Mr. Speaker, it is a pleasure to speak about the government's main estimates for the 1995-96 budget year.
The main estimates are a reflection of the government's spending priorities for its departments and programs as set out in the budget. This year's estimates lay the details for the government's planned budgetary expenditures totalling $164.2 billion.
The basic figures contained in these documents show overall program spending has declined by 10.8 per cent, from $120.9 billion 1994-95 to $107.9 billion in 1996-97.
The positive side of these dramatic spending cuts is that the government has managed for the first time in more than 20 years not only to reach its deficit reduction objective but to exceed it by $4.4 billion, without raising personal income taxes.
With its second budget, the government will be able to meet the red book objective of reducing the deficit to 3 per cent of GDP by the end of 1996-97.
I will mention some of the concerns communicated to me by my constituents prior to this year's budget and how the government addressed these concerns.
The build up to this year's federal budget saw a variety of letter writing campaigns opposing any new tax measures. I recall a few campaigns opposing any increases in personal income tax, any taxation of employer contributions to group health plans and registered retirement savings plans.
As part of the government's prebudget consultation process I wrote to the Minister of Finance requesting that group health benefits and RRSPs not be taxed. I was very pleased the budget contained no increase in personal income taxes and that no taxes were levied on the programs I mentioned.
It is important to understand that a whole new approach to governing was adopted in order to achieve the budgetary goals I referred to earlier. The program review contained in the budget redefines what government does and how its programs are delivered.
We are in fact witnessing a redefinition of liberalism. This, however, could make us forget important liberal principles such as giving everyone equal opportunities. Many Canadians feel, like me, that our social programs helped create a more just society.
After what the previous government did to social security, it is no wonder that many Canadians are concerned by any talk of reviewing social policy and public pension plans.
I am nonetheless convinced that our government can and will modernize the social safety net in order to make programs more efficient and less costly and, more importantly, to preserve access for all Canadians, whether rich or poor.
An important item in the estimates will guarantee the future viability of our social programs. The Canada social transfer will replace the current transfer payments to the provinces and territories under the Canada assistance plan and the established programs financing. Combined with the equalization payments that will continue to increase, the Canada social transfer will provide the provinces with more than $35 billion in 1996.
During the 1993 election campaign I repeatedly said what we need are more people paying taxes, not people paying more taxes. It has always been evident to me that the best way to preserve our social programs and at the same time reduce our fiscal deficit is by creating jobs. More people working means more people paying taxes and less people drawing costly benefits such as unemployment insurance. In other words, we must continue with our job and growth agenda. We need a balanced approach between spending cuts and job creation. Fiscal restraint must not be an end in and of itself but a facilitator in achieving the overriding goal of job creation.
The government did in many ways adopt this approach. Consider that 433,000 new jobs were created in 1994, many as a result of the national infrastructure program. The unemployment rate is now at 9.4 per cent, the lowest in nearly five years, productivity has surged and our trade surplus is at its highest level ever.
It is important to increase the fairness of the tax system. Again, I must congratulate the government on the progress made in that regard through measures such as these: a 12.5 per cent increase in the corporate tax rate; a 1 per cent increase in the corporate surtax; a temporary tax on the capital of deposit-taking institutions, including major chartered banks; the elimination of tax advantages resulting from the rules governing family trusts for the rich; and finally, the limitation on the scientific research and experimental development tax credit for large corporations.
These are major achievements, but much remains to be done. There is still a lot to do to help the unemployed find work and we must take a closer look at tax advantages that benefit a privileged few.
Some would attack the less privileged in our society and blame them for all our economic woes. This certainly seems to be the case in the provincial election in Ontario. However, politicians who take advantage of people's fears and anger over the future viability of our economy are doing a great disservice
to both the social and economic well-being of our country. This approach is fundamentally dishonest and very destructive.
Now that this year's budgetary process is coming to a close I offer my suggestions for the upcoming 1996 prebudget consultation.
There is much speculation in the media about the viability of our public pension plan and the necessity to review this program. I believe any review of the public pension scheme should also include a review of RRSPs. A considerable amount of money is invested in RRSPs. They have without a doubt contributed to better retirement security for thousands of Canadians.
However, the question of fairness has arisen with respect to advantages wealthy Canadians receive from current contribution limits. The last budget set limits of $13,500 for 1996-97. The limit will be increased by $1,000 a year to reach $15,500 in 1999.
Revenue Canada statistics also inform us only 6 per cent of individuals with income of less than $20,000 a year currently take advantage of RRSPs. On the other hand, individuals making $100,000 or more a year, who account for only 2 per cent of the population, account for 20 per cent of the total RRSP contributions.
In my opinion our current system of RRSPs acts as a considerable tax shelter for the wealthy because of its high contribution levels. For this reason I would not oppose a reduction in the RRSP contribution limit. This would only affect higher income Canadians because these limits are income contingent. Taxing lottery winnings is also another revenue generating avenue available to the government.
I urge the government to continuing applying fairness and compassion in budgetary policies. We must continue to give unemployed Canadians hope and encouragement, not blame them or punish them for their lot.