Madam Speaker, it is a pleasure to rise to bring some reality to the fact that the Canadian public is in tune with and in favour of the recent budget.
At a recent meeting in Haliburton I had the pleasure of speaking to a group from the chambers of commerce from Haliburton to the Quebec border. Most of them are managers, some operate chambers of commerce, are CEOs and so forth. They agreed that for the first time since the 1940s there was actually a budget cut, that it was not just a freeze, it was not something that would be taken off at the next election, it was not something that was going to change. It was actually an alternate course the government has decided to embark on. They applauded that.
In researching the budget in order to speak to the chamber of commerce and find something to talk about that I thought would be of interest to them, I did look at the reduction of business subsidies. These are dear to most of our hearts. We all believe that businesses should not be financed by federal governments. We have talked about that many times.
A key principle of the 1995 budget, as the Minister of Finance said, was to redesign the role of government in the economy to fit the size of the pocketbook and the priorities of our people. The decision dramatically reduces subsidies to businesses and shows how that principle is at work.
The simple fact is that subsidies often did more harm to businesses than help. It is a problem business leaders themselves have often pointed to. This was confirmed in the 1994 OECD job studies, which said that subsidies tend to operate in exactly the opposite way from what is needed: they slow rather than stimulate adjustment, they discourage rather than encourage innovation, and they tend to become permanent.
That is why the budget cuts business subsidies by 60 per cent, from $3.8 billion last year to $1.5 billion by 1997-98. Areas where subsidies will drop sharply include agriculture and transportation. Again, we can no longer afford subsidies that were designed decades ago and that today are actually undercutting adaptation, diversification, and competitiveness.
Western Grain Transportation Act subsidies are being eliminated, for a savings of $2.6 billion over five years. But because of the scope of this change there will be transition measures. For example, we will make a one-time payment of $1.6 billion to prairie farmer landowners and invest a further $300 million to help establish a more efficient grain handling and transportation system.
As well, in line with the recent decision of federal and provincial agriculture ministers, we will develop a core national whole farm package. This shared cost program will replace current programs based on individual commodities. This will encourage innovation and diversification while producing a 30 per cent reduction in federal contributions to agricultural safety nets.
The Atlantic freight subsidies will also be eliminated, for five-year savings of $500 million. This again will be balanced by a five-year transition program, including helping to modernize the highway system in Atlantic Canada and eastern Quebec.
Of course our cuts to subsidies extend far beyond agriculture and transportation. At Industry Canada subsidies will fall by half, from $525 million in 1994-95 to $264 million in three years. Remaining spending will focus on initiatives in high growth sectors and in partnerships with the private sector.
A new role for the regional development agencies will see them focusing on small and medium sized enterprises. This assistance will rely on loans and repayable contributions rather than direct subsidies. As a result, subsidies from these agencies, the western diversification, the Federal Office of Regional Development for Quebec, the Atlantic Canada Opportunities Agency, will drop from $700 million to $234 million.
Subsidies to cultural industries are also being reduced. This includes an eight per cent reduction in the postal subsidy, which reduces mailing costs for certain books and magazines.
As well, we are eliminating the Public Utilities Income Tax Transfer Act, which returns to provinces the taxes paid by privately owned utilities. As a result, major energy subsidies will virtually disappear, dropping from $410 million now to $8 million.
These subsidy cuts are vital components in restoring Canada's fiscal health. We also recognize that there are times and places where governments can and should assist the private sector in today's fast changing global environment. For example, the government will continue to play an appropriate role in supporting exports for companies in sectors facing intense international competition.
The government will be working with Canada's banks between now and the fall to elaborate meaningful benchmarks regarding small business lending.
A survey in my riding provided overwhelming support for the budget. In fact most would have gone further. Eighty per cent approved the cuts made and are looking for Canada to live within the fiscal constraints of the reality of our income.
The results of my survey include to this date 1,167 people as of yesterday. One of the questions was: Do you agree with the government department spending cuts announced in the 1995 budget? That was a very simple question. The response was no, 18 per cent; yes, 73.6 per cent.
Do you believe the government spending cuts went too far? Yes, 8.7 per cent; no, 83.9 per cent. Do you believe that the government's spending cuts did not go far enough? Yes, 70 per cent; no, 19.6 per cent. Do you support the proposed changes to MPs' pensions? The survey indicated what those changes were. Yes, 90.9 per cent.
