Mr. Speaker, I will be happy to talk to the hon. member from Calgary afterward and respond to his concerns. I am always delighted to hear from him.
Look at what we have already done in terms of payroll taxes even though we have a lower level of payroll taxes than the United States. Since we have been in office, we have taken six major reductions in those payroll taxes.
We reduced the statutory formula which would have taken us from $3 to $3.30 and we held it at $3. We reduced the rate from $3 to $2.95 in 1996. Just recently the minister announced that it was going from $2.95 to $2.90. Every time we reduce it a nickel, it costs us $350 million. We reduced the maximum insurable earnings from $875 to $750, again for monstrous savings. In December 1995 we gave premium relief for small businesses and we extended that again last year. The sum of these six reductions has been to reduce payroll taxes by some $4 billion since we have come to office.
We recognize there is a surplus building in terms of employment insurance. We recognized that but we said that because of our priorities in order to be competitive we do not have to further reduce the payroll taxes or the corporate taxes because when we combine them they are already lower than those in the United States.
Where we have really high levels is in terms of our personal income taxes. We heard from the scientific community and the high tech community how these high levels of taxes in Canada are hurting us. We have heard, and the finance critic for the Reform Party has mentioned this many times, that Canadians with an income over $50,000 constitute 10 per cent of tax filers but they pay 50 per cent of the taxes. We also heard that a single wage earner earning $6,500 is also on the tax rolls.
Our priority as a committee was to say that because our personal income taxes are out of line, in the future when we might be able to afford cuts, which we cannot afford today and we did not
recommend them for today, our priority for tax cuts would be in terms of personal income taxes. What did we recommend in our majority report? Apart from targeting the six priority areas I mentioned, we called for minor tax reductions.
Again this year as last year we called for income averaging for people whose income fluctuates significantly from year to year and they suffer a tax penalty, people such as artists and writers. We have called for extending the deduction for medical and dental benefits to those who are self-employed. We called for abolishing the tax on jewellery, the 10 per cent excise tax and we looked at some other measures such as ones dealing with heritage property and the high cost of mechanics tools for those who are required to purchase them before they can get a job in a garage.
We called for tax increases as we did last year in terms of tobacco. We want those taxes on tobacco products to go up just as quickly and as often as circumstances relating to smuggling will permit. We know it is a deterrent to the iniquities of smoking. We have called for a tax on lotteries, a 15 per cent withholding tax on winnings from government run lotteries of anything over $600, as we did last year. We have also asked that the government consider a few other measures.
We recognize that big businesses are not going to be the job creators of the future in Canada. Job creation will largely fall on our small and medium size enterprises. We are still concerned about the role of our financial institutions in providing financing for small business start-up, equity and operating capital. We are pleased to note that this year, due largely to blandishments from the Minister of Finance and from the industry committee, the banks have taken very seriously their role of providing funding to small businesses. I compliment the banks on the number of steps they have taken in this area.
We have seen a tremendous blossoming of the labour sponsored venture capital fund. There is now $3 billion available to help small businesses get started, to expand and create jobs. We urge those who cannot get money from traditional lenders to take a look at this fund.
We are pleased that the business development bank has extra capital of $350 million. We were pleased that a group we recognized last year, the Calmeadow foundation, under the leadership of Martin Connell has increased its efforts to lend money to the small entrepreneur. We call it micro lending. It is for the person who needs $3,000 or $5,000 to get into a business. We commend these efforts and the steps taken in concert with our financial institutions to try to institutionalize this type of initiative, to take it beyond just the simple efforts of Calmeadow. This means co-operation with the banks.
Our finance committee recognized in its report on financial institutions which was tabled in this House in October, that it would be very helpful to consumers and small and medium size businesses if we increased competition. We have asked that Canada's doors be opened wide to foreign lending institutions, that the administrative barriers be removed. This will help meet the future needs of our small businesses.
We have also said that one of the biggest bangs for the buck we can get is through encouraging foreign direct investment in Canada. We recommended this last year and the government has taken steps. I understand there are now about 15 individuals working directly on this.
Studies done by KPMG Peat Marwick Thorne and others have shown that cities right across Canada have a competitive edge over American cities as places for new foreign direct investment. We have to get this message out to the big companies and investors right around the world. We recommend expanding these efforts to attract direct foreign investment in Canada which would create jobs here. We have such an incredible product to sell.
We heard from many Canadians, not just those in the voluntary and charitable sectors, who are making a tremendous difference in the lives of Canadians. There is one person in particular who came before us, Mr. Charles Pielsticker from Toronto.
A couple of years ago Mr. Pielsticker realized that business was not getting involved with our educational institutions so he formed the Learning Partnership which is funded basically by business contributions. It is doing many things, for example taking kids to work for a day, which involves hundreds of thousands of kids and their parents; and having volunteers work with teachers in public schools to help them teach science. This type of thing is all done on a voluntary basis.
A woman who is doing the same type of thing also appeared before us. It is another voluntary organization which teaches science to teachers to make it particularly interesting for their students. Again, it was another volunteer driven organization. We commend these people for the type of leadership they are giving us.
We heard considerable cries for Canada to increase the payments for transfers to the provinces. This came from the official opposition. Part of the cutbacks we have had to do unfortunately fell in the areas of post-secondary education, health care and helping those who are on welfare. Like everything, they had to be cut or we would not have got to our targets.
It was our finance committee having listened to Canadians a year and a half ago said that we cannot cut all the cash transfers, we have to have a minimum cash base in order that we can as a federal government ensure the five principles of the Canada Health Act are adhered to. We saw how the Minister for Human Resources Development went across the country talking to his provincial counterparts to try to get agreement on the principles that underlie
the CHST to the provinces, the transfers for health care, welfare and post-secondary education.
As Judith Maxwell who appeared before our committee said, we can no longer impose these federal standards unilaterally. We have to work in dialogue and in co-operation with the provinces. This is what she called the management of our interdependence. We encourage the government in its efforts to do this. This is so important, particularly in terms of the Canada Health Act because we all know that health is critical to Canadians but good health is also good for our economic future.
Tax harmonization was an incredible theme we heard going right back to the summer when we met with people working with the task force headed by Dr. Jack Mintz. He was appointed by the minister to look at our business taxation to see if it was competitive.
We heard in testimony before us how one corporation with four affiliates had to file 1,100 pages of tax returns. This is insane. Why should we have provincial and federal income tax, capital taxes, sales taxes, excise taxes and different payroll deductions, different administrations, different tax laws and different enforcement officers going in?
Canadians said: "We are only 30 million, we cannot afford it as taxpayers. We cannot afford it as companies that have to comply. Get your act together. You are politicians. You can agree on similar harmonized laws in all these areas. We expect you to. We expect nothing less of you. We do not want these petty jurisdictional turf wars". This is why we want a national securities commission. Why do we need 11 or 13 different jurisdictions dealing with securities in this country?
We heard from Canada's cultural industries. Our cultural industries employ one million Canadians. They contribute $30 billion to our gross domestic product. One of the wonderful things about people who are artists, performers or whatever, is that they do not need high paying jobs. They have found ways to cope and to supplement their income. To create a new job in the arts costs only $20,000. But these are the people who give us a raison d'etre for being Canadian. They are the ones that give us the heart and soul of what we are. We cannot do without our culture.
We encourage the government to look at a number of the measures we have suggested. In particular, we feel that the recommendation for vastly enhanced tax incentives for charitable donations are the ones which will impact very directly on the cultural industries and will give them the multi-year stable funding they need in order to plan for the future.
In closing, I would like to thank all members of the committee from all parties who worked so co-operatively. I thank the incredible staff of the House of Commons who arranged the meetings, the researchers, the person who advises on the text, Mr. David Abbott, people in our offices who worked with us.
Mostly I would like to thank Canadians. The last three to four years have not been easy. We have had to cut back in order to restore fiscal health and to protect the programs and the way of life which we consider to be so important. It is Canadians who have had their programs cut and have been the ones who have suffered. They have borne with us and shown a fortitude, an acceptance and a generosity of spirit toward their fellow Canadians and toward one another in sharing the burden we have imposed.
We must not detract from the overall goal of keeping on a sound monetary and fiscal track so the deficit targets are met and surpassed. In the meantime, because we have exceeded those targets to such a great extent, we believe it is good for the economic future but it is fundamental that we make some strategic investments at this time. These investments will introduce greater fairness into the system and are critical for a vigorous economic future. I am talking about investments in disadvantaged children and those with disabilities, in literacy, in students, in research and development and charitable and voluntary sectors.
I thank members for their indulgence and I look forward to the debate.