Mr. Speaker, as I mentioned earlier, I will be sharing my time with the hon. member for Ottawa West.
I am pleased to have the opportunity to participate in this prebudget debate. As the finance committee outlined in its recent
report, the government has made good progress in meeting its economic and fiscal objectives. The 1997 budget is the time to stay the course and finish the job.
When the Liberal Party formed the government in 1993 it had as its agenda jobs and growth. Since that time it has made progress, although more needs to be done. Yet the record is clear. At the end of November nearly 650,000 more Canadians had jobs than when we assumed office three years ago. The last year alone saw the private sector create almost 223,000 new jobs. That is not yet good enough, but when we compare this job growth to the three years prior to our coming to power when thousands of jobs were actually lost we see that progress is being made.
Canada has also achieved economic growth. Since October 1993 the GDP has significantly expanded. In the third quarter of this year real GDP rose 3.3 per cent. Canada is expected to have the strongest growth among all G-7 nations next year.
These successes have been solid accomplishments. More important, the pace at which the economy and employment is expanding is and will likely continue to increase. They will do so because the government has a specific and well designed strategy to support growth and job creation. It is this strategy I should like to take a few minutes to speak to.
The government's plan addresses both immediate and long term job creation needs through five key components. First, it will set the appropriate macro economic conditions to keep interest rates low and to encourage investment. Second, it will get government right by ensuring that government programs and policies contribute to a more productive economy. The third part of the strategy is to ensure that we create opportunities for Canadian businesses to grow by selling in the world economy. Fourth, it will invest in growth through strategic investments in new technology, in worker skills and in capital projects such as infrastructure. Fifth, it will help Canadians to adapt by encouraging them to adjust to the new economy, helping small business grow and prosper and reducing the regulatory burden on business.
That strategy is working because the Minister of Finance and the government have understood the importance of appropriate fiscal and economic policy and have carried out these policies as well as any nation in the industrialized world.
On our first priority of setting healthy economic fundamentals, the accomplishments are significant. Interest rates are at their lowest level in 40 years. Inflation is at its lowest sustained level in 30 years and both factors are leading to increased investment and business confidence. In the last quarter alone business investment in manufacturing equipment and machinery was up by almost 33 per cent. This increased confidence leads to increased jobs.
On the second priority, we are getting government right. When we took office the deficit was $42 billion, almost 6 per cent of GDP. In the present budgetary plan, after the two year cycle, it will drop to $9 billion, or 1 per cent of GDP. That is an 80 per cent decrease. We will have gone from having the second worst record on the deficit among the G-7 countries to having the very best. We have achieved this success not by emphasizing increased taxation rates but by getting government right and by reducing spending.
Together our last three budgets have put in place savings which will build to $29 billion annually by the fiscal year 1998-99. By that time departmental spending will be 21.5 per cent lower than in 1994 and program spending will have declined by 14 per cent from where it was in 1992-93. Most important, the Minister of Finance is expected to table a budget with a two year plan which for the first time in 30 years will not require the federal government to enter into new borrowings. This will free investment for the private sector and will lower the economic drain of interest payments to foreign debt holders.
As I mentioned earlier, these actions have led to low inflation and low interest rates. The records show that in the long run countries with sustained low inflation tend to have lower unemployment rates.
On the third point of creating opportunities through trade, the government has again made good progress. The volume of Canadian exports has increased by 28 per cent since we assumed office. It now makes up 52 per cent of the real value of total Canadian production. In September 1996 exports were $201 billion and the trade surplus was $28 billion. Most important, it is estimated that this improvement in Canada's trade balance has created about 275,000 jobs in the last two and a half years.
The fourth component of the government's job agenda has been to invest in growth and to give Canadian businesses and workers the opportunity to succeed in today's economy. This investment has taken many forms, including technology initiatives. They are initiatives such as the establishment of Technology Partnerships Canada, a $250 million fund to lever private investment in the strategic high tech sectors of the economy. There is a new investment of $50 million in the Business Development Bank of Canada. There is the community access program which allows rural communities to access the information highway. There are many other initiatives such as the industrial research assistance program and the sectoral partnership initiative. These initiatives are making Canadians more competitive and will lead to future job creation.
The fifth component of the government's plan in our jobs and growth agenda is to help Canadians adapt. Nowhere has this initiative been more strongly pursued than in our assistance to small businesses. We have helped increase access to capital by expanding the small business loans program from $4 billion to $12 billion. We have expanded the asset base of the Business Development Bank from $3 billion to $15 billion and the Minister of Industry has established a community investment plan which
allows communities to match individuals in their areas that have investments with the businesses that need that investment in order to grow in their communities and to create jobs.
We have helped business to access information through the development of Strategis, the largest business web site in Canada. It provides our businessmen and women, the entrepreneurs who go out every day and put it all on the line, with the information they need to be successful.
With a lower tax rate on small business earnings under $200,000 and the $500,000 lifetime capital gains exemption, it will allow a small business person to continue to invest their earnings back into the business and ensure that they have some sort of wealth when it comes time for them to retire.
The government has managed the Canadian economy well. The deficit is down substantially, spending is down, social programs have been reformed to ensure their sustainability, exports are up, new investments in technology and infrastructure are taking place to secure our future.
In conclusion, the economy is growing. It is real progress. It is not enough yet and that is why the government intends to stay the course and finish the job.