
I wish to speak on a topic closely intertwined with my home province of Newfoundland, changes the budget will bring about in the Department of Fisheries and Oceans.
I congratulate the Minister of Finance on maintaining his commitment to the TAGS program. Under the budget the total funding of the program remains at $1.9 billion over five years, including the $1.7 billion of new funding announced last year. This funding is to help Atlantic Canadians to adjust to the devastation in the ground fishery, a situation over which they have no control.
Atlantic Canadians are a proud people. Given the opportunity, they would much rather work than receive government assistance.
The funding is meant to help them to adjust to the sad reality that the ground fishery has been mismanaged and overfished by foreign vessels. Again the minister, through his commitment to this funding, has ensured that the most vulnerable in our society are protected.
Other measures such as the merging of the coast guard with the Department of Fisheries and Oceans will enable Canada to strengthen its conservation efforts even more outside the 200 mile zone at a time when it is most needed.
In summary, I am pleased to pledge my full support for this budget. It shows that the Liberal government can do more than simply talk about deficit reduction. By setting reasonable targets for deficit reduction and then meeting them, this government has earned the trust and respect of the people of Canada. More important, this budget has managed to reduce the deficit largely through expenditure reductions while ensuring that those in society who are most vulnerable are protected.
While it is not with any great pride that many of these expenditure cuts were introduced, it was out of necessity to ensure that our economy stays on the road to recovery and our social system can remain sustainable in the future.