Mr. Speaker, I congratulate my colleague for a very fine budget address.
I start my budget address, as I know all members do, by congratulating the Minister of Finance for yet another successful budget. Like the two previous budgets, the needs and wants of Canadians have been addressed. It will result in the creation of jobs and promote economic growth by further reducing the deficit. To the minister I say a good job, well done.
The government is continuing the processes that began with the 1994-95 budget. The comprehensive strategy for federal finances determined is measured and responsible. The government is determined because we are not letting up our fight to reduce the deficit. The books will be balanced. The debt to GDP ratio will be on a constant downward track year after year.
It is measured because our fiscal action is not indiscriminate and mindless but is structured to a pace conducive to efficient adaptation. It is designed not as a quick fix but to achieve long term, permanent progress.
There are those in the House who would want us to believe that a quick trashing of the government books would be the cure all of the national debt. The government knows that deficit reduction must be measured in order for it to be sustainable.
Our approach is responsible because it is a strategy that involves carefully weighing the needs of our economy and our society and equally carefully designing the policy options to meet those needs. Just as important, we are striking the balance necessary to keep Canadians on side for our deficit reduction efforts.
Again, referring to the slash and burn tactics of some people in the House, their approach would result in a revolt so massive it would make the Ontario strike look like a walk in the park.
We all know the reasons behind reducing the deficit but I feel they must be reiterated. The lethal combination of high interest rates and deficit borrowing also means a growing share of government resources must go to interest payments on a growing debt.
That is why we have acted, not because tackling Canada's fiscal problem is not a goal in and of itself but because it is a fundamental component for our natural growth, new jobs and economic security.
We have maintained our focus on reducing program spending because the debt is a problem created by government and the
solution should focus on cutting in our own back yard. Therefore there are no tax increases in the 1996 budget; no personal taxes, no corporate taxes, no excise taxes. This is good news to people in my riding and to all Canadians.
The federal government has fought quite hard to reduce the deficit since taking office. However, what is equally important is that the provinces and territories are doing the same. The provincial and territorial governments are well on their way to balancing their budgets. The combined provincial-territorial deficit has been cut to $12.6 billion in 1995-96 from its peak of $25 billion in 1992-93. This is a drop of 3.6 per cent of GDP to 1.6 per cent.
I am pleased to say the P.E.I. provincial government had a balanced budget in 1995 and it did so without major tax increases. Even more impressive is the $3.4 million surplus for the 1996-97 fiscal year presented last week in the provincial legislature by the provincial treasurer, the hon. Wayne Cheverie.
As a result, Canada's total government sector deficit is projected to improve sharply relative to other G-7 countries. This is very important for an open country like Canada.
Since over 30 per cent of our national income is generated by our exports, it is important that we remain competitive. All levels of government are helping to do that by getting their fiscal houses in order. For its part, the federal government is reforming the way it conducts its affairs. This and the past two budgets are reducing waste and inefficiency and redefining the government's programs and activities. These actions will ensure that program spending continues to fall through 1998-99 delivering major fiscal savings into the future.
The federal government will further clarify its core program responsibilities in the economy. The government will make these programs more efficient and effective in order to deliver better quality services at a lower cost to the taxpayer.
The program review which was initiated in the 1994 budget is continuing. We are still exploring new ways to improve the delivery of service and reduce costs. The essence of these changes is to give service delivery organizations greater autonomy to provide their services in ways that are more responsive to the needs of their clients and more cost effective.
This will reduce overlap and duplication. Through co-operation and partnerships with the provinces and territories, these goals can easily be achieved. We are working with the provinces on a continuous basis to improve services to Canadians.
I have spoken long enough on our deficit reduction agenda. For the benefit of hon. members on the other side of the House I would now like to talk about some of the benefits of our efforts.
Last year the Minister of Finance and cabinet announced the implementation of the Canada health and social transfer. As a result of the efforts, this transfer will be stabilized and will even begin to grow. That is right, it will grow. The CHST will be stabilized at $25.1 billion from 1997-98 to the turn of the century. After that this transfer will actually grow according to a formula tied to economic growth.
To the residents of my province of Prince Edward Island this means that the 1997-98 CHST will amount to $114 million and by the year 2003 it will be up to $122 million. That is good news for our provincial government and for Islanders as a whole.
Further good news is the guarantee of the cash portion of the transfer. The cash floor within the transfer will be guaranteed by legislation. This is quite different from the old direction of the transfer that would see the cash portion totally disappear within a decade. The stability of this transfer is very important to the provinces. This will provide greater clarity for their own budget forecasts.
The groundwork of our deficit reduction was laid out in the first half of our mandate. The savings accrued from those hard decisions now allow us to turn our attention to other items of concern to Canadians. It is through our efforts that our social programs will be saved.
I for one am glad that when I go back to my riding on the weekends I can tell my constituents that the Prime Minister's promise to seniors has been kept. The changes announced in this year's budget do not affect today's seniors. The pension of every Canadian who is 60 and over as of December 31, 1995, and their spouses regardless of age, will be fully protected.
When the new seniors benefit is implemented in 2001 these seniors may choose whichever system is more advantageous, either moving to the new system or maintaining their OAS/GIS payments. It should be emphasized that savings will come from slowing the rate of growth in program costs, not at the expense of those in need. While the savings at first will be small, they will build year by year to about 11 per cent of program costs by the year 2030.
Legislation will be tabled later this year and we will be inviting public submissions on the proposal to be followed by consultations through parliamentary committee hearings. The response should be positive because the seniors benefit meets these key public goals: reducing the long term costs will make the public pension system more sustainable; targeting help to those who need it most is the fairest way to reduce costs; and with the new seniors benefit all Canadians, particularly the young, can be assured the public pension system will be there for them now and in the future.
Another item of concern to Canadians that has been addressed by this budget is reform of child support as was mentioned by my colleague a few moments ago. A more equitable treatment of support payments will be implemented. As of May 1, 1997 the
system will move to a no deduction, no inclusion format. The payers of the support payments will no longer deduct them from their taxable income and the custodial parents will not include them in their taxable income.
There will also be guidelines for the payment of child support and greater measures for the enforcement of those payments. The approach will address the first priority: our children. These children are our future. We must provide for them as much as we can.
That brings me to our next point: investing in our future. The government is taking durable, meaningful steps forward rather than relying on short term direct spending programs which only result in a step back when we look at the long term effect. It emphasizes collaboration with partners and strategic investments to steer the forces of the economic change toward greater employment, employment that is sustainable.
But first things first. For the sustained economic growth needed to deliver new jobs, we must start by securing Canada's economic fundamentals which as I have said earlier means getting the deficit down and keeping it down. High persisting deficits go hand in hand with high interest rates. High interest rates as we all know discourage investment, borrowing and consumer spending. Ultimately they discriminate against jobs.
We have a plan. We will focus on getting our youth on the job. The first job is very important. Giving our youth a better chance at their first job will improve their confidence and ability to get the equally important second job. Our youth programs will accomplish this task. Coupled with our learning package these measures will provide the means for young Canadians to get the education and experience to obtain the challenging and rewarding career for which they strive.
However, government cannot do it alone and more important, as has been said, it is not supposed to. The role of government is to create the economic environment which will allow the private sector to create the jobs that are needed to get Canadians back to work.
It is through partnerships with the private sector that our role can be fulfilled. One way the government can do this is to target its investment in the key areas of our economy.
The budget also increases investment in technology and innovation through a number of actions over the next three years funded by the reallocation of $270 million from budget savings. For example, Technology Partnerships Canada will be established to encourage risk sharing with the private sector and to leverage investment in the development and commercialization of high technology projects and processes. Funding will grow from about $150 million in 1996-97 to about $250 million by the year 1998-99.
I believe this is important for all Canadians and I believe it is important for my province of Prince Edward Island. We have the capabilities to succeed in the high technology world. All we need is help to tap into it. Islanders welcome the possibilities that come with the focus on high growth sectors of the Canadian economy.
I urge Prince Edward Islanders to take full advantage of this focus. We have little to lose and so much to gain. It is possible to create year round employment on the island and it is up to the private sector to create those jobs.